Rebirth of the Capital Legend

"At present, it is definitely safer to view it as a rebound," said Lao Wu. "Any higher expectations will depend on the subsequent market forces."

No one can accurately predict the trend of the financial market before it emerges.

Based on past trend history.

Every reversal in the market starts with a rebound.

Therefore, Lao Wu cannot say with certainty that there will be no expectation of a reversal in the market. After all, after such a tragic bear market in 08, the market instead experienced a small bull market in 09 when everyone generally believed that there would be no chance of a reversal, in which the index doubled.

The current market situation seems to be somewhat similar to that time.

However, after the market expands, the incremental funds required for the trend to shift from rebound to reversal will definitely increase many times.

"Even if the trend of the entire market cannot form a reversal..." Xu Qiao paused and said, "As long as the market's bullish sentiment and money-making effect rise, there will be no major risk problems before the Shanghai Composite Index reaches 3000 points, right? Moreover... the main line of 'big infrastructure', with the support of the national 'supply-side structural reform' policy and the 'new era of land and sea Silk Road' policy, coupled with the recovery of the national real estate market and the influence of the main position layout of 'Huayi Capital', an institution headed by the Su brothers, I think even if the overall market trend is not expected to be strong, it should be able to develop an independent market like the previous 'consumption' and 'pharmaceutical' main line sectors, right?"

"I feel that the logic of the main line of 'big infrastructure' is still somewhat different from that of the main lines of 'medicine' and 'consumption', right?" Lao Zhang said, "What's more, the current 'medicine' and 'consumption' sectors are already the areas where domestic public fund institutions are concentrated, and their market trends have been somewhat out of touch with the fundamentals.

On the other hand, real estate, steel, coal, nonferrous metals, building decoration, building materials... these are the main sectors of "big infrastructure".

The internal chip structure is still basically in chaos.

The locked-in shares are heavy, the chip structure is dispersed, and the vast majority of chips are basically concentrated in the hands of retail investors. Publicly offered fund institutions rarely hold positions in these areas.

Even the institution 'Hua Yi Capital' headed by the Su brothers.

Previously, it did not hold many positions in the main line of "big infrastructure". It was only after seeing the gradual recovery of the current global real estate market that it reduced some of its positions in the main line of "new energy industry chain" and turned to the layout of the main line of "big infrastructure".

But even so...

Judging from the current situation, the 'Hua Yi Capital' institution headed by the Su brothers.

Their holdings in the main direction of "big infrastructure" and their expected holding weights should not exceed their institutions' holding weights in the "big consumption" sector.

In general, the main line is 'big infrastructure'.

It is still uncertain how high the market will reach, and whether it can become the core theme of new main institutional groups to build positions and speculate like "medicine" and "consumption". "

"I think it is possible." Xu Qiao said firmly, "It is precisely because the entire 'big infrastructure' main line has gone through the entire bull-bear transition, and in the previous continuous decline, in the previous bull market, many public fund institutions that held positions in the 'big infrastructure' main line have distributed almost all of their chips to the retail investors in the market, resulting in a chaotic chip structure in the entire 'big infrastructure' main line, which is basically all held by retail investors. Only then can we look up to the market development of the 'big infrastructure' main line.

After all, no matter whether everyone agrees with the logic of the "big infrastructure" main line or not.

It is true that the global real estate market is recovering, right? It is also true that housing prices in major core cities around the world, and even in major second- and third-tier cities, are beginning to rise and rebound, and there seems to be a bull market in the real estate market.

There is also the strategic plan of "supply-side structural reform" proposed by the country, as well as the macroeconomic strategic planning of "Silk Road on Land and Maritime in the New Era" that is being continuously promoted. It is also a fact that there are long-term benefits to the entire "big infrastructure" main line and the market demand for infrastructure, right?

That is to say...

The underlying logic of the core theme of "big infrastructure" is constantly changing, and the fundamentals of the entire industry are gradually improving. This is completely predictable, right?

Since these factors are all beneficial to the main line of "big infrastructure".

As future expectations are getting better and better, the leading companies in the industry are expected to have a huge explosion in future performance.

How could there be no funds to invest in this main line? In those markets, many public fund institutions that have minimum holding requirements and cannot fully exit the market, how could they not adjust their positions to this core main line?

What's more, there are basically no other major institutions lurking in this main field.

In other words, there are no other large financial institutions suppressing the entire "big infrastructure" main line.

You must know that the retail investors in the market are the least united, and their favorite operation is to chase rising prices and sell when prices fall.

The chip structure is entirely composed of retail investors, which gives the newly entered main institutions an opportunity to collect chips and control the market easily.

And in the entire market...

The main sector of 'big infrastructure' is one of the few main areas that can carry large capital activities and has relatively high liquidity.

I believe that with so many favorable factors, in the face of such obvious speculation and investment opportunities, and with major institutions such as Huayi Capital headed by the Su brothers already creating a money-making effect and bullish sentiment, other major institutional groups inside and outside the market cannot help but follow suit, and cannot help but hype up this main area in a group.

In fact, in the last two or three trading days.

Following the Su brothers' Huayi Capital, the institutions that bought into the main line of "big infrastructure", the majority of the funds were bought by institutional groups. This can be clearly seen from the daily Dragon and Tiger List data, where institutional seats appear on the core stock buying list of the main line of "big infrastructure".

"What Xiao Xu said does make sense." Old Wu thought about it carefully and responded, "From the market trends in recent trading days, we can clearly sense that large capital groups inside and outside the market are continuing to flow to the core theme of 'big infrastructure' and continue to build positions."

"I don't know if you've noticed..." Hearing the dispute between Xu Qiao and Lao Zhang, Brother Chen smiled and suddenly reminded them, "In recent months, the market trend has been continuously changing towards blue chip stocks. The previous speculation model, or the investment model that many funds relied on to survive, is gradually losing its effect and is gradually being eliminated by the market."

"That's true." Lao Zhang responded, "In the recent market trends over the past quarter, the A50 Index and the CSI 300 Index have been stronger than the Shenzhen Index, the ChiNext Index, and the CSI 500 Index. Among them, the trends of the A50 Index and the ChiNext Index are the most obvious."

"From the trend of the A50 Index, the market has obviously bottomed out and is in the stage of overall rebound and repair." Old Wu also said at this time, "From the trend of the ChiNext Index, it is obvious that it is still in a continuous downward trend in search of a bottom, without any bottom pattern characteristics at all. The trend of the constituent stocks related to the ChiNext Index is even worse, especially the stocks related to the two major sectors of 'mobile Internet' and 'film and television media'. After falling 60% from the high point, there is no sign of any resistance at all."

"The stocks of the two main industries, 'mobile internet' and 'film and television media', are basically the core main areas that were hyped by various fund groups during the bull market in 14 and 15." Xu Qiao said, "These related sectors and related stocks have been hyped up in the bull market, and both valuation and expectations have been seriously overdrawn. It is understandable that they are weaker than the market and have fallen more sharply than the heavyweight stocks now, right?"

"It's not just the two main sectors of 'mobile internet' and 'film and television media'," said Lao Wu. "Look at the growth concept sector of the entire market, especially the small and medium-sized concept stocks with a market value of less than 100 billion. Even in the bull market of 14 and 15, some small-cap stocks that did not rise much, performed weaker than the performance-weighted stocks in the market, and showed a trend of continuous decline."

"Could it be that the investment logic of the market, which was based on the expectation of 'growth' in the past few years, has been completely shaken?" Lao Zhang asked, "Otherwise, the difference in the trend between growth stocks and weighted performance stocks would not be so great."

"It can only be said that the investment preferences of the main market funds are changing rapidly." Brother Chen said, "If this market style continues, those institutional funds that previously expected 'growth' will gradually be eliminated by the market if they do not change their investment thinking and investment model in time."

"It seems that there is really no bible in the financial market." Lao Zhang sighed, "The trading model that was profitable before has now become the source of losses."

Old Wu responded: "This is called the source of profit and loss!"

"No wonder the main fund product 'Hua Yi Expedition No. 1', an institution headed by Brother Su, has completely shifted its position allocation to low-valuation blue-chip weighted stocks dominated by performance, as well as high-performing white horse stocks." Xu Qiao suddenly realized and exclaimed, "It seems that Brother Su had noticed the change in market investment style as early as the circuit breaker stock market crash at the beginning of the year, and changed his investment ideas and investment style in advance?"

"That's impossible?" Lao Zhang said in surprise. "At that time, there was no obvious difference in the market performance between heavyweight stocks and concept growth stocks. The entire market was in a general decline. At that time...how could we tell that the market's investment style would switch from the previous growth style to the heavyweight blue chip style?"

"It's possible." Old Wu said, "Brother Su's keen sense of market trends and investment style changes is unmatched."

"Fuck, if that's true..." Lao Zhang said in shock, "Then Brother Su is really awesome."

Xu Qiao said: "No wonder I always thought Brother Su's investment style was so strange. It turns out that the fundamental reason for his change in investment style is here!"

"In fact, the market investment style and the investment preferences of major funds have gradually shifted from growth concept stocks to weighted blue chips and high-performance white horse stocks, which is understandable and traceable." Chen said, "From the perspective of market transactions, it is obvious that growth concept stocks have greater elasticity, while weighted blue chips and high-performance white horse stocks have better liquidity, stability and predictability.

When the market generally has a higher investment risk appetite.

That is, the market is in a period when trading volume is rising steadily, market bullish sentiment is high, and incremental off-market funds continue to enter the market to take over.

Large funds will naturally choose to invest in growth concept stocks with higher elasticity.

And abandon the heavyweight blue chips and high-performance white horse stocks in a timely manner.

Because only in this way can we seize the market's excess returns from the higher elasticity of growth concept stocks.

However, when the market moves from a bull market with higher risk appetite to a bear market with lower risk appetite, when market liquidity drops sharply, on-site funds flow out one after another, and off-site funds have no motivation to enter the market to take over the market.

Growth concept stocks also have liquidity issues due to the uncertainty of future expectations.

It is not suitable for large funds to hold shares for a long time or to invest as a main position.

On the contrary, the market's undervalued blue chips and high-performing white horse stocks will become the first choice of major funds in the market due to the relative certainty of future expectations, stability of performance and high liquidity in the market.

at this time……

What the major funds are pursuing is not absolute excess returns.

Rather, it is about stability, certainty, and various factors and conditions on how to survive the bear market and keep the fund from being liquidated.

Therefore, the current market investment style has changed, the Shanghai market is strong and the Shenzhen market is weak, and the ChiNext Index is far weaker than the A50 Index.

It is completely reasonable and logical.

And I think the market will maintain this investment style and model for a long time in the future.”

"Brother Chen, do you mean that the short-term thinking logic of speculating in 'growth concept stocks' is basically invalid now?" Xu Qiao asked, "We also need to change our thinking and trading and investment styles in the future?"

Brother Chen responded: "The previous hype model and trading ideas cannot be said to be completely ineffective, but the effect is definitely greatly reduced, and I think it is also difficult to maintain stable profits."

"In fact, it is really difficult to trade in the short term in this market period." Lao Zhang said, "The leading stocks at high prices are always hitting the 'nuclear button', and the first-board stocks at low prices are always breaking the limit. Even if the low-level limit does not break during the day, there will be no premium the next day. It is difficult to make a profit whether you go high or low. However... in the past few days, with the 'Huayi Capital' institution headed by the Su brothers, which has brought up the core theme of 'big infrastructure', the overall bullish sentiment in the market has rebounded, and the market volume has increased a lot, short-term trading has become a little easier."

"The previous hitting the board model is indeed not very effective now." Xu Qiao also clearly felt this way.

Old Wu said: "When more and more people follow a trading model, it is easy to form consistent expectations, and naturally it is difficult to make money. Short-term trading... to put it bluntly, it is a chip game, and chip game means betting against each other. Since it is a bet against each other, it is naturally difficult for most people to make money."

"So, this model will have to evolve before it can adapt to market changes." Lao Zhang said, "Before we find a short-term model that suits the current market, it is a good choice to change our investment thinking and embrace the blue-chip stocks and blue-chip stocks that are beginning to be embraced by major financial institutions."