Everyone believes in the snowball theory, yet everyone secretly hopes their wealth will expand like popcorn. What they don’t realize is that slow, steady growth is the true foundation of lasting wealth. Sometimes, being just a little smarter than the next person early on means being far, far wealthier in the end.
These past two days, many friends have been messaging me asking: does this current rally mean the bull market has truly arrived?
Master Chi has thought carefully about this for two full days. My clearest answer: what we are experiencing right now is the pre-eruption phase of a great wave. The true bull is still a little ways off.
Therefore, regardless of what the short-term trend looks like from here, it does not change the fact that the great bull is coming.
I want to walk through my reasoning — and also share what the people around me, the ones who’ve gotten rich in every single bull market, actually did right.
So this article is structured simply: the first half reads the market, the second half gives you the playbook. Direct and to the point.
Why do I say we’re currently in the preparation phase of a great bull?
Four things:
1 — The index rally is being led entirely by institutional-grade stocks, with no wildcard “demon stocks” yet. Look at who’s been driving the market lately: almost entirely state-backed and institutional capital moving in coordinated blocks.
2 — All the supporting policies and infrastructure have only just been laid down, and they still need time to take effect. Even the hot money traders and market makers haven’t fully figured out the new rules and their limits yet.
3 — The herd hasn’t woken up yet. (This point is especially important.)
4 — There will be a medium-length correction ahead, followed by more reform and expansion policies — all designed to set the stage for greater heights.
Now I’m sure many of you will disagree. That’s great — everyone has their own read, and we should learn from each other.
But Master Chi is genuinely put off by a certain type of person: those who, after some exposure to investing, become excessively “elite” about it. They toss around policy analysis and geopolitical judgment, deliver sweeping comprehensive breakdowns loaded with jargon. Can’t say it’s useless — but this kind of hyper-specialization often narrows the vision rather than broadening it.
Because at the end of the day, we all know that all investing boils down to one fundamental question:
Right now, at this moment — will there be more people willing to take the other side later?
Sorry, let me rephrase that more delicately: In the short term, will there be people who reach the same conclusion as us, and come to pass us the baton?
The conventional wisdom is that “you judge the market by the index.” That’s actually imprecise. What truly reveals the market’s stage is the state of the majority of participants. Broadly, it breaks down like this:
Phase 1 — Slump / Recovery Very few participants. Trading volume is thin. Nothing much happening.
Phase 2 — Normal More people than Phase 1. Occasional thematic plays pop up, but nothing dramatic unfolds.
Phase 3 — Preparation Phase (where we are now) Various supporting policies and market expansion measures begin to appear. Legitimate financing channels start to stir.
Stocks that hot money would never normally touch start getting lifted. This is why sectors like brokerages, real estate, and finance — normally with no exciting story to tell — have suddenly surged recently. Only these sectors are large enough to hide the real giants while also propping up the index and producing a respectable scorecard.
(Won’t go further into this here.)
Everything right now is laying groundwork for a much larger move. But even the fiercest preparation phase comes with occasional small corrections — and small corrections don’t mean the bull market has been stillborn. More on that below.
Phase 4 — Adjustment Phase (Coming soon) After Phase 3, the market goes quiet again — for weeks, maybe months. This time is given to the wolves beneath the dragons and tigers to gather. Only when the wolf pack has assembled will they begin to lure and ambush the sheep.
During this period, large amounts of capital start to flow in, with hot money traders and market makers beginning to negotiate and position themselves.
Put plainly: Phase 4 is deliberately left as time for all the big players to react, prepare, and get set. (A great move never appears from nowhere — the bigger the move, the longer the preparation, and the longer the silence before it.)
Many people never understand why the prairie needs wolves. This gets into the Dao of things. Yes, wolves consume the sheep — but more importantly, they mobilize sheep-like capital into motion. There are things that dragons and tigers simply cannot do. Only wolves can package narratives, set ambushes, engineer setups, and establish positions. Without them, where would market legitimacy come from? The wolves are also the ones you need to follow and emulate.
Phase 5 — Bull Market Peak Beyond a strong index, genuinely exciting themes start to emerge. Market makers, hot money, media, communities, and retail investor groups all converge around certain themes and push them up — and those themes hold. Then another comes. Then another, one after the next.
Note: The retail investors at this stage are still mostly experienced players. Newcomers are few, and those who do enter do so only tentatively. Don’t worry — the snowball begins rolling from here.
Phase 6 — Bull Market Mid-Phase After the peak phase passes, the whole market gets restless. The wealth created during the peak produces many “demon stocks” and many celebrated “market gurus.” During this period, you don’t even need to search — open your phone, check the news, and it’s wall-to-wall stock chatter.
Now the newcomers arrive.
Always remember: the market’s sheep are impulsive, naive, and childlike — and you will never guess just how impulsive, naive, and childlike they really are. They haven’t been through it all like you have. They don’t understand the rules of the game. So after making their first limit-up gain, their first double, their blood is fully boiling.
Phase 7 — Bull Market Tail End Ride any public transit and you’ll find the vast majority of people around you have their stock apps open. Wild narratives begin circulating — “Charging for 8000!” “Hitting 10000!” And in your social feeds, people are actually talking about selling their homes to invest, shutting down their businesses.
But something quietly feels off. The index is still roaring, demon stocks are everywhere — yet a quiet doubt creeps in:
“With market caps this high, with everyone participating — who exactly is left to keep buying? These numbers…”
Phase 8 — Wind-Down Out of nowhere one day, a sector that seemed unshakeable suddenly breaks support — then quickly recovers. It’s a sector you would never have expected to be the first one cut. Traditional, stable, boring — nothing like the hot stuff being chased.
But here’s what you need to understand: when something that isn’t being feverishly chased gets hit before the hot stocks do, it means some of the capital that “never loses” has already started to exit.
Let me say it again: in your entire life up to this point, you have almost never seen core institutional capital take a real loss.
Then one sector breaks, then two, then three. People still rush in to fill the gaps. Until finally one day, the index no longer feels invincible — and yet someone says, “Don’t be scared, it’s just a correction!”
And the newly arrived sheep… believe it. They actually believe it.
What they don’t know is that by this point, hot money traders, market makers, and veteran players have already pulled out their principal. What remains in the market is only a portion — sometimes a small portion — of their profits. We entered in Phases 2 through 3.5. Those who entered in Phase 6 have now become our harvest.
Phase 9 — The End Behind the feverish market lies cold, calculated intent. You, me, and the hot money players have already withdrawn the vast majority of our positions — leaving only a tiny fraction of chips in play.
If bad news hits someday, we don’t even care. We just dump at the limit-down price without a second thought. Someone will take it. It just won’t last much longer — usually a final spasm of another month or so, and then the market fully collapses.
By contrast, we, having entered in the early phases, have by now fully captured our profits.
And those newcomers who entered in Phases 8 or 9 are left holding massively overpriced chips that no one wants.
This is why Master Chi always says: all investment, at its core, carries a certain element of windfall fortune within it. Because don’t flatter yourself into thinking you’re innocent here — every chip in this market, didn’t you take it from someone else’s hands?
So is tomorrow, next week, next month going to be the moment the bull truly arrives? Still too early to say.
Yes, I know account openings have surged. I know more and more people are taking interest in the market. I know there have been plenty of positive signals.
But all of this only registers on the radar of people like us who pay close attention. For the vast majority of people in this country, we are still an absolute minority. We are nowhere near the “national frenzy” stage — we’re about three orders of magnitude away.
And everything showing up right now, without exception, signals that at both the top levels and locally, this is nothing more than a grand, sweeping preparation phase.
Yes, every detail of it signals the arrival of a great — even monumental — era. One that will create countless fortunes for those who seize it.
Just not yet.
So personally, what directions am I focused on right now?
First: low-priced, small-cap stocks in hot sectors. These are the prime targets for hot money in the next phase.
Hot money doesn’t have unlimited firepower to burn. What they love are stocks with manageable market caps, decent fundamentals, sitting in a hot sector. This lets them:
- Move the stock without excessive capital strain in the early stage.
- Build a compelling narrative — a good stock in a hot sector can accommodate almost any story, and the sheep will buy in.
- Time it well with the index — easy to exit, good for market-making, and profitable for early sheep too. A three-way win.
So Master Chi sincerely recommends: start doing your homework now.
The big-picture directions remain the old three: technology, healthcare, infrastructure. The recently hot internet brokerage theme is also worth keeping an eye on.
Within those sectors, look for stocks with healthy balance sheets but persistently small market caps.
Then assess your own risk tolerance. If you’d rather not overthink it, get a broad sense of things, then check out the various community stock review sites.
Don’t listen to any of their analysis — the herd will only give you noise. What you want to focus on is just one thing: “Is the noise loud enough?”
Loud noise is itself an advantage. It means that once the stock starts lifting, more people will come in to take the other side. That’s what they mean when they say: a business built on fame isn’t afraid of being criticized — it’s only afraid of being ignored.
On capital allocation:
Start arranging your available funds gradually — gradually.
Don’t be the reckless gambler who sells their home to invest. Almost none of those people end up okay.
Instead, start arranging the low-cost, accessible capital you already have: maybe a modest portion of your total savings, plus a fraction saved from your regular expenses.
Many people dismiss this kind of money as not worth bothering with. They want a big sum all at once.
What they don’t realize is that wealth built during the early phase of a bull market may seem insignificant now — but by the time the mid-to-late phase arrives, it could become the most meaningful first pot of gold of your life.
And if you exit in time, even as the market deteriorates afterward, you’ll still be able to maneuver at the lows and capture beautiful returns.
Remember: you won’t see only one bull-bear cycle in your life. Most people live through three or four cycles of varying magnitudes. If you position yourself well across all three or four, you will without question ascend into the new wealthy class. Don’t even doubt it.
As for those currently talking about chasing the high — chasing the index heavyweights dominating the headlines — that’s everyone’s own call, neither right nor wrong.
You could even argue that even if a correction comes, those who got on the boat a little late won’t suffer all that badly. They’d just need to sit through it and wait for the recovery.
If I were to close with one genuinely heartfelt piece of advice:
Right now is actually the time you should be most deeply engaged with the market — not to blindly throw money in, but to learn how to map out your operational game plan for when the great era truly arrives.
For example: if you’re going with the early-phase small-cap approach, buy in now and then simply hold. Don’t fidget. Don’t impulsively chase and flip around.
Then wait patiently for the mid-phase. When official leverage becomes available, spread across a few demon stocks. When the themes play out, follow calmly and exit cleanly. Leave a little tail-end profit for others — which is also how you dodge the risk early.
Keep a tiny sliver of your profits in just to keep playing, to feel the market. Call it entertainment.
Because beyond “everything going up aggressively,” the other defining trait of a bull market is this: it eliminates all single-digit stocks, pushing them into double digits.
This isn’t some rule — it’s simply that these stocks are perfectly sized for hot money to work with. Sometimes just a hundred million, or even tens of millions with leverage, is enough to get it done. They love this playbook. The return on effort is extraordinary.
On top of that, over the past few years — despite the rough environment — the total deployable capital that people have accumulated has actually grown considerably compared to before.
In short: today, and in the near short-term future, whatever direction prices move, one thing is certain: the great bull is truly coming.
It’s close. Close. Close. Everything is being prepared for it.
Honestly — it’s long overdue. After so many difficult, grinding days, doesn’t everyone deserve something to lift their spirits?
Because ultimately, the market serves the broader environment. And in any environment, the most important thing is the human heart.
Right now, the market’s heart — public confidence — has not yet settled, and has not yet been won.
Let the bullet fly a little longer.