避其锐气，击其惰归。

Investment Interpretation

This principle emphasizes that chasing the market at its most exuberant moments often leads to poor outcomes. True investment opportunity arises after the initial hype has passed, when market pressure and volatility subside. By avoiding peak momentum, investors minimize risk, enhance the margin of safety, and position themselves to capitalize on sustainable growth rather than short-lived trends.

Key insights:

• Markets often overreact during periods of hype, creating inflated prices and higher risk.
• Acting after the peak allows for better risk-reward profiles and more predictable returns.
• Patience and discipline in timing improve long-term performance and reduce exposure to losses.

Investment Application

Million Leaf applies this principle through strategic patience and calculated entry points:

1. Market Cycle Awareness
   • Monitor macroeconomic trends, sector rotations, and investor sentiment to identify peaks in momentum.
   • Recognize signs of overvaluation and excessive speculation.
2. Wait for Pressure to Fade
   • Allow market volatility to settle before deploying capital.
   • Focus on opportunities where price reflects fundamentals rather than emotion-driven momentum.
3. Margin of Safety Optimization
   • Ensure sufficient buffer between market price and intrinsic value before entering positions.
   • Reduce exposure to investments where upside potential is limited or risk is disproportionately high.
4. Opportunistic Execution
   • Enter investments strategically once market pressure fades, volatility decreases, and probability of success improves.
   • Combine disciplined timing with rigorous fundamental analysis to maximize returns.
5. Avoid Herd Behavior
   • Resist the temptation to follow the crowd during euphoric rallies.
   • Focus on areas where your analysis and edge identify true value and sustainable advantage.

Summary

By avoiding peak momentum and acting when pressure fades, Million Leaf captures opportunities with greater precision, lower risk, and stronger alignment with fundamentals. Strategic patience ensures that investments are made under optimal conditions, enhancing the likelihood of long-term success.