Recently, I have been thinking deeply about a problem.
*Make money, where is the best place to make money**?
And what kind of investment methods are relatively easy to earn excess returns?
This seems to be the ultimate proposition, and it is also the most difficult place to explain in investment.
Today, let's talk about some of the latest thoughts on cabbage.
I hope you can read it patiently.
In the past three years, that is, the three years when Caitou wrote articles, although each point has maintained a relatively small drawdown, it has also missed some excess returns.
The most typical is the wave of traditional fossil energy from the low level after the epidemic, including coal and oil stocks, which have at least doubled, and most companies have doubled several times.
Natural gas also rose sharply for a while, and now it is back at a low level.
Coal and oil are still at a high level.
In fact, in 2020, due to special reasons, the ** of oil fell to negative oil prices historically, and the ** of related energy companies also fell to a relatively low level in history.
It was at this time that Warren Buffett increased his holdings in Occidental Petroleum and Chevron.
Many people said that they couldn't understand Buffett's operation, including a number of domestic investment bigwigs.
Obviously, it is impossible for international oil prices to maintain negative oil prices for a long time, which is common sense that almost everyone agrees, but overly pessimistic expectations distort the market.
As a result, the pessimistic expectation of future demand has led to a consistent view that it is difficult for the short-term demand of fossil energy represented by oil to appear in a business cycle, which is the consensus of the market at that time.
Especially in 2020, when new energy has just shown signs of explosive growth, no one believes that the next few years of fossil energy will usher in a wave of super.
Correspondingly, there is also the counter-cyclical ** of the liquor epidemic in the past three years, of course, the reasons for liquor are more complex, and this will be analyzed in detail when I have time in the future.
Continuing to talk about fossil energy, when the world has pessimistic expectations for fossil energy and commodities, almost everyone ignores an important factor, that is, the epidemic has led to the disruption of the ** chain, the chaos of transportation (**, which has caused a wave of rapid ** in energy and most commodities, and soon continued to hit new highs in the past 10 years.
Then, the energy fragmentation in Europe brought about by the subsequent Russia-Ukraine conflict exacerbated the evolution of this demand.
Therefore, whether it is international oil prices, natural gas in 2022, and domestic coal, there is a high boom cycle along with the international energy industry.
If you look at it from a rearview mirror point of view, there are a few key factors in this.
First, the Fed's unlimited quantitative easing monetary policy after the epidemic has pushed up the price of commodities;
Second: the first chain (epidemic shutdown) and the disruption of transportation, which exacerbated the dislocation of supply and demand;
Third, the Russia-Ukraine conflict and geopolitics have further divided supply and demand;
Fourth, the development of new energy is very fast, but the substitution role of new energy for fossil energy is overestimated.
Then, under the above effects, global fossil resource stocks, especially the domestic coal and oil sectors, have seen a double recovery in performance and valuation.
That is, in the past three years, oil and coal stocks have seen Davis's double-click.
Looking back now, it is not complicated to understand, but when the new crown epidemic first occurred in 2020, when international oil prices fell to negative, it was a very small number of people who could see through these essences.
The allocation of domestic public and private equity in resource stocks such as coal and oil has been at a low level until now, which also shows that most professional investors have also failed to capture this opportunity.
Caitou has made a little money on Shaanxi Coal Industry and LONGi Green Energy, but there are not many **, and the heavy warehouse is considered to have missed this big **.
So next, is there still an opportunity for overinvestment in coal stocks?
In fact, it is difficult to judge this, if in terms of intrinsic rate of return, oil and coal stocks that are already in the middle and high valuation (quantile) will still face the problem of insufficient growth even if the business cycle can be maintained.
The guaranteed return is a high dividend payout.
However, this does not rule out the possibility that ** will once again hold at a high level in the future, such as liquor stocks in 2021, and the obvious overvaluation will not prevent ** from continuing to hold together.
Before liquor stocks were grouped, the ** held by institutions was also at a historical low.
At the end of 2018 and the beginning of 2019, it was the time when the liquor public offering ** held the lowest position, and all active public offerings** held only about 2% of Moutai**.
Therefore, the effect of chasing the rise and killing the fall, the institution is not weaker than the first, if the investment in liquor is for an intrinsic rate of return of about 4%, then obviously everyone will not believe this truth.
Most people are still betting on stock prices**and**.
The same is true for coal stocks, if the average price-to-earnings ratio of coal stocks rises to more than 10 times, in the context of no growth support, deducting a part of the maintenance capital expenditure, assuming an average dividend payout ratio of 60%, then it is clear that most investors will not overallocate for the 6% dividend.
Moreover, coal also has a cyclical characteristic, as well as the background of carbon peaking in 2030.
These are the underlying analyses.
You should be able to understand what the dish is trying to say.
Then, back to the issue of liquor.
Caitou knows several friends who are real value investors, and they have all started **liquor companies** one after another, especially several leading companies.
But the logic of their ** liquor may be different from others, first of all, these friends have relatively large investment amounts, and almost all of them are completely financially free.
The biggest difference between them and ordinary people is that due to the longer investment time, the financial situation is relatively solid, with hundreds of thousands of dollars per year, and millions or even more than 10 million dividend income, and after these dividend income is received, part of it is used to buy dividend financial products as a requirement for risk diversification.
The other part of the funds will be used for reinvestment.
When Moutai's intrinsic rate of return, corresponding to the 2024 price-earnings ratio, the holographic income is about 4%, even without considering Moutai's own growth, this income is much higher than the average return of treasury bonds and most dividends**, at this time, it is a more reasonable choice to transfer part of the funds originally allocated to fixed income products to allocate liquor**.
However, if you have a higher cost of capital, such as financing** (which requires a fixed interest on financing), or a better opportunity to invest elsewhere, so the opportunity cost is higher, then investing in liquor stocks is not the best choice.
Moreover, if liquor stocks stop growing and digest inventories in the next 3-5 years, it is worth speculating whether they can maintain a price-earnings ratio of about 25 times for a long time.
To be more pessimistic, what if there is a slight decline.
In addition to Moutai, the rest of the companies will have a wave of small performance adjustments in the next 3-5 years, which is not a small probability.
Especially in recent years, after the performance growth rate of liquor stocks has exceeded the growth rate of GDP for a long time, there is also a need for internal adjustment and purchasing power matching.
And the combination of these factors may break a certain inertia of thinking.
In particular, the effect of chasing up and killing down will be affected in any industry.
Baijiu is no exception.
Chasing up and down can easily lead to over-rise and over-fall.
So let's go back to the problem of the big financial sector.
Here mainly talk about banking and insurance, real estate adjustment in the past two years, it is indeed more than the expectations of Caitou, as for the future of the leading companies to what extent the performance of the leading companies can be restored, I personally do not have a bottom.
There is nothing wrong with the 10 trillion market, but it is difficult to judge who the future players will be.
Therefore, the most critical difficulty is to determine which companies will survive in the future, and I personally have not been sure.
At present, it is still believed that several major central enterprises and Greentown, which are companies with better financial conditions, Vanke is more special, and it is a bit difficult to get rid of the dilemma.
For example, after the previous steel overcapacity, even a giant like Wuhan Iron and Steel is also the object of mergers and acquisitions, so in the future, Vanke, Poly and these companies seem to be facing the problems faced by the steel industry, and there is a certain probability.
Therefore, in the future, I will strictly control the **, and will not easily add the ** of real estate, at present, about 10%, even if it is made up a lot at a low level, there is still a floating loss of about 50% in the past two years, which has dragged down the performance of the overall income.
This loss, I personally have been treated as a permanent loss, if there is a better investment target in the future, it is not ruled out that it may be replaced to a more certain industry.
But banks are not the same as insurance, and Caitou firmly believes that Ping An and China Merchants Bank are still the best insurance companies and commercial banks.
This has not changed in any way, and even after this round of cycles, it is more certain.
At the same time, I firmly believe that the two companies were wrongly killed, and there will be valuation repairs in the future.
China Merchants Bank is still a high-quality growing bank, and according to the penetration rate of China's insurance, Ping An is still an excellent company in its youth.
Then, when the performance of the best commercial banks and insurance companies begins to resume growth, I believe that China Merchants Bank and Ping An will complete a round of Davis double-click like CNOOC and China Shenhua in the past two years.
So far, Ping An and China Merchants Bank have counted the financing part, and the two companies together have reached about 50% of the top of the cabbage.
As long as a round of valuation repair is completed, the average yield of the past three years will be pulled back at one time.
For this, Caitou firmly believes, even more firmly than Tencent, which is also a heavy position.
Because of this, at the beginning of the month, Tencent also sold part of its position to China Merchants Bank, which is based on this judgment.
From 2020 to the present, Caitou has not sold a single share of Ping An and China Merchants Bank, and continues to be in a state of net increase.
As for the results of the year, I trust my own judgment.
It's hard to invest, even if it starts in 2024, it's been three years, and three years is enough to get through most people, so even if you know the whole truth, whether you can really transfer the money to your pocket is completely different.
If Caitou can write until 2025, I will definitely form a bureau, take a group of partners who have been with Caitou from 2021 to that time, go to the desert and grassland in the northwest to run a few laps, experience a handful of cooking cattle and slaughtering sheep and be happy, and will have to drink 300 cups of pride.
Finally, in addition to today's summary, there are only two last issues left in 2023, and when the last issue is summarized at the end of the year, I will fix the valuation in the column in a unified manner.
The companies tracked in the column have had very little adjustment since two years ago, which also shows that the valuation of most companies is consistent with Caitou's judgment.
If you strictly follow the ideal buying point in the column to disperse the allocation**, then there is a high probability that it will far outperform the index in recent years.
Although the cumulative profit of Caitou in the past three years is not much, whether it is the drawdown or the average annualized return, it is still much higher than the CSI 300 Index.
In the future, as long as there is a round of valuation repair, there is a high probability that it will still pull back to a relatively ideal average return.
Of course, on the other hand, it may not be difficult to achieve an average annual income target of more than 20% in the context of rapid economic growth, but it is not an easy thing to do in the context of the overall economic growth in the future when the growth of the overall economy begins to slow down and downshift.
This also highlights Buffett's greatness even more.
Especially in the 7-2-1 environment of A-shares, more than 90% of ordinary people can maintain profitability for a long time, and a stable annualized income of 10% is estimated to be able to drop 95% of people in seconds.
A stable annualized return of 20% belongs to only 1% of people.
I hope that Caitou can become this 1% of people with some friends in 2025.
The above is a personal reflection and summary of Caitou, and does not constitute any operation suggestions, please combine your own actual situation to obtain your own growth and cognition. Click on a fortune like, **up limit! Original debut |Caitou Diary (ID: CT600519) Author |Choopy head.