Kingdom Sword: A Wise Guide to Stock Investment

Author: Yin Hong, Hu Hongxia / Country: Mainland China
Publisher:
Publish Date: 2005-06-01
Features: Chapter Stock Swordsmanship
Section Learning the Sword – Keep One Eye on Self-Reflection
In modern Japan, there were two top swordsmen: Miyamoto Musashi and Yasunori Yagyu. Musashi was Yagyu’s master. When Yagyu began learning the art of swordsmanship, he asked Musashi, “Master, based on my talent, how long will it take to become a top swordsman?” Musashi replied, “At least ten years.” Yagyu said, “Wow, ten years is too long. If I train twice as hard, how long will it take to become a top swordsman?” Musashi answered, “Then it would take twenty years.” Yagyu looked puzzled and asked, “What if I don’t sleep at all and train day and night?” Musashi replied, “Then you will surely die. You won’t become a top swordsman.” Yagyu was shocked. “Why?” Musashi said, “The prerequisite to becoming a top swordsman is to always keep one eye on yourself and constantly reflect on your actions. Now, both of your eyes are fixed on the title of a swordsman. Where is the eye to look at yourself?”
After hearing this, Yagyu broke into a sweat and immediately had an epiphany, eventually becoming a renowned swordsman. The way of the sword is like the stock market. Every investor hopes to become a “top swordsman” and has their own investment goals. However, in securities trading, when we focus all our energy on trading plans and profit targets, our emotions often fluctuate with the market, our mindset gradually loses its calm and balance, and ultimately, we drift farther away from our goals.
Humans need ideals and goals. But if all we see are goals and ideals, we will lose ourselves, fail to understand our own circumstances and abilities, and become unaware of our strengths and weaknesses. Sun Tzu’s Art of War says, “Know yourself and know your enemy, and you will never be in danger in a hundred battles.” If you don’t know yourself, how can you avoid danger? Investors need to keep one eye on self-examination, like a guiding light in the vast sea of stocks, helping them escape the whirlpool of chasing gains and cutting losses. When investing successfully, it reminds them not to forget the risks hidden behind the profits. When the trend worsens, it guides them to choose the right path to break free.
In the ever-changing stock market, keeping one eye on self-examination helps us see into our own hearts, align our investment mindset, review our trading strategies, summarize our successes, reflect on our failures, and always maintain the best investment state. This is the way to successful investing.
Section Short Sword – Recognize Weaknesses to Play to Strengths
A swordsman went to visit a martial arts grandmaster to ask how he had mastered extraordinary swordsmanship. The grandmaster took out a short sword, only about a foot long, and said, “Thanks to this fine sword, I have achieved what I have today.” The swordsman was baffled. “Other people’s swords are three feet and three inches long, but yours is only about a foot. The Sword Spectrum says, ‘A sword one inch shorter, three inches more dangerous.’ Holding such a short sword clearly puts you at a disadvantage. How can you say it’s good?”
The grandmaster replied, “Because I am at a disadvantage in terms of the weapon, I constantly think about how dangerous it is to face others with this sword. So I practice diligently, using my swordsmanship to compensate for the weapon’s weakness. As a result, my swordsmanship keeps improving, and my disadvantage turns into an advantage.”
Retail investors should correctly recognize their weaknesses and avoid them: without information advantages, don’t spread rumors; without capital advantages, don’t fight against institutions; without technical advantages, don’t casually participate in short-term trading. Calm down, play to your strengths and avoid weaknesses, fully leverage the advantage of being a “small boat that turns easily” and the advantage of time costs, and use patience to turn weaknesses into strengths.
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