[Red Envelope] Brother Bai Bei reads Chapter 17 of the "Tao Te Ching": The best investment is quietly making money without anyone noticing!

Chapter 17 Original Text [Taogu Ba]

Taishang, knows the existence of all;
Next, he is close and praises it;
Next, he fears it;
Next, he despises it.
If trust is insufficient, there will be disbelief.
Esteemed words are precious.
When achievements are accomplished and tasks completed, the common people all say: “It’s natural for me.”

In the previous chapter, we discussed cultivating emptiness, maintaining tranquility, observing the return to roots, aligning with cycles and trends—these are about the inner principles of investing and market laws. Being able to stay calm, see clear trends, and follow cycles already puts you above most people.

What Chapter 17 reveals from the Dao De Jing is an even higher level: realm or境界 (state of mind). Yes, that almost stigmatized word. It refers to a person’s level of understanding of the market, trust in the laws, and the state of being natural, effortless, and transparent when trading to the extreme.

This chapter does not talk about indicators, candlesticks, or methods. It only discusses levels of cognition and trading mindset. The level you are at determines how much money you can make and how far you can go.

1. Taishang, knows the existence of all

The highest realm is where people only know of his existence.

For us investors, he is unpretentious, unanxious, does not predict frequently, and does not make random statements. While others chase gains and sell at losses, busy entering and exiting, he remains calm, composed, and follows the trend as if he does not exist.

He merges with the market, follows the laws, rather than fighting against it. When the trend arrives, he holds positions; when it departs, he observes; when cycles come, he makes arrangements; when cycles pass, he exits.

Ordinary people cannot understand him with their own perspective because he does not trade based on emotions or rumors. He only trusts laws, cycles, trends, and his objectively quantified system.

This is the highest realm of investing: seemingly doing nothing, yet doing everything; appearing calm, yet enduring long-term.

2. Next, he is close and praises it

One level below the highest realm, people value others’ recognition, care too much about gains and losses, and about praise or blame. Being close and praising seems glorious, but it has already deviated from the “Dao.”

The true ideal state is to act without action, teach without words, allowing people to live spontaneously, without deliberate kindness or showing virtue.

In investing, this means simply following the rules, doing what you should do, without overly caring about gains or losses, nor about others’ opinions. Be brave to follow your own path and stick to your judgment.

Investing requires walking a narrow path. This path is lonely; true masters dare to be different, brave to be different, without caring about others’ opinions or market views, and persist in their independent judgment.

In short, “close and praise” is the second level of governance described by Laozi, reflecting a secondary optimal state of virtue-based influence. He not only does well himself but also happily helps others, giving roses and gaining fragrance, but it does not reach the natural realm of “the people do not know his governance.”

Once you start caring about praise or blame, your mindset becomes chaotic; once you care about market approval, you dare not judge independently; once you seek to prove yourself, you tend to go against the trend, act rashly, and hold onto positions, easily leading to losses and mediocrity.

3. Next, he fears it

A lower level is ignorance and fear of the market.

These investors do not understand the laws, cannot see the trend clearly, and cannot grasp cycles. They fear rising prices, fear falling prices, fear pullbacks when holding, fear missing out when in cash, cannot hold stocks, and regret cutting losses.

They know little about the market, lack confidence in themselves, and lack understanding of laws. They live daily in anxiety, led by the market.

Fearing it is not respecting the market but being afraid of it. Respect can keep one disciplined; fear stems from ignorance—lack of understanding of the market.

Of course, fearing because of ignorance is better than being ignorant and unrespectful. Ignorance combined with lack of respect is the beginning of disaster, which is what the next section discusses.

4. Next, he despises it

The lowest level of investors are ignorant, arrogant, dismissive of laws, and disrespectful of the market. When a novice hears the Dao, they laugh loudly; without laughter, it’s not Dao.

When prices rise, they think they are stock gods; when prices fall, they curse the market, the main players, and the environment, never reflecting on themselves.

They heavily leverage against the trend, trade frequently, do not cut losses, lack risk control, listen to rumors, and trade on feelings. When wrong, they blame the market.

They ignore trends, oppose cycles, violate laws, treat investing as gambling, and trading as pride.

Despising it means looking down on the market, dismissing the Dao, and underestimating laws.

Laozi said: “Not knowing the constant, recklessly doing harm.”

Those who despise it will ultimately be harshly taught by the market.

5. Trust is insufficient, disbelief exists

Why do some people close and praise, fear it, or despise it? The root cause is trust deficiency.

They lack trust in market laws, cycle operations, trend strength, and their own systems.

Because they don’t trust, they chase news; because they don’t trust, they chase rises and sell declines; because they don’t trust, they act recklessly; because they don’t trust, their hearts are unsettled, and their actions are unsteady.

Lack of trust stems from ignorance—knowing little about the market but not knowing it—and not knowing oneself. The greatest enemy in investing is not market fluctuations but the inner instability, ignorance of limits, and lack of self-awareness.

6. Esteemed words are precious

True masters are calm, composed, few words, and do not speak recklessly.

In trading, this means not making predictions lightly, not fully deploying positions, not making statements, and not being easily disturbed.

Esteemed words mean not issuing trading commands impulsively. Avoid unnecessary positions, emotional orders, chasing useless momentum, or gambling on uncertainty.

The master’s trading state is: mostly observing, waiting, maintaining tranquility, and watching for opportunities. When the timing is right, act; when the trend is unclear, wait; when cycles are not ripe, hold back. When acting, it aligns with the trend; when exiting, it follows the law.

Esteemed words are slow, steady, few, precise—doing less, but earning longer and more steadily than those who operate daily.

7. Achieve success and the people will say: “It’s natural”

What is the highest state of investing?

Making money, crossing cycles, capturing trends—others think he’s extraordinary, but he says: “I am just following laws and trends.” There are no gods in the world, only those who discover and master laws.

No miracles, no luck, no correct guesses, no divine operations. Just maintaining tranquility, observing, following the trend, knowing when to stop.

When the trend arrives, I follow; when it departs, I retreat; when cycles come, I act; when laws are clear, I proceed. Everything is natural—effortless, unentangled, un anxious, unstruggling.

This is the ultimate state of investing: aligning with laws.

It’s not that I have defeated the market, but that I have followed it; not that I am powerful, but that I respect the laws.

There are no stock gods in the market—only those who discover and respect market laws.

Chapter 17 discusses four levels of investment realm.

The highest investor is modest, calm, and follows the trend; the next seeks praise and recognition; the next is fearful and anxious; the lowest despises the market, disrespects laws, and ultimately suffers the consequences.