"Buying stocks means buying businesses." Everyone says it — but very few people actually invest that way.
Many people call themselves value investors, but what they really care about is the stock price — happy when it goes up, nervous when it goes down. When they buy, they think, "Will it rise tomorrow?" instead of, "Will this company still make money five years from now?"
I always say: when you buy a stock, you should treat it as if you're buying the whole company. If you don't know what the business does, how it makes money, and where its strengths are, then you're not buying a company — you're buying a lottery ticket.
The logic of value investing is simple: buy a good company at a fair price and hold it for the long term. But in practice, the hardest part is just sitting still.
Buffett once said that the essence of value investing is "buying a good business and then waiting." That "waiting" sounds easy — but it's not. It's hard when everyone else is making quick money and you're doing nothing. It's hard when the stock drops and your heart starts racing. It's hard when no one agrees with you and you start doubting yourself.
When I invested in NetEase back then, the stock fell from $1 to $0.70, and I kept buying. Because what I cared about was whether the business could make money in the future — not whether the stock would go up tomorrow.
Here's a simple example. If you were opening a restaurant, you'd look at the location, the menu, the regular customers, the profitability, and whether it could make money for years to come. You wouldn't sell the business just because it had a slow day. You wouldn't buy a competitor just because its valuation went up.
It's the same with stocks. Stop staring at the price. Look at the business. You're not buying a ticker symbol — you're buying its ability to make money and grow for decades.
The market doesn't reward the smartest people — it rewards the most patient. Most people can't hold onto a stock not because they don't understand it, but because they can't resist reacting.
Stock prices change every day, but the company's real value doesn't. Short-term ups and downs are just noise. What truly matters is whether the company is getting stronger.
In the end, value investing isn't rocket science. It's not about how sophisticated your models are — it's about whether you can stay calm when everyone else panics, and stay patient when everyone else rushes.
Conclusion: "Buying stocks means buying businesses." Everyone says it, but very few truly live by it. If you can really think like a business owner — study the business before you buy and sit through the test of time after you do — you're already ahead of most people in the market.