History is always strikingly similar, it is still October, or the 3,000-point defense battle is lost, and after going around for a year, A-shares have returned to the "original starting point".
I believe that many people's feelings are as complicated as I am - there is the unwillingness to return to the original point after a year, the disappointment of the big A, and the excitement of approaching the bottom of the market.
As Warren Buffett said: I am afraid when others are greedy, and I am greedy when others are fearful.
The current A-share market is entering the stage of abandonment and self-taking, and the stock index has fallen below 3,000 points, which is the time for investors to consider buying the bottom. Although the A-share market has been hovering in the 3,000-point range for more than a decade, 3,000 points is basically the center of value, and below 3,000 points has become a bearish trap in the market.
Why?
This brings us to the difference between 3,000 points in different periods in the history of the A-share market.
1. 3000 points and 3000 points are not the same day
If we only look at the index point, we are naturally easy to habitually think that A-shares have been hovering at 3,000 points for 16 years without improvement, but if we look at it together with the valuation, it is not an exaggeration to say that "the point is 3,000 up and down, and the light boat has passed the ten thousand mountains".
According to a research report by Jinyuan Uni-President Securities, historically, when the Shanghai Composite Index was at the bottom of valuation, the price-to-book ratio usually hovered around 1.2 times.
At the same time, since 2007, the corresponding valuation of the Shanghai Composite Index around 3,000 points has continued to decline at different times, of which the price-to-book ratio of the Shanghai Composite Index was just close to the bottom of the valuation when it was 3,000 points last year.
In addition, looking back at the five rounds of market bottoms in the history of A-shares since 2000, it can also be clearly seen that the Shanghai Composite Index corresponding to the bottom is gradually rising, getting closer and closer to 3,000 points.
This means that as the net assets of the Shanghai Stock Exchange continue to grow, the valuation corresponding to 3,000 points will continue to decrease, and in the future, 3,000 points may even change from the center to the bottom.
Returning to the current market, the Shanghai Composite Index already has multiple conditions such as being below the value center and valuations close to the bottom level, so although the big reversal is not clear, the market does usher in a good opportunity to buy the bottom.
Second, it's not that the market can't afford to copy, it's that the science and technology innovation board is more cost-effective!
Since it's all laid out at the bottom, what to buy is crucial. Investment is a very personalized thing, if you want to be more stable, you can generally consider the large-cap broad-based index, but if you want to have higher return potential, I think that the listed companies on the Science and Technology Innovation Board are undoubtedly a better choice.
As a test field for reform, the Science and Technology Innovation Board is actually the darling of the Shanghai Stock Exchange and even the entire A-share market, focusing on a "hard technology and high growth".
At present, there are two major indices on the Science and Technology Innovation Board, namely the Science and Technology Innovation 50 and the Science and Technology Innovation 100, and I am personally optimistic about the latter. There are three main reasons for this:
First of all, the STAR 100 industry is more fragmented, which is obviously better from the perspective of the margin of safety.
Among the constituent stocks of the Science and Technology Innovation 50, semiconductors account for half of the country, while among the constituent stocks of the Science and Technology Innovation 100, the industry distribution is much more balanced, almost the same as the science and technology innovation board in the outer ring as a whole.
Secondly, when investing in the Science and Technology Innovation Board, one of the indicators that I am personally concerned about is the content of "hard technology", which mainly looks at who has more specialized and special new enterprises.
Among the constituent stocks of the Science and Technology Innovation 100, there are 36 specialized and special new enterprises, which are significantly higher than the Science and Technology Innovation 50 in terms of number and weight.
Finally, there is the issue of growth elasticity, from the perspective of scale, the Science and Technology Innovation 100 also has a label, that is, the index of "focusing on the small and medium-sized caps of the Science and Technology Innovation Board", most of its constituent stocks are within 20 billion, and a considerable part is even less than 10 billion, and there is a lot of room for growth.
You can think about it, which is easier for a company to rise from 10 billion to 50 billion, or a company to rise from 50 billion to 250 billion? Apparently the former!
Of course, in addition to being optimistic about the STAR 100 Index itself, from the perspective of timing, it is also the time for investors to pay attention to the STAR 100 and invest in the STAR 100.
After all, while the Shanghai Composite Index returned to the original point, the Science and Technology Innovation 100 also returned to the basis point, and on October 20, the closing point of the Science and Technology Innovation 100 was only 1009.29 points, which can be said to be the right time to buy the bottom.
If you have a similar view to me and plan to lay out a first-hand STAR 100, you can consider the recent issuance of related index funds, such as the recently issued Penghua SSE STAR 100 ETF (code: Class A 019861, Class C 019862) is a good choice.
Finally, I would like to add that although I have been saying "buy the bottom", the reversal trend of the market is not clear, and everyone should not be in a hurry to stud, according to their own financial situation, just take your time in a small amount and many times.
Risk Warning: The content of this article does not constitute investment advice. The performance of other funds managed by the Fund Manager does not constitute a guarantee of the performance of the Fund. Please read the "Prospectus", "Fund Contract" and other legal documents carefully before purchasing. Investment is risky, and you need to be cautious when entering the market.