Sister Mu's experience investing in Nvidia

NVIDIA is one of the companies in traditional technology that interests me greatly.

I suggest everyone take some time to search online for its growth process; I believe that after reading it, everyone will benefit immensely.

When NVIDIA was first established, the field it targeted was not well regarded because the gaming sector it aimed to serve had hardly any market at that time (in fact, even now this field is not particularly "sexy"). The reason why Jensen Huang's angel investor invested in him was largely due to the reputation of his former boss.

After going public in 1999, NVIDIA's stock performed quite well and underwent several stock splits. From less than $0.5 at its IPO in 1999 to $60 at the beginning of 2020, the stock price increased more than 100 times over 20 years.

Its market has steadily expanded from the initial gaming graphics cards to later being used for mining and then for cloud computing. These markets are all good, but they are also markets where the ceiling is easily visible.

NVIDIA's stock price truly began to soar starting in 2022. From that year, its stock price skyrocketed from $121 at the beginning of the year to $1200 now, increasing tenfold in just over two years.

We all know the reason behind this: NVIDIA's chips have become an indispensable core resource for AI applications, and AI will soon permeate every aspect of our lives, making this market unimaginably large.

Looking at NVIDIA's growth history, I believe its true transformation is due to the rise of AI. Before that, its position was merely a bonus. Since then, its status can at least be said to be unique for the next few years.

So as investors, even if we missed the first 20 years, as long as we seize 2022, we can still achieve substantial returns.

In fact, for investors of our age group, this is an event we have personally experienced. If we pay attention to the development of the technology sector and have independent thinking and judgment, we have the opportunity to seize such targets.

To grasp the divine opportunities brought by the massive changes of the times, on one hand, investors need deep insight and keen judgment; on the other hand, they also need a certain degree of foresight.

Insight and judgment refer to whether investors have the ability to see opportunities and act on them in a timely manner. Foresight refers to whether investors can look ahead after identifying an opportunity and estimate how long this potential can last—more colloquially, the possible length of this track.

In this regard, Cathie Wood of Ark Invest has a noteworthy investment experience with NVIDIA that we can learn from and reflect on.

She bought NVIDIA in 2013. After the rise of autonomous driving and deep learning in 2015, she heavily invested in NVIDIA.

At that time, autonomous driving and deep learning were just emerging, and the specific application scenarios and business models were still not very clear. To dare to invest heavily in such a scenario is quite remarkable. This alone shows that her insight and judgment are quite impressive.

However, at the beginning of 2023, she sold a large amount of NVIDIA stock, reasoning that she believed NVIDIA might follow in Cisco's footsteps. In this regard, I think she could be more forward-looking; at least for the next few years, NVIDIA's position is unlikely to be challenged.

Of course, based solely on her investment performance in NVIDIA, it is already excellent, but from the perspective of project investment, I believe there is still room for greater improvement.

I have also noticed similar phenomena in Cathie Wood's investments in the cryptocurrency field. Compared to retail investors who entered this field earlier than her, her entry point for Bitcoin was not particularly cheap, but in the long run, it wasn't bad either. However, her selling point is somewhat perplexing, and I don't quite understand her reasoning.

Therefore, from Cathie Wood's investment experience, I believe that for targets we are optimistic about and have participated in, we should pay attention to examining their sustainability and not let a lack of foresight lead us to prematurely let go of potential assets, thereby missing out on rare opportunities.