1. A short story.
The 2017 Nobel Prize winner in Economics, Richard Thaler, and his research team studied a group: taxi drivers. In many cities, the taxi business has its peak and off-seasons. Suppose you are a taxi driver; how would you handle the business during these seasons?
If you focus on the money, you usually act like this: during peak season, you start your shift at 8 AM and by 3 PM, you count your money and think that's enough for the day, so you wrap up and go home. But in the off-season, if you haven’t made enough by 8 PM, you think about the company's share of money, realizing you haven’t even earned today’s gas money, so you keep driving on the street. This is the normal reaction of a person.
If we take a step back, this behavior pattern seems foolish. What characterizes the peak season is that you earn more per unit time when driving on the street, so of course, during peak season, you must work hard, wanting to work from 8 AM to 10 PM. But during the off-season, since I am still driving on the street, the earnings are relatively smaller, so it’s better to rest, take care of my health, and spend time with family. That is the right approach. So you see, as long as your target is wrong, like when aiming for the income of taxi driver Maoding, your actions could be misguided.
2. The bear market is the best learning opportunity.
When the bull market comes, there is simply no time to learn because even sleeping feels like a waste of precious money-making time. Then, there’s no time to learn. If you tell someone, 'You should study well first,' they will probably roll their eyes at you in their hearts, thinking, 'Don’t hinder me from making money.'
During last year's bull market, many people were flying around every day, looking at projects for investment, leaving only a little time to sleep. The market was rising, making your heart race and keeping you awake all night.
Learning is for better earning. According to the examples mentioned, the bull market is like the peak season for taxi drivers, where you earn more per unit time, so you have to work hard, look at investment projects, monitor the market, and change cars, etc. (of course, the prerequisite is having those capabilities). The bear market is like the off-season for taxi drivers, where you earn less per unit time, thus it's better to rest more, learn more, and spend time with family.
From an economic perspective, learning during a bear market is cost-effective. However, to make money in a bull market, you must have a high level of understanding; otherwise, you might miss the opportunities right in front of you.
3. There are also opportunities to make money in a bear market.
Now many friends are still mainly trading by buying the dip and selling at a high. Accumulating assets in a bear market is indeed a good method, but now we live in a fast-paced era, and so does investment. Even if you are holding assets, the feeling of being stuck is not pleasant. Many investors are already under a lot of pressure, and being stuck directly affects normal life. Many fans privately message me saying that even though they know they can make money by holding assets in a bear market, they will never do it again because the waiting time is too torturous. Moreover, time cost is also a cost; if there is no multiple return, it is not worth it, bringing too much anxiety. The time being stuck makes a person look haggard. However, there are now many new investment methods, such as short selling, which can make money in a bear market by going short. When the market turns, you can buy long again. This way of two-way trading eliminates the worry of being stuck and is more efficient; a bear market can also bring profits. Recently, big market movements have been happening at night. Some fans say that they open a short position before sleeping and wake up to find they've made a fortune. This kind of statement is indeed valid. In this era, following the trend is what makes a person capable. The short selling platforms in the country are also developing rapidly, with many that allow for direct trading, which is very convenient, like UEX and Huobi, which are the largest platforms for domestic users.