Cao Renchao's Unpopular Investment Views | Generated by AI
Question: What are unpopular ideas from Cao Renchao, the famous Hong Kong investor?
Answer:
Cao Renchao (曹仁超, often called “Cao Sir” or the “平民股神” / “common people’s stock god”) was a renowned Hong Kong investor and longtime columnist for Hong Kong Economic Journal (信報). He passed away in 2016 and is best known for turning HK$5,000 into massive wealth (often cited as 40,000 times growth over 40 years) through trend-following, strict discipline, and bold moves during major market waves. His core philosophy emphasized “有智慧不如趁勢” (“wisdom is not as good as riding the trend”), focusing on long-term macro trends rather than short-term stock picking or pure value investing.
While many of his ideas (like strict stop-losses, avoiding margin trading, and aggressive riding of bull trends) are now mainstream among trend investors, several stood out as unconventional, harsh, or unpopular—especially in a retail-heavy market that prefers “buy and hold” or optimistic narratives.
Here are some of his more unpopular or controversial ideas/views:
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“好人都不赚钱，赚钱的通常不是好人” (“Good people don’t make money; those who make money are usually not good people”)
He suggested that making big money in markets often requires a ruthless, “non-good” mindset—being willing to cut losses coldly, act against the crowd, or capitalize aggressively when others suffer. This cynical take on market psychology and morality was seen as lacking humanity by some critics. -
“血流成河，便是入市時” + “形勢有利時要狠” (“When blood flows in rivers, that’s the time to enter” + “When the situation is favorable, be ruthless”)
He advocated buying aggressively during extreme panic/crashes (contrarian timing) and then riding winners very hard without hesitation. This “ferocious” approach was criticized as aggressive or inhuman, especially since it implied profiting from others’ pain. -
Heavy emphasis on trend/momentum over traditional fundamentals or “being a good long-term holder”
In an era when many preached patient value investing (e.g., hold blue chips forever), Cao stressed catching big secular trends and industry waves (“趁勢”), often via second-line or turnaround stocks rather than safest names. He viewed pure “buy and hold without timing” as naive for big wealth creation. -
Strict “魔鬼原則” (devil’s principles) including very mechanical stop-losses
He used rigid rules like cutting losses quickly (e.g., unified 15% stop-loss across positions for simplicity) and refused to treat being “trapped” as long-term investing. In bear markets, he saw frequent big drops as normal and insisted on preserving capital over hoping for recovery. This discipline felt overly cold or pessimistic to many retail investors who hate selling at a loss. -
Skepticism toward over-optimism and “everyone wins” mentality
After surviving major crashes (including losing heavily twice early on), he warned against overconfidence, margin/leverage (“不要炒孖展” — never buy on margin), and treating temporary paper gains as permanent. He preferred keeping powder dry and only going aggressive when the macro tide clearly turned.
These views were unpopular because they clashed with emotional retail tendencies: hope, loyalty to stocks, aversion to realizing losses, and dislike of “mean” or opportunistic framing of profits. Cao himself acknowledged his style was “魔鬼” (devilish) rather than angelic, and he preferred being effective over being liked.
His ideas remain influential among disciplined Hong Kong and Chinese trend investors, but they were (and still are) seen as too harsh or contrarian by the broader public.
References:
- https://www.bbc.com/zhongwen/trad/hong_kong_review/2016/03/160301_hkreview_caorenchao_life
- https://zhuanlan.zhihu.com/p/361354339
- https://zh.wikipedia.org/zh-hant/%E6%9B%B9%E4%BB%81%E8%B6%85
- https://zhuanlan.zhihu.com/p/633963405