Renowned investor Duan Yongping, who has been "retired" for over two decades, recently made a rare public appearance. In an interview program titled *Strategy* (recorded on October 16, 2025), he addressed a series of questions from Fang Sanwen, founder of Xueqiu, covering investment philosophy, business management, and personal growth.

**Duan’s Most Hesitant Moment**

Duan revealed that his only holding in the A-share market is Kweichow Moutai Co., Ltd., which remains one of his few heavily invested positions. When asked whether he would sell if Moutai’s P/E ratio reached 50x, he emphasized that investment decisions should be based on a company’s future cash flows rather than a single valuation metric.

He admitted that in extreme scenarios—such as the stock price rising severalfold from an already expensive level—he would consider selling. Reflecting on past experience, he shared: "When Moutai hit ¥2,600–2,700, I really wanted to sell because it seemed relatively overvalued."

What stopped him was not a lack of conviction in the company but the challenge of opportunity cost. "My biggest hesitation was our oversized position—what would I buy after selling?" he explained. As a "fully invested" investor, he avoids holding excessive cash due to low interest rates and the risk of poorly timed reinvestments. "Holding Moutai made more sense because I knew it would recover eventually."

Even when Moutai’s stock price halved, Duan remained unfazed, stating, "If you can’t withstand a 50% drop, you shouldn’t buy the stock in the first place." His deep belief in Moutai’s intrinsic value led him to hold and even add to his position during downturns. This episode encapsulates his investment philosophy: true investing requires deep understanding, comparison, and selection anchored to intrinsic value and cash flows—not short-term price fluctuations. The real risk lies not in temporary declines but in investing in what one doesn’t truly comprehend.

**Duan: Would Have Traded Moutai for NVIDIA Five Years Ago**

When asked whether he would swap Moutai for another asset with superior discounted cash flows, Duan responded unequivocally: "Absolutely." He clarified that investing inherently includes the option to sell, countering a common misconception that equates value investing with "never selling."

Duan stressed that "long-term holding" reflects an initial mindset, not a rigid rule. While investors act with long-term expectations, they must continuously reassess opportunity costs. For instance, had he fully grasped NVIDIA’s potential five years ago, swapping Moutai for NVIDIA would have been rational—provided he "truly understood" the latter. Without such understanding, he cautioned, any switch would be speculative and outside his circle of competence.

**Duan’s Ultimate Investment Answer: One Sentence**

Duan distilled his investment philosophy into one principle: "Buying stocks means buying businesses." The critical addendum, however, is "understanding the business," which he considers exceedingly difficult—hence his mantra: "Investing is simple, but not easy."

The simplicity lies in the clarity of focusing on business models and cash flows; the difficulty arises in execution, as few companies are truly comprehensible. Even grasping the core principle itself is challenging, he noted, but true understanding eliminates fear of short-term volatility.

He acknowledged that ignorance doesn’t preclude profits—comparing it to blind stock-picking where half might succeed by luck—but such outcomes are unrepeatable. As practical advice, he endorsed buying the S&P 500 index for long-term gains, adding that doing so reflects a form of understanding.

**Why Nokia Failed: Prioritizing Business Over Users**

As founder of BBK (parent of brands like Oppo and Vivo), Duan witnessed the shift from feature phones to smartphones. Critiquing Nokia’s E71—a device hailed as an early "smart" prototype—he recalled its unintuitive interface and operational flaws, concluding Nokia’s culture had "rotted."

While acknowledging Nokia’s attempt to adapt, Duan blamed its downfall on a misplaced focus: "They cared too much about market share and business, not users." He cited Nokia’s refusal to adopt Android despite Google’s outreach as a fatal strategic error. Even strong management, he argued, couldn’t offset cultural and strategic failures.

**Finding the Right People: Selection Over Training**

Duan asserted that talent with shared values is "selected, not trained." At BBK, most team members were "ordinary people" who grew through collaboration, but alignment in values was non-negotiable. Without it, he said, organizations fracture.

He differentiated between "like-minded allies" (who deeply embrace values) and "journey companions" (who follow cultural guidance). Over time, even the latter become reliable within the right culture. This principle, he noted, applies equally to investing and partnerships: success hinges on cultural and value alignment.