Your A-share losses come from understanding that can't keep pace with change
After reviewing his 60+-percent drawdown this year, Zhang Jun discovered that the root cause of A-shares' short bull runs and long bear markets—and investors' short time horizons—was never the market itself, but investors' understanding of intrinsic value and macroeconomic cycles failing to keep pace with change's speed.
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The index barely moved, but whole sectors were sliced in half
Zhang Jun highlights a counterintuitive fact: Shanghai Composite's full-year range was under 20 percent, from January highs above 4,200 to lows above 3,600. Yet beneath that, sub-indices swung wildly. ChiNext and STAR Board each fell roughly 40 percent from June peaks; the optical module index dropped over 50 percent from its high. His point: concentrated sector bets faced far steeper drawdowns than the aggregate index suggests.
— Zhang JunEven dividend low-volatility funds got turned into high-volatility assets
Zhang Jun adds that supposedly defensive dividend plays didn't escape the carnage: the baijiu index fell 30-odd percent on its worst days; the dividend low-volatility index—promised stability—was down 10 points in its worst month. More tragicomically, in June when the market rallied and tech soared, this index fell 10 points in a single month, then gained them back in July when the market fell—behaving the exact opposite of its name.
— Zhang JunEvery industry has its own Xu Jiayin
Zhang Jun argues Chinese firms cannot sustain stable EPS growth because of abundant ‘entrepreneurial ambition’: CEOs want to expand scale, CFOs and key technologists push expansion and capex to advance their careers, and local governments' investment drives force companies to boost capital spending. Everyone knows Xu Jiayin, he notes, but every industry has its own version—the property sector's just leveraged hard enough to crater publicly.
— Zhang JunGraham never said to discount future cash flows
Zhang Jun revisits years of misreading Graham: value investors picture DCF models calculating intrinsic value, but that was Williams' idea, not Graham's. In “Security Analysis”, Graham calculated working capital and net asset discounts—the goal was finding a margin of safety, not pinning an exact intrinsic value number. He restates Graham's actual logic in three sentences: stocks are stakes in businesses; Mr. Market is a quotation device to exploit; and margins of safety matter.
— Zhang JunIntrinsic value isn't a point—it's a moving range
He cites a cutting-tool stock he sold too early this year: bought at 2 billion+ market cap aiming for 10 billion in three years, but AI-driven M&A turbocharged earnings to target, so he sold per plan—only later discovering the company's intrinsic value was still climbing fast and he'd treated a dynamic company as static. Takeaway: intrinsic value is never a fixed point but a range that shifts up and down with fundamentals; exit timing should track that range's velocity.
— Zhang JunStorage chip prices spike, but intrinsic value may not follow
When asked whether ‘rising demand equals rising intrinsic value,’ Zhang Jun uses storage chips to refute the simple narrative: Samsung, SK Hynix, and Micron learned overexpansion's sting, intentionally restrained supply to barely maintain a three-player oligopoly—then AI sent prices skyward, but now they're expanding again while YMTC enters. His conclusion: once a carefully guarded competitive structure cracks, surface price rallies and demand figures don't simply equal long-term intrinsic-value gains.
— Zhang JunWhether to add on dips—the question itself is the answer
Facing scenarios where stock price falls below your entry but intrinsic value falls faster (so margin of safety looks bigger), Zhang Jun offers this heuristic: if you're asking friends whether to add to a losing position, that act alone proves you don't understand it well enough—sell immediately. As long as intrinsic value is still sliding and you can't find new evidence of a bottom, buying purely because the price is low is short-term gambling and probably catching a knife mid-fall.
— Zhang JunValue investors with sweeping sector coverage—I'm skeptical
Zhang Jun offers an ‘immature observation’: no one can be expert in packaged food, consumer electronics, and AI simultaneously. If someone calling themselves a value investor covers too many industries, he doubts their authenticity. He reviews his own past expansion into chemicals, pharma, information security, and solar—convinced at the time he was applying value-investing method, but in hindsight nearly every call was wrong. Example: pharma volume-based pricing policy disruptions happened long before he grasped that industry logic had shifted.
— Zhang JunEffort breeds error; comfort invites crisis
Zhang Jun distills two mental models from this year's repeated mistakes: ‘effort breeds error’—the moment you deliberately strain to forecast or trade, bias enters; ‘comfort invites crisis’—the moment you think ‘good enough, time to rest,’ danger usually arrives. He cites late February as proof: market rallied to his year-start target and he was unwinding when an unexpected headline triggered another crash, proving the pattern once more.
— Zhang JunIn their own words · checked verbatim
This index dropped 10 points in a single month—that's how the market turned dividend low-volatility into dividend high-volatility.
这个指数单月 跌了十个点 就是我们的这个市场 把红利低波干成了红利高波
Zhang Jun6:09
There are two mistakes: one is adding at the peak, the other is selling at the bottom. Just avoid these two.
所谓犯错就是两个 一个是高位加仓 低位割肉 你只要不犯这两个错
Zhang Jun18:12
Graham's actual words are these three sentences: First, buying stocks is buying a company. Second, Mr. Market is here to give you a quote.
准确的原话应该是这么三句话 第一个 买股票就是买公司 第二个 市场先生是来给你报价的
Zhang Jun20:14
But we need to understand that intrinsic value isn't a single point—it's a range, and this range moves up or down.
但是我们要知道所谓内在价值 它不是一个点 它是一个区间 这个区间还会上移 或者下移
Zhang Jun23:15
You ask, so what should I do? Should I buy? Add more? Or sell? If David and I are really close friends, I'd tell him: the fact that you're asking me this means you're uncertain.
你说我现在怎么办 是该买呢 该加仓呢 还是应该给他卖掉 我真的跟David是很关系很好的朋友啊 那我就会给他说 你要问我这个问题 说明你纠结了
Zhang Jun35:25
You can't claim to be expert in packaged food, consumer electronics, and AI all at once—that's overreaching. So I'll offer an immature observation: if a value investor covers too many industries, I doubt whether he's genuinely a value investor.
你不可能说 食品饮料你很精通 消费电子你又精通 人工智能你又精通 那你这个东西有点妄议了 所以我提出一个 不成熟的观察 就是价值投资者 如果说他覆盖的行业很广的 我怀疑他是不是价值投资 过去我怀疑他是不是真的
Zhang Jun50:42
The first principle is ‘effort breeds error’—the moment you strain, bias creeps in. The second is ‘comfort invites crisis’—you think ‘good enough, everything's fine’—and then it hits.
第一个叫着力即差 你一用力 就会发生偏差 偏离 第二个句话呢 叫 一安即威 你当然觉得 哦 差不多了 挺好 来了
Zhang Jun1:12:51
So our problem is always this: insufficient self-knowledge leads to insufficient understanding of the macro economy and the market.
所以我们的问题 永远是就是 对自己认知不足 导致你对整个宏观经济 你对整个市场 认知不足
Zhang Jun1:22:53
Figures
| ChiNext and STAR Board indices down from June peak | ~40% | 4:09 |
| Optical module index down from peak | >50% | 4:09 |
| Baijiu index year's worst decline | ~30%+ | 5:09 |
| Dividend low-volatility index June single-month decline | 10 points | 6:09 |
| Zhang Jun's year-to-date drawdown | 60+ | 1:22:53 |
How to listen
Individual investors managing stock portfolios, fund managers, and anyone seeking to understand value investing's underlying logic rather than mechanically copying formulas.
1:04–1:20, philosophical discussion on learning the I Ching, reading notes, and life's meaning—personal reflection only—can be skipped.