Awesome! Chinese concept stocks have risen sharply across the board, Chinese assets have been robbed like crazy, and Hong Kong stocks are either on the way to new highs or new highs.
The stock index has been sideways for more than a week, the short-term attack has been blocked, two major opportunities are in front of you, and there are two risks to be vigilant against, let's take a look!
Today, I also share heavy investment dry goods: how to avoid the sickle of the bear market and take the train of the bull market?
4000 words long article, rich in content, very informative, full of dry goods, I hope it can be helpful to friends! Recently, there has been a serious lack of praise, so please give the dark horse an encouragement. Like first and then watch, make millions a day!
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1. It's crazy to buy! Why are Chinese assets so popular?
Last night, Chinese concept stocks listed in the United States collectively soared, and Hang Seng Technology has been on the rise recently, and Chinese assets have become a sweet spot for international capital to compete for allocation. There are three main reasons for this:
First, the global valuation depression is outstanding, and the value of medium and long-term investment is outstanding. Stock markets in Europe, the United States, Japan and India are at historical highs, and A-share Hong Kong stocks are at historical lows.
Second, China's economy is stable and improving, and the RMB exchange rate is stable. In the context of the global economic downturn, China's economy has shown stronger resilience, the general trend of stability and improvement is clear, and the prospect of China's asset appreciation is worth looking forward to. The RMB exchange rate has been relatively stable relative to the sharp depreciation of the yen, further enhancing the attractiveness of Chinese assets. As a result, "selling Japan and India and buying China" has gradually become an international capital consensus.
Third, global liquidity is expected to improve, and funds are deployed in advance. No matter how the Fed puts off the smokescreen, the next step in cutting interest rates is certain, and the $34 trillion in Treasury makes it difficult to keep interest rates high for a long time. The Federal Reserve cut interest rates, the world will start a new round of monetary easing cycle, liquidity improvement is expected, when a large amount of international capital will return to China to promote the stock market rise, so there are some funds in advance to enter the layout, waiting for latecomers to carry the sedan chair.
The above three reasons have led to the crazy robbery of Chinese assets, whether it is A-shares or Hong Kong stocks, they are currently in a new round of bull market journey, short-term or twists and turns, but the medium-term situation is improving.
Reminder: Hang Seng Technology has now rushed to the strong pressure area, although the medium line is optimistic, but the short-term chase is no longer suitable, and the callback opportunity after the rally is established is more fragrant. Chasing up is not a good habit and is often the origin of the quilt.
Second, two major opportunities and two risks
Opportunity 1: Medium- to long-term investment opportunities in China's core assets and high-quality industries
The soaring prices of Chinese concept stocks, the Hang Seng Index and Hang Seng Technology, as well as the accelerated return of foreign capital to A-shares, fully demonstrate that the major investment opportunities of Chinese assets are being widely recognized by international capital. Broad-based ETFs such as CSI 300 have been bought by mainstream funds, and listed companies have repurchased them in large quantities, which fully shows that the current investment value of A-shares is being recognized by domestic capital.
Representative indices of China's core assets such as A50 and CSI 300, as well as high-quality industries such as pharmaceutical, medical and biotechnology, Hang Seng Technology and Hang Seng Medical, are the obvious investment opportunities in front of us. Ordinary investors are suitable for the layout of broad-based indices and industry indices, and professional investors are more suitable for mining high-quality big white horses.
Opportunity 2: New Cycle Opportunities in Cyclical Industries
In the pro-cyclical industry, I am more optimistic about the elasticity and potential of non-ferrous metals and chemicals. With the Federal Reserve cutting interest rates coming, a new round of global monetary easing cycle will begin, and nonferrous metals and chemical will usher in medium-term opportunities. In fact, both have already been shown in advance.
In addition, Big Tech also has a clear industry cyclicality. For example, semiconductor chips, after nearly two or three years of destocking, the downward cycle has come to an end, the inventory replenishment cycle is expected to open in the second half of the year or early next year, and some subdivisions have entered the upward cycle, which is also a foreseeable medium-term opportunity. It is relatively difficult to select individual stocks in the science and technology track, the performance fluctuates greatly, the industry competition is fierce, and the development prospects are difficult to predict.
Risk 1: The risk of short-term strong stocks killing down
Since April, there have been dozens of stocks that have fallen every day, and in addition to performance mines, most of the stocks are dominated by short-term strong stocks, and many of them are directly checked after continuous surges.
For example, Jimin Medical, after three consecutive one-word boards, followed by two falling limits.
Another example is Nanhua Biology, after the big rise, there are two one-word boards in a row, and there is no chance to escape.
It looks very tempting for hot stocks to rise, but the short-term risks are extremely high, so you should be cautious!!
Risk 2: The risk of a pullback in a sector at historically high levels
For example, the coal sector has soared due to its low price-earnings ratio and high dividends, standing on the cusp of high-dividend assets, and has risen out of a rare contrarian trend. No matter how it rises at this stage, it can't change the investment attributes of a cyclical industry, and the return of valuation is an inevitable process after the industry's earnings growth declines.
Coal prices will be difficult to break through the highs of 2021 for a while and a half, and it will be difficult for the performance to exceed expectations. In the first quarter of this year, the performance of coal companies generally fell sharply, beware of the return of valuations.
The technical side is also weakening, the weekly MACD and KDJ both high death forks, once effectively falling below the white line at the neckline, the possibility of medium-term adjustment is greatly increased, it is advisable to beware of the weakening of the middle line.
3. Dry investment: How to participate in the redistribution of wealth in the bull market and avoid the reset of assets in the bear market?
A bear market is a reset of assets, and a bull market is a redistribution of wealth! Every bear market is a process of asset replacement, but anyone who stands guard at a high position and buys the bottom halfway will lead to a serious shrinkage of assets. Every round of bull market is a process of wealth redistribution, and those who dare to buy the bottom of the bear market and can hold firmly until they leave the market after the surge will achieve a surge in wealth.
80% of traders active in the A-share market do not make money, the fundamental reason is that they stick to what they should not stick to, give up the opportunity that they should not give up, get on the train when they should not get on the train during the flow of the wealth train, and fall asleep when they should get off the train, either miss the opportunity to get on the train, or miss the opportunity to get off the train, which is really a pity!
How to avoid the scythe of the bear market and ride the train of the bull market in the process of the alternating cycle of the bear market and the bull market? In fact, it is very simple, just do the following three points summarized by the dark horse.
The first is to judge the position of the market valuation.
Underestimation is the thickest safety cushion, overestimation is the most dangerous cliff edge. If you enter the venue when you are seriously underestimated, even if you fall to the ground, you will not be thrown into a vegetative state anyway if you are protected by a safety mat; Entering the market when it is seriously overestimated is like staying on the edge of a cliff, and if you accidentally fall down, you will fall to pieces.
There are two common ways to identify risks and opportunities:
1. Use financial indicators such as PE\PB to judge the valuation of major stock indexes.
For example, the CSI 300 index, the price-to-book ratio (PB) corresponding to this bear market low is lower than that of important lows such as 2018, 2016, 2014, 2008, and 2005. Isn't that an opportunity zone? Why have mainstream funds been buying CSI 300 ETFs frantically in recent months? The scale of a single product broke through the 200 billion mark, setting a historical record, just because I saw its major investment opportunities!
2. Use technical indicators such as KDJ on a monthly line and above to judge the position of major stock indexes and industry indices.
For example, in the chemical sector, the K value of KDJ on the monthly chart fell below 25, and the J value fell below 5, corresponding to a round of historical large bottom areas; The KD value is not rising in the high-level area above 80, which corresponds to the big top area of a bull market, and the opportunity area and the risk area are clear at a glance.
The second is to select high-quality targets with great potential for growth.
If you want to make a big profit, you can only allocate targets with big rising potential. For example, the chemical sector in the chart above has amazing performance in every round of bull market, with good gains and considerable returns. At present, it is in the historical big bottom and low area, isn't it a good opportunity for medium-term layout or regular investment? The end of global monetary tightening is coming, and the domestic economy will inevitably recover under the policy intensification, and the chemical industry, as a pro-cyclical industry, will benefit from the economic recovery. Recently, the chemical sector has strengthened, and the trading volume has been significantly enlarged, indicating that there have been medium-term funds entering the layout.
The third is to be clear-minded, overcome human weaknesses, and follow market rules and investment logic.
No matter how accurate the analysis and judgment are, no matter how good the investment opportunity is, it is impossible to overcome the greed and fear in the heart, hesitate when entering the market, and suffer from gains and losses when it is time to leave, so how can you do a good job of investment? The most important thing to follow in investment decisions is the market rules and investment logic, rather than various subjective ideas in the mind, so as to avoid the impact of market fluctuations and market sentiment, and cultivate independent thinking and reverse thinking habits. For example, at the beginning of February 2024 and the end of October 2022, when the market plummeted, the dark horses were all decisively entered the market and bought low, not affected by the stock market crash at all, let alone the pessimistic tone of bearishness at that time.
Tell us about specific investment decisions. For example, I am more optimistic about the medium-term layout opportunities in the chemical industry, but it has risen a lot recently, and the direct heavy position is too aggressive, what if there is a large drawdown? But it is not scientific to passively wait for a pullback, what if it continues to rise strongly? Investing is not fortune telling, not gambling, rather than guessing, it is better to use scientific fund management methods to deal with the present, to invest in the car weekly, if there is a big callback and then increase investment, this is not a good solution to the contradiction between anti-stepping and anti-deep set?
Fourth, after a long adjustment, when will the technology market set sail again?
2024 has become the year of AI stories, with AI news coming almost every month. Today, Open AI released GPT-4o, the "best ever" multimodal model, which supports any combination of text, audio, and image inputs, and generates any combination of text, audio, and image outputs for human-level responsiveness. AI is becoming more and more powerful, which will drive the entire industrial chain to take off, and will also bring subversive changes to human life, which is of epoch-making significance. The development of AI is getting better, and the halo of the protagonist is still there, so this round of technology market is far from over.
Chinese concept stocks are crazy, Chinese assets are robbed, and a new round of opportunities to allocate China is coming, what do friends think? Let's discuss.
Finally, please give a thumbs up, give encouragement and support, thank you very much!
The above content is personal opinion only and is not intended to be instructive. The mention of individual stock funds is only to record market views and the actual operation process, and accumulate materials for future creations, without making any recommendations, please do not blindly follow up. Past performance is not indicative of the future and investors should be aware of the risk of market volatility.