Learn from Duan Yongping: The Essence of Value Investing and 10 Investment Principles

Chinese legendary investor, Dan Yongping, is not just the “Chinese version of Buffett,” but a leading investment philosopher in Asia. By deeply understanding his investment strategies and thought system, you’ll see the essence of truly profitable investment methods in the market. This time, we will reveal the investment principles that Dan Yongping has practiced and repeatedly tested.

The Path of the Investment God of the East: Dan Yongping’s Career and Investment Shift

In 1988, at just 28 years old, Dan Yongping took over a small factory facing management crisis and rapidly grew its annual output to nearly 10 billion yuan within a few years. Later, in 1995, he founded BBK, which continuously secured CCTV “Top Brand” advertising, propelling the company to industry leader. In 1999, Dan saw the potential of next-generation business models, split BBK into multiple divisions, and incubated the global smartphone brands OPPO and vivo.

However, Dan Yongping’s true turning point came in 2001. At age 40, he stepped away from corporate management, moved to the United States, and transitioned into a full-fledged investment career. This decision led him to become one of China’s top investors. Today, his assets have grown to over $30 billion.

Winning with Entry Price and Company Quality: Dan Yongping’s Investment Practice Examples

Dan Yongping demonstrated his true investment value when he invested in high-quality companies facing difficulties. In 2001, when NetEase was shaken by a lawsuit and its stock plummeted to $0.8 per share, Dan boldly invested heavily despite surrounding concerns. Subsequently, the stock rebounded sharply, and his investment of about $2 million grew to over $100 million, yielding roughly 20 times profit. Reports say his total return over three years reached 68 times.

His investment in Apple exemplifies the resonance between Dan’s and Buffett’s investment philosophies. In 2006, Dan became the first Chinese investor to have lunch with Buffett for $620,100, during which he discussed Apple’s competitive advantage. This conversation is said to have sparked Buffett’s large-scale purchase of Apple stock. In 2011, Dan himself bought large amounts of Apple shares and held them long-term. As of late 2024, his Apple holdings in his investment account reached $10.233 billion, accounting for 70.50% of his total position.

In Tencent investments, Dan’s “contrarian thinking” stands out. Between 2022 and 2023, when Tencent’s stock was depressed, he repeatedly bought Tencent ADRs, acquiring 200,000 shares (about $8.2 million) at around $41.05–$41.10 per share in November 2023. Regarding Pinduoduo, when its earnings fell short of market expectations in August 2024, he actively built positions using put options, and in Q3, added 3.8 million shares, elevating it to his fifth-largest holding.

For Kweichow Moutai, Dan has a unique perspective of “long-term bonds.” He believes Moutai’s intrinsic value is stable, and despite price fluctuations, its essence remains unchanged. He invested almost entirely in Moutai through RMB accounts, confident that in ten years, it will outperform traditional assets like bank deposits. He has maintained this position for over a decade without ever selling.

Avoid Investment Failures: The 10 Principles Dan Yongping Repeatedly Emphasizes

Dan Yongping’s investment philosophy is encapsulated in 10 principles that serve as a compass to discern the essence amid market noise.

1. “Fish where the fish are” — A famous quote by Charlie Munger, but the most important principle Dan values. Chinese A-shares have stagnated around 3,000 points for over a decade, while the US market has grown significantly over 20 years. That’s why he focuses on the US stock market. Choosing the right direction is more important than any effort.

2. “Choose stocks for 1 year, hold for 10” — Buffett’s advice that “stocks you can’t hold for 10 years shouldn’t be held for even 1 second” is condensed here. Chinese investor Lin Yuan also emphasized “big money earns while sleeping.” Stocks that allow you to sleep peacefully are true investment targets.

3. “Buying stocks is buying a company” — As long as a company has good products, a solid business model, and visionary management, temporary declines shouldn’t scare you. When Tencent or Tesla crashes, that’s when true investors step in.

4. “Absolute conviction is necessary” — Dan has two accounts: one for value investing, where he bought Apple and held it for 14 years without selling, gaining hundreds of times profit; and another for speculation, which yields small gains. This contrast illustrates the power of conviction.

5. “There are no shortcuts in investing” — If someone believes there are shortcuts, they’ll be searching for them even after 20 years. Speculation as a “shortcut” is essentially a 55-45 chance game, no better than flipping a coin.

6. “Reduce decision frequency: don’t make more than 20 decisions a year” — Too many decisions lead to mistakes. True investors only need about 20 decisions in a lifetime, Dan is convinced.

7. “If profits aren’t coming, review your strategy” — Does improving speculative methods really bring big money? This question highlights the fundamental difference between investing and speculation.

8. “Buy when unnoticed, sell when popular” — When asked why he dared to buy NetEase, Dan replied, “If you’re selling something worth 10 yuan for 1 yuan, what courage do you need?” At that time, NetEase’s cash value per share was 4 yuan, but the stock price had fallen to 1 yuan.

9. “A-shares are not gambling; they are a value investment arena” — Dan’s investment in Moutai has never been sold in over a decade. True profits in A-shares come from the patience of value investors.

10. “Believe in fate, be yourself” — This deep insight suggests human nature cannot be changed. Dan cannot change speculative-minded people, but those who realize the importance of value investing will naturally become such investors. This is also why Dan had dinner with Buffett.

The Biggest Secret of Dan Yongping’s Investment: Patience and Conviction

Ultimately, what sets Dan apart from other investors is his patience and strong conviction. After selecting the right companies, he ignores market noise, holding for years or even decades. Short-term price fluctuations do not shake his judgment; he believes in the long-term growth of the companies.

From Dan Yongping’s investment philosophy, we learn that investing is not about frequent buying and selling in the market, but about deep understanding and conviction in excellent companies, with long-term commitment. If his approach inspires you, try to incorporate these principles into your own investment activities.