CEIBS Fund Peng Wei: The excess return comes from the alpha of the selected industry, but the pure thematic investment of "Chicken Dog Ascension" does not participate
Cai Lian News Agency, September 28 (Reporter Feng Qijuan) Peng Wei's arrival has added another general to the Mesozoic fund manager team of CEIBS Fund.
Peng Wei graduated from Shanghai Jiao Tong University, which is rich in engineers and frequent investors. He majored in materials science with a bachelor's degree and studied at Antai School of Economics and Management of Shanghai Jiaotong University. After graduation, he joined the Rong Tong Fund, starting as a researcher, covering construction materials, real estate, steel and coal industries, and then promoted from research team leader, fund manager, to general manager of the company's research department.
Peng Wei, a cycle researcher, has gradually polished the investment framework of industrial trends after years of investment and research experience. It is not purely top-down or bottom-up, but from a meso perspective, find industries that conform to the development of the times, as well as excellent enterprises in related industries. He pointed out that the future will be more based on the existing investment framework, with the help of CEIBS, a larger investment platform, continuous learning and optimization.
After many years of cyclical industry research, the follow-up research of meso industry has become the top priority of Peng Wei's work, which will naturally be more sensitive to the cyclical law of the industry, structural factors and the impact of external variables on the cyclical law. In Peng Wei's view, from research to investment, it is a stage that requires logical judgment, data verification and performance fulfillment, and those who meet these three criteria are often more pan-manufacturing industries. Coupled with his background in the research cycle, Peng Wei's circle of competence is more extensive in the manufacturing industry and hard technology fields.
A well-balanced player who takes into account both industry and style
In terms of the configuration idea of the combination, Peng Wei hopes to take into account the industry and style, and prefers to be balanced and does not do the ultimate combination configuration. In Peng Wei's portfolio, 1/2-2/3 are industry trend assets, 20%-30% are stable growth assets, and a small number are inflection point assets.
Peng Wei also pointed out that this allocation ratio is a semi-quantitative concept, to a certain extent, it only represents the tendency of the portfolio structure, and not all market environments or stages will strictly follow this ratio. In Peng Wei's view, doing a good job in asset allocation can balance the offensive and defensive nature of the portfolio to a certain extent, and hope that the fund portfolio can not lose performance flexibility under moderate control of drawdown.
For example, in the bull market stage, there may be more offensive assets, and the allocation ratio is 2/3 or higher. In 2019, when the market situation is better, the market environment and macroeconomy are better, there are more industrial opportunities, and the proportion of inflection point assets is not high, and the relevant allocation will be more aggressive; In 2018 or 2022, when the market performance is more structured, in the portfolio presentation of Peng Wei, there will be more stable assets, and even more inflection point assets.
Although it is an investment style that is biased towards industrial trends, Peng Wei mentioned that he will not gamble in a single track or style, and will control a certain upper limit of a single industry allocation. Peng Wei, who does not do "single bet", hopes that the combination can allocate seven or eight industries, and combine the boom cycle stage of different industries to do different weight allocation.
The outside world will think that Peng Wei's overall style is more large-cap growth, but he pointed out that he will not be particularly biased towards the large market or the small and mid-cap market, but more from the perspective of the industry, find more high-quality companies, or measure from the perspective of performance and valuation, and find companies with more suitable return on investment.
From August 2017, when I first took over the management product, to the beginning of 2021, the market as a whole was biased towards core assets, and at that time, it appeared to show a strong large-cap growth style. In the following years, some small and mid-cap stocks also gradually increased their holdings. In this process, the scale of Peng Wei's products under management has also increased from the initial scale of 50 million yuan to a high of nearly 13 billion yuan (data source: periodic report, deadline: 2020/9/30), and the scale change is also a passive factor.
Peng Wei believes that due to the research background of the cyclical industry, it is necessary to take into account the research and understanding of macro strategies, and the research framework system of the cyclical industry can be better applied to the research of consumption or growth industries to a certain extent. Peng Wei also pointed out that the research framework of the partial cycle industry focuses on a deeper understanding and research at the industry level.
Although Peng Wei believes that the applicability of its methodology is relatively extensive, it does not mean that it can take care of all industries, and some industries are not applicable. Most industries need to be logically deduced through certain data and information and verified in the industrial chain. When some industry sectors cannot effectively track data and realize industrial logic deduction, it will lead to certain blind areas in personal judgment. Similar industries are difficult to enter its circle of competence, Peng Wei mentioned, purely business models, soft technology industries, or similar military industries, are not within its circle of competence.
Until now, Peng Wei still refers to this framework system, relying on the usual tracking and analysis of the core key factors of the industry, and regularly combing and screening subdivided industries under this framework. When it comes to improving the effectiveness of industry tracking, Peng Wei bluntly said that we must learn to do nothing, shrink the front, and do a good job of subtraction first, such as through fundamental data analysis, some industries are likely to be at a relatively high point, and there is a lack of investment opportunities in the medium term; Then the industry where the data is at the bottom can be included as part of the tracking observation; In the midst of industry trends or industry booms, including industries that already hold key positions, they should allocate their main energy to focus on tracking research.
From cyclical industry researcher all the way, Peng Wei has experienced a long market stage without opportunities. After starting to manage the fund, he experienced a bear market in 2018, which also gave Peng Wei time to accumulate in the process of transforming from researcher to fund experience. In 2019, Peng Wei will soon be able to see the opportunities in the market clearly and dare to increase his position when facing potential opportunities.
In Peng Wei's view, there is no right or wrong methodology, as long as it can match his personality, cognition and research. However, Peng Wei also admitted that the larger drawdown that occurred in April 2022 was more or less related to the routines and factors in the framework. At the same time, he believes that improving bottom-up stock research capabilities and finding some individual stock investment opportunities may reduce the large drawdown that occurred during this period.
When it comes to retracements, Peng Wei believes that some retracements are systemic, and some retracements are his own mistakes. The former, as long as the big logic of individual stocks or industries is not wrong, he will stick to it. And if you see the mistake, you must admit the mistake, and the adjustment should be adjusted in time, do not linger.
In terms of excess returns, Peng Wei believes that this first comes from the alpha of the selection industry, and secondly from the alpha of stock selection, and it is difficult to achieve excess returns in the long run.
Grasp core industry indicators and industry signals
After many years of cyclical industry research, the follow-up research of meso industry has become the top priority of Peng Wei's work, which will naturally be more sensitive to the cyclical law of the industry, structural factors and the impact of external variables on the cyclical law. When there is an external variable in the industry, whether this external variable or the structural factors of the industry itself will have a substantial impact on the future supply and demand relationship and future prosperity will also be a problem that Peng Wei focuses on analyzing and paying attention to.
When understanding the core contradictions of some industries, find their key indicators, such as price or industry profit changes. Once he found that the industry was at the bottom, he dared to increase his position decisively. Speaking of this, Peng Wei mentioned the pig farming sector in 2019.
In 2018, before the start of African swine fever, pig prices had fallen to around $10. Overall, around 10 yuan, it already means that the pig price has reached near the historical bottom. The data near the bottom is superimposed on African swine fever, and Peng Wei's first judgment is that the industry has bottomed out, and there will be great changes on the supply side. Previously, Peng Wei had just experienced the supply-side reform of coal and steel from 2016 to 2018, and for the pig breeding sector in 2019, Peng Wei believes that this is also a similar supply-side reform to bring about the price elasticity of the industry.
Peng Wei pointed out that there is a big disagreement at the end of 2021 on whether to participate in a new round of pig cycle. The reason why he did not participate was that the combination of industry operating indicators was not yet at the bottom of a relatively perfect one. Around the National Day in 2021, pig prices fell below the break-even line again. Peng Wei's first reaction is that the whole industry has begun to lose money again, but is it worth participating?
At that time, Peng Wei saw two indicators, one is that the data of breeding sows is still in a historically high position at the end of 2021; Second, the valuation of most companies is not cheap enough, unlike the valuation level at the end of 2018; In addition, the industry has made a lot of money in the past two years, and now it has just lost money, coupled with the high supply of pigs, his first judgment at that time was that this round had just begun to lose money, and it was too early to intervene.
At the beginning of this year, pig prices have significantly fallen below the industry break-even line, although sow data is still high, Peng Wei pointed out that this round of company valuation is relatively cheap, and the decline time has been relatively extended. For this phenomenon, Peng Wei has a certain inertia thinking, and feels that this time there is a high probability of entering a round of capacity contraction. Once the cyclical industry encounters a supply contraction, it is worth paying attention to.
For inflection point assets, when realizing that the industry is near the bottom, Peng Wei believes that on the one hand, it is necessary to combine the valuation cost performance, on the other hand, combined with the winning rate under the entire industry operating data portfolio, looking at the cycle will look at many data including inventory, capacity utilization, marginal cost, cost curve and so on.
In this regard, Peng Wei will grasp two core factors: first, although it is at an inflection point, the valuation is not in a more reasonable position; Second, some other indicators have a better cooperation, at the beginning of the loss, the industry as a whole is still in the profit stage, the data combination at this time is not ideal.
Based on the investment framework, only with enough persuasion, Peng Wei will make industry switching. In his view, the phased switching of the industry is subjectively or formed by the industry configuration, behind the switch is to find a fundamental-driven industry, a few may be from the individual stocks to find signals after expanding to the industry, but the essence is still in the dimension of industry logic to switch. But following the industry signal, Peng Wei believes that it can inspire him to find industry investment opportunities.
In February, when OpenAI first received investment from Microsoft, Peng Wei initially thought that this might just be a thematic investment opportunity. Until after March, Peng Wei found two industry signals: first, OpenAI began to significantly reduce prices; Second, Microsoft launched an application-level tool such as Copilot. At this point, Peng Wei began to realize that AI is not only a thematic investment, but has begun to transform into an investment sector with industrial trends worth participating in in some links of the industrial chain.
But Peng Wei also bluntly said that when OpenAI's GPT is converted into applications, it is impossible to commercialize downstream in terms of its initial cost. Until the price is significantly reduced by 90%, it is gradually expected to achieve industrialization and commercialization. A product, from the introduction period to the penetration rate from 0 to 1, from 1 to 10, and finally 10 to 50, needs to meet the commercialization conditions. Microsoft's investment in OpenAI, including the emergence of large models, is just a sign of potential industrialization. From the stage of industrialization to commercialization, many problems need to be faced, including whether market demand and business models can be formed. For particularly expensive products, the market demand is often limited, or only in the laboratory stage.
In order to realize the transformation from industrialization to commercialization in some industries, there is often a certain threshold range, and once the critical value is broken, the demand logic or business model can run through. Similar to photovoltaic and wind power, they relied on subsidies until they broke through the price threshold, and they no longer needed subsidies, and market demand spontaneously generated. Including the sudden rise of the wind power sector in the second half of 2022, the essence is that the price of wind power continues to decline, thus entering the era of parity, and the relevant market demand has exploded.
Peng Wei said frankly that there will indeed be many themes of chickens and dogs ascending to heaven in the market. If it is only a pure thematic investment, he may not participate, but if there are some things that can be landed, orders or performance, or there are things with strong logic, they may also be laid out.
For Peng Wei, investment has always been uncertain. In any year, there will be a high level of uncertainty, especially if there are many factors that are not in the pure financial and economic framework, such as the epidemic and political factors.
Peng Wei bluntly said that the uncontrollable and really incomprehensible industries will not participate. At the same time, it is also possible to find the factor of hedging in the portfolio. For example, for damaged stocks and beneficial stocks in an uncertain event, this risk can be hedged during portfolio management, and the rest can find their respective alphas.
In the short term, Peng Wei believes that at least the worst is over. In the current position, Peng Wei believes that with the four dimensions of economic support, policy support, index in a cost-effective position, and relatively abundant liquidity, there is no need to make pessimistic judgments in the future environment.
For the difficult situation of investment in recent years, Peng Wei also feels quite a lot, and the pressure is also great. Pressure comes from drawdowns, and in terms of relative returns, the ranking of public fund managers is also a source of pressure.
After joining CEIBS Fund, Peng Wei mentioned that he will continue to improve and optimize his investment framework system; In addition, further increasing the research and investment of some bottom-up individual stocks can to a certain extent dilute the blind spots in the investment framework of the meso industry.
In Peng Wei's view, in the process of studying individual stocks, it is also necessary to do industrial verification. The first step is to research and track what you can understand and verify in the circle of competence. The second step is to pay more attention to the shareholding structure and relevant information of the management in terms of management. The third step is to have the ability to make value judgments about individual stocks from a medium-term perspective.
(Cai Lian News Agency reporter Feng Qijuan)