The Risk Of Systemic Bursts Is Still Not Good For The Entity.

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In the case of solid cooling, the removal of foam causes systemic risk and is still not good for the entity.

Only deleveraging while not allowing the price of financial assets to fall sharply is a relatively safe way, and it can also avoid a substantial loss of bailout funds.

But the price is the long-term distortion of valuation, leading to resource mismatch.

Li Xunlei believes that in 2016, investment can basically continue to enjoy bubbles in the way of 15 years. In the stock market, we must keep up with the cash flow. The scale of capital flowing into A shares will also be less than 15 years, but the limited funds will be more concentrated in the new economy or high growth industries, and will focus on more subjects.

Stock market investment in 2016

In the real estate market, it is important to follow the flow of population; in the stock market, it is closely following the capital flow.

The population flow in 2016 will continue to be less than that in 2015, but the limited floating population will be more concentrated in large cities and large cities, both to enjoy the shortage of public services and to obtain employment.

Similarly, the scale of capital flowing into A shares will be less than 15 years, but limited funds will be more concentrated in the new economy or high growth industries corresponding to the subject matter, will focus on more topics, such as state-owned enterprises reform, mergers and acquisitions and so on.

Is there any opportunity for big blue chips? In the history of China's stock market, speculation and growth have only been made.

There should be no speculation.

The stock market capitalization of 03-07 is better than the small and medium capitalization market, such as the five golden flower, not because of valuation, but because China has entered the peak period of heavy industrialization, just like the rise of home appliance industry in the middle of 90s.

07 years later, the peak of heavy chemical industry has passed, and good times are gone forever. Now it has entered the "rust age" similar to that of developed countries in 70s.

In the 70s of last century, some developed countries had experienced the decline of the old industrial base after the heavy industrialization period, and a large number of factories closed down, and there were idle factories and abandoned rusty equipment. Therefore, these old industrial bases, such as Ural mountain in Russia and Ohio in the United States, were collectively referred to as "rust belt".

In 2015, the bubble continued to expand.

This year's central economic work conference put forward five core tasks: to go to capacity, to inventory, to leverage, to reduce costs, to make up short boards.

Compared with previous years, it appears to be more specific and urgent.

Looking back at the five to six core tasks of the central economic work conference over the past 5 years, four of them referred to "economic growth" and "agriculture", of which three refers to "structural adjustment" and "improvement of people's livelihood".

Last year's central economic work conference also mentioned that "economic risks are generally controllable, but the risks that are characterized by high leverage and bubble" will continue for a period of time. We should not only solve the problem of overcapacity, but also explore the future direction of industrial development by giving full play to the role of market mechanism.

It can be seen that last year, the central government has realized that high leverage and bubble are the main characteristics of all kinds of risks, but at the same time, it is still necessary for us to resolve risks for some time.

A year later, the central economic work conference clearly defined deleveraging as the core task.

But there is no mention of the word "bubble".

Although not mentioned, it does not mean that there is no bubble in the market, nor does it mean that the bubble has been reduced in the past year.

Looking back at the price trend of stock market, bond market and housing market in the past year, it is not difficult to conclude that 2015 is a year when the bubble of financial market and real estate market continues to expand.

First look

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Despite the stock market crash in June, the stock index dropped from 5000 points to the current more than 3600 point, but the level of valuation is very high, and the degree of bubble is still high.

At the closing price of December 8th, although the average weighted P / E ratio of Shanghai and Shenzhen 300 is only 13 times, the median of P / E is 30 times, which is 50% times higher than the 20 of the US P & P 500.

But the valuation level of the US stock market has hit historical highs, and there is downward pressure.

But the Shanghai and Shenzhen 300 is still relatively inexpensive plate. If all A shares are priced from high to low, the median will be 99 times. The median price earnings ratio of the motherboard is 85 times, the small and medium board is 96 times, and the gem is 121 times.

If the non recurring gains and losses are deducted, the median price earnings ratio of the main board will be about 143 times, which is as high as that of the gem, and the deficit side is expanding.

Judging from the performance of major indexes in the past year, the Shanghai Composite Index, Shenzhen stock index, SME board index and gem index rose by 12%, 18%, 57% and 90% respectively.

Look at the bond market again.

First, the bond market in the 15 years also showed a fiery scene. Not only did the turnover rate increase significantly, it was estimated that the total exchange rate of all the bonds in the interbank market was over 200%, an increase of 70% over the previous year. In addition, the balance of the bond repurchase between banks increased by more than 1 times over the previous year, and the volume of pactions could exceed 450 trillion.

Second, the bond yield level is significantly downward, of which the yield curve of treasury bonds is about 60-70 basis points. Last week, the yield of 10 - year treasury bonds also fell to the lowest level in 09 years, and the yield of corporate bonds declined even more.

Third, the credit spreads are at a relatively low level. At present, the credit spreads above AA+ and above are below the historical 1/4 quantile, and the credit spreads of AA ratings are near the median of history.

This shows that the signs of bubbles in the bond market are also showing signs of improvement, compared with the previous year, though the ratio with the stock market is not too far off.

Finally, look at the housing market.

In the past 15 years, the overall price of housing in China has also risen, especially in the large cities such as Shenzhen, Shanghai and Beijing. The first and second tier cities have also rebounded significantly, while the three or four tier cities are relatively stagflated.

Moreover, the volume of real estate pactions over the past 15 years has also been significantly enlarged over the 14 years.

If the valuation level is calculated according to the ratio of rent to house price, the rental yield is about 2%-3%, which is also significantly lower than that of the western countries.

2016, enjoy the bubble

It can be seen that in the past 15 years

The problem should be more serious than 14 years ago. But why did the central economic work conference refuse to mention bubbles?

I am afraid it is related to the abnormal fluctuation of stock market which began in June, because the high leverage of the stock market in June is the result of the puncture.

If you choose to rescue the market in the value investment area (for example, the 2000-2500 point), systemic financial risks may erupt.

Therefore, it is helpless to choose to save the market below 4000.

What's more, banks' lending ability is decreasing. In 13th Five-Year, the proportion of direct financing should be increased. If the stock market falls sharply, the financing function is difficult to achieve, so it is difficult to carry out public innovation.

In fact, there are some similarities in the real estate market. Although some cities take measures to curb the excessive rise of housing prices, the overall inventory level of real estate is still rising, and the growth rate of real estate development investment has dropped to about 2%.

This can explain why all kinds of financial products indexes are rising, but PPI has a negative value of nearly 6% in more than 40 consecutive months, because the investment growth rate of the real economy has dropped sharply, resulting in overcapacity.

Therefore, the threat brought by real estate to the economy is not bubble but inventory. Inventory is high. Real Estate Company's loan repayment is a problem. It involves banks, and also involves suppliers, and finally involves basic industries.

Therefore, in such a financial hot and solid cold situation, the bubble will lead to the outbreak of systemic risk, which is still not good for the entity.

Only deleveraging while not allowing the price of financial assets to fall sharply is a relatively safe way, and it can also avoid a substantial loss of bailout funds.

But the price is the long-term distortion of valuation, leading to resource mismatch.

Just like the structural problems of different regions in the real estate market, there is also a bitter mixture of the main board and the gem and small and medium-sized boards.

In fact, the solution is to further marketization, for example, to give more residential land supply to the super large cities, and to cancel the price limit and limit on the issue of shares, but the short-term cost of doing so (stock market crash) may be relatively large.

Or to pay a long-term price for short-term stability (valuation distortions, mismatch of resources), or pay a short-term price for long-term stability.

Judging from the current decision-making thinking, it seems that the stock market will remain stable and the remaining problems will be solved slowly.

If we follow this line of thinking, there will be no major changes in the policy level at least 16 years, because the decision makers do not want to see the consequences of the bubble collapse.

Therefore, the investment can basically continue to enjoy the bubble in 15 years' thinking, that is, the small market value and high growth (corresponding to high P / E) stocks of super large cities and A shares can still be held.