I recently came across an interesting investment failure case: Shengyuan Environmental Protection invested 60 million idle funds into a private equity product, ultimately losing 46.92 million, with a loss of 81.54%. Even more heartbreaking is that this company's net profit in the first three quarters was still 211 million, but it was dragged down by a single investment.

This incident is worth discussing because it exposes some of the most common misconceptions among ordinary investors.

The first pitfall: **The confidence killer in cross-industry investing**. Shengyuan Environmental Protection mainly focuses on environmental protection business, but then turned to high-risk fields like futures derivatives. In plain terms, it's "amateurs gambling with other people's money." The promises from those private funds sound dazzling, but the financial team only has a superficial understanding, yet they still poured 60 million. From another perspective, many retail investors follow the trend into crypto assets, without even understanding the trading rules, and end up going all-in. The result? They lose everything. The core logic is simple: **Don't touch fields you don't understand. This isn't conservatism; it's the basic rule for survival and making money**.

The second pitfall: **Superstitious trust in risk control clauses, this paper tiger**. The contract is filled with R4-level risks, custodians, and risk control clauses, sounding very professional. But in reality? Private fund managers overstep their authority to trade, forge net asset values, and the custodian, China Merchants Securities, neglects its duties. No matter how beautiful the documents are, they are just documents. The key is whether the other party truly has risk management capabilities and transparency. This also applies to crypto asset investments—those that claim to have "risk isolation."