Hello friends:
Today is the twenty-eighth day of the twelfth lunar month. This issue is the last valuation report for the Year of the Tiger in the lunar calendar. Thanks to friends for their love and encouragement over the past year. On 61, I would like to wish everyone a happy Chinese New Year, health and safety, family happiness and income in the coming year Changhong.
In the last issue of the Year of the Tiger, let’s talk about the reliability of index valuation:
1. Value is subjective
From the perspective of universal logic, we believe that something exists objectively, and its value should also be objective. However, our judgment of the value of a certain thing will be affected by factors such as environment, ability, experience, resources, market, etc. We will conduct a “subjective” analysis of a certain thing based on our cognition, thereby forming its value judgment.
We will find that the same thing has different values in the eyes of different people. For vegetable farmers in mountain villages who work on farmland every day, the value of cabbage in their hearts is 50 cents per catty, while for consumers in cities, the value of cabbage may be 2 yuan per catty. The same item has different “values” due to different environments, resources, and needs.
Therefore, from the perspective of a certain trader, the value of a certain subject matter is subjective. Therefore, the stock market often has the following words to warn investors:
1) Respect the market and don’t think the market is wrong.
2) If you find that the market is wrong, there is a high probability that you are wrong.
3) Don’t fall in love with stocks, blind preference will easily lead to regret.
2. The price is objective
The value will be subject to the subjective judgment of different traders. According to our subjective judgment, we buy or sell the target at what we think is a reasonable price, thus forming the market price.
But just because value is subjective, the price formed by the transaction is only valid for the transaction party, and the rest of the bystanders may have different opinions on it. Therefore, we will find that when someone conducts a buying and selling operation, bystanders will ask: “Why buy at a price of 1 yuan?”, “Why sell at a price of 1 yuan?” Different, the final judgment is also different.
But as the transaction proceeds, the freer the market and the wider the transaction, the more representative prices will eventually be formed. In the stock market, tens of thousands of traders are participating, conducting sufficient transactions every moment, and the final transaction price is true and objective, and its effectiveness far exceeds the subjective judgment of an ordinary investor.
3. Data needs to be robust
Thin, one-sided, and partial transactions are extremely sporadic, and the prices generated by such transactions are actually not robust. We need to find robust data on sufficient transactions of a wide range of investors to form an effective judgment on investment.
The valuation curve formed based on the full historical data represents the objective judgment of every transaction in the market in history. For example, in a bull market, traders’ blood is running high, and greed goes to their heads, forming a high price point; in a bear market, traders are in danger, and fear keeps cutting their flesh along with them, forming a low price point. Historical data includes crises, disasters, and conflicts, as well as reforms, innovations, and breakthroughs. Behind each point of the curve are thousands of real traders, making final judgments based on various situations.
The longer the time and the fuller the transaction, the more historical valuation data generated by the formed price can represent the market’s comprehensive judgment on this target. The full historical valuation data, to a certain extent, completely shows the true form of a certain target in every state in the long history.
Therefore,61 when using valuation data, try to use full historical data as much as possible .
4. It’s hard to get full marks, but only eighty
Even the full historical data, for individual stocks, is also widely affected by many internal and external factors of a specific company, such as: the authenticity of financial reports, the stability of the management team, the effectiveness of R&D investment, and so on. Therefore, on the premise of full historical data, try to choose a broader trading target – a broad-based index.
The broad-based index is rich in the most important, stable, and reliable package of excellent companies in the stock market. There are uncertainties in one way or another for individual stocks, but when they are evenly distributed among the 300 best corporate portfolios, most of the risks will be eliminated. invisible.
Therefore, using excellent index + full historical valuation data can solve the one-sided subjectivity of an ordinary investor in judging the value of a certain target to the greatest extent.
We set the 20% valuation percentile of the full historical data as underestimated. Although it is subjective, the full historical data tells us that batches of fixed investment below 20% have a high winning rate. We just need to wait patiently for the passage of time, for the reappearance of historical data, and for the return of the underlying value. Therefore, investment is actually a science of probability. Under the premise that the retracement is controllable, the winning rate over the years is far more important than the number of wins in a certain time.
Of course, even so, it is impossible to be perfect, even if the whole history, or affected by a series of influences such as data source reliability, update efficiency, calculation method, time difference, exchange rate, etc., there will still be flaws of one kind or another. But even if there are flaws, this type of investment method is still the best option for most ordinary investors within their ability .
As the saying goes: It’s hard to ask for full marks in life, but ask for eighty.
1. “61” Market Valuation Dashboard
2. “61” Index Fund Valuation Table (0133 issue)
Three, key tips
1. GEM 50: PE rose to 40.61, and the historical percentile rose to 18.68%, which is underestimated and close to normal valuation. If it continues to rise, even friends with a high wind bias need to suspend regular investment in the index.
2. CSI 500: PE rose to 23.66, and the historical percentile rose to 19.28%, which is close to the normal valuation. In the last round of decline, the decline of CSI 500 was relatively small, so the overall rebound since November has been relatively weak.
3. Deep dividend: PB rose to 2.07, and the historical percentile rose to 36.18%, which is at a normal valuation. Affected by the compilation rules, in this round of rebound, the deep dividend performed better than the Shanghai Red and Zhonghong. The deep dividend is actually an “enhanced version of the Shenzhen Fundamentals 40 Index Bonus”, which has both strong growth and high growth potential. security.
Affected by the rebound of the Shenzhen Big White Horse this round, it has risen by 31%+ since the low point on October 31, and it has performed well in the broad-based strategy index. 61 Since March this year, I have been investing in the index one after another, and the current floating profit is about 10%, which is not bad.
4. All refers to medicine: PE rose to 30.67, and the historical percentile rose to 20.13%, officially entering the normal valuation stage. Of course, the overall valuation is still at a low level, just at the boundary line between underestimation and normal.
5. Technology leader: PE rose to 35.29, and the historical percentile rose to 32.58%, which is at a normal valuation. Affected by the decline in performance, the technology industry will face a difficult situation of falling prices and rising valuations in 2022. With the improvement of the external environment and the recent rebound of consumer electronics, medical and pharmaceutical industries, leading technology companies are trending better.
The index 61 is also scheduled to invest for a long time, and there is only a slight floating profit at present. Although the return to the index valuation percentile of 32.58% may seem like a slight loss at first glance, but the industry index can easily do so. When the fundamentals of the industry improve and the growth rate returns, there may be an ideal situation of rising prices and falling valuations. Just wait patiently.
6. Household appliances: PE rose to 16.78, and the historical percentile rose to 29.26%, which is at a normal valuation. After the low point in April, the rebound high point in June, and the bottom again in October, home appliances just took a roller coaster ride. Household appliances are also one of the main industry indexes that 61 invested in last year, and the current floating profit is 12%+.
7. China Securities New Energy: PE = 23.23, the historical percentile is 3.88%, and it is at a relatively low valuation stage. Beginning in September last year, 61 began to make regular investments in CSI New Energy. At present, the positions have a slight floating loss, and there are still some positions, and the follow-up will continue to make regular investments.
8. National Securities Chip: PE = 37.95, the historical percentile rose to 12.52%, which is underestimated. Also starting in September last year, 61 is also making regular investment in Guozheng chips. The trend of chips has been very weak in the past six months. The current position has a floating loss of -6%, and the regular investment will also remain slow.
New energy and chips, as highly volatile emerging industry indexes, are more difficult to judge in valuation and have a worse holding experience. Generally speaking, 61 does not recommend that novices get involved in this type of index.
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Once again, I wish everyone auspicious Year of the Rabbit, see you next year! ![[火箭]](http://js.xueqiu.com/ugc/images/face/emoji_83_rocket.png "[Rocket]"){kind=small}
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Further reading: “61” index fund fixed investment guide series articles (must read for novices)
$GEM 50ETF(SZ159949)$ $Deep Bonus ETF(SZ159905)$ $Technology ETF(SH515000)$
Risk warning: Funds are risky, and you must be cautious when entering the market. Article content is for reference only and does not constitute investment advice.
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