1. Observation and reflection on the current situation.
At the beginning of September last year, I canceled the prediction in my previous blog post that there would be a long and slow bull market in 2022, and changed it to "the next two years will be a big balanced market". This change is not unfounded, but is based on my observation and thinking about the situation at that time.
First of all, I found that there are too many new listings, which undoubtedly increases the pressure on the market. Secondly, I noticed that the valuation of new energy lithium batteries, photovoltaics, liquor, food, head medicine and other sectors is overvalued, and these sectors account for the majority of the weight index, so their trend has a huge impact on **.
However, after the management significantly reduced the number of new listings in September this year, I found that the index still could not stop falling. This made me realize that there is another problem, that is, lithium batteries, photovoltaics, liquor, food, and top pharmaceutical stocks, which occupy the weight index, have not stopped falling. These sectors are overweighted to make it impossible for the index to stop falling.
2. Analysis and judgment of key sectors.
For the above ten ** that have a greater impact on the index, I am well aware of the influence of their trend on **. For example, the weight of CATL is very large, and its trend has a huge impact on the ChiNext index. In the past two years, CATL has led the lithium battery sector to triple the ChiNext index, and now the ChiNext index is also closely related to it.
However, judging from CATL's market capitalization and valuation, I think it is difficult to stop its decline at present. Although I am not sure of the specific stop price, based on past observation and analysis, I think that between $120 and $125 may be the price at which it stops falling. Similarly, Moutai's stop price may be around 1,200 yuan.
3. Reflections on the long-term trend of China.
I am well aware of the root cause of China's long-term inability to get up in the past 14 years. Unlike U.S. equities, we don't rely on a group of world-class high-tech companies to lead the index. On the contrary, we rely on banks, real estate, brokers, insurance, coal, liquor, food, lithium batteries, photovoltaics and other sectors to maintain the index. The ** of these sectors is not recognized as technology stocks by the majority of investors, so their ** adopts the method of plate rotation. The result of this approach is that in the past 14 years, China's index has actually been a large equilibrium market.
If our company has led the index in the past 14 years, then our country will definitely not be a balanced market, but a long bull market. I have a hunch that in the future, Huawei's subsidiaries may be listed in China, which is not only in line with Huawei's own development needs, but also in line with the development needs of the country, and more in line with the development needs of China.
Fourth, the analysis of the current reasons.
Recently, the root cause of the unilateral stock is the large number of traditional weighted stocks, and China's technology stocks have not come up to fill this index space. This is due to the fact that our tech stocks have not yet developed into world-class high-tech companies and cannot lead the index like Apple, Nvidia and others. Therefore, we need to find new economic growth points and promote the development and growth of technology stocks to achieve a long-term bull market in our country.
In the coming days, I will continue to pay attention to the latest dynamics, analyze market changes, and provide valuable reference information for investors. At the same time, I also hope that the majority of investors can maintain a rational investment mentality, not be affected by short-term market fluctuations, adhere to the concept of long-term investment, and jointly welcome the arrival of China's long-term bull market.
Fifth, the outlook for the future.
Despite some difficulties at the moment, I remain confident about the future. With the continuous growth of the country's economy and the acceleration of scientific and technological innovation, I believe that China will usher in a more prosperous and stable period.
First of all, the continuous improvement of the country's economic strength will provide solid support. With the continuous expansion of the domestic market and consumption upgrading, many high-quality companies will usher in greater space for development, which will provide more high-quality investment targets for the world.
Secondly, the rapid development of scientific and technological innovation will lead the company into a new stage. With the wide application of emerging technologies such as 5G, artificial intelligence, and cloud computing, technology stocks will become an important driving force. The rise of these high-tech companies will drive the index and lead it into a new bull cycle.
Finally, the optimization of the investor structure will contribute to the long-term development of the company. With the growing growth of institutional investors and the increasing maturity of individual investors, investors will pay more attention to long-term investment and value investment, which will help stabilize market sentiment, reduce market volatility, and provide a favorable environment for the long-term development of the world.
In short, I am full of confidence in the future of China**. I believe that under the influence of multiple factors such as the sustained growth of the national economy, the rapid development of scientific and technological innovation, and the optimization of the investor structure, China will usher in a more prosperous and stable period. As investors, we need to remain rational and adhere to the concept of long-term investment, and jointly welcome the arrival of China's long-term bull market.
6. Suggestions for investors.
In the face of the current volatility and uncertainty, I recommend investors to adopt the following strategies:
Stay calm: Short-term volatility is a normal market phenomenon, and investors should remain calm and not be swayed by market sentiment. Don't blindly follow the trend, don't be affected by short-term ups and downs, and stick to your own investment philosophy and strategy.
Long-term investment: Investors should establish a long-term investment philosophy and not pay too much attention to short-term market fluctuations. By holding high-quality companies for a long time, we can share the dividends of corporate growth and achieve long-term asset appreciation.
Diversification: Investors should adopt a diversified investment strategy to diversify their risks. In addition to focusing on technology stocks, you can also focus on high-quality companies in traditional industries, as well as potential stocks in emerging industries. Reduce the risk of a single ** by diversifying your investments.
Focus on fundamentals: Investors should focus on the company's fundamentals, including profitability, solvency, operational efficiency, etc. Determine the company's future growth potential through an in-depth understanding of its business model and competitive advantages.
Learning and research: Investors should continuously learn and research the knowledge of market dynamics, industry trends, company analysis, etc. Improve your investment judgment and decision-making ability through in-depth understanding of the market and industry.
In short, in the face of the current volatility and uncertainty, investors should remain calm, adhere to long-term investment, diversify investment, pay attention to fundamentals, and continue to learn and research. Through rational investment behavior, we can achieve long-term appreciation of assets and accumulation of wealth.
7. Expectations for the future.
The rise of tech stocks: I look forward to seeing tech stocks become the dominant force in the future. With the acceleration of technological innovation, technology companies will play an important role in various fields, bringing new growth momentum to the world.
The emergence of high-quality companies: I look forward to seeing more high-quality companies go public and provide investors with more high-quality investment targets. These companies have strong profitability, good governance structures, and broad market prospects, which can bring long-term stable returns to investors.
Optimization of investor structure: I look forward to seeing further optimization of the investor structure, with institutional and individual investors working together to promote the healthy development of the market. The growth of institutional investors will help stabilize market sentiment and reduce market volatility, while the maturity of individual investors will increase the rationality of the market.
Improvement of regulatory policies: I look forward to seeing the further improvement of regulatory policies to provide a more fair, just and transparent market environment. Strengthening market supervision, cracking down on illegal activities such as market manipulation and insider trading, and protecting the legitimate rights and interests of investors will contribute to the long-term development of the market.
Internationalization of the market: I look forward to seeing a further internationalization of China** and attracting more international investors to participate in China**. This will help to introduce international capital, promote the internationalization process of China, and also help to improve China's international influence.
In short, I am full of expectations for the future of China. I believe that under the influence of multiple factors such as the sustained growth of the national economy, the rapid development of scientific and technological innovation, and the optimization of the investor structure, China will usher in a more prosperous and stable period. As investors, we should seize the opportunity, invest rationally, and jointly promote the long-term development of China.
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