Yesterday, we took the stock of Cambricon (688256.SH) as an example and discussed Guosheng Securities' research report comparing it to East Money Information Co.,Ltd. (300059.SZ) during its significant price surge over a decade ago.
Some investors pointed out that if Cambricon can replicate East Money's past stock performance—experiencing an 80% decline but then rebounding strongly starting in 2018, even surpassing previous highs by 2020 and opening new upward potential—that would be highly favorable. Waiting just two years for such a turnaround might not seem daunting.
Furthermore, NVIDIA (NVDA), located across the ocean, offers a more direct industry comparison to Cambricon and is even more aspirational. Between 2021 and 2022, NVIDIA's stock fell by two-thirds but subsequently embarked on a sustained rally, creating numerous multi-millionaires and billionaires. The idea is simple: hold steadfastly, and one could potentially join their ranks.
However, from a practical investment perspective, such hindsight-driven judgments hold little reference value. They are merely backward-looking analyses based on known outcomes. The real challenge lies in the psychological fear during the holding period, which stems from uncertainty and self-doubt.
When stock performance deviates significantly from expectations and the future appears shrouded in fog—especially while witnessing rallies in other sectors—the anxiety of opportunity cost and comparative psychology can erode patience day by day. How many investors can truly endure the solitude and withstand a prolonged, stealthy decline? This is not a test of investment skill but a trial of mental fortitude.
Returning to East Money, it stands out as the best performer in the "internet + securities information" sector, a classic example of survivorship bias. Other companies in the same space fared far worse. For instance, after becoming a ten-bagger, Wins (300377.SZ) peaked in May 2015 and then entered a decade-long phase of gradual decline.
Ten years is long enough to test anyone's resolve. During this period, Wins' financial performance deteriorated, with dividends per share dropping from around 0.3 yuan to a mere 0.1 billion yuan. With dividends dwindling and the stock failing to rebound, compounded by rotating market themes like liquor and solar energy, how many investors held on until new highs were achieved after the 924 market event?
Moreover, persistent stock declines often come accompanied by convincing negative narratives: "the company is failing," "the investment thesis is disproven," or "it has been abandoned by the market."
Take NVIDIA as an example. During its two-thirds decline between 2021 and 2022, the global PC and gaming hardware demand shifted from explosive growth to a sharp contraction. This significantly impacted NVIDIA's gaming revenue, and a plunge in Bitcoin prices led to miners offloading used graphics cards, further hurting sales of new gaming GPUs. These factors fueled doubts about NVIDIA facing severe cyclical, if not structural, challenges.
If you held NVIDIA stock during that period, watching daily paper losses add credence to a grim story, even the most thorough fundamental research would seem inadequate. Each cent lost feels like a cut to your psychological account, and the slow, "frog-boiling" erosion of portfolio value makes the pain tangible and entrenched. How many could withstand such pressure?
Consider another stock in the same sector as East Money—DZH Ltd. (601519.SH). After peaking in April 2015, it plummeted over 90%, was flagged for financial fraud, faced delisting risks, and has yet to recover. Such a scenario would unsettle any investor.
The objective reality retail investors must confront is that in the vast ocean of capital markets, they are like solitary boats. At times, it feels like exhilarating surfing; more often, it involves endless waiting and turbulence. The hardest part is enduring the loneliness during calm or adverse conditions and withstanding stealth declines through long, dark nights.
The cruelest aspect of the stock market is that each cycle conducts a brutal screening process. A key takeaway is this: never overestimate your ability to hold on based on "logic and confidence," and never underestimate the destructive power of "stealth declines and uncertainty."