[Red Envelope] Hundredfold Brother reads Chapter 14 of the "Tao Te Ching": Retail investors focus on appearances, experts look at patterns.

Chapter Fourteen

When you see it, you cannot see it; this is called “Yi.”
When you hear it, you cannot hear it; this is called “Xi.”
When you try to grasp it but cannot hold it, this is called “Wei.”
These three cannot be fully explained, so they blend into one.
Above, it is not bright; below, it is not dark.
It is intertwined and indescribable, returning to nothingness.
This is called the formless form, the image of nothingness, called “Hu Huang.”
You cannot see its head when approaching, nor its tail when following.
Hold to the ancient way to govern the present existence.
Knowing the beginning of the ancient times—that is the record of the Dao.

In the previous chapter, we discussed why some investors are always easily shaken by praise or blame, panicking at gains and losses. We told everyone that to achieve consistent and stable profits, one must not be enslaved by fluctuations or emotional reactions to gains and losses.

This chapter is an abstract and often overlooked part of the Tao Te Ching. In the stock market, it refers to most investors who only focus on visible candlesticks, news, and price movements, unaware that the true determinants of an account’s fate are the invisible laws and rules behind the scenes.

This chapter can be interpreted from multiple angles, but that would make it too long. We will focus on just one aspect.

1. When you see it, you cannot see it; this is called “Yi”: Most of what your eyes see are traps.

Let’s look at the first sentence: When you see it, you cannot see it; this is called “Yi.”
Using your eyes to look, yet unable to see—that’s “Yi.”

In investing, most retail traders only trust what their eyes observe—rising means good, falling means bad; profit is right, loss is wrong; chasing red candles, fearing green candles.

But what your eyes clearly see is often already the end result. The real big opportunities are usually quiet and unnoticed before they start.

By the time beginners see large bullish candles, main upward waves, continuous limit-ups, or viral online, it’s often no longer an opportunity but a zone of bagholders.

“Yi” teaches us not to be deceived by appearances, not to be fooled by current price fluctuations, and not to make decisions based solely on visual cues. Instead, learn to make decisions based on cognition and systematic analysis.

2. When you hear it, you cannot hear it; this is called “Xi”: What your ears hear is all noise.

The second sentence: When you hear it, you cannot hear it; this is called “Xi.”
Using your ears to listen, yet hearing nothing—that’s “Xi.”

In the market, the most abundant thing is various experts, influencers, chat groups, insider tips, and endless rumors.

Liking to listen to all kinds of news is a common mistake among beginners. But the more sensitive your ears are, the more you suffer losses.

“Xi” reminds us that the true forces driving the market are never in the noise or shouting; they are silent and require independent judgment. The more you can filter out noise, the fewer traps you will fall into.

3. When you try to grasp it but cannot hold it, this is called “Wei”: The core is what you cannot hold.

The third sentence: When you try to grasp it but cannot hold it; this is called “Wei.”
Reaching out to grab, yet unable to hold—this is “Wei.”

Some investors have an overly high mindset—they refuse to buy unless at the lowest point, refuse to sell unless at the highest; once they buy, they want limit-up stocks, hot stocks, or leaders; their ambitions are sky-high, but their luck is fragile.

What happens? The more they try to grasp, the more they miss; the more precise they want to be, the more they get slapped; the pursuit of perfection leads to more mistakes.

The core forces that determine the market—such as market laws, capital logic, sector rotation, cycles, and sentiment turning points—are intangible. You cannot see, hear, or touch them, but they control everything.

This is “Wei”: intangible yet omnipresent; unseen yet decisive.

4. The three blend into one: The ultimate truth of investing is called “Trend.”

Laozi said: These three cannot be fully explained, so they blend into one.

What is unseen, unheard, and intangible—ultimately, they are the same thing: the Dao.

In investing, this is called: “Trend.”

A trend has three characteristics:

1. When you see it, it appears ordinary before it starts; only after it unfolds do you realize its significance.
2. When you hear it, there is no noise or shouting; it quietly gains strength.
3. When you try to forcefully grasp it, you cannot; going with it leads to prosperity.

The power of a trend is immense. Therefore, we focus on quantifying trend analysis and have named our system the “Trend Quantitative Investment System.”

This name contains two words: “Trend” and “Quantitative.” Quantitative analysis serves the trend, directly reflecting the fundamental principle of the trend.

5. The formless form, the image of nothingness: Experts pursue subtlety and ambiguity, not perfection.

Laozi described: “The formless form, the image of nothingness”—a state without shape or image, elusive and faint.

The stock market itself is a chaotic system. There are no certainties; investing relies on high probability. The idea of chaos is one of our seven philosophical principles of investing. The chaos of the market is also one of the reasons for its great appeal.

If one misunderstands the chaotic nature of the market or doubts the importance of high probability, they are likely to make serious mistakes and be excluded from professional investing.

6. Hold to the ancient Dao to govern the present: Use unchanging principles to handle ever-changing markets.

The most crucial line: “Hold to the ancient Dao to govern the present.”
Grasp the laws that have always existed to navigate the fluctuations and trends of reality.

Markets change daily—topics, hot spots, news, sentiment—all in constant flux. Beginners often follow these changes blindly, exhausting themselves.

But the underlying laws of the market remain unchanged: cycles, movements, balance, repetition, mathematics, chaos, and the philosophy of limits. When many rise, they must fall; when many fall, they will rise again; prosperity declines, and adversity turns into fortune.

A master only does one thing: use the unchanging to respond to the ever-changing.

Apply unchanging laws to handle the shifting market; use a stable system to navigate fluctuating trends.

Knowing the origin of eternity—that is the Dao’s blueprint.

Chapter Fourteen of the Tao Te Ching does not mention a single stock or indicator but clearly points out the right and wrong paths in investing: what is seen with the naked eye is mostly traps; what is heard is mostly noise; what is grasped is mostly volatility; only the unseen laws and trends are the sources of profit.

Retail investors are trapped in the visible world; masters live in the realm of unseen laws.

When you are no longer deceived by appearances, no longer disturbed by noise, and unaffected by fluctuations, you enter the realm of free investing. Earn money through cognition, laws, trends, and the Dao.

This is the ultimate secret to long-term compound growth.

Next chapter, we will explore Tao Te Ching Chapter Fifteen: “The ancient sages who excel at Dao are subtle, profound, and inscrutable.” It discusses the temperament, cultivation, and vision of top traders, and why some people are destined to win the moment they act.

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