Duan Yongping: The Underlying Cognitive System for Navigating Cycles

In Chinese business history, Duan Yongping is an extremely unique figure. He doesn’t like to endorse brands, doesn’t talk about trends, and doesn’t discuss valuation models, yet he has almost taken long-term success to the extreme. If I had to summarize Duan Yongping’s core philosophy in one sentence, it would be: do the right things, do things right; the rest, leave to time.

I. The First Principles of Investment: Buying Stocks Is Buying Companies

Duan Yongping repeatedly emphasizes: Investment is not trading, but an extension of management perspective.

In his view, a truly mature investor must see listed companies as non-listed companies that cannot be casually sold:

• Are you willing to invest your entire net worth?
• Can you accept not checking the stock price for ten years?
• If the company cannot go public, would you still invest?

If you can’t confidently answer these questions, then what you call “research” is essentially just gambling.

That’s why he says:

Investing is no different in essence from running your own business; it’s just that you don’t manage it yourself.

II. What Is a “Great Company”?

In Duan Yongping’s system, “good companies” and “great companies” are two different things.

The standard for a great company is:

25–30 years from now, it’s still great.

Companies that can achieve this almost always share a few common traits:

1️⃣ Pursuit Beyond Profits

Great companies are not unprofitable, but they do not prioritize short-term profits as the ultimate goal.

• Prioritize consumers over profits
• Prioritize long-term value over short-term data
• Prioritize principles over opportunities

Profit is just the result, not the goal.

2️⃣ Strong Corporate Culture

Duan Yongping believes that corporate culture is the real moat:

• CEO determines 5–10 years
• Board of directors determines 10–30 years
• Corporate culture determines over 30 years

A company without culture is merely “alive”;
a company with culture can stay “evergreen.”

III. Business Model: More Important Than “People”

Many people like to talk about “knowing people,” but Duan Yongping’s attitude is very clear:

Even the best driver can’t drive a junk car well.

In investing, the order is always:

Business Model ＞ Corporate Culture ＞ Management ＞ Price

What makes a good business model?

A simple definition is:

Able to generate large amounts of net cash flow steadily over the long term, and not easy to be destroyed by change.

This means:

• No reliance on price wars
• Not heavily dependent on capital expenditure
• Hard to copy
• Able to raise prices, rather than only lowering them

IV. Differentiation: The Starting Point of All Moats

Duan Yongping is very cautious about the words “cost performance.”

He believes:

• Products without differentiation will inevitably lead to price wars
• Price wars are essentially failures of the business model
• Truly good products are those for which users are willing to pay a premium

This is also why he highly admires Apple, Costco, and Coca-Cola.

Differentiation is not “being different,”
but meeting needs that others cannot satisfy, and doing so sustainably over the long term.

V. The Essence of a Moat: Not Scale, But “Indispensability”

In Duan Yongping’s view, a moat is not a concept but a result:

• Can prices be easily raised?
• Will users leave after a price increase?
• Is there unused pricing power?

If the answer is “yes,” then there’s almost no need to model further.

The truly hard-to-copy parts of a moat often come from:

• Corporate culture
  • Long-term accumulated trust
  • Extreme restraint in “what not to do”

VI. Integrity and Calmness: The Mental Framework to Survive Cycles

If the previous sections are methodology, then “integrity” and “calmness” are Duan Yongping’s inner cultivation principles.

What is integrity?

It’s not moral coercion, but:

Not earning money that shouldn’t be earned, not doing things that shouldn’t be done.

The truly frightening thing is not making mistakes, but:

• Knowing it’s wrong
• Continuing to do so because of prior investments

What is calmness?

It’s not “Buddhist detachment,” but:

• Being able to return to the essence of things during temptations
• Staying calm in good times, steady in bad times
• Always prioritizing “living long”

VII. Why is Duan Yongping’s System Extremely Difficult to Replicate?

Because this system:

• Doesn’t give you short-term feedback
• Doesn’t create excitement
• Doesn’t promise instant wealth
• Doesn’t cater to human nature

But it has one advantage:
It almost never leads people toward catastrophic mistakes.

Duan Yongping never pursues “winning more,”
he pursues — making as few fatal errors as possible.

Conclusion

Duan Yongping’s philosophy is essentially a system that resists human nature, trends, and quick fixes.

In an era that encourages speculation, chasing speed, and storytelling, it stands out as out of sync. But it’s precisely this “out-of-timeness” that grants it the power to survive cycles. Play the long game, avoid mistakes, and time will work in your favor, with compound interest naturally accruing.