Inspiration from Dadao's purchase of GE stock - Outbound compliance, secure, encrypted digital currency exchange platform

On March 29, 2013,

Da Dao shared on his blog why he bought GE,

which is very worth learning from,

and through his sharing,

I was greatly inspired.

In his early years of running a business, Da Dao began paying attention to Panasonic and GE,

later, he abandoned Panasonic after finding issues,

but he was deeply impressed by GE’s famous CEO Welch,

then he started to delve into why GE is a conglomerate (founded in 1892, with a history of 133 years up to 2025),

this stems from business management problems,

how can my company be as enduring as GE?

so he further studied the company’s culture.

At the same time, he also started to pay attention to GE’s stock,

but felt it was not cheap,

so he never bought it.

This reveals a person’s curiosity,

without curiosity, one wouldn’t dig deep.

Curiosity is probably the most persistent productivity in this world.

About more than 10 years later,

we arrive at the 2008 financial crisis,

In September 2008, Lehman Brothers collapsed,

then the entire market was panicked,

Da Dao felt that his “greed” was about to be triggered,

In the same year, on October 16,

Warren Buffett published an article titled “Buying America, the Right Time.”

But he didn’t buy GE immediately,

instead, he started buying when GE fell below $10 in February 2009,

buying from $9 down to $6,

then back up to $12 and continued buying.

He raised funds everywhere to buy.

He went all in.

His approach was to buy more as the price fell,

becoming more excited as it dropped,

even wanting to leverage with financing to buy more,

but based on his principle of doing the right thing,

he stopped.

This story gave me a big insight: in this process,

one is time,

Da Dao took at least 10 years from paying attention to the company’s culture and stock to actually buying the company,

I wonder how long today’s A-share investors have been understanding a company before buying?

Is it more often that they don’t even understand the company or only scratch the surface?

Understanding a company is not easy,

harder than earning a master’s degree,

it takes a long time,

after spending a lot of effort to understand the company,

you still need to wait a long time.

Here I propose my own principle: after understanding a company (maybe it takes three years to understand),

then wait calmly for three more months,

only then can you consider starting the waiting period.

How long to wait exactly,

I don’t know.

Another insight is calmness,

Da Dao didn’t buy GE right at the start of the financial crisis,

nor did he buy when Buffett published his article encouraging everyone to buy US stocks,

but based on his understanding of the company,

after evaluating its intrinsic value,

he started buying,

this is another timing skill,

the entry point,

margin of safety.

Da Dao also said that the absolute value of the returns this company brought him that year was the highest,

but it was because he took the heaviest action,

not because of the biggest increase.

He still believes this is the best outcome,

because he took the heaviest action,

and sleeps well.

When you truly understand a company,

you will naturally have your own judgment on its value and price,

and you will know the price at which you’ve waited long enough to make your move.

Da Dao gives us a broad path of investment,

but how to walk this path,

still depends on how we understand and act.

Finally, I pose a question to fellow investors: how do you think you can truly understand a company?

If you understand companies like Moutai,

Anker Innovations,

Jinbo Bio,

Xiaomi Group, etc.,

how much time are you willing to spend waiting for your ideal entry point?