Hu Liyang: A Share Market Ushered In Investment Golden Period

25 years ago, I returned from Wall Street to Taipei, when I didn't want to be an investor, and wanted to be an educator in the stock market. This kind of vision encouraged me to observe many markets in the world.

Observing the growth track of the mainland stock market, I have a feeling of deja vu.

This feeling probably stems from my understanding and understanding of Taiwan stock market.

20 years ago, when the mainland stock market sprouted, the Taiwan stock market began to develop margin trading. At that time, many people in Taiwan questioned whether financing could be justified. Will the securities market lead to market turbulence and skyrocketing? Over the past 20 years, it has proved that margin trading has not produced any negative effects.

2-3 years after that, the stock index futures market has opened up and the restrictions on foreign investment have been relaxed.

The voice of market doubts is coming back: is it not the benefits that have made the main capital and foreign capital occupy? It turns out that these reforms and innovations have not only made the stock market turbulent, but also smoothed the volatility of the stock market.

Because there are both strength and strength in the market, and the balance between the two forces has come down.

Taiwan imported many types of foreign capital at that time. Their operation methods, viewpoints and rate of return requirements were different. Some were buying and holding, some were band trading, some only earned fixed income, and the competition between them was fierce. This caused the market homogenization trend to be broken, and the market had a balance effect.

This is closely related to the development of the stock market in Hongkong and Singapore.

Many people may ask, the mainland stock market also has margin trading and stock index futures, and also has the participation of foreign capital, why the fluctuation is bigger and bigger.

In fact, the fundamental reason is too much homogenization of operation methods, investment philosophy and revenue pursuit.

Once we came to a bad day, we all looked at the sky. When we came to a profit, we made a lot of decisions.

To break this situation, we need to introduce more types of foreign capital and absorb different kinds of investment ideas abroad, and the market volatility will come down.

Investor education is very important. Mainland investors are highly speculative and are too short to pursue a rise or fall.

Sometimes I feel very distressed, the market has reached a very low position, and investors are constantly throwing cheap chips to the main players.

In fact, for ordinary investors, making big money depends on long-term investments, such as Microsoft, apple and Hon Hai, Taiwan, which have brought hundreds of times or even thousands of gains to long-term investors over the past 20 years.

Moreover, I also think that it is the best time to invest in the mainland stock market for a long time, because the A share market is low enough and the mainland economy is good enough.

With the development of the market, this opportunity will be less and less.

With the further deepening of financial innovation, the full opening of foreign investment, the diversification of investors and the diversification of investment products, the future A share market will become more and more moderate. The capital market will become an inclusive financial department store. The ups and downs of the market will be less and less, and the chance of making big money will become less and less.

At that time, when the stock market is relatively high, people think of how important the long-term investment will be.

Therefore, I often tell investors now: "the stock market is basically ups and downs. When others make mistakes, they provide opportunities for you to accumulate wealth."

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Many people are still worried about inflation at the moment.

In fact, from the statistical data, as long as the inflation rate is less than half of the economic growth rate, do not worry too much.

Suppose we increase GDP by 10% this year, so long as CPI is less than 5%, we need not be afraid.

This is still moderate inflation.

In fact, look at India and other emerging markets, inflation is now at 7%, 8% or more than 10%.

Their GDP growth rate is much lower than that of the mainland, only 6%, 7%, 5%, and CPI is 7%, 8%, 10%.

It shows that the mainland's economy is the best.

From the perspective of global macroscopical situation, a very strange phenomenon has appeared throughout the world, which I call "water and fire homologous".

The world can be divided into two parts, some of which are emerging markets, such as mainland China and Brazil. They are worried about inflation because the economy is developing too fast. The other half is represented by Europe and the United States, especially the United States. They are very worried about the two economic recession.

In the history of global economy, I have not found such a record that the world can be divided into two, half worried about inflation and half worried about recession.

It was all like infectious diseases, inflation and inflation all over the world.

It's half and half right now. It's wonderful.

What is the effect of this half and half on the stock market? In such a case, if the funds are very abundant, the share price will only go ahead.

But there are pot covers and iron plates, which will be stuck somewhere in the middle, because some people are worried about inflation and some people are worried about the recession.

The flow of funds is painful.

Over time, there will be a phenomenon: the market has to crawl forward, the characteristics of the market will not rise too fast, it is not easy to fall, as if in a box up and down, but the trend is upward.

For the mainland stock market, what I emphasize most is confidence, and the mainland economy is booming, and share prices will eventually merge with the economy.

In a short period of time, if we encounter some bad profits, we will be overly nervous, which will cause the share price to fall, but it will return to the fundamentals of the economy in the end.

Of course, I would also like to emphasize that the stock market is always "anti humanity" market, the American market is the case, the Hongkong market is the case, and the Taiwan market is the same.

A shares were 20 years ago. Today is the case, and 20 years later it is still the same.

What I want to say is that the construction and innovation of the market system is to provide investors with a "three public" market as far as possible, but it can not guarantee every investor to make money.

If we want to shine in this market, we need to continue to practice.

In my opinion, a person who is not interested in research, vague in figures and unclear in concept, who has no idea and everyone is cloud, is not able to make great contributions in the market without foresight and ambition.

This is why no matter which market, no matter when, there is always the main reason for the "721" Law (seven deficit, two flat and one earning).

Over the past 20 years, the market has undergone tremendous changes, but the weakness of human nature is still greed and fear.

Therefore, I often tell ordinary investors that the first purpose of making stocks may not be to make money, but to enjoy what it brings to us.