Yang Delong is the chief economist of Qianhai Open Source Fund and a director of China Chief Economist Forum
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On Wednesday, the Shanghai and Shenzhen markets showed a volatile rebound, continuing the continuous upward offensive this year. The structural bull market in the A-share market has begun to take shape, with many sectors such as consumption and brokerages leading the rise, driving the popularity of the entire market. The logic of rising consumption is very clear, and after the new ten articles came out, the pent-up consumer demand for three years was released intensively. Chinese New Year's Eve Before the Spring Festival, many people went to Sanya and other popular attractions for vacation, consumption enthusiasm has been released intensively, the characteristics of retaliatory growth of consumption are particularly obvious, many popular attractions are difficult to find, overcrowded, which also shows the huge potential of mainland consumption. In the past five years, consumption has surpassed investment and exports to become the most important engine of economic growth, branded consumer goods themselves have brand value, and long-term performance growth is relatively stable. In 2022, affected by the epidemic, the performance of many consumer stocks has declined, but this is a temporary phenomenon, once released, the performance of consumption will appear retaliatory growth, especially like catering, tourism, hotel performance is active, driving the rise of sectors such as liquor, duty-free, tourism, etc., especially the leading stocks of liquor, brand liquor performance is more prominent. Brokerage is the wind vane of the market, the general brokerage is the market when the start of the performance will be better, the continuous performance of brokerage stocks also shows that the market can also look higher in the future, a number of brokerages in the recent continuous upward attack, of course, but also by the policy favorable promotion, regulatory authorities issued some regulations to prevent price wars, for the healthy development of the brokerage industry is very beneficial, but also driven the rise of the brokerage sector.
On December 20 last year, I made my first top ten predictions for 2023, clearly saying that A-shares and Hong Kong stocks will show the characteristics of a structural bull market in 2023, especially after the epidemic is liberalized, consumption recovery has led to economic recovery, and the mainland economy will show a trend of rising quarter by quarter, and the annual GDP will return to more than 5%. Since the beginning of this year, the operation of the market has gradually shown that the upward trend of the market has been established, and the characteristics of the market reversal are more obvious, so it is recommended that everyone also maintain confidence, once the market trend is formed, for many investors to seize the opportunity to get on the car. When the market was at its lowest in October last year, Qianhai Open Source Fund was bullish on the long and long, combining knowledge and action, and purchased its own funds with 290 million yuan, ranking first among the public funds that had been announced. In 2016, I proposed that every time the market is extremely pessimistic, when the market falls below 3,000 points, it is a relatively good bottom position opening area, and insisting on the strategy of only buying but not selling below 3,000 points is effective from the current point of view. Now that the market trend has reversed, entering the right side of the position opening opportunity, everyone should seize the opportunity to open a position to get on the car in time, do not miss the opportunity in hesitation.
The market always arises in despair, rises in hesitation, and perishes in madness. If in October last year, I suggested that when you did contrarian investment, it belonged to the left side to open a position, then now it is in the stage of rising in hesitation. Munger once said, "Which of our people who do value investing didn't survive?" You don't even need to be smart with your brains, and those in my generation who persist are very successful." Staying up is a process, but also a mentality, in October last year, when the market was at its lowest, many investors had no confidence, at that time I gave you a word: stay up. Survive the epidemic, survive the economic downturn, survive the bear market of the stock market, winter is coming, will spring be far away? And I emphasize that sowing and harvesting are not in the same season, spring planting and autumn harvesting, and now these strategies are very successful. Munger said that the group of value investors survived, and perseverance is victory. Buying stocks generally holds for four years, which actually means staying up for four years, Templeton is staying up for five years, Buffett is staying up longer, sometimes even waiting for ten years, decades, and has achieved long-term success, which shows that insisting on value investment in investment requires a good attitude. Howard Marks said, "The right judgment is not necessarily immediately verified, so even the top investors will often make mistakes, if you don't like this, it's better to change careers", that is, even good stocks, after buying does not mean that they will rise immediately, they all need to survive, because the stock market is a voting machine in the short term, and the weighing machine in the long term. Buffett said, "Even the people who participated in the voting are not qualified, so the short-term stock price fluctuations do not have much to do with the company's fundamentals, and it is relevant in the long run", and companies that make money refer to companies that can make money in the long run, not companies that perform well in the short term. To make investments, everyone should find a good company that they can understand, only in this way can they understand why they can make money, and when the market falls, they will not panic. When the stock price falls, we have to think about whether the stock price is a short-term adjustment or a long-term decline, such a market is often confusing, and the more confused we are, the more we have to look far away what it will look like in ten or twenty years. To do investment to have a normal mind, ordinary mind is actually the habit of rational thinking, the market often has emotional collapse moments, overcome fear, grasp the true meaning of investment, that is, do a good job of the company's shareholders, ordinary people insist on doing the right thing, the result can be very unusual.
Most stock investors, especially successful ones, are chronically optimistic. If you are a pessimistic investor, you cannot exist in the market for a long time, the so-called pessimists are correct, and optimists move forward. When the market is most panicked, when everyone thinks that the end of the world is coming, what supports you is actually not mainly rational analysis, but faith. Faith is the belief that tomorrow the sun will rise as usual, the future will be better than the past, believe that technology will continue to advance, and human society will always continue to advance. Warren Buffett said in 1998, "The best thing for us is that a great company is in temporary trouble, and we want to buy while they're on the operating table," revealing the true meaning of investing, which is to dare to buy good companies when the market is at its lowest, when investor sentiment is at its most pessimistic. Even with the collapse of the U.S. stock market in March 2020, Buffett was very calm, losing $100 billion at one point, and completely recovering lost ground in the following two years, and the stock price reached a new high. Without perseverance in the desperate time of the market, you cannot enjoy the benefits of the market's rise. Now that we have survived the toughest 2022, we should firmly seize the opportunity of the structural bull market in the market in 2023.