Watchman Nee emphasizes the Holy Spirit's discipline in the life of a Christian, using Jacob's experiences to illustrate how God works to reveal Christ within us. He explains the distinction between our natural strength and the old man, highlighting that while the old man is crucified in Christ, the natural man must be progressively weakened to allow for the formation of Christ's character in us. Nee points out that true spiritual fruitfulness comes not from our efforts but from the Spirit's work in us, transforming our character to reflect Christ. He concludes that God's ultimate purpose is to create precious stones through trials and discipline, which represent the work of the Spirit in our lives. The sermon calls believers to understand and embrace this transformative process as essential to their spiritual growth.