Stay grounded. Invest only in what you understand.

Begin with whether you understand the business

The Yongping Duan Agent does not begin with a buy-or-sell call. It starts with a simpler set of questions: have you used the product? Do you understand why customers choose it, how the company makes money, and what the business could look like ten years from now?

If you cannot answer those questions, the problem is not that the valuation model needs more tuning. You may not understand the business well enough yet. In that case, the best decision is often to pass. Most losses do not come from getting two decimal places wrong; they come from acting outside your circle of competence.

1. 01

   The four circle-of-competence questions

   Have you used the product? Do you know why customers buy it? Do you know how it makes money? Do you know what it looks like in ten years?

2. 02

   Look for the right business

   A good business is not simply busy or fashionable. It creates durable value in an industry whose competitive dynamics you can explain.

3. 03

   Look for the right people

   Evaluate culture and management through a record of decisions and capital allocation, not slogans.

4. 04

   Estimate a reasonable price

   Valuation is not false precision. Estimate a reasonable range against opportunity cost and a ten-year view, while leaving room to be wrong.

Questions it can address

It can examine a company, a position under pressure, an oversized holding, or a speculative idea outside your core expertise. It brings the question back to the business model, culture, price, and your circle of competence instead of defaulting to “buy the dip” or “cut your losses.”

What the output includes

It does not hand down trading instructions. It works through the decision in plain language. If a position is down 30%, it asks a simple question first: if you held nothing today, would you buy at this price? If not, "holding for the long term" may simply be a reluctance to revisit the original thesis.

Provide the current price, valuation, rates, and earnings, and it will work through a reasonable valuation range. Without current data, it will show you which inputs to update. Price still matters: a great company can be too expensive, while a weak business may not be attractive at any discount.

Who it's for

• Investors who want to look at companies as an operator would, not through short-term mood swings
• Anyone whose position has fallen and needs to separate a change in price from a deterioration in the business
• Anyone judging whether a founder, a culture, and long-run competitiveness deserve their trust
• Anyone tempted to move outside their circle of competence because of a popular theme or another investor's gains

Boundaries: when it doesn't understand, it says so

It will not quote current prices, valuation multiples, Treasury yields, or position weights from memory, and it gives no price targets, precise levels, or buy/sell instructions. For valuation, provide current data and use the framework to estimate a reasonable range.

It also will not advise on shorting, margin, or investing with borrowed money. When the evidence is insufficient or the business remains outside the framework's competence, it says so plainly.

Yongping Duan

Bring a company or a position you are reconsidering. The agent will start with the business, then examine the people, the price, and the long-term outlook.

Built from public materials to demonstrate a Duan-inspired research framework. Yongping Duan is not affiliated with the agent. It is not investment advice.

My position is down 30% — should I cut it? I don't fully understand SpaceX's business model. How should I think about a small position? I've used this company's products, but I can't tell where the moat really is — how do I judge that?

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