Ordinary people want to profit in the market primarily by seeking opportunities of mispricing.

In 99% of cases, market pricing is effective, and most ordinary people cannot profit in such an environment because potential profits have already been calculated and allocated by smart people, institutions, and insiders in the market.

Opportunities for mispricing generally manifest in two forms:

1. Finding ineffective markets: Generally, these markets are relatively new, filled with public biases against them, and competition is not intense. For example, various arbitrage opportunities, '土狗' (local dogs), etc.; this is also commonly referred to as: alpha. This requires you to have a keen perception of information and the ability to quickly learn the rules to find potential loopholes.

2. Waiting for that 1% ineffective moment in the market: Most of the time, maintain a low-risk exposure, engage in arbitrage, and earn interest. When the market pricing is irrational and ineffective, profit from others' mistakes. For example, buying on the dip during a crash or buying puts during a frenzy with a certain position.

Why does Buffett hold a massive amount of cash for years? Why does Seth Klarman typically only hold a 50% position? Why does Howard Marks always wait for a market crash to pursue extreme moments of the market pendulum?

Because one good opportunity is worth more than 100 mediocre ones; opportunities for massive profits arise when buying at extreme discounts. Indeed, what you need to do is very simple: assess the value of the asset and then wait to buy when the market is ineffective; at this time, the market is giving you money.

Of course, achieving this is not easy: talent, effort, the courage to step out of your comfort zone, independent thinking against authority, patience, and a good mindset, among others, are all indispensable.