One
April was tough.
According to the view of travel capital, the spring market generally ends in the first half of April.
At the same time, April is also the deadline for the annual report and quarterly report of listed companies, and the later the release date, the worse the performance.
For most of the junk stocks that rely on the concept to rise, waiting for the financial report to come out is to see the light die.
There are bloggers' statistics that also support this:
Except for several big bull market years such as 2006, 2007 and 2015, other years were affected by the calendar effect in April, especially in late April.
In the past 19 years, the median increases in the first, middle and second half of the year were 2.25%, 0.20% and -0.76% respectively.
The 8-year median from 2016 (mainly excluding the impact of the 2015 bull market) was 1.03%, 0.03%, and -0.70%, respectively. The later it gets, the greater the impact.
Therefore, students who have a heavy position and are worried about riding a roller coaster ride still need to take advantage of the rebound to reduce their positions.
Two
But Lao Siji is still increasing his position, and today he mainly increased his position in the falling banks and infrastructure.
There are 3 reasons for this:
First, my high-dividend strategy system is relatively unafraid of declines.
Second, I have always regarded the equity of high-quality companies as high-quality assets, which can outperform cash and housing prices in the long run, and as long as I have money, I will exchange it for high-quality equity holdings as much as possible.
My goal is to cover my living expenses with dividend income, and until that goal is achieved, I try to hold equity rather than cash.
Third, based on the long-term, ignoring the short-term, for excellent companies, the long term, the decline is definitely a good opportunity to increase positions;
The fall in April is not the key, but whether the valuation is cheap after the fall, and whether it can reach new highs in the future, is the key.
After talking about banks yesterday, I will continue to talk about infrastructure leaders today.
According to many people's understanding, infrastructure belongs to a link in the real estate chain, and if real estate is declining, infrastructure will not be good.
And if the real estate developer's money cannot be recovered, the accounts receivable will become bad debts, and the net profit will not be high.
Is there any reason for the market's worries?
Quite right.
So why do I dare to go against the market?
First, the excellent infrastructure leaders are still growing, and they have not declined with the decline of real estate;
In the three years of the real estate downturn, the non-net profit of the excellent infrastructure leader increased by 19%, 9% and 9% respectively.
Source: Wind
The performance growth rate is twice that of GDP, which is not low.
Infrastructure is still the ballast stone for steady growth.
Source: Wind
Second, the gold content of net profit is not low.
How to measure the gold content of net profit?
The industry usually uses the indicator of "net cash profit from operating activities/net profit attributable to shareholders of the parent company", if the indicator is greater than 1, it means that the company has received real money.
In 21-23, the company's indicators were 1.15, 1.39, and 0.47, and both 22 and 23 were greater than 1, which was relatively normal.
Third, the valuation is very cheap.
Although infrastructure leaders are still growing steadily, the market is very biased.
The company's ROE has been above 10% for many years, and under normal circumstances, a price-to-earnings ratio of 10 times is a reasonable valuation, at least worth 1 times PB.
However, the company's A-share market earnings ratio is 5.1 times, and the price-to-book ratio is 0.6 times.
Hong Kong stocks are even more exaggerated, with a price-to-earnings ratio of only 2.8 times and a price-to-book ratio of 0.31 times.
The 23-year annual report announced a dividend of 0.21 yuan per share, corresponding to a dividend yield of 3.04% for A shares and 5%+ for Hong Kong stocks.
As long as the company maintains a compound growth rate of 5%+ in the future, coupled with a dividend yield of 5%+, it is likely to still achieve the double-digit income target.
Three
Moreover, this kind of central enterprise has also implemented equity incentives for many years, and it is not as rigid as everyone thinks.
Source: Announcements of listed companies
From the sharp rise in coal in the past three years, coupled with the book "The Future of Investors", I have realized a truth:
First, don't be biased against any industry, you don't need to invest in popular industries, you can get satisfactory returns;
Second, the core of the return on investment is the expected difference, which is determined by the price we pay and the dividend yield we receive.
When the market gives cheap value, it must imply very pessimistic growth expectations.
However, if the market expects a performance of -5% and the actual performance is 5%, then the relative risk is lower than that of investing in popular industries, but the actual return is higher.
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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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