As the Year of the Horse approaches, the stock market, having firmly surpassed 4000 points in the Year of the Snake, is poised for more excitement. To achieve success in the new year, the first step is to become a learning machine, allowing one's mind to "weave brocade."

Warren Buffett and his late partner Charlie Munger created a miracle in the history of human investing, achieving a compounded annual gain of 19.9% between 1965 and 2024. A key secret to their success is their commitment to lifelong learning; they spent more time on learning and thinking than on taking action.

By simply reading annual reports, Buffett earned $3.5 billion from his investment in PetroChina, achieving a 700% return over six years. Munger is often called "a bookshelf on two legs." Buffett read every investment book in the Omaha public library by the age of ten and has continued his lifelong learning with an astonishing volume of reading.

Reading is the most affordable way to advance in life. A book that has stood the test of time contains the wealth-creating codes we dream of discovering.

Read Books Beyond Your Current Level Although Buffett had read all the investment books in the Omaha library by age ten, his true investment enlightenment came at age 19 when he read "The Intelligent Investor." He realized this was the true path to investing, calling it the greatest investment book ever.

We should read material that is beyond our current level, and time-tested classics are undoubtedly the best choice, applying the "Lindy Effect" to reading and learning. Nassim Taleb, author of "The Black Swan," suggests that the Lindy Effect means the life expectancy of non-perishable things like technology or ideas is proportional to their current age. Thus, every additional period of survival implies a longer remaining life expectancy.

If a book has withstood the test of time, remaining popular after fifty, one hundred, or five hundred years, it is likely to remain so for the next fifty, one hundred, or five hundred years.

The first edition of "The Intelligent Investor" was published in 1949. In 1972, during the revision for the fourth edition, Buffett commented: "I read the first edition of 'The Intelligent Investor' in early 1950; I was 19. I thought then it was the best book on investing. Now, over twenty years later, I still think it is the best book on investing."

Munger himself is a biography enthusiast. He believes reading is like making friends with "the eminent dead": if you can befriend Adam Smith, you will surely learn economics well. If you truly make friends with the great figures of the past in your life, you will lead a better life and receive a better education.

There is nothing new under the sun. Morgan Housel, author of "The Psychology of Money," notes that the dead outnumber the living by 14 to 1, yet we overlook the accumulated experience of this vast group. They have tried everything we are attempting; while the details differ, they strove to succeed with wisdom in intense competition.

Cultivate First-Principles Thinking What effects do we hope to achieve from reading? As one investor said, absorb the essence from books; it will become part of your soul, like weaving a brocade.

Harrington Emerson, author of "The Twelve Principles of Efficiency," stated that while there may be a million methods, there are very few principles. Those who grasp the principles can successfully choose their own methods, but those who try methods while ignoring principles are sure to encounter trouble.

Munger believes the way to gain wisdom is to learn the great ideas that form the basis of reality. Once you develop certain thinking habits, even if you are not a genius, you can surpass others in your thinking.

Gautam Baid, author of "The Joys of Compounding," states that first-principles thinking means "thinking like a scientist." A scientist first asks questions like, "What can we be absolutely sure is true?" and "What has been proven?"

Elon Musk advises that before delving into leaves and details, one must understand their fundamental principles—the trunk and big branches—otherwise, there will be nothing to hold onto.

In the field of value investing, the principles can be simplified to: buying a stock is buying a company, Mr. Market, margin of safety, and circle of competence.

To acquire first-principles thinking, we also need to know the forbidden zones. Taleb calls this "via negativa": we know more about what is wrong than what is right, and knowledge of what doesn't work (negative knowledge) is more robust than positive knowledge.

A pope once asked Michelangelo the secret of his genius, particularly how he created one of the greatest sculptural masterpieces of all time, the statue of David. Michelangelo replied, "David was already in the marble. I just removed everything that was not David."

There are houses of gold within books. In the preface to the Chinese edition of "Poor Charlie's Almanack," Li Lu wrote that Charlie Munger is a man who succeeded entirely by wisdom, which is undoubtedly an inspiring example for Chinese scholars. His success comes entirely from investing, and his investment success stems from self-cultivation and learning.

(Some content in this article is excerpted from Gautam Baid's "The Joys of Compounding.")