Buying Cheap Is Not the Main Point: Holding and Exiting Determine Returns

Originally published 2021-01-10Robin’s commentary

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Collected in Robin Shen’s Field Notes · Content type and attribution are shown above

English translation of the Chinese post originally published 2021-01-10. Translated 2026-10-31 with AI assistance. Historical figures and claims have not been updated or independently verified. 中文原文

Reading guide

When discussing acquisitions and mergers, we usually consider synergies, but price is another critical factor. Robin argues that strategically minded entrepreneurs can look beyond the immediate price. Investors often deliberate over one or two units, or even half a unit, in the entry share price, but for a genuinely attractive investment this is insignificant beside the prospect of returns exceeding tenfold. Buying is an art; holding and exiting are harder. He says the holding period is what truly determines returns, and exiting too early or too late has the greatest impact.

Key points

When strategic value is high, do not obsess over small differences in the entry price.
Buying is an art; holding and exiting are harder.
Returns depend on the holding period and exit timing.
Returns exceeding tenfold are an illustration, not a guarantee or trading recommendation.

Trees at different stages of growth with connected roots on cream paper, suggesting patient cultivation and lasting value. — Venture capital & investmentThematic illustration · AI generated

Full text — English translation

When discussing acquisitions and mergers, we generally consider strategic value such as post-merger synergies. Another critical issue is price. Zuckerberg’s two legendary acquisitions fundamentally laid the groundwork for Facebook’s development over the following decade and more, making it the undisputed leader in social networking. Robin: “We sometimes want to buy cheaply and get exceptional value, quibbling over small amounts. But entrepreneurs who truly look to the future and strategic value can see beyond the immediate price. In investing, for example, we often spend ages deliberating over a one- or two-unit difference in the share price, or even half a unit. If you genuinely see a good investment, however, that one or two units you hesitate over today is insignificant compared with potential returns exceeding tenfold. Buying is an art, but holding and exiting are truly harder. What determines the rate of return is not the purchase price but how long you hold. Exiting too early or too late is what truly affects investment returns.”

These articles are personal notes, book excerpts, and collected reprints. Figures and events reflect the time of the original publication, are not current information, and do not constitute investment advice.

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