[Red Envelope] Brother Bai Bei reads Chapter 12 of the "Tao Te Ching": Excessive desire is the biggest obstacle in investing!

Chapter 12

The five colors blind the eye;
The five sounds deafen the ear;
The five flavors dull the palate;
Chasing after hunting and racing makes the heart go wild;
Rare goods hinder one’s progress.
Therefore, the sage prefers the stomach over the eyes,
And so he abandons the former to take the latter.

In the previous section, we discussed the dialectical unity of existence and non-existence, the importance of a humble mind, leaving space in operations, and continuous learning and iteration—these are the prerequisites for sustainable and stable profits.

In Chapter 12, Laozi directly clarifies: no matter how high your knowledge, how systematic your approach, or how strict the rules, once driven by desire, you will still suffer total losses.

The biggest mistake investors make is the mismatch between desire and ability. We have repeatedly explained this principle, and it has been emphasized several times in earlier chapters.

This chapter is the most poignant, realistic, and closely related to retail investors’ daily lives in the entire Tao Te Ching. It does not discuss profound theories but directly exposes investors’ inner selves: the greatest risk in the market is never the market itself, but your inner desires—desire mismatched with ability. Wanting too much with too little effort, expecting too many gains with little understanding.

It can be said that every major loss you have suffered in the market can be traced back to this root.

1. The five colors blind the eye: The more dazzling the market, the harder it is to see the truth

Five colors refer to vibrant, dazzling hues that dazzle the eyes. Seeing too many, too chaotic, causes eye fatigue, and eventually, one sees nothing—this is called “blindness.”

In investing, continuous limit-up days, soaring speculative stocks, screens full of excitement, trending sectors hyped online, and the lively atmosphere of everyone acting like stock gods are all examples of five colors. The more brilliant and glaring these are, the more chaotic people’s minds become. When the mind is chaotic, the eyes are blind.

The market is adept at using the most dazzling appearances to hide the most dangerous truths. During big surges, some believe they are destined; in madness, some think this time is different from the past; at the peak, some believe the rise will last forever, even developing “faith.” When the tide recedes, they realize they have been swimming naked. It’s not that the market is too ruthless, but that you have been blinded by the “five colors.”

True experts are never fooled by superficial rises and falls. They are not blind because their hearts are not blind; their hearts are not blind because they adhere to rules, suppress desires, and see the laws clearly.

2. The five sounds deafening: The more noise, the harder it is to hear the true voice of the Tao

Five sounds refer to the musical notes of gong, shang, jue, zhi, and yu, representing various noisy sounds.
When the ears are overwhelmed by too many, chaotic, and loud noises, one becomes deaf, unable to hear the true voice.

In investing, predictions from various experts, rampant rumors, anxious celebrations in stock forums, myths of quick profits in short videos, and daily endless good and bad news are all five sounds. The more chaotic the noise, the more anxious the mind; the more anxious, the more chaotic judgments become, making it easier to lose direction.

Many retail investors do not lack understanding of the market but are “deaf.” They cannot hear their own system’s voice, only the shouts of others; they cannot hear the rules’ warnings, only the temptations of quick profits; they cannot hear the warnings of risk, only the impulses to hold full positions.

Experts’ ears are “closed.” Not because they cannot hear, but because they only listen to rules, ignore noise; trust the system, ignore rumors; focus on laws, ignore emotions.

3. The five flavors delight the mouth: The more stimulation, the easier it is to lose judgment

Five flavors are sour, sweet, bitter, spicy, and salty—various intense tastes.
When the flavors are too strong and stimulating, they can ruin the palate, making it impossible to taste the true flavor, called “mouth delight.”

In investing, some are obsessed with the intense stimulation of trading—the thrill of chasing, the ecstasy of profits, the excitement of limit-ups, the addiction to frequent buying and selling.
The more刺激, the more numb the person becomes; the numbness leads to loss of control.

Many retail traders are not truly investing but seeking stimulation. They feel uneasy without trading for a day, anxious without watching the market, and restless without chasing hot stocks. They make more mistakes, and mistakes lead to more mistakes, falling into a vicious cycle.

Experts do not pursue刺激; they pursue规律; they do not chase快感; they follow rules; they do not seek quick profits; they aim for long-term survival.

4. Racing and hunting make the heart go wild: The more狂, the faster you die

Racing and hunting involve riding horses, wild奔跑, and放纵欲望. When one indulges to the extreme, the heart becomes狂, losing rationality.

In investing, this is the most terrifying state.

What does it mean for the heart to go狂?
Rising and追逐, falling and慌乱;
Turning红 and飘飘然, green and割;
Making profits and becoming arrogant,亏损 and seeking revenge;
Encountering行情 and going all-in,赌身家 and赌命运.

A狂心的人 has no rules, no bottom line, no敬畏. They only see profit, not risk; only冲动, not思考; only欲望, not restraint.

The market is the best teacher and the harshest judge. Heaven and earth are仁, but the market has no情感; it does not show mercy, only follows规律. It punishes disobedience and狂乱. We discussed this in Chapter 5.

5. Rare goods hinder progress: Obsession with暴利 leads astray

Rare goods are treasures, scarce and valuable. When one excessively追求 these, they behave abnormally and take risks—this is called “行妨.”

In investing, rare goods refer to overnight riches, doubling妖股, blindly赚钱, and effortless gains.

Many enter the market not to invest but to dream. They obsess over暴利 beyond their认知, fixate on copying others’ big wins without effort, and dream of一夜翻身 and财务自由.

For these obsessions, they do not learn, do not think, violate rules, heavily leverage, chase高点, buy at the top, refuse to止损, ignore风险控制, and dismiss advice. They see traps as opportunities; cliffs as平坦大道.

The fairest place in the market is here: the money you earn with luck will be lost with实力. The profits you obsess over that do not belong to you will be taken back by the market with interest.

Experts do not贪图“难得之货”; they only earn within认知; they only trade within规则; they only seize opportunities within their能力圈.

6. Therefore, the sage prefers the stomach over the eye; abandons the former to take the latter

Here, Laozi offers the only way out for investors: prioritize the腹 over the目, abandon the former to take the latter.

What is “for the eye”? It is chasing appearances,刺激,虚荣, and success in others’ eyes. Following hot trends,贪暴利,乱操作, and being led by情绪.

What is “for the腹”? It is追求规律,追求趋势,追求周期,追求规则, and追求长久复利.守系统,守纪律,守认知,守敬畏.

Those who chase appearances are educated by the market; those who prioritize the腹 are rewarded by the market. Abandoning the superficial and embracing the essential is the correct choice in investment.

This chapter is not about sensory pleasure but a warning to all investors. The chaos of五色 makes you blind to the truth; the noise of五音 deafens your ears to规律; the obsession with五味 destroys judgment;狂乱 makes your心态崩盘; the pursuit of rare goods leads to冒险.

Knowing these are wrong, the more热闹 the market, the calmer we should be; the more诱惑, the more坚定; the more欲望, the more戒. Use戒定慧 to counter greed, anger, and ignorance.

By守住规律,守住规则,守住自己, you can live steadily, go far, and earn long in this market.

In the next chapter, Laozi will continue discussing how to remain calm amidst荣辱, how to value大患 as if it were one’s own body, and how to achieve indifference to涨跌,盈亏.