"What truly makes people rich is not the bull run, but how you cope with the fall." The first point: The fall is not an accident; it is the normal breathing of the market. The decline of the stock market is not mysterious, nor is it "a problem." Historically, a pullback of around 10% occurs almost every one to two years; bear markets of over 20% come every few years; and while a rapid fall of over 30% is the most frightening, it is also part of the cycle. The market breathes like a person, with ups and downs. If you cannot endure the fall, it will be difficult to have a long-term relationship with investing.

The second point: the three acts of the market are essentially a cycle of human nature. Each cycle almost always repeats three acts. The first act is the euphoric phase, where prices rise, confidence is abundant, and even unrelated people start giving investment advice, ignoring risks. The second act is the liquidation phase, where prices fall, emotions collapse, and panic selling becomes the main theme. Many people do not lose on assets but rather lose due to emotional control issues. The third act is the phoenix phase, where the market slowly recovers and reaches new highs, but the real wealth gap has long been widened during the liquidation phase.

Point three: The euphoric phase is the most dangerous, and the liquidation phase is the most critical. The real risk often isn't the fall itself, but the leverage, heavy positions, and mistaking luck for skill during the euphoric phase. Once in the liquidation phase, leverage triggers margin calls, forcing people to sell their best assets at the lowest point, which is a blow that many cannot recover from. The liquidation phase tests not judgment, but emotional management skills.

Point four: The first principle to survive a recession is to avoid using leverage. Leverage may seem to amplify gains, but it actually makes mistakes easier to magnify. When the market is favorable, it's like an accelerator, but when the market reverses, it becomes a catapult, directly ejecting you from the game. It's not that you judged the direction incorrectly, but rather that you didn't live to see the day the market came back.

Point five: Cash is not cowardice; it is a choice. When a recession hits, many people are busy waiting for their salaries, waiting for rent, waiting for calls from the bank. Only those who hold cash are not passively enduring their fate but are qualified to choose opportunities. Cash is the confidence to remain calm and dignified amid panic.

Point six: Don't go all in; diversification is a respect for luck. The money earned in the stock market often has an element of luck. Hitting the right trend once does not mean you truly understand the risks. The role of a recession is to filter out those who mistake luck for skill. Diversified allocation is a fundamental respect for uncertainty.

Point seven: Don't sell randomly during the liquidation period, and buy slowly in batches. Don't fantasize about perfectly timing the bottom, nor about perfectly escaping the top. The bottom is never a single point, but rather a long period of time. Buying in batches and holding for the long term is essentially using discipline to counter human nature, rather than trying to outsmart the market.

Point eight: The true anti-human nature occurs at two moments. The cheapest time in the market is often when you are the most reluctant to buy; when the market has just recovered, it is the easiest to get itchy hands to switch stocks and chase hot trends. True wealth relies on having the courage to sow during the clearing period and restraining desires during the phoenix period.

The core conclusion in one sentence. A recession is not the end of the world, but a moment for wealth to be reshuffled. Those who are unprepared are asked to leave the table, while those who are planned and disciplined are invited to the table. By the time you feel "safe" to enter the market again, opportunities are often already very expensive.