Recently, The Shanghai Securities News conducted an exclusive interview with Mr. Chen Jinquan, who exchanged in detail his investment philosophy, the latest market views, and the company's investment research culture, the details of which are as follows.
Note: This article is reproduced from Shanghai Securities News
Reporter: Chen Yue
Chen Jinquan
Deputy General Manager of Industrial Securities Global Fund
Director of Investment Department and Fixed Income Department
Investment Manager of The Special Account Investment Department
He has 21 years of investment and research experience in all product lines, covering bond + equity, securities + insurance + fund, public offering + special account business.
◤ Walk with good companies and draw the most beautiful net worth curve ◢
Over the years, the "less and fine" product strategy and the investment performance of "long and beautiful" have made the Industrial Securities Global Fund (formerly "Xingquan Fund") recognized by many professional institutions and investors. In the view of Chen Jinquan, deputy general manager, fixed income department and special account investment department of Industrial Securities Global Fund, all these appearances come from a concept: the company takes good investment as the only criterion, and all decisions are driven around investment. Simplicity and purity are fundamental to the company's culture.
"Picking good companies, then holding them for a long time, believing in the power of time, this is the true meaning of investment." Chen Jinquan said. "We are tirelessly looking for companies with core competencies, and investing can be such a simple game. And to make investment more pure, in order to draw the most beautiful net worth curve of life. ”
Good company and good investment
In Chen Jinquan's view, since investment is a lifelong thing, it is necessary to often return to the thinking of the origin of investment, only in this way can we always maintain the awe of the market and constantly improve our investment framework.
"Picking good companies and then holding them for a long time is what I think investment is all about." Chen Jinquan said, "I believe in the power of time, but it must be excellent companies to realize value, and non-excellent companies are destroying value." ”
In Chen Jinquan's view, many value traps arise because you look like a company is very cheap, but in fact, its management or the industrial prosperity it is in has become unsustainable, and it seems to be bought very low, but it may fall even lower under the continuous consumption of follow-up. On the contrary, good companies can continue to grow in the tailwinds, and long-term holding will bring great returns, such cases are not uncommon.
How to define a good company? Chen Jinquan's standards are somewhat harsh.
First of all, there must be a good business model, and then there is a good profitability, the company with these two conditions is already one in ten, coupled with the requirements for growth sustainability, pricing ability, and global competitiveness, the number of companies that can finally invest is not much. "We want to continuously improve the screening criteria on the front end to improve our hit rate. Constant trial and error, high-frequency repositioning and stock swapping will only increase costs, but also can not reflect good results. In the long run, we are constantly optimistic about the three industries of medicine, technology and consumption. For technology and pharmaceutical stocks, we benchmark the experience and pricing methods of U.S. companies, lower the bar appropriately, and supplement them with other ways to judge their value. Chen Jinquan stressed, "Investment is a dynamic process, and in this process we are constantly summarizing experience." ”
On the other hand, the judgment of the company is also based on a deep understanding of entrepreneurship. "Excellent companies are always few and few, and excellent companies will cherish their feathers very much, and it is difficult for the genes of companies that are not excellent for a long time to suddenly mutate."
In Chen Jinquan's view, some outstanding entrepreneurs still have an entrepreneurial spirit when they are already very rich, and strive to enhance the core competitiveness of enterprises and create value for shareholders. "We also found that we can only choose good companies and good bosses to help us achieve our investment goals, which is the only way to invest."
The opportunities in the second quarter outweigh the risks
Since the beginning of the year, the global financial market has been violently shaken, and it is difficult for A shares to stand alone. For the investment of asset managers, it is undoubtedly a new challenge.
"Personally, I think the decline in U.S. stocks is mainly due to the previous excessive prosperity. The 10-year bull market in the U.S. stock market has accumulated enough risks, and the combination of factors such as too low interest rate levels to promote a large number of corporate debt repurchases has led to an increase in corporate leverage levels, coupled with fears of recession caused by the spread of the epidemic. Chen Jinquan said that in contrast, the situation of the A-share market is much better.
First, China has controlled the epidemic in a very short period of time, and then gradually promoted the resumption of work and production.
Secondly, the Chinese government still has a lot of room for fiscal and monetary policy, so there are still strong forces to promote economic recovery in the event that domestic and external demand may be interrupted.
In addition, the current valuation level of the A-share market is still at a relatively low level.
Based on the above factors, Chen Jinquan believes that the A-share market has certain uniqueness compared with the stock markets of other countries. However, the short-term panic has brought about a sharp decline in the global capital market, and A-shares are difficult to stand alone. At the beginning of the year, the lively rise in technology stocks was interrupted, the market turned to the rapid increase in attention to domestic demand, and the consumer sector represented by food and medicine became a safe haven for some funds.
"Considering that the short-term rise of technology stocks is too fast, too lively and investment, we have begun to reduce our holdings of technology stocks since the end of last year," Chen Jinquan believes that the short-term suspension of the economy has grown downward, and the performance of companies in the traditional highly economically relevant industries such as banks, real estate, insurance, automobiles, home appliances, chemicals, and utilities will also be seriously rewarded, and short-term valuations appear cheap, but some of them are value traps, and some are temporarily difficult for good companies. Technology companies will also have problems due to external demand and disruptions in global supply chains.
Based on this, Chen Jinquan believes that the performance of many listed companies in the entire second quarter is difficult to have a good performance. "The key to investing is to select excellent companies," Chen Jinquan stressed, "from a long-term perspective, the current opportunities outweigh the risks." Because good companies stand out in the woes. ”
Simple and pure based on the long term
Good-looking skin bags are the same, interesting souls are one of the best. For a long time, circumstantial global funds have been regarded as a unique existence in the industry, and the "less and fine" product strategy and "long and beautiful" investment performance have been supported by many loyal investors, and are known as a fund company with a "soul and temperature". Chen Jinquan, who has been around the world for ten years, believes that all this comes from the company's philosophy.
"Our most important feature should actually be to make investment more simple and pure." Chen Jinquan explained, "Build a good platform, all decision-making, processes, evaluations, reward and punishment mechanisms are around investment, so that the assessment is fair, the rewards are in place, and the long-term focus is paid." Good people will be self-driven, as long as they do things well, so that the efficiency is higher. ”
Focusing on the long term, it has been fully reflected in the performance return of CIS Global's products. Galaxy Securities statistics show that as of the end of 2019, there were only 28 public fund products under the Industrial Securities Global Fund, of which 9 active partial stock funds that have been established for more than three years have an average annualized return of 16.50% since their establishment.
"We are tirelessly looking for companies with core competencies, and investing can be such a simple game. We are fortunate to be able to gather on such a platform and be able to do simple things in the simplest way. Chen Jinquan concluded with a smile, "So I often tell my friends that since the goal and things are so simple, everyone will invest all their youth and try to draw the most beautiful net worth curve in life here." ”
Good investment, time visible
Risk Warning: The company promises to manage and use the fund property in good faith, diligence and responsibility, but does not guarantee that the fund will be profitable, nor does it guarantee the minimum return, investors should carefully read the relevant fund contract, prospectus and other documents when investing in the company's fund and select investment varieties suitable for their own risk tolerance. The short operating time of China's funds cannot reflect all stages of the development of the stock market. The past performance of the fund does not indicate its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of the performance of the fund. The views expressed in this article are solely those of individuals and do not represent the positions of the Company and are for reference only. Opinions are time-sensitive.