Guan Shanxiang was once a successful value investor, heavily invested in real estate and insurance stocks before his death. However, following China’s implementation of the "Three Red Lines" policy on real estate credit control in 2020, these investments gradually declined. Despite this, Guan steadfastly adhered to his investment philosophy. By September 2023, his portfolio had lost over 60% of its value. News of Guan’s death emerged the day after Evergrande's chairman, Xu Jiayin, was arrested on September 27, 2023, leaving behind three young children.

The greatest investment logic lies in understanding global political history, not just financial and value analysis.

Relying solely on economic and financial analysis is far from sufficient in the Chinese stock market, especially post-2015. Since then, the Chinese stock market has been regarded by Xi Jinping as a tool used by political adversaries against him. Under such circumstances, traditional investment analysis has failed; what is truly needed is an understanding of Chinese political psychology, not pure value investing. Guan had too much faith that the Communist Party would intervene to support the economy for the sake of the people, but this was an illusion. China's longstanding "family rule" mentality implies that the government only mobilizes policies to raise funds when the national treasury is exhausted, with the people serving as their source of capital. The ruling class, using modern financial tools, still operates under this historical mindset.

Similarly, in the U.S. stock market, relying solely on domestic economic and financial analysis is also insufficient. This is exemplified by two investment mistakes made by Warren Buffett: his 1962 purchase of Berkshire's textile mills and the 1993 acquisition of Dexter Shoes with Berkshire stock. The issue with these decisions was their lack of international market competitiveness in terms of production costs. Despite a 30-year gap between these decisions, Buffett focused too much on the discrepancy between a company's stock price and its cash flow generating potential, overlooking shifts in international trade trends.

For a successful investor, it is extremely difficult to identify blind spots in their investment logic. Beyond using a checklist to mitigate risks, like Mohnish Pabrai does, a more thorough approach is to study world political and economic history and modern geopolitics from a humanistic perspective, especially psychological and cultural perspectives. Focusing on the big picture while managing details enables safer long-term investment decisions.

Finally, it’s worth noting that Mohnish’s fund experienced a 60% drop in 2000, and Berkshire’s stock price fell by 45% in 2008. I am unaware of Guan Shanxiang’s exact financial status, but a 60% loss is not fatal, unless the funds were borrowed or leveraged. From the materials he left, Guan’s investment principles and life philosophy were more profound than most investors’. His outcome illustrates that investing is a grand endeavor, where any misplaced beam can bring the whole structure down. Beyond pursuing higher levels, it’s essential to clearly understand the hierarchy of logic.

Building an antifragile investment structure is the core logic that all long-term investors should prioritize.