Hello friends, I am the master.
The A-shares have fallen a bit miserably recently. Especially this week, the major sectors have been bombarded in turn. I read everyone’s comments, and many people’s mentality began to be unsteady.
If you look at the recent decline alone, it is indeed a little panic. Many large-cap stocks plunged and fell sharply when they encountered a negative situation. There are also some groups that have pulled back sharply, making everyone feel insecure.
But this drop is really nothing. Compared with the financial crisis in 2008, the circuit breaker in 2015, and even the bear market in 2018, it is not worth mentioning.
Some people will say that this is just the beginning, the real estate is surging, and the economic development is struggling.
This is undeniable, the possibility is there, but objective analysis, 2022-2023 can be worse than 2008 and 2015?
Obviously, this kind of negative degree is not the same level. Those who have experienced the two stock market disasters know what kind of environment can lead to such a big drop.
So today I wrote this article just to give you a massage. The current market has not reached the bottom of the stock market crash, and the risks are still under control. We should pay more attention to opportunities.
Since we talk about opportunities, we cannot do without three factors, one is the macro economy, the other is stock market valuation, and the other is investor sentiment.
(1) Macroeconomics
This year is the third year of the epidemic. It is difficult for the whole world. The stock market is not only down for us. Other markets such as Europe, America, Japan and South Korea are in decline. The stock market is a barometer of the economy.
Especially this year, the Federal Reserve and other developed economies have raised interest rates wildly, which has made the stock market even worse. This year is likely to be the most difficult year in recent years.
What about after this year?
Investing depends on expectations. Next year, the interest rate hike ends, the epidemic is further controlled, or in some cases the epidemic exists like the flu, everything will be completely different.
The economy is cyclical, and the recession is only temporary. After the risk is released, it will still go up. The upward spiral is a major trend.
So there is no need to be overly pessimistic now. The darkness before dawn is often the ultimate darkness, and the pessimism of most people also means that a reversal is about to happen.
(2) Stock market valuation
The statistics below are as of September 15, 2022.
At present, the major indexes of A-shares are all in a low position. The historical quantiles of the price-earnings ratio of the Shanghai Stock Exchange, the ChiNext Index, and the CSI 300 Index are 27.1%, 34.7%, and 28.5% , which are basically at historical lows. The bit value is 8.6%, because the time is relatively short and the reference is not very strong.
Taking the CSI 300 Index as an example, the historical bottom of the valuation has occurred three times, at the beginning of 2009, the end of 2014 and the bottom of 2018. The historical quantiles of these three valuations were all below 30%, and then the stock market appeared. soared.
At present, the price-earnings ratio of the CSI 300 Index, which represents the core high-quality A-share companies, is only 11.8 times, and the price-performance ratio is really high.
Speaking of Hong Kong stocks, the historical quantile of the price-earnings ratio of the Hang Seng Index is only 5.9% , which is undervalued. I believe that Hong Kong stocks only need an opportunity for recovery in the future, and everything will return to the normal value track.
Finally, looking at US stocks, the valuation of the Dow Jones Industrial Index is still not low, but the Nasdaq Index has also fallen back to the 30% quantile , which I think is also attractive.
Historical quantiles of major market indices P/E ratios
If there is no big negative like the level of the financial crisis, I think it is too unwise to continue to short A shares.
(3) Investor sentiment
Recently, there have been a lot of posts on the forums, and there are endless complaints. Such a fall is really painful, so everyone’s mood is very pessimistic.
There are more people out of stock
There are more people singing empty
There are more people shouting 2000 points
More people left
Aren’t these signs that the stock market has bottomed?
The stock market is full of opportunities, and the stock market is also full of risks. Opportunities are risks, and risks are also opportunities. Risks and opportunities have always been there, but different people see different results.
In the end, stock market falls are never scary, what is scary is losing confidence in yourself .
@Today’s topic @snowball creator center # When the market falls, how should Jimin respond# $ Yili Shares (SH600887) $ $ LONGi Green Energy (SH601012) $ $ Oriental Fortune (SZ300059) $
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