According to data released by Simuwang.com, Lin Yuan Investment, a private fund, is highly likely to report an annual loss for 2025. A closer examination of its investment philosophy reveals that behind these losses lies a profound contest between "long-termism" and "market cycles."
Lin Yuan attributes the losses to short-term price fluctuations in his portfolio holdings and has explicitly stated that he will not adjust his core strategy as a result. He remains steadfastly focused on industries with stable demand, particularly the consumer and pharmaceutical sectors closely tied to his concept of the "mouth economy." Baijiu, fast-moving consumer goods, pharmaceuticals... the inelastic demand in these sectors operates like an "iron law"; regardless of economic conditions, people's needs to eat, drink, and seek medical treatment do not disappear. Lin Yuan has famously stated, "I only invest in companies whose business I understand and whose accounts I can project for the next several years." This adherence to a defined "circle of competence" has allowed him to remain calm during tech stock frenzies and unmoved during real estate stock crashes.
Lin Yuan is not bearish on technology per se; he acknowledges that artificial intelligence represents a future direction, but he "almost never proactively gets involved." The reason is simple: innovation in the tech sector is fraught with uncertainty, and leadership changes as rapidly as a revolving lantern. He has admitted that even if he bought tech stocks, he would "worry so much he couldn't sleep," because "the fate of the investment isn't in his own hands." This extreme pursuit of "certainty" leads him to steer clear of the tech stock rally, instead embracing the "slow-moving variables" of consumer and pharmaceutical sectors.
Banking, internet, and real estate stocks are consistently absent from Lin Yuan's investment list. For banks, he believes profit margins are compressed, making risk and reward misaligned. For internet companies, he worries about the dual uncertainties of regulation and competition. For real estate, while acknowledging the industry won't vanish, he views it as requiring heavy fixed-asset investment and having long adjustment cycles, failing to meet his standard of "quick supply-demand correction." His logic is straightforward: investment should select sectors capable of "weathering cycles," not bets on "cycle reversals."
Lin Yuan concentrates almost all his capital on the consumer and pharmaceutical sectors, which he calls "tracks that will absolutely produce ten-thousand-bagger companies." His list of major holdings—such as Kweichow Moutai, Zhangzhou Pientzehuang Pharma, and Wuliangye—bears out this conviction. The common characteristics of these companies are: products with short shelf lives, no need for massive ongoing capital investment, and rapid supply-demand adjustments. Compared to "heavy asset" industries like real estate or highways, they are more like "light cavalry," able to pivot quickly amid market changes. However, the market in 2025 showed no mercy to the "mouth economy." Weak consumption, centralized medical procurement, and pressures from single-disease payment policies... under the weight of these multiple factors, the food & beverage and pharmaceutical sectors significantly underperformed the CSI 300 Index. The baijiu industry entered a phase of channel inventory destocking, putting pressure on prices; the medical sector saw profitability decline due to the normalization of anti-corruption campaigns and centralized procurement. Lin Yuan's portfolio performance could be described as a "disaster," yet he still chooses to "hold and buy more," believing that "these sectors can provide investors with relatively stable returns."
Lin Yuan's losses are, in essence, a mismatch between a long-term philosophy and short-term market trends. In 2025, AI-related stocks (like NVIDIA and Alibaba) became market darlings, yet investors simultaneously worried about the sustainability of their high valuations. Conversely, the consumer and pharmaceutical tracks that Lin Yuan adheres to, while under short-term pressure, harbor latent opportunities. Taking baijiu as an example, after industry adjustments, channel inventories are gradually clearing, making the brand moats and cash flow advantages of leading companies even more pronounced. In pharmaceuticals, driven by an aging population, demand for innovative drugs and medical devices continues to grow, and the normalization of centralized procurement is forcing companies to enhance efficiency.
Lin Yuan's losses in 2025 serve as a mirror, reflecting two contrasting mindsets in the capital markets: the "speculator" chasing short-term trends, and the "tree planter" committed to long-term value. The former might soar high on the wind, but can also fall hard when it stops; the latter may endure a long wait, but once the trees form a forest, the harvest is sustainable compound growth. Lin Yuan's story teaches us that in investing, there is no "constant victory," only "evergreen" resilience. Holding fast to principles amidst volatility, and seeking certainty within uncertainty, may be the ultimate answer to navigating cycles. After all, the market's pendulum always swings back, and true value is never afraid of being undervalued.
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