My investment strategy is in one sentence:
Focus on high-dividend strategies, look for high-dividend companies in the future, if the company meets the "two highs and one low" (high ROE, high dividends, low valuation), as long as the performance and dividends are growing, even if the stock price does not rise for a long time, it can achieve the double-digit investment income target.
Specific industries, home appliances, banks and coal, as well as food and beverages on the Changniu track, which have risen high this year, are all in line with this characteristic.
In terms of active funds, Liu Xu, Jiang Cheng, Zhang Yifei, and Bao Wuke, who have heavy positions, are basically fund managers who value dividends and low valuations as a margin of safety.
One
Let's talk about Liu Xu first, whose masterpiece Dacheng high-tech industry has a double-digit increase this year.
Observing its heavy stocks, the price-earnings ratio is basically no more than 20 times, the ROE is basically 15%-20%, and the dividend yield is also 4-5%+, which is in line with high ROE, high dividends, and low valuation.
Source: Wind, as of April 29, 2024
In the home appliance industry, which has risen first this year, he has a heavy position in Midea and Gree, up 20%+.
In the oil industry, which rose fourth, he took a heavy position in the Hong Kong stock China National Offshore Oil, up 50%+.
If the time is extended, Dacheng high-tech industry has been managed since July 15 (bull market high), with a cumulative return of 305%, equivalent to an annualized rate of 17.3%, ranking first in the same category (common equity, 1/119).
It has been almost 10 years since his debut, and although his performance is so good, Liu Xu has never been out of the circle.
Source: Wind, as of April 29, 2024
Because of which year it comes out, the performance of Dacheng's high-tech industry is not outstanding.
Especially in the big bull market of growth stocks in '19 or '20, it's just the market average.
So can Liu Xu's long-term performance still rank first?
Because he has excess returns in a bear market, which is very obvious.
For example, in 16 years, the CSI 300 fell by 11%, and the high-tech industry was 1%, exceeding the quota by 12%.
In 21 and 23 years, the CSI 300 fell by 5% and 11% respectively, and the high-tech industry was positive by 28% and 5%.
Controlling the drawdown is the soul of compound interest.
Let me give you a mathematical formula: 1.1*1.1>1.5*0.8.
Even if the income is only 10% for 2 consecutive years, it is higher than earning 50% in the first year and losing 20% in the second year.
If the investment is compared to the field and the game, the good fighter has no outstanding achievements, and the defense can win the championship.
Warren Buffett is not because he grabbed Coca-Cola and Apple, but because he made fewer mistakes than others.
And good investors, even if the long-term performance is very good, are very humble.
Zhang Kun said after becoming famous: It takes at least 10 years to evaluate an investor's dimension to smooth out the influence of style, cycle, luck and other aspects.
Liu Xu is the same, he mentioned in an interview:
At this stage, I have actually thought about many things very clearly.
What plagues me now is that I am not capable enough, I am not good enough, and many times I can't grasp the essence of things and understand the laws behind events, which sometimes makes me feel uncomfortable.
I actually think about these questions every day, but I think it's quite difficult and requires a deep understanding of things.
I read a lot of books every day, mathematics, philosophy, logic, etc., and I will also review the cases of some companies to see the logic behind the ups and downs, hoping that one day I can understand them.
Therefore, when I see a fund manager who says that there is no shortcoming in his ability, and when his performance is good, he is very public, and he directly blacks out.
Two
Let's talk about Jiang Cheng again, the value of Thai Xingyuan in his masterpiece is preferred, and this year's income is also double-digit.
Source: Wind, as of April 29, 2024
From the perspective of its holdings, high ROE, high dividends, and low valuation are clear at a glance.
This year's home appliances, which rose first, he repositioned Supor and Midea.
The bank that rose second, he repositioned ICBC and China Merchants Bank.
In addition, the paper industry leader and infrastructure leader also performed well.
Many people are always worried about star fund managers, will they fall as soon as they buy them?
In fact, just look at one method: it is to look at the price-earnings ratio of his fund's heavy stocks, whether it is high or not.
Most companies have a long-term reasonable P/E ratio of 15-25 times, and highly leveraged industries such as banking and real estate are discounted by 7 to 10 times.
Three
Finally, let's talk about Zhang Yifei, the equity and bond balance fund Anxin Min's steady growth as his equity representative.
Source: Wind, as of April 29, 2024
Fund managers who focus on low valuations and high dividends will also have a lot of overlap in stock selection:
For example, China National Offshore Oil is Liu Xu's heavy position, China Merchants Bank, China Overseas Development, and Conch Cement are Jiang Cheng's heavy positions, and the three of Midea have all bought them.
For these traditional industries, it is precisely because there is a lot of market bias or short-term fundamentals that valuations are very cheap.
However, I have a potential return on the best companies in the traditional industries, compensated by very low valuations and high dividend yields, and the potential returns are not inferior to those in the popular industries.
Coal has set an example, and the oil faucet has risen for four consecutive years, which is the best example.
Source: Wind, as of April 29, 2024
When the industry's performance is super reversed, it is when these undervalued industries take off.
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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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