Zijin Chen's prediction this time was wrong, and his bottom reading did not usher in a miracle.
On February 24, speculative novelist Zijin Chen continued to make up positions in the Chinese Internet ETF fund, when his position had been covered by 17 points. At that time, he should not have expected that a new round of Chinese stock plunge storm was coming.
Hong Kong stocks fell sharply on March 4. On the same day, Zijin Chen announced that it would once again bottom out the Hang Seng Internet ETF Fund. In this regard, he also sighed in the back: Press a big miracle day!
But the speculative novelist reasoned wrong this time, the miracle did not come, he bottomed out the Hang Seng Internet ETF fund, fell to 0.367 yuan on March 15, 10 days fell 24.6%. And the Chinese stocks he copied at the bottom even suffered a bloodbath on March 10 and March 11.
After the opening of the market on the morning of March 7, Zijin Chen complained on The Snowball: Chinese Internet ETF, will the world be better?
On March 14, in the face of falling Hong Kong stocks, Zijin Chen, who claimed to be unable to watch, chose to continue to increase his position in the Hang Seng Technology ETF by 50,000 shares. At the same time, he said: I don't dare to increase my position should be fast.
Some fans asked him: Did you instigate it? He replied, "It's really instigated." ”
But more fans are following the message to persuade him: "Write a novel well, what to do in stock speculation" "You need to write a book to make up for it", and some people praised him: "Although there are tens of millions of people, I am going to die".
According to the data of The Financial Associated Press, there are 323 Chinese companies listed in the United States, and in the first nine trading days of March this year, an average of 230 billion yuan was evaporated every trading day. Countless investors choose to "clear their positions with tears" and "endure the pain of cutting meat". It was not until March 16, when the Special Meeting of the Financial Stability and Development Committee of the State Council delivered a positive signal, that Chinese stocks briefly rebounded.
In this round of rare stock disasters in Chinese and Hong Kong stocks, some people left the market in the dark, and some people entered the market at the bottom.
"Helpless clearance", on March 27, Zhang Miao updated a message on social platforms. He did not expect that after experiencing "three days of falling an era", the decline of Chinese stocks was not over.
On March 23, local time in the United States, Sina Weibo (WB.US) was included in the "Provisional Delisting List" by the U.S. Securities and Exchange Commission (SEC), becoming the sixth Chinese-listed company to be included in the list.
On the evening of March 24, it was reported that the market speculation that the PCAOB, the accounting supervision committee of the US public company, had reached a final agreement on accounting supervision with the Chinese side was "premature".
After the news was sent, the US stock market opened on March 25, and most of the popular Chinese stocks fell. Among them, Happy Auto fell 14.62%, Didi Chuxing fell 13.95%, and Park Xin Education fell 13.36%.
Along with the fall, there is Zhang Miao's newly revived Belief in Chinese Stocks. As a member of the "beggar gang", he watched his funds lose tens of thousands of dollars overnight, just rose a little back, and then the loss increased, physically and mentally exhausted. He "bottomed out" Chinese stocks in the second half of last year, when he thought it would be the "bottom.". It was not until March 8 this year that 5 Chinese stocks were included in the first batch of "pre-delisting lists" by the United States, and Chinese stocks were tragically "bloodwashed", and he found himself copied halfway up the mountain.
Selling, or continuing to bottom out, this divergence also arises in institutions and star investors. Prior to this, well-known Wall Street investors and institutions such as Munger and Qiaoshui had already repositioned Chinese stocks in 2021Q4, and the domestic "public offering brother" Zhang Kun and the 100 billion private equity fund Jinglin also heavily invested in Chinese stocks last year.
Source: Snowball
On March 15, Duan Yongping, chairman of BBK Group, known as "Tencent iron fan", directly said: "Sell Berkshire, to copy the bottom of Tencent." However, no one can really tell where the bottom of the market is, but what can be confirmed is that the value of Chinese stocks is being re-examined.
Speculators are in action
At the same time as the plunge, speculators are also waiting for an opportunity.
Li Ming, 33, who was watching "the end", increased his position to 10% on March 7 and bought a China-wide Internet ETF. After the Plunge in Chinese stocks, he added another 50% position on March 10. In the middle, he also made a difference. He said that although he is very optimistic about Chinese stocks, he will still choose to sell them according to the opportunity. Su Ying, another employee of the company, entered the market in batches on March 7 and 14, and after the income reached 10%, she quickly got out of the hand, "Long-term or optimistic about Chinese stocks, but considering the current factors, or decided to look again."
"If last year has fallen to the floor, this year's post-holiday plunge is equivalent to falling to another eighteen layers of hell." Liu Ran, who had made a small profit in Chinese stocks, bottomed out the Chinese stocks of Wuxin Technology, Tencent Music and Litchi Network at the end of last year.
Since 2021, Chinese stocks have experienced several rounds of declines, and some individual stocks have fallen amazingly. Liu Ran aimed at the point in time, and when the stock price fell about 50% from the peak, he entered the market, "Originally wanted to take a bottom and make some short-term gains." Liu Ran said.
But paper wealth comes and goes quickly. Taking Wuxin Technology as an example, on January 22, 2021, The parent company of Yueke, Wuxin Technology, rang the bell and listed on the New York Stock Exchange. On the third day of listing, it hit an all-time high of $35, with a total market capitalization of $54.8 billion. However, with the implementation of regulatory policies, the attitude of the capital market has changed sharply, and in more than a year, the stock price and market value of Fogcore Technology have fallen by 94%, and the latest stock price of Fogcore Technology on March 26 was $1.96.
After falling to the price of cabbage, Liu Ran had no choice but to lie flat. "There is no difference between cutting and not cutting, and the rest of the position is considered a long-term investment."
At a time when Chinese stocks continue to fall, most investors have stopped their losses and left the market, but there is still no shortage of solid fans.
Wang Qiang, an investor who has worked in enterprises and institutions and speculated in stocks for 11 years, focused on A-shares in his early years and turned his attention to Chinese stocks in 2018. In early 2022, when the China-wide Internet ETF dropped to 1.4, he bought some of it. When the China-wide Internet ETF fell to 1.1, he bought another 20,000 or 30,000 yuan, and after falling below 1, he shot again and bought 200,000 or 300,000 yuan.
According to the data released by China Fund News, since July last year, more than 70 billion yuan of funds have been used to read the bottom of Chinese stocks through related exchange-traded open-ended index funds (ETFs) such as China-Wide Internet and Hang Seng Interconnection. Many of them are retail investors. At present, the leading Chinese fund in the market, E Fangda Zhongyi Internet ETF (513050), as of December 31, 2021, has an asset size under management of 32.653 billion yuan.
Wang Qiang told reporters that because the premium of China-list Interconnection is too high, he also purchased a little Hang Seng Technology Index. He personally prefers Internet companies with mature business models and clear profit prospects. Therefore, in this wave of Chinese stocks, he focused on Tencent, Ali, Baidu, JD.com, NetEase and other companies.
"Now the share price advantages of Tencent and Ali are obvious, and Ali is not on the List of Hong Kong Stock Connect." Wang Qiang eventually bought Tencent at a price-to-sales ratio of 15 times, with a combined cost of HK$363 per share.
Although the stock price is still falling after he bought Tencent, he is not uneasy, "now is a good time to buy."
"I am greedy when others are afraid", in the wave of Chinese stock decline, Buffett's investment quote is being practiced by many people. On the way to the bottom, in addition to retail investors, there is also a wave of "heroes of the world".
Duan Yongping is a loyal "fan" of Tencent. Tencent's shares reached an all-time high of HK$751 in February 2021 and fell below HK$300 in more than a year since. In August 2021, when Tencent fell to the early 400s, Duan Yongping first let go of tencent; then he added his position again in less than half a month; by the end of February this year, he bought more than $5 million.
On March 8, Duan Yongping said: "I plan to add a warehouse every 10% drop." On March 15, Tencent fell again, falling below the 300 Hong Kong dollar mark, after a series of bottom-reading Duan Yongping said, "Don't wait, ready to sell Berkshire Hathaway to buy Tencent." ”
Earlier, Tian Xuan, deputy dean of Tsinghua University's Wudaokou School of Finance, said in an interview with China Entrepreneur, "From the perspective of the underlying logic, the plunge in Chinese stocks has little to do with fundamentals, and the main driving factor comes from the market panic caused by negative news." The long-term potential investment value of Chinese stocks still exists, which may be the main reason why many investors choose to bottom out. ”
There is also a well-known player known as the Canadian "Duan Yongping". Recently, Kevin O'Leary, a Canadian entrepreneur and a popular investor in the American reality SHOW "Creative Intelligence Winner", bought three stocks such as Tencent and Meituan in the plunge of Chinese stocks.
Kevin O'Leary said there are no plans to sell the shares because the same growth opportunities are not found anywhere else, and the fundamental reason for holding Chinese stocks is confidence in Chinese consumers and the Chinese economy.
The cheap Chinese stocks are not only optimistic about the above investors, but even companies have repurchased them.
On the morning of March 22, Alibaba announced that it would continue to expand its repurchases, raising the size of the original share repurchase program from US$15 billion to US$25 billion (about 158.9 billion yuan). This repurchase scale accounts for nearly 8% of Ali's current market value of $312 billion, which is the largest repurchase in Ali's history and a historical record for the repurchase scale of Chinese stocks. Subsequently, Tencent, Xiaomi, Bilibili and others also released repurchase plans.
Divergence among institutional investors
In 2021, after encountering regulatory storms, sell-offs and plunges, a wave of bottom-pickers emerged.
Buffett's golden partner, Charlie Munger, for example, favors Alibaba. In January, Daily Journal, a publishing group owned by Charlie Munger, filed its 13F statement for the fourth quarter of 2021 with the SEC. In the last three months of last year, the company's only operation was to buy 300,000 shares of Alibaba, raising the total number of positions to 602,000 shares, almost doubling the number of shares. It is worth mentioning that the Daily Journal to build a position in Alibaba began in the first quarter of 2021, that is, from the Beginning of the Decline in Chinese Stocks, it is "bottoming out".
At the Daily Journal shareholders' meeting on Feb. 17, 98-year-old Charlie Munger said Alibaba was an investment opportunity that made him feel comfortable: "I think Alibaba has a very competitive advantage, even in the highly competitive retail sector. ”
In addition, Goldman Sachs has also taken out real money and silver to "bottom out" to do long Chinese stocks. On November 11 last year, Goldman Sachs Group submitted a 13F report to the U.S. Securities and Exchange Commission, showing that it had significantly increased its holdings in a number of Chinese stocks such as Alibaba, New Oriental and Good Future in the third quarter of 2021, and as of the end of the third quarter of last year, Alibaba accounted for 1.82% of Goldman Sachs' portfolio, continuing to rank as Goldman Sachs' fifth-largest heavy stock.
Zhang Kun, the first fund manager in China to manage a 100 billion active equity fund, also chose to reposition Chinese stocks in the fourth quarter of 2021. Internet stocks such as Tencent Holdings, JD.com, and Meituan have all been increased.
For the bottom of the Chinese stocks, Zhang Kun judged: "After the valuation digestion in 2021, the valuation of some high-quality enterprises has become attractive, and in the dimension of 3 to 5 years, the performance growth of enterprises will be projected into the growth of their market value." ”
As one of the funds most optimistic about the Chinese market, in the third quarter of last year, the world's largest hedge fund Bridgewater bought 1.87 million shares of Alibaba, and in the fourth quarter of last year, it increased its holdings by 978,000 shares. By the end of the fourth quarter of last year, Alibaba had become the eighth largest heavy stock in Bridgewater Fund. In addition, it also increased its holdings in Baidu, Pinduoduo, JD.com and Nio Automobile, while liquidating Amazon, Netflix and Oracle.
JD.com, iQiyi, and Ideal Auto are the third of the top ten heavy stocks currently invested by Hillhouse, ranking sixth, ninth and tenth respectively in their positions.
Most of these overweight actions were completed in the third and fourth quarters of last year, in the face of the continued impact of the US "Foreign Company Accountability Law" and other factors, Chinese stocks have collectively pulled back several times, and these heavy institutional investors will inevitably face the pressure of repositioning or reducing their positions.
A few days ago, the assets of 100 billion private equity Jinglin encountered a difficult situation due to heavy positions in Chinese stocks, which led to a sharp decline in performance and angered investors.
Source: Visual China
On March 17, a news came out about "Jinglin asset holder communication will become a customer complaint meeting". It is rumored that on the afternoon of the 17th, Jinglin Asset held a holder communication meeting, and investors were rebuffed by many investors because of Jinglin's poor investment performance in the past two years: "Don't take value investment as a fig leaf for poor performance." ”
Jinglin Assets, the investment scope mainly covers A-shares, Hong Kong stocks, US stocks and Chinese stocks. As an established institution, its investment income in recent years has not been outstanding. The bottom-reading Chinese stock Internet enterprises are regarded as the biggest feature of Jinglin Assets' position strategy adjustment in the fourth quarter of last year.
According to the information on the U.S. stock positions held by Jinglin overseas entities as of the end of 2021 disclosed by the U.S. Securities and Futures Commission in February this year, the top ten U.S. stocks held by Jinglin Overseas are Sea, Meta, Google, NetEase, Shell, Zhongtong Express, Pinduoduo, JD.com, DoorDash and BOSS Direct Hire, of which about half are Chinese stocks.
Hu Bo, manager of Rongzhi Investment Fund under the private equity ranking network, told China Entrepreneur, "According to the traditional value investment idea, some traditional price investment funds have invested in many Chinese stocks, and these funds have been seriously injured, including many private equity funds in Shenzhen. Because they are close to Hong Kong, they have a strong international vision and more information about overseas markets. Many funds also made a lot of money on Chinese stocks in the early years, and the success of the early years created path dependence. Recent negative factors have been superimposed on various aspects, resulting in a relatively tragic wave of them. ”
While many institutions have chosen to increase their positions in some oversold Chinese stocks, many foreign institutions have also chosen to reduce their holdings.
BlackRock's 13F report disclosed on November 10 last year showed that it sold 6.8786 million shares of Alibaba in the third quarter of 2021 and held only 2.951 million shares as of September 30. In the third quarter of 2021, Baiji also significantly reduced its holdings in Alibaba, with a reduction of 61.23%, holding 9.9773 million shares as of September 30.
In addition, Allianz Asset Management, the Canadian Pension Plan Investment Agency and the Royal Bank of Canada reduced their holdings of 845,500 shares, 4,294,600 shares and 2,207,400 shares respectively to Alibaba in the fourth quarter of 2021; 72 Point Asset Management Company reduced their holdings in Jingdong shares by 400,600 shares; in the fourth quarter of 2021, Tiger Global reduced their holdings by 3,104,900 shell shares, and the Canadian Pension Planning and Investment Bureau reduced their holdings by 1,042,400 shares of iQiyi stock.
The divergence of institutional investors also shows the outside world that the road ahead for Chinese stocks is still unclear.
In this regard, Tian Xuan also said that the situation is unclear and cautious to read the bottom. "From the historical experience, the trend of continuous shock and decline of Chinese stocks has lasted for more than a year, during which some well-known institutions have launched bottom-reading actions, but they have once again encountered a market tsunami. The Chinese-funded trust market, the accelerated flight of foreign capital, the third party wants to sit on the profits, whether the Chinese stock market dominated by market sentiment has ushered in a turnaround, it is still unclear, blindly following the trend can only bear the risk. ”
On March 25, the news that private equity tycoon Dan Bin was suspected of being short was instantly screened. He was once known as "Buffett of China" for advocating value investing. Although Hu Bo said that Bin does not hold many Chinese stocks, "in the long run, this is a pain in the era." Scarce assets in the future still have their investment value. Relatively speaking, it may be better to go to Hong Kong stocks to find investment targets than to find them in Chinese stocks. Moreover, the companies in the Chinese stock market that have been listed in the two places will have some investment advantages."
(In the text, Zhang Miao, Li Ming, Su Ying, Liu Ran, and Wang Qiang are pseudonyms)
References: "Aiming at Chinese Stocks Goldman Sachs Large-scale Continuous Positions", Investment Express