Doubled in 2019, and this year has not lost much, this manager has something

Recently Fengyunjun checked the subjective long private placements that fell within 5 points (or close to) this year, and wanted to see how many “survivors” were still in this large “disaster field”. It turns out that there are already less than 10 companies if only this one condition is limited. If some other qualifications are added: if the company has been established for more than 1 year, the annualized income is greater than 20%, and the maximum drawdown is less than 15%. Zhuang Xian, Renqiao, and Qingli. Fengyunjun has always been yearning for @zhuangxian investment . Recently, I was very honored to have an opportunity to communicate with Wang An at a “close distance”, so I couldn’t wait to ask a few questions that have been haunting my heart, and the answers

Past! Down! Look!

Q: What do you think of the market this year? Which sectors are currently deployed? How many positions are there?

A: It should be admitted that 2022 will be characterized by many macro variables, which are relatively complex. We have listed three macro variables here:

1. Geopolitical fluctuations. This is not something that A-share investors can grasp, but the degree of catalysis and evolution of this macro variable has a significant impact on the process of the entire A-share market. For example, in the short term, we will feel that energy and some individual stocks will benefit from this war. , we can only make changes to our positions in time according to the evolution of the war process.

2. Overseas interest rate hikes suppress European and American economies. The impact of interest rate hikes and the disturbance of the war is obviously that the entire economic cycle has entered a state of stagflation. Under the stagflation state, many asset valuations will be re-priced and re-scored. In this situation, our idea is to avoid some high-valued things, Or avoid some storytelling, high valuations of theme types or track types, and more to return to the logic of down-to-earth production, starting with profits to create more values ​​for the company. In part, we still benefit from the big cycle relative to other sectors.

3. The balance between domestic epidemic prevention policies and economic development. Looking at the domestic epidemic prevention policy, there is no sign of loosening, and the economic situation this year should be relatively bad. When the capital market believes that the policy response and the pressure on the entire economy can reach a balance point, it may be the turning point where sentiment gradually turns from pessimism to optimism. This point is a macro variable that we are paying close attention to, but it does not depend on any personal will. Individuals can only deal with it, and do not imagine making predictions.

Now our stable position is about fifty or sixty percent. (Stable products generally do not exceed 60%) We are optimistic about the sectors of coal, crude oil chemicals, pesticide-related, fertilizer-related chemicals, as well as stable growth-related real estate, some infrastructure, and some APIs related to the new crown in medicine, These are the directions we will focus on at the moment.

Q: Is there any difference between Zhuang Xian’s big-cycle investment strategy and traditional cyclical stock investment?

A: We call it the “big cycle stock long strategy”. Different from the traditional cyclical industry division, we include all stocks whose price changes caused by changes in the supply and demand curve into the cycle range, with the concept that everything is a cycle. For example, liquor has a seasonal cycle, and securities companies have a mood cycle. These stocks that are not in the traditional cycle range are covered in our strategy. Therefore, our cycle strategy is not a narrow industry base, but a fund that covers a wide range. .

Specifically, we divide investment into three circles: the core circle, the sub-optimal circle and the outer circle. The core circle is mainly the chemical subdivision industry and the industries it radiates: petrochemical, fuel, pesticide, chemical industry can be regarded as the upstream supplier of all manufacturing industries, not a limited large refining and chemical industry chain; new energy upstream, Pesticide, photovoltaic, military, etc. will all involve chemical industry. From the perspective of chemical raw materials, opportunities in other sectors can be touched.

The sub-optimal circle includes all cyclical sectors. From the firm launch in 2018 to the present, historically we have obtained relatively good returns from steel, coal, nonferrous metals, rare earths, pork, and chicken, including those that may have energy types recently.

Outer circle: Here we may look at local opportunities in liquor, securities companies, and military industries.

Q: What are the special advantages of investing in the cyclical sector?

A: The predecessor of our company was a local private chemical company in Hangzhou (it is this background that the overall style is more in line with the practice of some private funds to pursue stable income). Some of the companies in the company have established good cooperative relations with chemical and related companies. The background of this company will help us build the entire stock investment system in the future.

In addition, another fund manager is Song Zhejian, President Song. He is my senior brother at Tsinghua University. Both undergraduate and graduate students majored in chemical engineering. This is also closely related to the development of our chemical industry theme. More is to provide us with some theoretical support.

Q: Does the big cycle strategy adapt to the market this year?

A: We look at it this way. The entire market strategy is divided into three levels: consumption, technology, and cycle. I feel that consumption is basically not considered in the case of a very poor economy. In the whole environment, optional consumption is unlikely to be willing to pay for it. The valuation of technology is very high. I also mentioned just now that the capital market is unwilling to pay for high valuations in a large stagflation environment. The problem you mentioned is that we think that among these three big strategies, the logic of the big cycle strategy is: This year is most likely to be a strategy that can cope with the fluctuations in the market environment, because we will seize several waves of opportunities from the rotation between industry sectors and the switching of individual stocks to increase the entire income. We think that the big cycle has more opportunities.

Q: I have noticed that Zhuang Xian Rui Jin No. 2 has achieved positive returns every year since its establishment in 2018, and the retracement is well controlled. How does it manage the risk?

A: We have four dimensions of risk control:

1 Overall position risk control. For new products and units whose net value is not higher than 1.05, the position cannot be higher than 50%, generally a safety pad of 2-30%, which provides protection for new products. For example, the net value of newly established new products has fallen relatively less. .

Risk control of 2 stock positions. At present, our holding stocks are weighted according to three dimensions, the highest is 20%, the second is 10%, and the third is 5%. Generally speaking, there are not many stocks that can reach 20% of stable products. Generally, there are one or two, two or three stocks with a weight of 10%, and others are 5%. Basically, the number of stocks held by each product is 15-20.

3 stocks retraced risk control. This has a relatively rigid stop loss requirement. The drawdown of any single stock cannot exceed 2% of the total assets. If a single stock takes a 10% position, you cannot lose more than 20%. If it exceeds, then no more within 6 months. A new position is opened, and it is forced to sell. This is actually a hard stop loss. It is not based on the personal subjective judgment of the fund manager. If this line is really encountered, the trader has the right to sell directly.

4 The overall retracement risk control, general products are done according to the stop loss line of 90 and 80, but our internal principal retracement is basically done in accordance with 95, I hope the retracement of the principal is not too large, this is our The overall drawdown risk control.

Q: What is the current scale?

A: The overall scale of the company is about 2 billion, and the stock is about 1.4 billion.

Q: What is the turnover rate?

A: From 2018 to the present, the annualized average is 8-10 times. The average position is more than 1 month and less than 2 months, but there are differences between years. For example, the turnover rate in 2021 will reach more than 15 times. , 20 times the appearance, there were many market hot spots that year, around rare earth, military industry, new energy vehicles, photovoltaics, wind power, as well as steel, carbon neutral plates, so our turnover rate is also relatively high, the market environment in 2018 Very cold stocks will be held for a long time, and the turnover rate will be relatively low, so this is not necessarily true.

Fengyunjun believes that these questions can paint a rough picture of Zhuang Xian. in conclusion,

Zhuang Xian has the following characteristics :

1. It is relatively scarce in the market, and it is very good at cyclical investment, and its large-cycle strategy is not limited to traditional commodity-based cyclical stocks, but cyclical and non-cyclical industries radiating outward from the chemical sector, covering There are many industries and sectors.

2. There are inherent advantages in the research and layout of the cyclical industry: whether it is the scientific research background of the fund manager or the industrial background of the strategic partner, the combination of theory and reality can obtain some research advantages that are ahead of the market.

3. From the perspective of strategy and trading, it is good at exploiting the bottom reversal opportunities of sectors and individual stocks, trading on the left side, and prefers high-quality companies with “high growth” attributes under the background of large cycles.

4. The first-class retracement control ability is mainly due to the timing of macro positions and relatively strict risk control discipline.

$Zhuang Xianrui Jin No.2(P001045)$ @Snowball Private Equity

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