Li Xunlei Believes That Registration Will Not Lead To Stock Market Crash.

Because of the unclear understanding of A share rules, many people have many misjudgments about the stock market.

First, the A share market is short, but in fact, if it is carefully calculated, A shares will be a "bear and bull" market.

We mainly focus on the card composite index, because it represents a large market value cyclical stock, so it is not good.

However, the performance of CSI 500 and Shanghai 380 is much better than that of Shanghai Composite Index or Shanghai Stock Exchange 50.

In fact, from 1996, the average duration of A share bull market is 20 months, the bear market is 10 months, and the concussion is 25 months.

The second mistake is that the loss of money by individual investors is not guaranteed by management.

In fact, the A share market is an overprotective market.

Because A shares basically did not strictly implement the delisting system, so basically no delisting, so that the credit premium is very low.

The main reason for the loss of personal investors is high-frequency trading.

This year

The turnover rate is about 1200%, that is to say, it changes hands 12 times a year, the small and medium board is close to 10 times, the motherboard is 6.3 times, and the turnover volume and turnover rate are all proud of the whole world.

What is even more surprising is that the A share market accounts for 85% of the total retail market, that is, the annual turnover of retail investors is estimated to be between 24 and 28 times.

More than 60% of individual investors lose money because of frequent trading pitions.

For the hot topic of "registration system", Li Xunlei said: "we are very worried about the registration system coming out next year.

It is based on this worry that I believe that the introduction of registration system should be a gradual process. As the SFC spokesman said, "registration system reform will adhere to the marketization and rule of law orientation, establish and improve the system of the main responsibility of the market players, protect investment, and finance, grasp the relationship between the pace of reform, the intensity and the affordability of the market, and make overall plans and step by step, so as to ensure the stable operation of the market."

Therefore, the biggest challenge to the registration system will be how to release the pricing issue.

At present, the guidance price is no more than 24 times the price earnings ratio, but the median market price earnings ratio (after deducting recurrent gains and losses) is 135 times.

This can explain that most of the current IPO premiums are between 3-5 times.

By contrast, the price earnings ratio of mature markets such as the United States is only about 17-20 times that of the bull market.

China is in such a high valuation, it is necessary to maintain stability and reform.

Therefore, it is estimated that the introduction of registration system next year is more important than the substance.

Li Xunlei pointed out that in 2016,

It is expected that investors will look forward to "style conversion", that is, undervalued stocks will usher in the spring.

This possibility is not ruled out.

But looking back at the pformation of China's economy, it is easy to see that the decline of "old" and the rise of "new" are already irresistible. They do not think that the turning point of style will appear, and the rate of error following the trend seems to be lower.

It is pointed out that, from China's stock market to now, if we buy junk stocks and hold them for a long time, the rate of return will be very high, which is the characteristics of this market.

If you want to make money, as long as you don't buy SSE 50 or Shanghai and Shenzhen 300, you can buy a combination of SSE 380, and now the income is more than double that of 2007.

For example, buying a stock in 90 years and holding it to date will yield 230 times, which is far ahead of Buffett.

As investors, we need to be familiar with the unique rules of the game in the Chinese market. As regulators, we need to know how dangerous the rules of the game are, which will lead to bad money driving out good money.

The reason why junk stocks have long held value in A shares is that each A stock has implicit warrants.

Many small cap stocks are losing money, but the share price has been rising. How can it explain? It is because it has the possibility of being injected into assets and has the possibility of being backdoor. If the backdoor is sports media, Internet finance or environmental protection, or graphene, the implied warrant price will go up, though its valuation level will fall.

By contrast, A shares are not performing well in large capitalization stocks.

This may be attributable to the nature of the industry - the traditional cyclical industry, and also the reason for ownership.

However, the premium of these large cap stocks and H-shares is not high, indicating that the valuation level is relatively reasonable.

But reasonable valuations will not be pursued in the market where the retail investor has pricing power.