Is the bull market really over?

category:Finance
 Is the bull market really over?


In fact, the bull market of science and technology, medicine and consumer stocks has already begun. It is a false proposition to discuss whether the bull market has arrived at this stage. However, we need to clarify one point: at present, it is a structural bull market, and a systematic bull market may not be seen for a long time in the future. This is determined by the new economic normal and industrial structure u3002

To make investment, we must not focus on the daily rise and fall. We should judge the future trend of the stock market according to the so-called capital flow, market sentiment and macro policies. Investors must take a long-term view and see the core elements of the future trend of the macro-economy and the stock market, so as to make a scientific judgment. If we look at the drastic adjustment of the market in these two weeks, according to the technical analysis, many indicators of the A-share market have gone bad, and we can conclude that the bull market has ended. But the problem is that technical indicators are based on the past history to infer the future trend, which is not scientific in itself. If you can make money by speculating in stocks according to technical indicators, it will be too easy and there will be no growth space for valuable investment.

Why is the bull market not over? Lets look at the flow of money. There is always a large amount of liquidity in this society. Chinas M2 has exceeded 200 trillion yuan. The central bank is also constantly releasing liquidity. Chinese residents have a lot of savings. With so much money, they always want to find a way to generate money from money. In the past decade or so, social funds, especially the wealth of Chinese residents, have been mainly invested in the real estate market. House prices only rise but not fall has almost become the peoples firm belief. Although the real estate market has experienced many adjustments and controls, the real estate market still keeps going up after a short period of shock, especially in the first tier cities, which has increased dramatically since this year.

Why is the house of first tier city always rise ceaselessly? On the one hand, because a large number of high-quality social resources are gathered in the first tier cities, Chinas urbanization process has pushed a large number of people into the first tier cities; on the other hand, housing prices have been rising all the way in the past decade, and the myth of wealth creation has been repeated, and the profit-making funds will certainly continue to enter the real estate market. However, in the past two months, taking Shenzhen as the representative, the government has launched an unprecedented policy of restricting purchase and loan. It is certain that the real estate market will gradually enter a period of turbulence in the future. If a countrys economy is mainly driven by real estate, the financial income of a place can not get rid of the dependence on real estate. This economy must have hidden huge bubbles and risks.

Value investment of mechanization

If we only choose stocks based on the valuation level, we may not be able to make any money in the structural bull market since this year, because the valuation level of the three major categories of stocks, medicine, technology and consumer stocks, which have risen most frequently, are more than 40 or 50 times. When investors of mechanized value see such stocks, they will instinctively exclaim: too expensive! In fact, since the beginning of this year, many of the famous private placement companies have low or even negative returns on their products, which makes ordinary investors feel difficult to understand. Perhaps, these old private placement will fight back: all bubbles will burst, just a matter of time.

If you are still a mechanical value investment thinking, you may only hold undervalued products such as banks and insurance this year. Why can pharmaceutical, consumer and technology stocks rise to the point where investors begin to doubt life? In essence, it is because this is a structural bull market. The concentration of each industry has been greatly improved. Even every subdivision industry can only survive with the eldest and the second. The era of making money together in various industries has passed. Then, the valuation premium enjoyed by the leading enterprises of each subdivision industry is much higher than that in the past, because of the industrys quality The situation has changed and the ecology of competition has changed. For the industry and industry head companies in line with the future economic development trend, we should give a valuation premium different from that in the past.

Of course, public funds and foreign investors have more and more say in the A-share market. They hold shares in groups and hold shares in groups, which is also a new feature of the A-share market. This kind of behavior will only make the valuation of leading stocks in the industry higher and higher. At the same time, it does not mean that the evaluation value can be higher than expected. However good the industry and individual stocks rise, there will be adjustment Kinetic energy and demand.

At present, the tension between China and the United States is only a trigger factor in the current adjustment of A-share market. There is a demand for adjustment in the market itself. Every round of major adjustment, the market will change internally. For example, pharmaceutical stocks and consumer stocks that have risen too much in the early stage may last for a period of time, but the technology stocks and sector cycle stocks that have stagnated in the early stage, such as chemical industry, nonferrous metals, and especially It is closely related to the internal circulation of the plate, may be in the adjustment against the trend. In the short term, the market adjustment may continue, but the larger the adjustment, the closer the opportunity will be. If we are full of confidence in Chinas economic recovery, if we have sufficient confidence in Chinas response to the current international situation, every big drop is an opportunity for us to hold high-quality stocks for a long time! Short term frequent timing, in addition to allowing us to enjoy the fun of trading for a short time, a little longer time, in fact, has no contribution to the yield of our portfolio. Source: Securities Times editor in charge: Guo Chenqi_ NBJ9931

At present, the tension between China and the United States is only a trigger factor in the current adjustment of A-share market. There is a demand for adjustment in the market itself. Every round of major adjustment, the market will change internally. For example, pharmaceutical stocks and consumer stocks that have risen too much in the early stage may last for a period of time, but the technology stocks and sector cycle stocks that have stagnated in the early stage, such as chemical industry, nonferrous metals, and especially It is closely related to the internal circulation of the plate, may be in the adjustment against the trend.

In the short term, the market adjustment may continue, but the larger the adjustment, the closer the opportunity will be. If we are full of confidence in Chinas economic recovery, if we have sufficient confidence in Chinas response to the current international situation, every big drop is an opportunity for us to hold high-quality stocks for a long time! Short term frequent timing, in addition to allowing us to enjoy the fun of trading for a short time, a little longer time, in fact, has no contribution to the yield of our portfolio.