Learning from Duan Yongping's Investment Philosophy: Practical Principles for Successful Stock Investment

Known as the “Chinese Warren Buffett,” Duan Yongping is not just an investor but a unique figure who elevates entrepreneurial experience into investment practice. From his investment philosophy and concrete success stories, we can see principles that even ordinary investors can apply.

The essence of Duan Yongping’s investment approach lies in identifying a company’s intrinsic value and concentrating capital on trustworthy, long-term business models. By following his career path and investment portfolio, one can understand how to make investment decisions without being swayed by market noise.

From Business Management to Investing: The Evolution of Duan Yongping’s Career

Duan Yongping’s success did not come overnight. In 1988, at just 28 years old, he took over a factory facing management crisis, implemented comprehensive reforms, and rapidly grew its annual output value to 10 billion yuan. This was not just management skill; it demonstrated his ability to integrate talent, processes, and market needs.

After leaving Yihua Group in 1995, Duan Yongping founded his core team and established BBK. He launched consumer electronics like learning machines, VCDs, MP3 players, and mobile phones, and even earned the “Standard King” title in CCTV advertising. During this period, Duan mastered how to maximize corporate value through both product development and marketing.

In 1999, Duan Yongping decided to split BBK into three entities, leading to the creation of major smartphone brands OPPO and vivo. In 2001, at age 40, he chose to step back from management. This decision to “step aside and withdraw” became a key to opening the next chapter of his life.

After relocating to the United States, Duan Yongping fully transitioned into investing. Today, his managed assets are estimated to exceed $30 billion, making him one of the most successful Chinese entrepreneurs in the international investment market.

On June 30, 2006, Duan Yongping had the opportunity to dine with Warren Buffett. As the first Chinese investor to do so, he discussed Apple during that meal. Duan told Buffett, “Apple’s business model surpasses Coca-Cola.” This conversation prompted Buffett to buy large quantities of Apple stock, and the two became close allies sharing a deep belief in value investing.

Investment Philosophy and Reality: Key Cases of Duan Yongping

Understanding Duan Yongping’s investment style is best achieved by examining actual investment cases, which reveal a consistent thought process behind his choices.

Investing in NetEase: “The Courage to Buy at the Bottom”

In 2001, NetEase was abandoned by the market due to litigation issues. Its stock plummeted to about $0.80 per share, and doubts about its survival arose. Duan Yongping boldly invested at this point.

At that time, NetEase’s cash value per share was 4 yuan, but the stock price had fallen to 1 yuan. This meant that even if the company was liquidated, investors would recover 4 yuan, yet the market valued it at only 1 yuan. Duan told reporters, “Something worth 10 yuan is being sold for 1 yuan. What kind of courage does that take?”

His approximately $2 million investment rebounded significantly within months, reaching a peak value of over $100 million. Over three years, the return exceeded 68 times. This was Duan’s first demonstration of his ability to see the “disparity between intrinsic value and market price.”

Investing in Apple: “The Power of Long-Term Holding”

In 2011, when Apple’s market cap was under $300 billion, Duan gradually bought Apple shares and held them for 14 years. During this period, Apple’s stock price multiplied several times, becoming the largest component of his investment portfolio.

As of late 2024, the value of his Apple holdings in the H&H investment account managed by Duan Yongping reached $10.233 billion, accounting for 70.50% of his total position. This is not just due to stock price appreciation but reflects his trust in the company’s fundamental growth and his patience through short-term market fluctuations.

Investing in Kweichow Moutai: “Investing in Intangible Assets”

Duan Yongping regards Kweichow Moutai as a “long-term bond,” focusing his yuan-based assets mainly on Moutai. He states, “If there are no better investment opportunities, putting money into Moutai is the safest choice.”

Looking at Moutai’s stock price, he has never reduced his position over more than a decade. This reflects his confidence that the company’s intrinsic value will steadily grow, rather than reacting to short-term price movements. Duan emphasizes, “Prices fluctuate, but Moutai’s intrinsic value remains unchanged,” maintaining a patient holding strategy.

Practicing Contrarian Investing with Pinduoduo and Tencent

In August 2024, when Pinduoduo’s interim results fell short of expectations and its stock price dropped sharply, Duan Yongping sold put options to actively build positions. According to the 13F report for Q3 2024, H&H Fund added 3.8 million shares of Pinduoduo, making it the fifth-largest holding.

Regarding Tencent, during its prolonged decline from 2022 to 2023, Duan repeatedly bought Tencent ADRs. In November 2023, he announced acquiring 200,000 shares at $41.05–$41.10 each (about $8.2 million).

The common thread in these actions is the classic principle: “Buy when the market is pessimistic, sell when it is optimistic.” For Pinduoduo and Tencent, he judged their current stock prices to be significantly undervalued relative to their true strength.

Duan Yongping’s 10 Principles of Investing

From his concrete actions, ten principles emerge—practical wisdom necessary for successful investing, not just theories:

1. Fish where the fish are

Charlie Munger’s famous quote is also valued by Duan. Over the past decade, China’s A-shares have hovered around 3,000 points, while US stocks have more than doubled. To make big money, choosing a growing market is crucial. The right direction matters more than analyzing individual stocks.

2. Choose stocks over a year, hold for ten

Duan quotes Buffett: “If you can’t hold a stock for ten years, don’t hold it for even ten seconds.” Once you select a good company, time becomes your ally. Stocks that are sleeping often generate the greatest returns.

3. Buying stocks is buying into a company

If a company has excellent products, a strong business model, and visionary management, short-term price swings are irrelevant. Even if Tencent or Tesla temporarily crash, Duan remains unfazed because of this principle.

4. Confidence is essential

Believe deeply in your investment and remain unaffected by external factors. Duan uses two accounts: one for value investing—holding Apple for 14 years without selling—and another for speculation, which yields minimal profit. This contrast reflects his core values.

5. There are no shortcuts in investing

Those seeking shortcuts are still looking twenty years later. Choosing speculation as a shortcut means never escaping that path. The odds of winning in speculation are 50/50—like flipping a coin.

6. Make few, high-quality decisions

If you make 20 decisions a year, failure is inevitable. Good investors make about 20 decisions in a lifetime. The quality of decisions depends on the depth of thought, not quantity.

7. Reassess if profits aren’t realized

Just as a thief might improve his skills after being caught, questioning whether continuously refining “techniques” for speculation is truly right. If the strategy is flawed, no amount of skill will help.

8. Buy when no one is paying attention, sell when everyone is excited

When NetEase fell to 1 yuan per share, most fled. Duan bought then. When Moutai was undervalued, he invested. Contrarian investing requires insight beyond common understanding.

9. Be cautious in choosing stocks, but don’t consider selling

Duan holds Moutai for over a decade and Apple for 14 years because once he finds the right stock, selling is not even considered. Investing in the right company means holding long-term; selling is not the goal.

10. Belief in the core is the foundation of everything

Duan states, “Human nature doesn’t change. Speculators remain speculators, and those who believe in value investing become value investors.” His reason for dining with Buffett was that Buffett also practices value investing. Conviction is the ultimate determinant of success in investing.

What Duan Yongping’s Investment Philosophy Reveals

Through his ten principles, it becomes clear that investing is fundamentally a dual process: analyzing companies and understanding oneself. The ability to assess a company’s value and to stay true to one’s investment style are equally important.

Even amid market chaos and information overload, Duan’s continued success stems from his consistent principles and actions based on them. Choosing steady, long-term investments over flashy short-term trades has led him to the essence of investing.