It’s been a long time since I wrote anything, mainly because the current price changes of A shares have surpassed my ability to understand. I don’t quite understand the so-called valuation system with Chinese characteristics, but it does have an impact on market stock prices; I’m not sure about this Whether this impact is medium to long-term or short-term, personally, as an investor who lives by the market, I still choose to ignore this noise. Because, I firmly believe that in the long run, it is the company itself that can create value, rather than any artificial valuation method or system, and I am unwilling to put myself in a long-term unfavorable investment situation.
I’m also really thinking about the current market phenomenon. Why are small essays popular, and why value investing has not worked in the past two years. Let me talk about my personal views for the reference of those who are predestined. Although I can understand the environment in which the small composition hype exists, I really cannot understand why market investors would participate in the small composition hype. This is obviously a “game” that puts any investor with investment purposes at a disadvantage. The gamers and the few lucky ones can get away with it this time. I have always firmly believed that from the perspective of a person’s life, the element of luck is not worth mentioning. Only hard work, persistence and continuous improvement of cognitive ability can determine the long-term return rate of investors in the stock market. Of course, in an emotional market, any objective and rational point of view is unpopular, and it is easy to be slapped in the face in the short term.
Let me first talk about why small essays are popular. I personally think that it is mainly based on the current status of the A-share valuation system and the current global and domestic economic conditions. In the past few years, the epidemic has continuously affected all walks of life in various ways. For companies, some of them are positive, such as shipping, masks, medical protection and vaccines; of course, more industries and companies are negatively affected. influences. What’s interesting is that I don’t know when your prediction became the logic of investment hype, and I can understand the logic of predicting your prediction as a long-term valuation, but I really can’t understand why many airlines The valuations of stocks and travel stocks are higher than before the epidemic. This kind of hype is an insult to the IQ of market participants, but it did happen. Secondly, the epidemic and the conflict between Russia and Ukraine, and the US’s extreme containment and blockade of China have indeed provided various unexpected emergencies for the market. I wrote an article on the event study method before, pointing out that whether market speculators are aware of it or not I realized that the speculation of speculative funds in the market is basically based on the event study method. How can these speculative funds be unfavorable to various events in the market? Finally, and most importantly, our valuation is indeed not cheap after excluding bank stocks, especially in the context of rising dollar deposit interest rates and depreciation pressure on the renminbi. Increased value levels cause suppression. Although the depreciation of the renminbi and the interest rate hike of the US dollar are coming to an end, there is currently no sign that the renminbi will appreciate in 2023, and the export data in November and December will continue to exert pressure on the depreciation of the renminbi.
As for why value investing has not been successful in the past two years, I personally think that the core reason is that value stocks have experienced huge growth in 2019 and 2020, which has overdrawn future performance growth. Even after the decline in 2021 and this year, what we see in the market is that while some valuations of such stocks tend to be reasonable, the vast majority of stocks are still in the process of valuation regression. From a historical point of view, stocks that have experienced a round of bull market tend to be reasonably valued and will still face long-term bargaining chips to reduce investors’ holding costs (investors who bought at a high level cut their meat because they could not bear the long-term lock-in), and then for Create conditions for the next round of rise.
Now all parties in the market are in desperate need of money to repair their balance sheets or provide cash flow for survival and living. Whether it is a loan from a bank or a bond issue, there are some rigid index constraints, and the most important thing is to repay the money. It seems that it is more convenient to take money from shareholders.
The recent summit of the China-Gulf Arab States Cooperation Council has attracted global attention. This meeting will become another symbolic event for housing and not for speculation. Apart from the obstruction of the United States, the biggest obstacle to the globalization of the RMB lies in the free convertibility of the RMB under the capital account. The real estate bubble is the biggest obstacle to the free convertibility of RMB under the capital account. China’s economy has come to this day, and the US’s containment through globalization is the only choice of last resort. The other side of the internal and external dual cycle strategy-the biggest obstacle to the internal cycle is the real estate bubble. I have systematically discussed other reasons for the unsustainable real estate bubble 2 or 3 years ago, so I won’t repeat them here. My personal view on real estate stocks is that they should be speculated as an oversold rebound, and don’t get too involved.
The above are only personal opinions and do not constitute any investment advice! The stock market is risky, you need to be cautious when entering the market!
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