A Shares Defended Until The End Of The Year.

We believe that in fact, China broke away from the previous cycle in 2014 and opened a new cycle, which is a cycle of the balance sheet recession.

After the development of overseas economy to a certain extent and the accumulation of leverage to a certain extent, it will fall into this balance sheet recession.

The specific performance is that the actual leverage ratio of the economy is relatively high, the trend of economic downturn is relatively strong, and no new demand can be pulled.

This is a problem that our country has already realized, so we need to pform.

But this pformation will fall into concrete action, which will be a very difficult process or a long process.

In this case, interest rate downtrend may be a major trend.

Of course, there may be fluctuations in this area, for example, the state will intervene and cause economic fluctuations. At this time, monetary policy is loose as a whole. But what is its relaxed rhythm? This will affect the volatility of market liquidity.

Our view of the bond market as a whole is that although the bond market has been in the bull market for 3 years since the beginning of 14 years, the bull market is still not over now.

The past bond market is a bull market in three years, which is the same as the cycle of economic fluctuation.

For example, from 03 to 07 years, we have experienced a peak of economic fluctuation. But after 08 years of leverage, we find that the cyclical fluctuations are not.

The central bank tightened and the economy fell. The central bank released liquidity and inflation rose.

We feel that this is the cycle of state leveraging into the deleveraging cycle.

We want to analyze what the future economic trend is like.

In fact, the analysis of the future trend of the economy should start with the demand side.

In fact, the overseas economy is in such a situation that we can not find a new point that can stimulate the demand for economic growth.

We also try to analyze from the demand side what changes have taken place in our national economy in the past few years, and what the trend of these factors will be in the coming days.

Investment is also divided into three parts: manufacturing, real estate and infrastructure.

Many of the growth figures have returned to 2000, but since the beginning of 08, national infrastructure investment has been working hard, but the downward pressure on the economy has always been there.

The future private sector investment, such as real estate investment and manufacturing investment, can not come up? The biggest problem of private sector investment is not making money.

At present, the capacity of the real economy is excessive, and the return rate of the real economy is relatively low.

We believe that after 08 years of leverage, the leverage ratio is relatively high, and the leverage ratio of the real economy is more than 200%.

For entities, if the price of products continues to fall, for enterprises, the first thing to think is to reduce leverage.

Therefore, when the debt rate of the entity department is relatively high, it is actually restricting the credit expansion of the entity department.

We are not very optimistic about real estate.

We believe that next year's real estate may be an important variable for next year's economic downturn, which is also a key point that will affect China's economic trend in the future.

China's labor force has reached inflection point in 2011, and the stock is also relatively large. Although the second tier cities are not the same, the stock pressure on the three or four line is still very large.

We now have residents' leverage of 40%, but other countries can reach 70-80%. In fact, we did a research. We compared the countries with China's per capita GDP, and we think 40%.

Not low.

So it's not what we imagine that residents can add leverage.

This is why we are not optimistic about real estate.

We believe that the future is a process of deleveraging. In this process, the downward kinetic energy of the economy is relatively large, and deflationary pressure is also greater than deflation pressure.

Therefore, there are several ways in the future. One way is to stimulate the country, such as the policy of stimulating real estate before, but the bigger the bubble, the greater the cost will be paid in the future.

The second road, which the government hopes to get through, is to reduce its leverage in a reasonable way without affecting the economy.

The third way, like the Zhu Rongji era, is to clear the capacity and clean up the economy, but this is not what the government wants to see.

Based on this, we believe that the pition period in the future may take 5 to 10 years.

In terms of monetary policy, we think it is difficult to have a tight policy, but the pace of relaxation may not necessarily be the same as that predicted by the market.

But now there should be no shortage of money as in 2013, and no increase in social costs.

This year

It's actually hard to do.

On the one hand, the expected rate of return may be relatively high, but to achieve very difficult, on the other hand is the need for gambling, and the government, the central bank game.

Although the general trend can be clearly recognized, government measures will bring volatility to the market. Therefore, we need to grasp the rhythm well, which puts forward higher requirements for us.

This is also the two major predicament we face when we look at the bond market.

In the first quarter of next year, my view is to see the concussion market.

In my view, at present, because of the downward pressure on the economy, liquidity easing can be seen, and there is a clear positive side in liquidity.

However, I am more worried about some uncertain events that followed, including the US general election and the Italy referendum. All kinds of political and economic events have an impact on the market.

Maybe these things will have a phased impact on the market, but we think the market should be phased upward.

A good thing about capital in 2017 is the hope that long-term capital will enter the market.

Venture capital has been raising stocks from 5% to 10%.

In fact, many A shares now have the appeal of configuration.

Now that high-yield assets are becoming less and less, stocks have become a better asset.

In addition, there are also overseas funds. On the one hand, the MSCI will have an increment of 1 trillion and 500 billion or so, and on the other hand, A shares are not expensive now than the valuation of the international stock market.

Another good news is the profitability of listed companies.

From the three quarterly report, in fact, whether it is financial stocks or gem, there is a clear upward trend of growth.

In terms of valuation, A shares are now valued at 20 times as much as 20 times the S & P Five hundred, so the valuation system of A shares is not high, gem valuation is 47 times, NASDAQ 32 times, relatively high, but many domestic growth stocks are also very good. It can be considered that the growth of A shares is better than many foreign markets.

Again, the price ratio of many A shares and H-shares is much lower than that of H-shares at present, compared with Hong Kong stock prices, and many A shares and H-shares.

Therefore, although A shares look expensive, it is not very expensive.

We have always been dominated by growth styles, and I will be able to match the valuation and growth stocks.

At the present stage, from the present to the end of the year, our company has substantially reduced its positions. In the first two months, our style was more radical, with a lot of PPP and so on. But now we are adding varieties such as banks, gold, automobiles, household appliances, liquor, medicine and so on.

Of course, the growth pattern of our core main force has not changed much, but great changes have taken place in its structure.

For our company, this is the greatest defense.