At the time of writing, the North Stream pipeline exploded, the haze of nuclear weapons reappeared, and the whole world was becoming highly unstable, which made us deeply feel the fragility and ignorance of human beings.
The U.S. dollar index climbed on record this quarter, global assets fell sharply, Hong Kong stocks hit an 11-year low, the UK pension crisis, and now Credit Suisse’s turn. I vaguely remember that the National Day in 2008 was also spent under such a haze. After a long time in the market, it will go through cycles and crises, and we have been preparing for it.
Against this background, many of our investors are adding additional subscriptions to our fund. I am very grateful for this long-term trust. This is an important driving force for me to make fund products. I personally continue to add company products recently to achieve deeper binding and Shared interests.
I have always regarded investment as a survival game and pursued lasting rather than temporary gains and losses. In this quarter, we increased our research strength against the trend in the consumer and Internet sectors. We have invited two experienced analysts. I hope we can cover Continue to improve in depth and breadth. This is also one of the gifts the bear market has given us. Instead of pursuing something other than ability (cognition), we focus on ability itself. I believe it will come naturally.
In terms of allocation, we pay more attention to the current cash flow and the corresponding dividends and repurchases, and pay more attention to the return brought by the equity itself, rather than the stock price. The question I often ask myself is, if Mr. Market suddenly stops quoting, how soon can we get our investment back? From this perspective, we should certainly be happier than two years ago, and we are now seeing more and more companies joining the ranks of buybacks and major shareholders.
I have no answers to many macro questions, but we can deal with them, choose and compare. Now that core assets around the world are falling, and valuations have returned to a reasonably low level, then we will continue to maintain a positive long-end, continue to compare prices between these assets, pursue better unit cash flow returns through fine-tuning, and wait patiently An inflection point appears. This inflection point can be a collapse in asset pricing or a turning point in economic fundamentals.
On the short side, although the level of short selling in the market is still at a high level, we began to reduce our short positions by a large proportion at the end of September, which is reflected in the result of the holdings that the total position decreased and the net position increased. Because the valuation of the short-selling target is not high at present, I will not pursue the income from underestimation to lower valuation, just like we did not pursue the income from overvaluation to higher valuation two years ago, which is also a kind of positive.
In extraordinary times, we are also trying to find derivatives with high odds (no more than 1% positions) to protect our portfolio. I am impressed by the performance of Pershing Square Capital in March 2020, using 1% derivatives to achieve It has achieved a 100-fold return and effectively resisted the rare four circuit breakers in the history of U.S. stocks.
As managers, as investors who believe in bottom-up, we are also anxious and anxious. Under the pressure of the macro, the micro is sometimes very powerless, but the micro is like flowing water, a trickle, and eventually it can flow out a path. . I will do my best to take our team and investors through the current fog, thank you again for your trust.
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