Today is another green day.
The drop is not small!
The CSI 300 and CSI 500 dived about 1% in the morning. But in the afternoon, a wave of smashing took away, one closed down 1.78%, and the other closed down 2.29%. The national team also flexed its muscles, but it didn't work today......
1. The more benefits there are, the more losses there are?
At such a low point, you can still kill and fall, and the kneeling people are convinced.
Ah Hong Kong fell even worse today, with the Hang Seng Index being hammered by more than 2% and Hang Seng Technology being hammered by more than 3%.
Because of the fall of Chinese concept stocks listed on the U.S. stock market last night, a certain Duoduo, a leading cutting-edge Chinese concept company, was hammered 8% overnight because of a bearish report.
Obviously targeted by Lao Mei!
I am more optimistic about the Internet platform, which is also inseparable from our daily life. As a result, the Hang Seng Internet Fund has been more serious recently.
After the intraday dive, the national team quickly shot!
Taking the CSI 300 fund, the largest fund in the market, as an example, there have been several waves of intensive large orders today.
Source: iFind, as of January 30, 2024
But we will find a very interesting phenomenon:
When the national team made a move, the market started a wave of charging and climbing the pit, and suddenly and quickly went up. But as soon as the national team stopped, the index quickly dived and fell.
How did you climb up, and how did you fall down.
On the whole, with the support of the national team's buying of the broad market and the "Chinese prefix", the performance of the large-market index has been lively. Year-to-date, the CSI 300 is down about 5%, and the Shanghai 50 is down slightly by more than 2%.
Therefore, if you want to do a good job in the future, try to refer to the trends of the national team. The direction of the national team's protection plate is also dominated by CSI 300. You can use the CSI 300 index fund to cover your position.
We have selected 12 CSI 300 index funds for you and sent a "margin call".
Most other indexes, industries, and individual stocks fell even harder.
For example, small and medium-sized caps without support and double creation have become the main force to kill the fall. Especially Shuangchuang, which has fallen by more than 16% since the beginning of the year, has fallen and cried.
Source: iFind, as of January 30, 2024
Many investors have complained, "I feel that I have lost more after the bailout", "How can I lose more if I am good?"
2. When will the GEM stop falling?
Many Lao Tie are very concerned about this topic, so let's analyze it with you from my point of view. Note: This is a personal opinion only and does not constitute investment advice.
First, let's take a look at historical performance.
Taking the ChiNext index as an example, the index has shown a strong bull market aggressiveness since its listing, often rising sharply and in a straight line like lightning.
When the market switch and style change lead to a killing, the same decline is fierce, and even a pullback and grinding for several consecutive years.
Therefore, the sharp attack in the past few years and the continuous shock and fall in recent years are no different from its previous investment style.
It's just that many people thought that they could continue to rise sharply or that they could buy the bottom, but they hastily killed it.
Second, historical drawdowns and drawdown estimates.
From the above chart, you can also make the next 3 rounds of bull and bear estimation:
(1) In the round from 2011 to 2012, it fell from more than 1,200 points to less than 600 points, with a maximum drawdown of more than 50% and lasted for two years.
(2) From 2015 to 2018, it fell from more than 4,000 points to 1,200 points, with a maximum drawdown of about 70%, which lasted for about 3 and a half years.
(3) In the current round, it has fallen from 3550 points to 1584 points now, with a maximum drawdown of about 55%, which has lasted a little more than 2 years.
From the comparison of these data, it can be seen that the GEM has fallen so much that it can fall out of the previous bear market.
Therefore, it is not that the GEM has fallen too hard.
However, some investors are too optimistic about the GEM and lack reverence for history and the capital market.
Fortunately, it has fallen to the present, which is similar to the historical decline.
Third, the doubts here are the greatest
Let's take a look at the valuation data of the GEM index.
GEM refers to the current price-earnings ratio of PE is 23.99 times.
At the end of 2018, the valuation was 27.06x, and at the bottom of 2012, it was 29.86x. Now lower than both of them.
Source: iFind, as of January 29, 2024
At present, the price-to-book ratio of the GEM index is 3.25 times.
At the end of 2018, it was 3.25 times, and at the bottom of 2012, it was 2.52 times.
It is now the same as the bottom of 2018 and higher than in 2012.
Source: iFind, as of January 29, 2024
There is also the industry allocation and the overvaluation of heavyweight stocks, I have the biggest doubts here!
From the perspective of dismantling, the reason why the GEM has been falling and falling endlessly is because the index is highly dependent on new energy, medicine and medical care, accounting for more than half of the GEM. Looking at the historical data, in the first two years, the weight of new energy, medicine and medical care on the GEM was greater than this.
And these industries continue to fall, and recently they have both fryed.
Therefore, if you want to explore when the GEM will bottom, you need to pay attention to when new energy, medicine and medical care will bottom?
Source: iFind, as of January 29, 2024
In addition, I noticed that there are still many high-stock companies and overvalued companies in the new energy and pharmaceutical and medical care areas on which the index is highly dependent, and the weights are still very high.
For example, a certain Rui Medical, which has fallen to the present, has a current price-to-book ratio of 9 times. Recently, it also acquired 20% of the equity of a company for 6 billion, a premium of 60 times.
When the market is bullish and the market is good, it may be understandable that there is a high premium. But when the bear market, the industry is deserted, and the winter is ready, is it still so crazy?
There is also a certain ophthalmology, which has fallen to the current price-to-book ratio is still as high as 7 times. As a result, goodwill accounts for more than 30% of net assets......
To be honest, I was too timid to touch them at all. PS: I prefer a value style, and my investment style is stable and conservative.
Finally, I would like to summarize my views with you:
The GEM has fallen to the present, which is similar to the historical decline, and it is not appropriate to be too pessimistic. If it can stabilize at the current point and stand above the 5-day moving average, a rebound can be expected. Especially in the first month of the year, it fell by more than 16%, and it has been over-fallen in the short term, and there is a chance to repair the rise.
However, it is difficult to see the bottom of this, because the industry allocation and weighted stocks of the index may have to fall or take time to digest the valuation.
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Disclaimer: The content of this article is based on public information research and does not constitute investment advice. Investors should make prudent decisions and bear risks independently.
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