In investing, understanding is more important than being "comprehensive".

Recently, I came across two very interesting pieces of news. What’s even more interesting is that if you put these two pieces of news together, it can highlight some of the essence of investing.

The first one is that recently when I was browsing Twitter, for some reason, the platform often pushed videos of Mr. Buffett criticizing Bitcoin as rat poison.

The second piece of news is that recently, some netizens joked about Duan Yongping, saying that he misjudged XX company. Duan Yongping's response was very calm: he has misjudged many companies, and what's important in investing is not whether you misjudged a company, but whether you made a significant investment in the companies you understood and believed in.

The essence of the second piece of news is simply a seamless elevation of the essence of the first piece of news.

I used to seriously criticize and mock Buffett's views on Bitcoin when I wrote articles early on. But now I completely see it differently.

It is not because I think Buffett's view on Bitcoin is correct, but because I believe that Buffett avoids things he does not understand and strictly adheres to his cognitive boundaries, which is something that very few people can achieve. It is precisely this character that can lead to real achievements in investing, and it is precisely this character that is extremely scarce among investors.

Everyone's perception has its limits, and once it exceeds their cognitive boundaries, there are likely to be two outcomes:

The first is to make reckless operations on investment targets that one does not understand, leading to losses;

Second, missing the opportunity to invest in this investment target leads to not making money.

The first one is a big pit.

The second situation is the one described by Duan Yongping. In fact, this situation does not affect the investment results at all. Not only does it not affect them, but it is also a great strategy for many investors to perfectly avoid pitfalls.

Investing does not require seizing every opportunity; it is enough to grasp the opportunities that belong to you. As Duan Yongping said, heavily investing in assets you understand can yield very good returns, and there is no need to regret the opportunities you missed. Because those so-called missed opportunities are often things that are beyond your understanding and do not truly belong to you.

Warren Buffett's views on Bitcoin are certainly debatable. However, Buffett's approach is completely justifiable; since it exceeds his understanding, he chooses not to invest in Bitcoin and instead focuses on excelling in areas within his comprehension.

What is scary is that it clearly exceeds understanding, yet still insists on making bold moves outside of that understanding; this is the first situation mentioned above.

In this situation, let's take a look at many participants in the crypto ecosystem; how many of them truly understand or believe in Bitcoin?

I estimate not much, their so-called trust is just because they were convinced by the price increase.

It's very likely that their true opinions are exactly the same as the old gentleman's, but nonetheless, they still want to buy Bitcoin.

Why?

It's not about understanding, but rather speculation----- regardless of whether it has value, it's still going up, so let's ride this wave of trend first, make some money and then talk.

In the future, when the bear market arrives and Bitcoin plummets, their true thoughts will be revealed: Bitcoin is not viable and has no value.

So in reality, Bitcoin is beyond their true understanding; they themselves do not really understand it, nor do they truly believe it has value, yet they want to operate back and forth on something outside this understanding due to their speculative mindset.

The result of this operation is obvious without much thought: it will definitely lose money.