Let's talk about my approach to trading in the US stock market

In the comments of yesterday's article, an old reader pointed out that I made a serious mistake when stating the data about Buffett's stock holdings during the online discussion last Saturday.

I later checked the data online and indeed found that my statement "the market value of Buffett's stock holdings (outstanding shares) is several trillion" was incorrect.

According to the latest data, the market value of the outstanding shares held by Buffett is actually only around several hundred billion.

I will be more rigorous in verifying and checking data in the future.

I would like to thank this reader here and apologize to the audience.

It is truly touching that this reader listened so attentively and carefully, able to spot such an error. This shows that they must have conducted serious research and thought about this type of news beforehand, which is a spirit worth learning!

Regarding why Buffett holds a high cash position, I remember a similar question was asked by a reader during a discussion last year.

In fact, Buffett has repeatedly explained his behavior, and the reasons boil down to the following:

• He feels that the prices of certain stocks are simply too high, or he believes that the companies behind these stocks have undergone fundamental changes that he does not favor, so he sold them.

• He needs cash for certain reasons, such as tax purposes, and sold some stocks.

• He discovered stocks with better investment value, so he sold some stocks to free up cash for acquisitions.

• He realized he made a serious mistake in understanding a company behind a certain stock, so he sold it.

Additionally, Buffett has repeatedly emphasized: he never understands how to predict the future trends of the U.S. stock market, does not know when the Federal Reserve will raise or lower interest rates, and does not understand how to predict the future trajectory of the U.S. economy.

However, the outside world often does not believe this statement.

As for the fact that the outside world often finds that whenever Buffett holds a large amount of cash, the U.S. stock market tends to experience unexpected events, I think it might be because Buffett has reached a certain level where he doesn't need to predict major trends; he can sense changes that ordinary people cannot just by looking at the prices of certain stocks.

The ancient saying "a leaf knows autumn" might be the reasoning behind this.

Regarding the U.S. stock market, I also shared my operations during the discussion last Saturday:

I feel that the current price levels of U.S. stocks are definitely not low; I can't judge specifically, and I feel uncertain, so I sold all the various indices I held. Even if they might rise to the sky next, let it be; for a while, I won't look at the indices.

As for individual stocks, I have Alibaba, Tesla, and a few other stocks.

Regarding Alibaba, I remember mentioning in a discussion around the end of last year or the beginning of this year that among Chinese AI companies, I would probably only buy two: one is Alibaba, and the other is ByteDance.

Because I believe the founders of these two companies have extraordinary vision and insight.

Unfortunately, ByteDance is not listed, so I only bought Alibaba.

As for Tesla, I wrote in an article long ago that I was very optimistic about it.

But now, Musk's deep and enthusiastic involvement in politics is really headache-inducing.

The key is:

His way of engaging in politics is not the usual collusion between politics and business, but rather an idealistic approach to reforming the bloated U.S. government, drastically cutting down on a large number of bureaucrats who are just coasting along, doing nothing, and taking money for nothing.

Moreover, he has pretty much offended the Democrats, and he is also alienating people on the Republican side.

The scope of this offense is too large; how many grudges is he creating?

As long as one of those he has offended gains power in the future, it is very likely that they will take revenge on Musk and his company.

So I sold half of my Tesla shares but still kept half.

Musk's recent actions remind me of Shang Yang.

Shang Yang's reforms successfully established the Qin system, and it can even be said that he pioneered the "Qin governance system that lasted for a hundred generations," but Shang Yang's personal ending was tragic; he was ultimately eliminated by the old nobility he had once offended, who imposed charges against him.