Lin Yuan’s latest end-of-year “reminder”: AI will inevitably face intensified competition; currently more optimistic about food, consumer, and CSI 300.

On the afternoon of November 20, billionaire private equity tycoon Lin Yuan spoke out!

This fund manager, known for his sharp remarks, always draws attention whenever he speaks. His investment comments are eye-catching, and sometimes even deviate from the "mainstream."

Especially since the debate over “old established stocks” has intensified, Lin Yuan has repeatedly spoken on behalf of traditional enterprises. This time, he not only continues to "stand with" them, but also breaks down his thinking thoroughly, explaining his “conviction” from fundamental logic to future trends in greater detail.

The entire speech appeared calm, yet every sentence from Lin Yuan carried a sharp edge.

Lin Yuan has brought back to the table some seemingly simple yet often ignored basic facts, making this both a subtle rebuttal to the “opposition” and a sober reminder to those chasing new concepts and sectors.

Latest Highlights:

1. In fields like artificial intelligence, biotechnology, and new energy, with time, they will inevitably reach the stage of capacity expansion and intensified competition. This is a market rule—just a matter of sooner or later.

2. For new industries, I admit their direction is not wrong, but from an investment perspective, I pay more attention to whether these companies can truly achieve sustainable profitability and survival.

3. During the previous boom, large amounts of capital flowed into urban construction and real estate. When asset prices fall in those areas, people intuitively feel their “assets have shrunk.”

4. Traditional industries have indeed been sluggish in recent years, but leading companies can still weather the storm thanks to their scale, capital, and management advantages. Moreover, the downturns have been fully reflected in their share prices.

5. Industries like food and consumption adjust supply and demand more quickly, their market self-correction ability is stronger, and that’s why we believe they are easier to grasp at this moment.

6. The core indices such as SSE/Shenzhen A50 and SSE/Shenzhen 300 have companies that support the fundamental base of China’s economy. And their overall valuations are at a rare level now; the risks are relatively controllable.

7. If you forget profitability, you’ll easily be led astray in this “new and old replacement” environment. I’m not conservative—I’m just being realistic.

8. In the future, we’ll focus on two kinds of companies: those that can make people happy, and those that can let people live longer.

ZiShiTang has organized his roadshow points below (from a first-person perspective) for readers’ enjoyment.

AI Will Eventually Face Fierce Competition

2025 is just over a month away. Looking back, small-cap stocks and “new sectors” have performed well, but leading companies in traditional industries are still adjusting. This reflects both changing market enthusiasm and the current macroeconomic environment.

In the past twenty years, we've experienced rapid growth driven by real estate and large-scale infrastructure, which absorbed vast amounts of capital and became the primary wealth source for residents. But in recent years, these sectors have run into collective problems, leading to sharp asset price volatility and a feeling among many that “income didn't rise, but wealth shrank.”

In this context, traditional industries naturally have a tougher time.

Improved production efficiency is another key factor. Many old industries have lowered costs through technology and scale, intensifying competition and leading to apparent overcapacity.

By comparison, new industries are still in the phase where their production capacity hasn’t been fully released—AI, biotech, new energy, apparently haven’t hit supply-demand imbalances yet. But I believe with time, they’ll also reach overcapacity and heightened competition. That’s the market rule—just a matter of timing.

Not Daring to Heavily Invest in “Hot” Sectors

Many investors ask: Where did the money go? Why does it seem like everyone has less disposable income now?

I think, during the boom times, capital mainly flowed into urban construction and real estate. When asset prices in those areas fell, people intuitively felt “assets shrank, pockets got lighter.” This is tied to company earnings and industry prosperity.

For sectors like AI, biotech, and new energy, I agree these directions are right, and will create future opportunities.

But from an investment perspective, my priority is whether these firms can truly achieve certain profitability and viability. New industries carry much greater uncertainty compared to traditional sectors, and in investing, certainty is what matters most—certainty of profits, operations, and survival.

Based on this, I won’t heavily invest in these tracks right now.

Low Valuations for “High-Quality” Traditional Firms

Traditional industries really have been sluggish in recent years, but leading companies can withstand pressure thanks to their scale, capital, and management advantages.

This is fully priced into their shares. Statistically, many high-quality companies in traditional sectors now have reasonable or even low valuations.

Therefore, from an investment perspective, I actually think now is a good time to lay out positions in large companies and major indices, especially like SSE/Shenzhen A50 and SSE/Shenzhen 300. The enterprises behind these indices are the bedrock of China’s economy.

And looking at decades of market history, the overall valuations of these indices are at a rare level, with relatively controllable risk.

Concentrating Holdings in the “Mouth Economy”

Our company continues to focus its strategy on businesses related to consumption and the “mouth economy.”

Their traits are clear: Products have an expiry date, don’t require huge investments to drive growth; if capacity overshoots, the market quickly corrects itself—unlike real estate or highways, where once you invest, it’s hard to fix mistakes.

Simply put, if you build too many houses, you can’t conjure up people to live in them; build too many roads, and losses are real.

But in food and consumption sectors, the adjustment is quicker, market correction ability is stronger, and that’s why we believe these industries are easier to grasp right now.

“Old Industries” Whose Demand Won’t Disappear

For our research team, the conclusion hasn’t changed: The sectors related to food and drinking, and to life itself, are still worth “holding” and “buying.”

If you split investing into holding, buying, selling, in these industries we prefer the first two.

The common trait: their demand won’t disappear. No matter how the environment changes, people always need to eat, drink, and see a doctor when sick. The vitality of these industries is stronger than people think; I’m repeating this now because I don’t want everyone to miss the right direction.

Of course, new industries will definitely breed large companies—I don’t deny that. AI, robotics, biotech, new energy—all will eventually produce large-cap firms. But the issue is, it's very hard for us to grasp their profit cycle.

These are mostly high-investment sectors, they burn money fast, take long cycles, and if things change or profitability lags, investors’ confidence is destroyed. These industries rely more on money piles than on steady profits.

So conceptually, we don’t put these tracks as main targets. We insist on putting “profitability” first—more than ever before.

If today you forget profitability, in an environment of “replacement of old and new”, you’ll be easily led astray. I’m not being conservative, just realistic.

Go review those “innovation” index funds—how many companies in there will truly survive in ten years?

I have a good sense of that.

Investment: Survival Comes First

Looking back at global tech history, it’s the same. Think of all the leading US tech companies in the 1980s—most are gone. Early new energy vehicle makers—the first movers didn’t necessarily make money, most disappeared. But food, drink, daily-use companies rooted in traditional industries are still standing firm.

Survival comes first.

Old or new companies, competition is there. But old firms require less investment, don’t need constant money injections, yet can keep earning profits—and those profits fuel future investments.

Eventually sentiment reverses, capital flows back to tangible industries. The market’s speculative character and human nature are most vivid here.

Today, everyone thinks traditional industries have no future, no growth, valuations are suppressed—but the demand behind these companies remains. The risk is clear and present; the only uncertainty is on future growth pace.

As for new industries, as long as population declines, their demand is also impacted. Ultimately, the consumer is still a person.

In this economic setting, while we are bullish on the big directions, we remain very cautious.

Take a look at our “mouth-related” industries—they don’t lose against time, nor against money. “Losing money” means the company or demand disappears. But if the company and demand are there, wait a bit, and opportunity will return.

We know the ups and downs of the market. Very clear which prices are high, which are low—that’s market speculation’s law, never to be defied.

The Price of Chasing the Wrong Trends

Some people chase hot sectors—they may succeed and become top capitalists if they pick that “truly profitable” company. But in new sectors, there are few winners, you need outstanding vision. Chase the wrong thing, and you end up with nothing.

But in traditional industries, if you have money to invest today, I don’t think you’ll suffer a loss. Many global phenomena prove this.

Take American manufacturing—after decades of offshoring, the US is now emphasizing bringing manufacturing back, showing they've realized the problem.

Their high inflation, high interest rates are all linked to manufacturing loss. High-tech is important, but the proportion that truly benefits everyday life is much lower than people imagine.

What will the future world look like?

Many say AI and robotics will replace lots of labor. Investment-wise, those are trends, but whether you’ll truly make money is another thing.

It’s like farmers growing crops, raising pigs—working hard, but whether they profit is still uncertain.

When everyone can do it and machines can be copied, making money becomes extremely hard, and vicious competition is more likely.

New Industries Will Become “No Longer Rare”

Manufacturing will become highly intelligent in future. Whether production or use, product quality can be very high, as specialization increases and technology matures.

But that brings its own problem: When all firms can make “high-quality” goods, competition focuses only on price.

Once attention to quality drops, manufacturing profit margins get squeezed. This is my clear concern about the future world.

Still, no matter how advanced, I believe the world will return to “people-first.”

Especially as population ages, taking care of elders—no matter the tech, machines can’t replace genuine human warmth.

Many hot new industries will one day seem ordinary. Rarity is valuable—giving me a robot or smart toy can’t bring real satisfaction. In the end, people need “warmth” and “joy.”

Focus on “Enduring Demand”

As our ancestors said—a lifetime revolves around “food and drink.” These are eternal needs.

At the same time, people want to live longer and better. The days of material scarcity are gone; society won’t ever go back to lacking food and drink.

Therefore, industries related to food and drink, and life extension, will always have enduring demand. I am deeply convinced of this.

Future investment focus, whether for 2026, 2027, or the next decade, won’t change for us. We mainly look for two types of companies: ones that make people happy, and ones that help people live longer.

Even birth needs—we won’t rule out. If population grows again, many current contradictions will ease.

Today, many choose not to marry or have children. But as they grow older, needs will change, and life expectations will shift. People in this world are here for two things: passing on lineage and living happily. In investment, we look for industries that support these two needs.

Alcohol and tobacco—will there be demand in future? Certainly. Plus all kinds of things that slow aging and keep people healthy—these can’t be replaced. Whether for your parents or yourself, ultimately it’s all about “quality of life.”

Avoiding “Value Dilution”

The biggest investment risk is when trends suddenly reverse. Not short-term volatility, but the direction itself goes wrong—when the wind shifts, you can’t hang on.

I lived through that wave between 1990 and 2000. The capital market focused on growth, stories, concepts; some companies posted red lines daily for 18 months. Years later, most were gone.

Later, I talked to the concept players from back then—they envied me for owning toll highways, collecting fees and having stable cash flow. See, same people, vastly different perspective shifts in just a few years.

That’s the capital market.

After the bubble bursts, once-hot sectors get ignored. Today’s traditional industries are in a similar stage; people tune out when you mention them.

Investing Is Participating in Value Creation

Still, we stick to our view: Investing in enterprises, at its core, is about participating in value creation—both social and financial value. Understand this and you won’t be swayed by short-term trends.

I first went to the US because I bought Coca-Cola stock. There, I saw almost every restaurant sold Coca-Cola. In that moment, I knew: That’s why its shares drop then recover, recover then hit new highs.

Because it’s a true “money-making machine.” Some things you can’t grasp from charts, but once you see it in person, you’ll understand.

That’s when I clarified my “mouth economy” investment strategy. I can say, in my lifetime, I don’t see it disappearing.

Abundant material erases scarcity; when nothing is scarce, there’s no excitement. When I was young a bicycle was precious; buying a Shanghai watch meant looking all day, it was rare.

Today, watches have become common—that’s the value dilution from improved efficiency.

Ten-plus years ago I bought several massage chairs, 50,000 yuan each, felt novel at the time. Used them for at most half a year; when renting the apartment, the tenant thought they were in the way, so I paid to ship them back. When I wanted to use them again, they’d lost all appeal. Real massage, real human touch—can’t be replaced.

Same for gold. Many boast how much they made buying gold at certain prices—but I believe 99.99% of people can’t truly predict. Gold has had decades-long downturns too; when you buy during those, it’s always wrong. That’s why it’s hard to grasp.

Investing can’t just be talk—it must withstand time. Only when you look back in ten or twenty years and still feel your decision was right, is it truly correct. If what you buy goes downhill for two decades, that hurts.

Minimize Directional Errors

We invest, so we must ask: Are we doing the right thing or just relying on luck?

Our standards are simple:

Can the company remain profitable?

Can you grow with it long-term?

Direction comes first. If your direction is right, the rest is easier.

I often say—don’t fear buying high, as long as the direction is right. “Mouth economy” companies today aren’t expensive; they’re cheap. New industries aren’t high yet, as they’re just starting. But “mouth economy” and new sectors differ essentially: both aren’t expensive, but certainty of profitability differs by an order of magnitude.

Not saying something is absolutely good or bad—you just need clarity about your own criteria.

Everyone sees things from their own point of view, so opinions differ—but investment standards should be one: Look at profitability and whether you can grow with the company long-term. Opportunities exist, but truly reliable ones are few. What we have to do is avoid making big directional mistakes as much as possible.

Risk Disclosure & DisclaimerThe market carries risks; invest with caution. This article does not constitute personal investment advice, nor does it consider individual users' specific goals, financial situation, or needs. Users should consider whether any opinions, viewpoints, or conclusions herein fit their circumstances. Investments made based on this article are at your own risk.