Duan Yongping said that buying stocks is like buying a company. So how did he choose the company? In fact, when he picks a company, he doesn't use a "screening" method, he uses an "exclusion" method. His logic has four layers, each of which is performing subtraction. Level 1: Is the business model good or not. Duan Yongping repeatedly asked a question: "If I have enough money, would I be willing to buy this company as a whole The criteria for the answer are very specific: differentiation, moat, and the ability to generate sufficient and stable net cash flow in the long term. He bought Apple because he saw clearly in 2011 that Apple had transformed from a hardware company to a software hardware integrated platform. His original words were: "At that time, the changes in Apple's business model were already very clear. I didn't have to judge in this industry, that was something I could see He bought Moutai because "Moutai and other Baijiu are two things". Brand barriers and state-owned attributes ensure that quality does not change arbitrarily. He comes from a business background and knows one thing best: if electronic products cannot be sold, they will become scrap after two years. The older Maotai is, the more fragrant it becomes, and vintage liquor can be sold at a higher price. On the other hand, why did he sell Vanke? I just can't understand it, I can't figure out what will happen in 10 years, so I haven't touched it again I filtered out any business that I couldn't understand. Second layer: Is the corporate culture correct. Duan Yongping said, "In the short term, we rely on the CEO, in the medium term, we rely on the management team, and in the long term, we rely on culture. ” He highly recognizes Apple's "user orientation". His original words were: "Apple is not the kind of company that is very business oriented. They care a lot about doing things well, they care a lot about user experience, and they have a long-term vision. ”Apple made a big mistake by delaying the release of large screen phones for three years, but it will eventually return to user demand orientation. He has a more ruthless case: General Electric. In the 2008 financial crisis, he bought stocks of General Electric. But he quickly withdrew. He later said, "Based on today's thinking, I would not invest in General Electric. The company's business model is not good, but I had not yet reached my current level at that time What's even more interesting is that he identified a detail in the deterioration of corporate culture: the word "integrity" on General Electric's official website has disappeared. He judged that there was a problem with its culture and immediately sold it. When culture changes, the company also changes. Level 3: Not listed. This is Duan Yongping's most core method. He said, "People care about what we have done, but in fact, a big reason why we are who we are is because of the things we don't do There are three iron rules on his' Stop Doing List ': Not short selling. He shorted Baidu and lost about $200 million, calling it a 'foolish act of losing his composure'. Do not borrow money from others. Because there have been more than 10 times in Apple's history where it has fallen by over 40%, leverage will make you out at that moment. Don't touch if you don't understand. Understanding a company is no less than studying for an undergraduate degree. Over the past thirty years, he has made fewer mistakes than others because 'if we knew it wasn't suitable for us, we wouldn't do it, and not doing it would save us from making many mistakes'. The fourth layer: Price is the final consideration. Duan Yongping has a classic expression: "The safety margin does not refer to cheap prices, but to how well you understand the company He doesn't buy because the stock price is cheap, but because he understands the long-term value of a business, and only sells when the price is reasonable. His operation in 2026 demonstrates this logic most clearly: Reduce holdings of Apple, Nvidia, and Google. Apple's position has decreased from over 80% to 41%, reducing holdings for two consecutive quarters. His reason is simple: "Apples are not cheap anymore Increase holdings in Pinduoduo and Berkshire Hathaway, and repurchase Alibaba. Simultaneously heavy warehouse Maotai and Bubble Mart. He once said on Snowball, "From the perspective of the next decade, Maotai is more stable and there is greater room for bubble appreciation Sell expensive items while buying cheap ones. He is not 'stock picking'. He is reconfiguring the business that he understands. Duan Yongping summarized the four logics of the company as follows: Firstly, the business model. Is there differentiation and can it sustainably generate cash flow. Secondly, corporate culture. User oriented or profit oriented. Thirdly, it is not a list. Don't short, don't borrow money, don't understand, don't touch. Fourthly, the price. The safety margin is not cheap, it's how much you understand. On his punching machine, he only has 20 holes in his lifetime. He said he hasn't finished using it yet. Choosing a company is not about adding, it's about subtracting. To the end, the rest is what you understand. Have you learned the logic of selecting companies and stocks from Duan Yongping?