Rebirth of the Capital Legend

Faced with the rare market closing situation of a general rise and a big positive line.

On the online stock investment exchange platform, discussions among a group of retail investors became heated and bullish views were overwhelmingly positive.

"Haha, it completely reversed yesterday's sell-off. I feel like the market trend is really going to reverse!"

"This is an unexpected trend. Fortunately, I didn't cut my losses in the early trading session, otherwise I would really regret it now."

"The main theme of 'big infrastructure' is really great, especially the 'real estate' sector, which almost set off a daily limit surge today. It feels like the market hasn't seen such a smooth surge in a long time."

"I remember the last time the Shanghai Composite Index rose by more than 3% was in April."

"Today's trading volume has exploded very well. The two markets have returned to the 6000 billion yuan trading volume mark. Compared with yesterday's volume of nearly 300 billion yuan, this should indicate that a lot of wait-and-see funds have entered the market, right?"

"There must be incremental off-market funds coming in."

"Today, the active buying funds focusing on the main line of 'big infrastructure' should mostly be institutional funds, right?"

"I feel that today's market is also dominated by institutional funds. In the past few days... it can be said that it was dominated by hot money, so the sustainability and smoothness of the market trend were not as good as today."

"Whether it's hot money or institutions, as long as the market goes up, that's fine."

"The main line of 'big infrastructure' reversed yesterday's trend and continued to hit a new high. Now... it can be said that the core main line of the market is the main line of 'big infrastructure', right? After today's reverse trend, it feels that the core main line of 'big infrastructure' can continue to be optimistic."

"There is no doubt that the strongest theme of the market in the second half of the year is the 'big infrastructure' line."

"It should be the real estate sector, right? The start of this round of 'big infrastructure' main line of the market was brought about by the real estate sector. Coal, nonferrous metals, steel, building decoration, building materials, cement and other sectors are only related sectors of the real estate industry chain. I estimate that the subsequent market trend will not be as strong as the real estate sector."

“Isn’t it because of the booming offline property market and the continued recovery of housing prices across the country that triggered the market?”

"It's not just the booming property market, but also the guidance of national policies, the main line of 'supply-side structural reform', as well as the policy benefits such as 'New Era Road and Maritime Silk Road' and 'New Urbanization Construction', which are also a major reason for the explosion of this round of 'big infrastructure' main line."

"And the Huayi Capital, which is headed by President Su, is also increasing its holdings with all its strength, right?"

"Yes, if Mr. Su had not used his position to increase his holdings, the market momentum and sentiment of the core theme of 'big infrastructure' would not have exploded so quickly."

"With so many favorable supports and so many major funds rushing to buy stocks, does it mean that... the core leading stocks related to the main line of 'big infrastructure' in the future will also follow the trend of many core leading stocks in the liquor, white appliances, and pharmaceutical sectors, and usher in a long bull trend?"

"That's not necessarily true. If we really want to see a bullish growth trend, I think we need to see subsequent performance explosions to verify it, right?"

“It’s not just the expectation of explosive performance, but also the joint efforts of institutions to lock in positions and go long.”

"I feel that the core theme of 'big infrastructure' is different from the two main themes of 'medicine' and 'consumption' in terms of underlying logic. The core theme of 'big infrastructure' should be more dependent on market sentiment and incremental funds, while the two main themes of 'medicine' and 'consumption' are themselves safe-haven sectors in a bear market, and are more likely to receive continued support from institutional funds. Moreover, from the perspective of future fundamentals, the expectations for the two main themes of medicine and consumption are also better. If the main theme of 'big infrastructure' wants to develop into a long-term bull trend, I think there is still a long way to go."

"The pharmaceutical and consumer sectors are mainly the main battlefields of institutions, and hot money does not touch them at all. However, the main line of 'big infrastructure' is different. I feel that compared with the pharmaceutical and consumer sectors, the real estate, steel, coal, nonferrous metals, building decoration, and building materials sectors in the main field of 'big infrastructure' are more explosive."

"I think so too. Moreover, the current position and overall valuation of the pharmaceutical and consumer sectors are already quite high. On the other hand, in the main field of 'big infrastructure', whether it is the core leading stocks in the real estate sector or the core leading stocks in the steel, coal, nonferrous metals and construction sectors, the basic valuations are at the historical bottom. In addition, core leading stocks such as 'Shenhua Coal', 'Conch Cement' and 'Poly Real Estate' are even negative net value stocks. The risk is quite low. I am sure that their future explosive power will be stronger than the core leading stocks in the pharmaceutical and consumer sectors."

"Once the property market develops into a sustained bull market, the stocks of Conch Cement and Poly Real Estate will indeed be very undervalued."

"Real estate, steel, building decoration, and building materials belong to the 'real estate industry chain' sector. Their fundamentals have reversed as the property market has recovered, which makes sense. But nonferrous metals and coal sectors should not be classified as the main line of 'big infrastructure', right? Does the reversal logic of these two sectors make sense?"

"The key support target of 'supply-side structural reform' is the coal industry. Isn't this underlying logic strong enough? Moreover, as the property market picks up, demand for real estate and infrastructure will explode. Won't the nonferrous metals sector also pick up? Won't the performance of related industry leaders also have explosive demand? In fact, the trend of the nonferrous metals sector is highly correlated with the trend of other related sectors of 'big infrastructure'."

"Without considering the policy factor of 'supply-side structural reform', the coal sector is almost ready for an industry turnaround."

"Yes, has everyone paid attention to the document issued by the National Development and Reform Commission not long ago? The seesaw effect between thermal power and coal is obviously going to be reversed."

"The share prices of the corresponding stocks in the coal sector are really low, and many of them are indeed at historical bottoms."

"So, in recent days, the coal sector has shown the strongest explosive power. The core concept leaders in the market, Pingmei Energy and Shenhuo Shares, have been able to hit the daily limit one after another. In fact, who is strong and who is weak can be seen from the market feedback. Big funds always know the foresight."

"That's true. The information channels of retail investors like us cannot be compared with those of the big funds in the market."

"Why do you need to analyze so much? When the market trend reverses, just follow the big funds. When the tide rises, buy heavily, and when the tide recedes, just sell at a profit. Although the market has rebounded sharply, I think it has not escaped the bear market as a whole."

"The market is in a bear market, no doubt about it. A bull market cannot come so soon."

"Although the bear market situation will not change in the short term, there should be no problem for a sustained rebound of several hundred points here, right?"

"Anyway, the Shanghai Composite Index is below 3000 points, so I think there is basically no risk."

"I think so too. Let's take advantage of this wave of 'big infrastructure' market first. The market has just started to gain momentum, so there is no need to be afraid or worried. With such a strong bullish sentiment today, there will definitely be more funds to take over tomorrow and the day after tomorrow."

"I don't know if the 'Internet software' sector has a chance to continue to rebound. During the last bull market, I invested heavily in the stock 'NetSpeed ​​Technology' and never sold it. Now I'm stuck."

"'Internet software' is obviously not a hot spot in the market at present, but I feel that if the market continues to rise, it will definitely recover some of its losses. As for the main field of 'technology', I think it is more attractive to prefer 'consumer electronics' stocks."

"To put it simply, it's the 'Apple industry chain', right?"

"That's about it. The Apple conference in the second half of the year is still worth looking forward to. The stocks of the 'Apple industry chain' are basically hyped up every year."

“The logic of the ‘Apple industry chain’ is still based on the logic of consumption, right?”

"At this point, it is safer to stick to the main line of 'big infrastructure'."

"Yes, today, 'Shenhuo Shares', 'Pingmei Energy', 'Tianshan Cement', 'Beijiang Communications Construction', 'Capital Group', 'Yu Development', 'Bayi Steel', 'Linggang Shares'... these stocks have all reversed. Even if you didn't catch up today, you won't lose money if you buy them tomorrow when the market opens."

"Indeed, the trend has emerged. Let's continue to increase our positions tomorrow."

Along with discussions among countless retail investors in the market, the hot bullish sentiment spread rapidly online and offline. It seemed that overnight, the attention of the stock market returned to the general public's field of vision, and even several hot spots became popular on various media platforms.

And at a time when bullish sentiment is spreading.

In the financial market, there are a number of financial media organizations.

At this time, articles began to be published to promote the market situation. Researchers, investment consultants, and related analysts from various brokerage institutions also began to frequently analyze market trends and express continued bullish views, attempting to expand the attention and popularity of the stock market as this wave of bullish sentiment spreads and proliferates, thereby attracting more off-market funds to enter the market and go long, intensifying the rise of the market's main trend.

"It's true that a big penis can change your outlook on life!"

Noticing the market's growing bullish sentiment and the sudden heated discussion, Wang Shujie, fund manager at the Blue Chip Hybrid Select Fund Product Trading Room at Noah Capital in Shanghai, could not help but sigh: "Before, all institutions and major securities firms said that the market lacked liquidity and funds. Now it seems that what is lacking is not funds and liquidity, but confidence!"

"Indeed." Li Shangfeng, the head of the trading team, responded, "Looking at the current hot state of the real estate market, the market is not short of active funds at all, and it can be said that the hot money in the market is very abundant. It's just that people's confidence in the stock market is insufficient, which has led to the lack of motivation for these hot money to flow into the stock market and participate in market transactions."

Wang Shujie nodded slightly: "So the most urgent task is to create a money-making effect in the market, create a wave of market conditions, and attract hot money into the market, so that it is possible to further reverse the bull-bear trend of the market."

"That's right, but it's still quite difficult to get hot money from the outside to flow into the market to go long." Li Shangfeng responded, "It's easy to destroy market confidence, but it's quite difficult to build it. In the last bull market, there were continuous stock market crashes and thousands of stocks hitting the daily limit, which had a huge impact on market confidence. The current market heat and rebound may not be able to make the funds that left the market at the beginning and many investors change their minds.

Moreover, from a technical analysis...

With the market adjustment now, there is room, but there is not enough time.

It has been almost exactly one year since the peak of the last bull market, and the market's memory is not blurred. It is difficult for the majority of off-market capital groups to believe that a bull market will break out here.

Another reason is that due to the booming offline real estate market, the entire real estate market will siphon market liquidity, causing hot money to flow into the real estate market for speculation.

You know, the amount of hot money in the entire market remains basically unchanged.

After the real estate market siphoned off part of the market's liquidity, the liquidity left for the stock market naturally became less.

With less liquidity, it is even more difficult to attract these funds. After all, let’s be realistic… in terms of current investment cost-effectiveness, buying a house is obviously better than buying stocks.”

"That's true." Wang Shujie nodded and said, "From the traditional perspective of most people, when it comes to investing in houses or stocks, they are more inclined to invest in houses. What's more, the real estate market is indeed hot now, and the policy is also supportive. The national strategic expectations for "big infrastructure" are also quite strong. In addition, given my country's national conditions, many new urban populations do have a huge demand for buying houses."

"So, from the perspective of liquidity," said Li Shangfeng, "with the favorable wind of the property market, the stock market should have a sustained rebound, which should be logical, but it is basically impossible to reverse the bull-bear trend. So... our investment strategy should be based on this expectation. We can't get too deep into the core theme of 'big infrastructure'. We still have to stop when the market is developing at a critical moment."

"Haha..." Wang Shujie couldn't help but laugh when he heard what Li Shangfeng said, and responded, "Why are you becoming more and more cunning now?"

Li Shangfeng responded with a chuckle: "There is no way. I was educated like this by the market. Our A-share market has always been short bull and long bear. If you invest in a bear market, you can't make a profit without being cunning. Sometimes, even if you judge the main trend and buy the right stocks, there is a high probability that you will experience a roller coaster and cannot take away the market's profits. This is just like the 'new energy' industry chain we did before.

Now there are many core stocks in the main line of "new energy industry chain".

Hasn’t the price at the beginning of the year fallen back to almost half of its original price?

I don’t want the same mistake to continue happening in our core business of ‘big infrastructure’.”

"Yes, I agree." Wang Shujie said with a smile, "The path of 'value investment' is indeed difficult to implement in our A-shares. It is difficult to make it work. The trend investment method is more suitable and more practical."