The principle of the circle of competence is one of Buffett's most classic investment criteria. Its core is that investors should focus their energy on companies they truly understand. Duan Yongping's bold investment in Apple is precisely due to his deep understanding accumulated in the consumer electronics industry. His precise analysis of Apple's moat also prompted Buffett to become a shareholder in Apple and reap substantial returns.

Buffett once vividly compared the focus on finding a 'one-foot-high fence' to easily cross rather than challenging the unattainable 'seven-foot obstacle.' He has always adhered to the principle of selecting investment targets only in familiar fields, and even if unfamiliar industries seem to have unlimited prospects, he resolutely remains unmoved.

In contrast, do most investors truly understand the companies they hold? Are they sure their value is underestimated? The reality is that due to a lack of in-depth understanding, most people not only find it difficult to hold onto their investments but also struggle to escape the dilemma of losses.

Building a personal circle of competence is not an overnight process; it requires systematic learning, in-depth reading, meticulous research, and field investigations to continuously expand the boundaries of understanding in specific areas. Only in this way can one be confident and steady in investments.