[Red Envelope] Brother Hundredfold reads Chapter 19 of the "Tao Te Ching": Avoid petty cleverness and return to the right path of investing!

Chapter Nineteen

Abandon sage and discard wisdom, the people will benefit a hundredfold;
Abandon benevolence and forsake righteousness, the people will return to filial piety and compassion;
Abandon cleverness and give up profit, there will be no thieves or robbers.
These three are merely words, not enough.
Therefore, let there be something to hold onto:
See simplicity, embrace purity, and cherish simplicity.

In the previous chapter, we discussed how “the Great Way is abandoned, then benevolence and righteousness appear”; how “wisdom emerges, then great falsehood arises,” making it clear that the more investors chase after market noise, the more they stray from fundamentals. When the proper path is not established, heart demons run rampant. Weeds grow wildly, and the crops cannot thrive.

Chapter Nineteen offers a subtractive approach to investing and cultivation: discard the excess, return to the simplest, most primitive, and fundamental way. Clear away the weeds so the grains can grow.

This chapter is about doing less, and also about knowing when to stop—addressing the tendency to overcomplicate investing, indulge in small tricks, greedily seek more, and frequently tinker. It is a necessary path for retail investors to move from losses to profits.

Knowing what is wrong, understanding the small pitfalls in investing, brings you closer to what is right, laying the foundation for establishing correct investment cognition.

1. Abandon sage and discard wisdom, the people will benefit a hundredfold

“Sage” refers to thinking oneself clever and brilliant; “wisdom” refers to calculations and petty cleverness. Abandon sage and discard wisdom does not mean becoming dull, but rather shedding those self-assumed clever calculations and petty tricks.

For example:
Blindly guessing tops and bottoms, not letting go of every small opportunity;
Always trying to buy low and sell high, precisely timing entries and exits;
Obsessed with various magical strategies and mysterious indicators;
Relying on news, emotions, or illusions to trade…

These are the so-called “sage and wisdom,” seemingly clever but actually misleading. The more you indulge in petty cleverness, the more likely you are to keep losing money. Petty cleverness is not true wisdom but the greatest foolishness.

The true way is not complicated. Give up petty cleverness and follow the big规律. Focus on trends, cycles, rules, and risk control, and you can achieve steady profits. This is what is meant by “benefit a hundredfold.”

There is a phrase in “Guanzi”: “Heaven and earth are harmonious, the sun lasts long,” and from this, its benefits are a hundredfold. The name “Bai Bie Ge” (benefit a hundredfold) comes from here. The Dao De Jing Chapter 19 also repeats the idea of “benefit a hundredfold.”

The word “hundredfold” does not mean that profits in business are exactly 100 times; it describes gaining a lot and reaping abundant benefits.

2. Abandon benevolence and forsake righteousness, the people will return to filial piety and compassion

Benevolence and righteousness, as discussed in the previous chapter, are only emphasized when the Great Way is abandoned; when the market is chaotic and losses are many, then concepts like格局 (pattern),信仰 (faith),长线 (long-term), and情怀 (sentiment) come into play.

Abandon benevolence and forsake righteousness means discarding those slogans used for self-comfort and self-deception.

Do not use “value” as a shield,
Do not use “long-term” as a shield,
Do not use “pattern” as a comforter.

When the trend is bad, it is truly bad;
When signals disappear, they are gone;
When cycles change, they change.
Do not deceive yourself, do not stubbornly hold on, do not numb yourself.

When you discard superficial things and return to objectivity, rationality, and规律, your mindset will naturally stabilize, and your rhythm will become correct. This is what is meant by “returning to filial piety and compassion,” returning to your true heart and normalcy.

3. Abandon cleverness and forsake profit, there will be no thieves or robbers

Cleverness refers to opportunistic shortcuts; profit refers to greed for quick gains, overnight riches, and full positions.

Abandon cleverness and forsake profit means stopping speculative shortcuts, avoiding greed for quick profits, and rejecting the mentality of overnight wealth.

These thoughts of opportunism and greed are among the reasons for losses, such as:
Wanting shortcuts, so listening to rumors;
Chasing hot trends for quick money;
Leverage for huge profits;
Copying others’ trades for easy gains.

By giving up these shortcuts and illusions of overnight riches, and diligently following trends, cycles, systems, quantification, and risk control, those traps and pits will naturally stay away from us—meaning there will be no thieves or robbers.

4. These three are merely words, not enough. Therefore, let there be something to hold onto: see simplicity, embrace purity, and cherish simplicity.

Laozi said: “Merely discarding sage and wisdom is not enough; these are superficial efforts. To truly uphold the Great Way and规律, and keep the mind steady, is fundamental.” Ultimately, it boils down to: see simplicity, embrace purity, and cherish simplicity.

See simplicity—return to the original appearance of the market, focusing only on basic elements like trends, cycles, and rules.

Embrace purity—adhere to the simplest, most effective system规律 and rules, without complexity, showiness, or mysticism.

Cherish simplicity—reduce subjective guesses, stubbornness, and biases.

Reduce欲望 (desire)—less greed for quick riches, fewer frequent trades, and less unrealistic expectations.

To excel in investment, one must go through a process of simplifying from complexity. The more you learn, the simpler it becomes; the more you do, the more straightforward it is; the more you practice, the purer it gets. Building on fundamental skills like swordsmanship, axe work, and basic techniques, in the end, even grass, trees, and stones can become swords.

Chapter 19 emphasizes the subtractive approach to investing.

Abandon sage and discard wisdom—avoid petty cleverness, trust only规律;
Abandon benevolence and forsake righteousness—avoid empty slogans, focus on facts;
Abandon cleverness and forsake profit—avoid greed for quick gains, prioritize stability.

As discussed in Chapter 16, knowing when to stop leads to stability.

Chapter 19 also teaches us to stop, to reduce—stop幻想 (fantasizing), stop taking shortcuts, stop greed, and stop overcomplicating.

Remember to like, watch, and share with friends.