The Investment Philosophy: Finding Strength in Focus
In the fast-paced world of investing, understanding one's limits and maintaining focus can be more crucial than chasing every trend. Yi Lihua, founder of Liquid Capital (formerly LD Capital), recently shed light on the core principles guiding his firm's strategy.
Core Focus: A Two-Pronged Approach
Yi Lihua emphasized that his team's strategy has remained consistent across sectors, concentrating on two primary activities:
- Primary Market Investments: Identifying and investing in early-stage projects with long-term potential.
- Secondary Market Trading: Engaging in tactical asset allocation and trading on public exchanges.
He acknowledged that while operating blockchain projects or exchanges can be lucrative, individual bandwidth and expertise are finite. His role regarding these areas is one of an observer and learner, not a hands-on operator.
A Learning Experience: Stepping Back from Unfamiliar Terrain
Yi shared a formative experience from 2018 involving an incubated market-making team. The partnership turned sour due to misaligned incentives, leading to significant losses on his side. This prompted a complete exit from direct market-making involvement in 2019. His current approach is limited to passive financial investments in promising trading teams.
Dispelling the "All-Rounder" Myth
Addressing common industry conspiracy theories about "manipulating" projects, Yi offered a clear rebuttal. He wryly noted that he is no all-capable "hexagonal warrior," lacking both the intent and the resources to orchestrate project movements. He clarified that legitimate trading platforms understand this reality, underscoring that true investment is about uncovering value, not creating volatility.
This reflection goes beyond personal experience, serving as a sober counterpoint to industry hype. In a landscape of constant noise, success may ultimately belong to those who define their circle of competence and commit to mastering it.