Investment Book Reading Notes and Insights
On a day at the library, I immersed myself in two investment-related books, which gave me a more comprehensive understanding of investing.
The first book is about the detailed explanation of MACD, written by an old stock trader with twenty years of investment experience, who reportedly achieved a 60% return for five consecutive years. However, in my view, five or six years of performance is not sufficient to fully validate the reliability of his methods; sustained stable performance over more than a decade is more convincing.
What concerned me most about this book was the underestimation of risk—risk warnings account for only 1/20 of the entire book, and the suggested operations are mostly to buy or sell all at once. This method may align with the trading habits of some retail investors, but if one fails to sell in time, it can easily lead to significant losses. Nevertheless, the book also contains valuable insights, such as the suggestion to use long-term indicators with a strong lag for investment, embodying the idea of “playing slow against fast, playing long against short,” which can enhance the win rate to some extent.
Some phrases in the book inspired me: “Buy when the annual line turns back,” “Buy high sell low,” “Short hands short feet,” etc., all contain the wisdom of practical summaries. I specifically compared it to Bitcoin’s trend and found it currently in the “short hands short feet” stage, while the price is high. Whether it will surge or decline later is still uncertain; I personally tend to be bullish, but if it breaks the 30% support line at around $65,500, the trend would deteriorate, and I can only acknowledge the arrival of a bear market.
Subsequently, I read a game theory book written by a Japanese author. The content is profound but not easy to read; it requires a certain level of logical thinking ability and an understanding of social games to grasp it deeply. I adopted a method of first looking at the conclusions, skipping unfamiliar derivations, and digesting the details during a second reading, which neither affected overall understanding nor hindered efficiency.
The greatest insight game theory gave me is that one should escape at the peak and lower expectations in investing. If one fails to exit in time and gets trapped, it is extremely unprofitable from a game theory perspective. The book’s explanation of the “Prisoner’s Dilemma” also filled a knowledge gap for me. Financial and investment knowledge is like a puzzle; only through gradual accumulation can blind spots be reduced.
Currently, I read about 30 books a year, which is not fast, but investing requires lowering expectations. In the future, I will maintain a conservative position until my knowledge system is complete. $SOL $BNB
