$China Ping An(SH601318)$ $China Taiping(00966)$ $New China Insurance(01336)$
After each round of crisis, insurance stocks and bank stocks, because of the “characteristics” of leverage, are extremely sensitive to the economy, and all have experienced gains far exceeding the market.
(one)
For 20 years, the U.S. stock market has continued to melt down, and the Dow Jones Index has fallen to 18,000 points, and then it has risen continuously for a year and a half. The reversal of the U.S. stock market is the same as after 2008, with a deep drop, the government quantitative easing, and rescue of the economy, and then the stock market doubled.
(two)
In a big bear market, financial stocks are in jeopardy due to their fundamentals, so any valuation indicators are invalid, and they continue to drop; and when the economy returns to a normal track, even without strong economic growth, the stock price can increase several times:
1. American International Group, an insurance stock, the stock price rose from 15 to 63
2. MetLife, whose share price rose from 20 to 77.
3. Bank stocks have also risen several times
(three)
It is worth mentioning that the economy was kept from sinking due to quantitative easing – printing money. Printing money tends to cause inflation in the future. Therefore, there are several judgments in the future:
1. Inflation will also appear in China in a few years.
2. Inflation is good for financial stocks.
3. Inflation has little impact on the poor and the rich, but the middle class has the greatest impact. The rich are less affected because their money is allocated in assets (house stocks); while the income of the poor will increase with inflation. But the middle class, the proportion of money in the bank is too high, so it is seriously damaged.
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1. In the past three years, the biggest problem in insurance is the impact of the epidemic, a series of domino-like collisions
2. The real estate issue has also reversed
3. The value of new business this year will re-enter growth
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I plan to write 6-10 long articles per year and this is the second one this year
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