The core logic of value investing, these key points must be mastered

【Counteracting Market Sentiment】

The market is like an emotional guy, quoting prices every day. Today he's excited, shouting everything higher; tomorrow he's downcast, pushing everything to the floor. Most people follow his emotions—when he's happy, they buy; when he's sad, they sell—resulting in being cut to pieces.

The true profit logic is the opposite: when others are frantically chasing highs, you need to stay calm; when everyone is selling off, you need to see clearly. Use the market's overreactions to your advantage, rather than being hostage to them.

【The Importance of Margin of Safety】

Before buying, ask yourself a key question: how big is the gap between this price and the true value? If an asset's true value is 100 dollars and it's currently selling for 60 dollars, there is a margin of safety.

Margin of safety is your insurance, protecting you when market judgments go wrong. Without a margin of safety, entering the market is playing with fire—slight market reversals could lead to liquidation.

These two principles sound simple, but very few people truly practice them.