Yang Delong: Reading The Stock Market Can Consider Value Investment

A strategic cooperation ceremony was held in Beijing.

Yang Delong, chief economist of Qianhai open source, delivered a speech. The following is the full text of the speech:

Good afternoon, distinguished leaders, ladies and gentlemen. I am very glad to share with you today my views on the A share market and my investment logic. I hope to provide you with a good reference for future investment in Sina.

Since this year, I have published many articles in sina finance. Just now Deng also said that I often read my articles. I think the most important trend is to grasp the big trend for A share investment.

For short-term fluctuations is actually very difficult to grasp, because A shares often appear some policies or unexpected events, resulting in short-term fluctuations in the market.

In the two day market, after 3000 months, more than half a month later, suddenly a big line made many investors feel like a frightened bird. They began to fear that there would be a new round of decline. The short term fluctuation of A shares is very difficult to grasp.

There may be some short-term experts, through some technical analysis or experience to do some short-term operation, but the success rate is not high, the real short line money makers are not many.

I think the most important thing in investing in A shares is to grasp the trend of the market. In fact, there is little chance that you can really earn excess returns in the short term.

In the past three years, the direction of Qianhai's open source fund should be recognized and confirmed by the market.

We all remember that in May 21st last year, when the market was the craziest, the Qianhai open source Fund issued a notice calling for a restriction on the allocation of the gem with higher valuation. At the same time, it reduced the stock position to less than 10%, which is equivalent to the only fund company in the market that successfully reduced the position to below 10% after the Spring Festival. After the Spring Festival, we changed the practice of empty warehouse. After the Spring Festival, we thought that the market had already seen the bottom of the medium and long term. We also increased the warehouse position to more than 90%.

We can see that this year, half a year ago, the first fund in the market is Qianhai's open source gold and silver jewelry. The half year report has increased by 26.6, and has increased by more than 45%.

Of course, the right direction is also very important. In the first half of this year, the three plates I recommended in my first report, liquor, gold and new energy vehicles, especially lithium batteries, should be said that the three plates contributed a lot to the profits, and the gains were also great.

The recent decline in the market is also the performance of these white horse stocks better, there are also a number of subject stocks, and some small cap stocks did not resist falling or falling significantly when they fell. Recently, such sectors as liquor, medicine and military industry have actually been some traditional white horse plates.

Starting in April, I said on sina that investment opportunities for value stocks were coming. After three rounds of last year's stock market crash, investors attached more importance to the value of listed companies.

In the past, you may be concerned about some storytelling stories. As long as we can tell a story, for example, how many small stocks will grow in the future, we will go to buy it. The bull market of the stock market has gone through more than 3 years. After last year's stock market crash, everyone began to learn from it. There are not many companies that can really fulfill them, and many stocks stay at the stage of storytelling.

At this time, the investment concept should be adjusted accordingly, that is to say, we should turn from the original story and the subject matter to the performance growth of the listed companies.

So the stocks that have gone up well from the beginning of this year are often very good fundamentals. For example, the traditional funds like plates, such as liquor and medicine, are particularly good in this year's growth, as well as gold. In the economic downturn, gold's risk aversion assets rose very well, and some, for example, the traditional white horse stocks, such as the United States and Pien Tze, these stocks have strong resilience and have relatively good returns.

In the first half of the year, we knew that the mood of the market was pessimistic. There were very few people who saw a lot. In the buyer's organization, almost all of Qianhai's open source companies were talking about the market. This year there are big rebounding institutions, most of which are pessimistic.

But I have told you before that in the process of market trend, most people are right, for example, when bull market last year, it is right to see more. But when the market comes to the turning point, when the market is at the top or at the bottom of the market, a few people are right. Most people are wrong. Why? Because most of them are trend investors. When they go up, they will struggle to see more, and when they are low, they will try to empty the air, causing most people to be wrong at the turning point. A shares can be said that most people can not grasp the chance of turning point.

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We believe that our grasp of the general trend of the market is right, so we insist on our view. After more than 2600 days of the Spring Festival, we begin to see more and do more, and think that there should be a thousand point rebound this year.

I also demonstrated this view from various aspects and logic. You can see my report on the Internet. Now half a year later, we look back at the market for the first half of the year. After the Spring Festival, we must be right. Why? One is that the index has risen from more than 2600 to 3000, and has reached 400 points.

If there are more opportunities for Industry and plate, some of the plates recommended by me in the first half of the year, such as liquor, lithium batteries and gold, have doubled in many stocks, and the stock of emerging industries such as virtual reality, AI and so on has doubled.

If we say that in the first half of the year, we are still pessimistic and will lose many opportunities. One is the opportunity to go to the industry. Second kinds of low cut meat, many of them are the most pessimistic times before and after the Spring Festival.

I don't think it's necessary to make strategic analysis, because the number of points is seen afterwards.

The most important thing in strategy is to judge whether the market trend has changed or how to deal with some events in the market. This is the strategy.

Judging from the Spring Festival, I think the Spring Festival is a watershed. Before the Spring Festival, the market is oscillating downward, and every round of decline is low. This is a downward trend, and after the Spring Festival, the market began to rebound. Although the rebound is a twists and turns, but the bottom is constantly rising, the market trend is constantly moving upward, this is the trend has changed.

When the trend changes, your way of thinking will also change.

At this time, I think A shares have gradually started to lift from the bottom and return to the vicinity of the 3000 point. There will be some differences in the nearby market. Many people may lose more when they fell last year, so it will take some time to restore their confidence, but the upward trend of the market will not change.

In May, when I was in the United States, I also had a Sino US forum in May. At that time, I also participated in the Sino US investment forum. With the opportunity of Buffett's annual meeting, I communicated with some institutional investors in the United States. At that time, I wrote some articles, and I said that we should look at A shares from overseas markets.

Because A share investors are mostly retail investors, and even the so-called institutions, for example, most of the holders of the fund are scattered. Therefore, the A share market performance is often lagging behind. When the inflection point occurs, its reaction will be slower than the overseas market, sometimes even slow for several years.

But it doesn't matter if it's slow. It will eventually be corrected.

Take a typical example, from 2009 to 2014, five years ago, the Fed entered three rounds of quantitative easing, and the US stock market took 5 years' bull market. The Dow Jones index rose from more than 18000 to 2.5 at the lowest 6500 points. A shares went through 5 years of bear market, that is, the A share reaction is very lagging behind. But in July 2014, with the opening of Shanghai and Hong Kong, and then the price of housing began to fall, A shares opened a bull market.

In other words,

The reaction is lagging behind, but it will not be absent.

Last night, the S & P 500 portrait continued to record high. The Hang Seng Index of Hongkong has recently gone out of the V rebound. The trend of A shares is indeed very weak. There are some troubles and some bad policies.

In this case, A shares will only be at the bottom of the consolidation time longer, but will not be absent. I recently published an article on Sina, I put forward a new concept, called "LV combination", what is called LV combination? That is, we know that economic growth in the next few years is a steady growth, that is, the growth of L type, many people's interpretation of L type growth is very negative, resulting in a decline in the market.

But we think that the economic L type is not a bad thing in the current situation. It contains two meanings. First, the central bank will adopt a relatively loose monetary policy to ensure that liquidity is abundant and prevent a sharp decline in the economy.

Second, it shows that the economy has the potential for growth. The economic growth rate will remain above 6.5 and no stall will occur. These two backgrounds are conducive to the rebound of the stock market.

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In the case of the L economy, the stock market is likely to get out of the V rebound. We look at the US stock market as typical. The US economy has been L type in the past 30 years, GDP has increased by 2% every year, but the US stock market has been 30 years' big bull market.

Now the domestic economy is L type, and the stock market will also have a V rebound. This combination is called "LV combination". The bottom point of this combination is the 2638 point seen before the Spring Festival. Now it is processed again, the market is further oscillating and adjusted, the bottom is also raised, and the possibility of returning to the 2600 point has been eliminated. The focus of the market is constantly rising.

So at this time, in fact, we should strengthen our confidence. On the one hand, we must confirm that under the 3000 point is the bottom of a long term, and we must adhere to the strategy of buying and selling only under 3000 points.

Second, to grasp the right direction, we must abandon some storytelling.

To abandon some theme stocks and embrace some blue chips, especially some traditional white horse stocks.

For example, the past market in the past three years, we can say that people like to stir up some "sexy stocks" and fry some minority stocks, as long as some investors like it, but now these policies from the supervision level are guiding everyone to invest in value. At this time, what stocks do we choose? We must choose the stocks of the general public, that is, the good stock that the whole country can accept will have a good performance, rather than like the minority stock, so that we can get better returns in the second half of the year.

In fact, value investing is also applicable in China.

In May 1, I joined many leaders of sina and I participated in the annual meeting of the American Buffett. 50 thousand investors in the world like the pilgrimage went to Omaha to listen to Buffett's views. In fact, investors had written and did not talk about new things before their views. Why would everyone like to come and listen to it? Actually, they want to feel this atmosphere, that is, we can truly realize the growth of net value through value investing.

Maybe you can make money in the short term, but in the end, it is difficult for you to pocket it for safety, and by value investing, you can really share the growth of the enterprise.

There are many investment masters in this world, Buffett is one, Soros is also, but why do so many people call Buffett "stock god", the whole world, no matter which nationality you are, which gender, which kind of investment methods all admires Buffett, and the worship of Soros is relatively small, because the money earned by Buffett is not the money earned by chives, it is really selected a good company, through the growth of money earned with enterprises, so he earned money is not someone else's money.

Like some international hedge funds, he earns money from other people's money, or is he constantly making money for shearing and leek. Such a person is not worth respecting, so we can really learn value investing in A shares.

Many people may have some misconceptions about value investing. They think that the so-called value investment is to buy stocks, but this is a misunderstood value investment. Value investing is to buy when an asset is seriously underestimated, and sell when this asset is seriously overestimated. This is value investing. We must value the value of the enterprise rather than the concept of short-term speculation.

When the market went up to 5000 last year, everyone knew that the stock had been very expensive, especially the stock of the gem was fried to more than 100 times the price earnings ratio. At this time, if the stock was still dead, he still dreamed of a rise to 8000, 10000, and this time was not a value investment, and this time the sale was a value investment, because these stocks were seriously overestimated.

When the market fell to more than 2600 points, everyone had not.

At that time, buying is a value investment, because many stocks are below their true value at this time. This is the real value investment.

Many people have said that if they invest in A shares in China, they may end up losing money. In fact, I believe that those who invest in A shares do not really value investment, but only value investment.

In fact, there are some cattle scattered in the A stock market. After a long time holding some good companies, thousands of times after birth, there are many examples around me. In fact, many of our white horse stocks have grown up from small businesses, such as Vanke, Moutai and Chang Yu. If you buy from any time after going public, you can get hundreds of times and thousands of times now. If you do some bands in the middle, you will not make enough money or even lose money.

So at this time, I think we should overcome this panic mentality and really settle down to choose some good industries and good stocks to configure, to change the space through time, and wait for your confidence to recover slowly.

If you go in at 3000, if you choose a good stock, you will get a lower cost. When you get information back, you will get a group of people who will help you lift your car and go up again.

The trend of A shares and the valuation of each round are the same. The key is to recognize where we are now, and to strengthen the confidence to choose some good companies to hold, so that we will get a good return in the second half of the market rebound.

So I think the logic of investing in A shares is also very clear. The key is whether you can do that after seeing it.

It's a long way to go from seeing to doing. As at 5000 o'clock last year, many people know that the stock market is expensive. Because of the rising tide every day, can you make a decision to reduce the position and clear the stock? It needs perseverance. After you sell it, the market is still rising every day. You will be under great pressure. Many people think that it is more difficult to take time off than to hang up.

A famous investor in Wall Street once said that it is better to set foot than to hang up. Why? Why don't you take a look at your account, you haven't got enough money after your flight, but if you hold up assets, it will shrink.

So we must not have this kind of thinking, that is, afraid of emptiness, you only have to find some good companies and find a better price. At this time, we must firmly hold. If there are some storytelling stocks, if we know that there is no value, we should not be deceived into it, and do not grab this rebound.

In this regard, we should have a lot of experience and lessons. We must establish a correct investment concept and make real money in A shares. We know that A share investment is indeed very difficult.

It is also very difficult for A share investors to make money. We can only look for good companies and grasp the big direction, so that we can really achieve long-term profits.

Investment is a lifetime business. For everyone, regardless of the amount of money, investment is all about making money, but never invest as a tool for gambling, nor invest as a tool to get rich overnight.

Why did many people try their best to increase leverage in the first half of last year, regardless of market risk? Because many people were thinking that when I was mad, I would add a lever and earn 10 times.

But often when you have this idea, you should at least look at the boss's face for 10 years, because when you think about it, it often makes your investment behavior deformed and begins to enlarge the investment volume regardless of risk. This is very dangerous.

Of course, when the market is crazy, now is the other way round. Now it is the time of market downturn. When everyone has no confidence in investing, you will have to find some good companies that have already fallen to their true value above this time, and now we need to overcome the fear and lay out some good stocks and wait for the bottom of the market to pick up gradually.

I think the rebound of A shares in the second half of this year will be stronger than that in the first half of the year. Even the absolute return of A shares in the second half of the year will probably raise stocks, because the US stocks are now at a record high. Every rise will have many profits and pressures. A shares are basically climbing up slowly at the bottom. There may be some holding plates when they go up, but there are not many profitable ones.

Therefore, the absolute increase will see that the performance of A shares in the second half of this year is likely to exceed that of the US stock market.