Stay humble — the golden rule of investing through cycles.

Source: CITIC Press

Stay Humble came about because of a netizen's reply to one of my tweets:

That netizen's suggestion was insightful and interesting. Soon after, I began preparing Stay Humble.

At the end of 2014, I spent $10 on a diary, which I consider one of the most valuable investments I have ever made. From that day on, I have been recording my investment decisions and their subsequent developments in my diary. This habit has helped me understand myself and greatly improved me as an investor and as an individual. I have received a lot of valuable feedback and used it to correct my biases. I have also kept a personal record of media commentary and investor behavior during market panics and archived it... I find that whenever the market experiences a cyclical sharp correction, referring to this information is very beneficial. Human behavior in the market hasn't really changed much over time.

——Compounding: 31 Lessons on Cognition and Decision-Making from the World's Top Investors (hereinafter referred to as Compounding)

Starting from 2018, the frequency of my diary entries increased rapidly. I experienced the brutal bear market in India from January 2018 to February 2020, followed by the March 2020 crash triggered by the COVID-19 pandemic. By the time the bear market ended, I had transformed from a highly concentrated portfolio focused on cheap stocks into an investor emphasizing quality and careful diversification. This experience deeply ingrained in my mind the importance of resilience and endurance — the two keys to compounding. Stay Humble tells the story of my transformation as an investor during the bear market, along with my reflections and insights from that process.

The bear market teaches us that fraud by management teams or downturns in business models can inversely affect the development of a company, containing cruel mathematical truths. This is when we truly grasp the profound wisdom of Andy Grove: "Bad companies are destroyed by crisis, good companies survive it, and great companies are improved by it." This is the catalyst for a transformation phase, where investors can take big strides to start rebuilding their portfolios, incorporating high-quality, strong companies. The key is not to succumb to greed in the future bull market.

——Compounding

As India's bear market intensified in June 2018, my learning process accelerated. I began leaving a large number of records in my diary. There was an important reason for this.

The best lessons always come from bear markets, and the fruits of these lessons can benefit you for a lifetime. Never let a good bear market go to waste.

——Compounding

Readers of Compounding will remember the following diagram at the beginning of the book, as well as my annotations on it. This is the effect of compounding. After years of relentless effort through repeated setbacks, the result I achieved in 2018 is shown in Figure 0. Resilience is an incredibly powerful force.

Readers of Compounding, having grasped the basic investment principles in the book, are now about to enter the exponential growth stage of this J-curve, experiencing the power of the compounding mechanism, just as I did from mid-2018 onwards. Although the stock names and case studies are mostly from the Indian market (my personal portfolio is primarily focused on India), the knowledge and investment principles are largely universal, timeless, and applicable globally.

I wish all my readers great success in their lives and investment careers.

Price: 69.00 yuan

ISBN: 978-7-5217-8375-9

CITIC Press Group

April 2026

Summary

Be humble about individual stocks, be humble about industries, be humble about the market.

Survival is the only path to wealth.

The Indian stock market has been surging, becoming a legend among emerging markets. However, amid the long-term uptrend, the Indian market also once hit rock bottom.

Starting from 2018, the Indian market experienced a brutal bear market. Every week, a batch of stocks was beaten to the floor. There were occasional market recoveries in between, until February 2020 when the market completely crashed amid global panic. In the volatility, many mid-cap stocks became small-cap stocks, and then micro-cap stocks. Only high-quality stocks could wait for the dawn. Amid doubt and suffering, amid the screening of value versus price, the author fully recorded the investment insights from this period before dawn:

Buying and holding is not as good as buying right and holding.

Expensive has its reasons, cheap has its causes.

The best strategy is the one that performs best even when the market is at its worst.

People should first focus on their personal career development to obtain ample cash flow for investing.

Over the long term, the market will keep cycling up and down. In this process, there will always be individual stocks that multiply tenfold or a hundredfold.

If you don't have a healthy body to enjoy wealth, making more money is meaningless.

The golden rule of investing is that there are no fixed rules. The only way to survive long-term in the market is to adapt to change. Respect the market, adapt to the market, and harvest the J-curve of your own wealth and happiness.

About the Author

Gautam Baid

Chartered Financial Analyst (CFA). Managing Partner of Stellar Wealth Partners India Fund, which is open to qualified investors in the United States. Equity Advisor for Complete Circle Stellar Wealth PMS, which provides portfolio management services to Indian citizens and Non-Resident Indians (NRIs). Author of Compounding: 31 Lessons on Cognition and Decision-Making from the World's Top Investors.

Translator

Qiao Jiangtao

Primary market investor. Has translated over ten books including The Turtle Trader, Deleveraging: The Investment Strategy for a Slow Growth and Deflationary Era, etc. Graduated with a bachelor's degree from East China University of Science and Technology and a master's degree from Renmin University of China.

Contents

Chapter 1 Panic Spreads Everywhere

To achieve success in stock investing, you must learn to be unaffected by stock price fluctuations

In investing, everything depends on the increment

Broad market corrections provide an opportunity to correct mistakes at a relatively low relative cost

The best investment strategy is the one you can stick with through multiple market cycles

Don't choose between growth and value; seek "growth at a reasonable price"

Chapter 2 A Bear Market Disguised as a Bull Market

Never waste a bear market that spares neither quality stocks nor junk stocks

What happens in the market is not always logical

Luck and risk are eternal components of the investment game

As long as a high growth rate can continue, an expensive quality stock will not become cheap – on the contrary, it will go from expensive to more expensive

Risk often comes from somewhere you least expect

Chapter 3 All Due to Greed and Fear

Great investors understand long-term capital cycles

Investing is an art of negation – knowing what not to do is more important than knowing what to do

A good investment is an unusual balance – firm confidence in your investment philosophy on one side, flexibility to admit mistakes when wrong on the other

You can only win by surviving long enough in the investment game

Buy good companies at a reasonable price, then just wait, ignoring the noise

Chapter 4 It's Always Darkest Before the Dawn

Adhere to a sound process, not obsession with achieving the best result in every trade

Stock investing is about maximizing the probability in our favor

Survival is the only path to wealth

Acknowledgments

References