The most important principle of investing is to avoid high-risk sectors.

1. Understanding low-risk assets: Low-risk assets do not specifically refer to undervalued assets, but rather to the fact that a company has an inherently antifragile business model and can be reasonably expected by the market to be a high-growth company if specific conditions are taken into consideration. Low-risk investing and growth investing are not contradictory at all and can even be combined. Low-risk growth investing pays particular attention to the sustainability and visibility of a company’s growth, i.e. the certainty of its growth.

2. Understanding market expectations: Companies whose value has been fully priced by the market and who face excessively high expectations should be avoided. Once assets are fully expected, bubbles will forma, making future stock price adjustments inevitable.

Investors may tend to think that great opportunities appear at dangerous moments, but we have to recognize the limitations resulting from inadequate research, incomplete information, the non-linearity nature of technological progress, the volatile external environment, and avoid paying an excessively high premium to the market or to a company we personally like.

3. Understanding long-term opportunities: Long-term and short-term perspectives on risks and opportunities are often contradictory. At the tail end of a bear market, from a long-term perspective, comes the best time for investing. In this situation, a short-term perspective can only lead to pessimism on the current market. At such a moment, we should decisively seize the long-term opportunity and do the “right” thing.