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Explore the essence of business from an entrepreneur's perspective
01
The hottest topic recently is the stock market, and yesterday the Market Supervision Bureau, the Ministry of Industry and Information Technology, the Ministry of Justice, and the Financial Supervision Bureau also came out to express their positions.
One department after another has come out to express its position, although there is no specific policy and stimulus scale, but it is likely to launch an epic stimulus policy next.
Investment is an industry that I have been engaged in for 30 years, and since the 924 mad bull market in 2024, I have heard a lot of voices, some people are glad that they did not have the impulse to enter the market at the highest point on October 8, and some people are glad that they have never bought stocks, and naturally there are no losses and profits, and more people regret the impulse and take over at a high level.
Whether you have invested in stocks or not, one of the four most important things for entrepreneurs and investors at the age of 40 is wealth management, and this round of policies to stimulate the economy and the stock market will affect business operations and personal wealth.
At this major critical juncture that occurs once in five years, we must thoroughly understand the policy. Just like Huawei's investment in R&D, it must adopt saturation attack, research and development of saturation attack, and learning from saturation attack, and we must be determined to win.
Based on my investment experience in the past 30 years, I summarize the three steps of the country's economic stimulus and the stock market: [sudden braking, sharp steering, and crazy oil pedaling], when you understand these three steps, you can go from a chaser who follows the crowd to a strategist.
02
Let's first take a look at how the country stimulated policies and the stock market in 2008/2009 through [sudden braking ~ sharp turning ~ stomping on oil].
In 2008, the United States subprime mortgage crisis triggered a global financial crisis, and the capital markets and economies of China and the United States fell sharply, United States the S&P 500 index fell by 60%, and the Chinese stock market CSI 300 index also fell by 77%.
Affected by this, China's economic growth rate has fallen rapidly, exports have declined, and a large number of migrant workers have returned to their hometowns, and they are pessimistic about the future.
In response to the financial crisis, many departments of the state have launched three rounds of economic stimulus and stock market policies, and if we understand the sequence and internal logic of these policies, it is possible to catch the country's economic stimulus again in 2024.
Round 1: Market policy for the slam brake
Since September 18, 2008, the state has launched a reduction in stamp duty, Huijin has increased its holdings of bank shares, and the State-owned Assets Supervision and Administration Commission has supported the increase in buybacks of central enterprises, and the index rose 9.3% on September 19, with a swing increase of 24%.
But after 6 days of rebound, the stock market started to turn down again, why is that?
If you look at these three policies, they are just market policies, and they are a sudden brake in the big fall.
Because stocks are not traded, the stamp duty reduction is not of much value, and the increase in holdings and buybacks can push up stock prices, but they do not reverse the economic shock caused by the financial crisis, and do not fundamentally reverse the economic trend.
Later, the stock market continued to fall for 18 days, falling by another 29%, hitting a new low, and many people who bought the bottom were trapped in it again.
Round 2: Fiscal policy that has taken a sharp turn
On November 5, the executive meeting of the State Council proposed to announce the 4 trillion yuan economic stimulus plan on November 9, and the tone of fiscal policy changed from the previous "prudent fiscal policy" to "active fiscal policy".
We need to pay special attention to the source and scale of funding, because there is no clear scale at the 10.12 Ministry of Finance press conference, which is what we need to pay special attention to.
New central investment: 1.18 trillion yuan, accounting for 29.5%, mainly from the central budget investment, central government funds, other public investment of the central government, and the central government's post-disaster recovery and reconstruction fund.
Other investment: 2.82 trillion yuan, accounting for 70.5%, mainly from local budgets, local government bonds issued by the central government, policy loans, corporate bonds and medium-term notes, bank loans, and attracting private investment.
Then, on December 1, the export VAT rebate rate for labor-intensive products and other commodities was increased, and household appliances were launched to the countryside on December 5.
On the day after the launch of the $4 trillion plan, the CSI 300 index rose 7.8%, and the 23-day swing rose 31%.
What is the difference between the $4 trillion stimulus package and the previous market policy?
The financial crisis, the stock market plummeted, housing prices plummeted, and exports also fell sharply, but relying on market policies could not promote economic reversal, and the stock market rebound was also unexpected.
However, the fiscal policy of four trillion to the real economy, so that listed companies gradually output performance, the market after digesting the good, rebounded to the huge position of 9.18 favorable policy, and then turned down, but because this time is not like the first sudden brake market policy, there is a substantial four trillion money, only fell 14%, erasing 59% of the previous wave of gains, and 918 rebounded after hitting a new low, erasing the -110% of the increase.
At this time, the trading volume of the stock market has been enlarged, indicating that everyone's confidence has gradually recovered.
Round 3: Stomping on Oil: Ten major industrial revitalization plans and central bank loans doubled
In January 2009, the State Council further launched the ten major industrial revitalization plans, and I also announced the start of the seventh wave of the bull market on the program of the Central People's Radio, and issued a bull market declaration.
The ten major industrial revitalization plans not only help alleviate the short-term impact of the financial crisis, but also lay the foundation for the long-term development and upgrading of the industry.
Through the financial initiative to stabilize the development of the industry, effectively ensure the stability of taxation, employment and the "three rural" issues, the stock market has also begun to usher in a new round of rise.
Subsequently, a series of domestic demand increment policies of "home appliances to the countryside", "cars to the countryside" and "trade-in" have been implemented one after another, driving the sales of home appliances and automobiles to rise sharply.
At the same time, a series of real estate policies such as down payment and interest reduction have driven the real estate chain to warm, and the durable consumer goods sector represented by automobiles and real estate has risen first, and non-ferrous metals have risen mainly by gold and copper prices.
Entrepreneurs who deal with banks know that under normal circumstances, when the bank's performance at the end of the year is basically completed, it will not lend again, and even if it does, it will be small.
However, in November 2008, the new loans jumped from 181.9 billion to 477.5 billion in a single month, and then soared to 764.5 billion in December, which is even more frightening year-on-year, directly 446.34% and 1476.29%.
In the first half of 2009, there were five months of loan volume growth of more than three digits, and I have never seen such a fierce money, which is the landing of four trillion yuan, which can be described as a splash of wealth.
In addition to the benefits of various industries, banks have also soared because of the sharp increase in loans, performance has risen sharply, as a key investment of four trillion in the machinery industry, Sany Heavy Industry Chairman Liang Wengen became the first richest man in the manufacturing industry, the richest man in the past are doing trade, games/Internet, real estate.
In this round of stock market rebound, the strong support of fiscal policy has led to a rapid economic recovery, and the improvement of industry fundamentals has promoted a V-shaped reversal of the stock market.
Judging from the trend of the stock market, in the early stage of the release of the "four trillion" policy, the market sentiment has been improved, the stock market valuation has been quickly repaired, and with the continuous force of the policy, the fundamentals of the economy and listed companies have also been verified in the data.
Let's look at several sets of data: GDP, industrial added value, home appliances, automobiles, real estate sales data have all shown a V-shaped reversal, and the stock market has naturally gained confidence, and this wave of stock markets has risen by up to 132%.
At that time, in order to strengthen the investment confidence of me, my clients and students, I kept my long hair, and this wave of bull market did not end, and my long hair was not cut, and I doubled my returns.
03
I don't know if you graduated from college in 2008 and started your own business?
Maybe no one has felt the law of [sudden braking-sharp steering-stomping on the oil], and then thinking back to the new crown epidemic in 2020, what tricks did the country make? Are there any routines that we are familiar with?
After the outbreak of the epidemic in 2020, the fiscal policy responded quickly, and the central bank lowered the reserve requirement ratio three times, the reserve requirement ratio fell by about 1%, and the liquidity released by the RRR cut reached 17,500.
Subsequently, several batches of re-lending and re-discounting quotas were set up, including 300 billion yuan of special loans, 500 billion yuan of re-lending and re-discounting quotas, and 1 trillion yuan of inclusive re-lending and re-discounting quotas, to support the financing of small and micro enterprises.
On March 27, the central government raised the fiscal deficit rate again, and the deficit rate for the whole year of 2020 increased from 2.8% to more than 3.6%, and the deficit scale increased by 1 trillion yuan compared with 2019 to 3.76 trillion yuan.
After 2020, the Ministry of Finance has successively issued and implemented 7 batches of 28 tax and fee reduction policies, the downward pressure on the economy has been effectively hedged, and China has become the only major economy in the world to achieve positive economic growth in 2020, with the stock market experiencing the 10th bull market in 2020, up by up to 70%.
I myself have done a review before the 924 mad bull market, reviewing the 2009/2015/2020 years, and clarifying the key indicators, which are also the indicators to pay close attention to in the fourth quarter of 2024:
1. The Ministry of Finance spends money to increase the fiscal deficit;
2. The central bank is responsible for issuing money, and the amount of bank loans has increased significantly;
3. Data corroborate, GDP, industrial added value, industry growth data.
Let's compare the volume of bank loans in 2008/2009 and 2020 in the manuscript to know how much efforts were made to stimulate the economy that year, and then compare the first nine months of 2024, the volume of bank loans has been growing negatively.
04
What's next for you as a professional investor in the fourth quarter?
I think you should pay attention to three points:
1. The data in the third quarter has little reference value.
At this time, special attention should be paid to the fact that due to the 40% rise in the 924 mad bull market, all aspects of monetary policy, fiscal policy, real estate and other industry policies have not been introduced or effective, and the recently released third quarter report of listed companies does not have much value, and the central bank monetary data released yesterday does not have much reference value.
2. The implementation of policies will lag behind.
As written above, the policy was issued at the end of 2008, and bank loans soared in 2009, and each round of policy implementation takes a certain amount of time.
3. Choose a good partner and financial advisor.
In fact, the above analysis, this is the analysis and advance layout of professional investors, and it is the result of our team sitting on the computer every day, searching for data from government agencies and industry websites, visiting research companies, and participating in shareholders' meetings.
Many people know that I have been investing for more than 30 years and ask me what stocks to buy? I want to buy it too.
However, behind the different investment decision-making systems is not only the cost of in-depth analysis of the investment market in the past 30 years, but also the cost of paying tuition fees.
Knowledge and ability have costs, and different investment decision-making systems have different values and underlying logic, just like the kung fu of Shaolin and Wudang School.
Let's imagine that after Liu Bei listened to Zhuge Liang's "Longzhong Pair: Three Points of the World", Liu Bei wanted to go back and go it alone, take Jingzhou and Sichuan, is it possible?
Liu Bei chose to worship Prime Minister Zhuge Liang, which is also the pattern of an entrepreneur, the enterprise turns to upgrading, and cross-bank investment, not to think of a few tricks to go it alone, but to find powerful people to cooperate.
05
Finally, to summarize today's sharing, I combed through the epidemic situation in 2008/2009 and 2020, and compared the current situation, I found the trilogy of three rounds to promote the economy and the stock market: the three rounds of stimulus policy of [sudden braking, sharp steering, and crazy oil pedaling],
In February 2024, policies such as the National Nine Articles and the restriction of short selling are the first round of "sudden brakes", similar to the "sudden brakes" on September 18, 2008, which rebounded by less than 20% and then turned downward.
After the 9.24 press conference, the mad bull market, similar to the [sharp turn] in November 2008, at the end of the month, the People's Congress approved the fiscal policy, before the official introduction of the specific amount, it is not excluded that the market is waiting for information, and at the same time complete the digestion of the high quilt set and 924 bottom profit.
Next, bank loans will continue to increase, superimposed similar to the 2009 top ten industry revitalization plan, this wave of wealth and wealth, entrepreneurs can run the government, run the National Development and Reform Commission to projects, investors to do a good job in the industry layout.
I have shared with you the "Longzhong Pair: Three Steps to Stimulate the Economic Stock Market" of the stock market economy in 2024, hoping to help you upgrade from a chaser who follows the crowd to a strategizing layout, and the next thing is to see how you take over the 11th wave of the bull market!
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Editor-in-Charge | Luo Yingfan
The pictures are all from the Internet
This article does not constitute any investment advice, the stock market is risky, investment should be cautious
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The content of this article related to listed companies is the author's personal analysis and judgment based on the information publicly disclosed by listed companies in accordance with their legal obligations (including but not limited to temporary announcements, periodic reports and official interactive platforms, etc.); The information or opinions contained herein do not constitute any investment or other business advice, and Market CapWatch disclaims any liability for any actions resulting from the adoption of this article.