Game of wealth re­quires strong will power

China Daily (USA) - - BUSINESS - By HUANG XIANGYANG Con­tact the writer at huangx­i­angyang@chi­nadaily.com.cn

Believe it or not, I read The True Story of Ah-Q, by renowned con­tem­po­rary Chi­nese writer Lu Xun, not as a lit­er­ary work, but a guide­book to suc­cess­ful in­vest­ment, ei­ther in com­modi­ties, stocks or funds.

The game of wealth is, in essence, all about hu­man psy­chol­ogy. In or­der to sur­vive in the money mar­ket, you not only need to have trad­ing tech­niques, an­a­lyt­i­cal skills or self dis­ci­pline, but also ex­cep­tion­ally strong will power.

You must re­main calm and re­sist the temp­ta­tion to sell be­fore your stocks peak. You must re­main un­fazed even amid dras­tic stock falls dur­ing cor­rec­tions in or­der not to be scared out of the game.

And most of­ten, you need to laugh off your mis­takes and losses so that you can al­ways bounce back from your lows. The ease with which you can poke fun at your­self, to make a mock­ery of your own fol­lies, no mat­ter how hard you were de­feated, is a se­cret you must learn to re­main un­beat­able in the mar­ket.

You need to look no fur­ther than Ah Q for in­spi­ra­tion. The main char­ac­ter of the short story, pub­lished in 1921, is a house­hold name in China for his abil­ity to al­ways trans­form de­feat into spir­i­tual vic­tory.

Ah Q is al­ways the win­ner. Af­ter los­ing a for­tune, he would slap him­self in the face as if he was hit­ting at an imag­i­nary op­po­nent to let go of the anger. When he is beaten by some­one, he would think it is as if he was beaten by his own son, and lament “what the world is com­ing to nowa­days”.

Just by chang­ing his mode of think­ing, Ah Q can find hope from de­spair, and turn ad­ver­si­ties to his ad­van­tage.

This mind­set is ex­actly what you need for in­vest­ment.

But to know the the­ory is one thing, to be able to ap­ply it to trad­ing ac­tiv­i­ties is an­other.

Ever since I started dab­bling in stocks more than 15 years ago, I have tried to see my losses as tu­ition fees I have to pay for a course on how to get rich quick.

But as the ex­penses keep in­creas­ing, to the ex­tent that even pos­si­ble prof­its to be made are un­likely to make up for a frac­tion of my fi­nan­cial in­put, it is hard for me to per­suade my­self to con­tinue with this costly course.

Af­ter a lot of soul-search­ing, I found the gist of the prob­lem: my ego. For too long I had been too self-cen­tered, con­cen­trat­ing too much on per­sonal gains and losses rather than pub­lic good. Life should not be about what you can get, but also what you can give. To find some­thing big­ger than my­self, I had to break down the walls of self­ish­ness and self-pity, and set my sights on a broader hori­zon. And it worked. Years ago I started to in­vest in a fund that tracks the bench­mark Shang­hai Com­pos­ite In­dex. At times af­ter the 2008 global fi­nan­cial cri­sis, the in­dex dropped to such lows that they sug­gested an im­mi­nent melt­down. Yet in­stead of cut­ting my losses, I put in more money, dou­bling or even tripling my ini­tial in­vest­ment. I was em­bold­ened by the thought that even if the mar­ket crashed withmy per­sonal wealth all gone, I could still have some­thing to rel­ish: I was do­ing pub­lic good play­ing the role of the ter­mi­na­tor of a mar­ket re­ally sucks.

Strange idea, wasn’t it? But it sus­tained me through the worst days for the mar­ket un­til it re­bounded last year, al­low­ing me to come out with prof­its.

Now I have built a fund port­fo­lio re­lated to crude oil, whose price has dropped from more than $100 a bar­rel in 2014 to around $45 at present, and I keep pump­ing my spare money into it.

Am I afraid of los­ing heav­ily if oil prices crash due to muchtouted ad­vent of an era of new en­ergy? Then wouldn’t it be good news for hu­mankind, and es­pe­cially Bei­jing, which has too of­ten fallen vic­tim to smog?

No mat­ter what hap­pens, with Ah Q’s mind­set I can al­ways stay se­cure and sat­is­fied — prof­its guar­an­teed or not. that

QI WEN / FOR CHINA DAILY

Investors talk about stocks in a se­cu­ri­ties trad­ing cen­ter on Tues­day in Fuyang, a city in east­ern China’s An­hui prov­ince.

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