Rebirth of the Capital Legend

Chapter 382 Follow the market trend!

"Okay." Li Shangfeng responded, "Then let's build a base position first. But what about the core stocks we originally planned to build positions in the main line of 'big infrastructure'? Should we continue to pursue them?"

Wang Shujie looked at the development of the market, pondered for a moment, and said: "Looking at the market trend, it is estimated that in the short term, the 'big infrastructure' line will not pull back, and the market investment style has shifted downward. Facing the 'big infrastructure' main line sector where the industry fundamentals have reversed, other institutional funds will definitely continue to intervene.

Furthermore, compare these core stocks, the subsequent performance explosion expectations, and the current market valuations.

The current stock price is still very cheap.

In that case, just continue buying according to the original plan.

Although we have decided to divide our positions into sectors such as 'consumer electronics', 'security lenses', and 'petrochemicals', there is no need to change the original strategic plan."

As a public fund, the fund product he is in charge of is the 'Nuoan Blue Chip Mixed Selection'.

It can be regarded as the flagship product of 'Nuoan Capital'.

This flagship product has seen a significant increase in fund size, thanks to the recovery of market investment sentiment in recent days and the company's effective publicity, as well as the continued subscription from new investors.

Therefore, they now have a lot of funds available for market layout.

"Okay." Li Shangfeng nodded, then turned around and instructed the traders behind him to continue increasing their positions as planned.

And just when the two decided to further increase their holdings...

On the market, core stocks related to the "big infrastructure" theme, a number of popular concept stocks, and major market indexes are still rising.

Moreover, the market's intraday trading volume is still in a trend of continuous increase.

"Today's volume is quite large." Noting that the two markets are still increasing in volume, and under the hot bullish sentiment, the general dive trend at 2 pm has not arrived. At this time, Xu Qiao, who has completed the flattening of positions in the main line of "big infrastructure" in the main group of Shanghai's ultra-short gang, said, "Compared with yesterday, so far, the volume has increased by nearly 300 billion. It seems that... off-site funds are entering the market very actively!"

"I feel that most of the funds entering the market now are still mainly institutional funds, right?" Lao Zhang responded, "There should not be many retail investors entering the market."

"Yeah, I think so too." Old Wu nodded slightly and said, "Currently, the stocks with the strongest buying support in the market are mostly the core leading stocks of the main line. These blue-chip stocks and white horse stocks are not very popular with ordinary retail investors. After all, their elasticity is limited and their trends are slow. However, these stocks happen to be the ones favored by major institutions in the industry. Now that these stocks are concentrated and continue to move abnormally, it is estimated that the major institutions that maintained a low position before are trying to replenish their chips in an attempt to seize the opportunity of the market explosion."

"Looking at the market trend, the dominant force of the market is indeed the weighted stocks and blue-chip stocks that are held by institutions." Xu Qiao said, "The fact that institutional funds are buying so eagerly should also indicate that this round of market will most likely not be short-lived and will have a lot of room for growth, right? After all, if it is a normal rebound, these institutions would not have to increase their positions so urgently and take chips in the form of forced short selling."

Old Wu responded: "Since the core theme of the market, 'big infrastructure', has shown a trend, its sustainability is worth looking forward to. However, I guess the reason why institutions are so eager to increase their holdings is mainly because the current recovery of the property market across the country has completely exceeded many people's expectations, making many people realize that the real estate sector and the entire 'real estate industry chain' cycle are at the threshold of recovery."

"In addition to the fundamental reversal, there should also be the impact of the change in the holdings of 'Hua Yi Capital' managed by the Su brothers?" Lao Zhang said, "Based on the previous situation of major institutions banding together in the liquor, white goods, and pharmaceutical sectors, many institutions in the market should be focusing on the holdings of the fund product 'Hua Yi Expedition No. 1' managed by the Su brothers, as well as the changes in strategy."

"Brother Su's influence should not have reached this point yet." Brother Chen said at this time, "The main reason is that after the market fell to this point, many core mainline leading stocks in the market have investment cost-effectiveness, and the fundamental situation has indeed changed.

When real market opportunities arise.

Even without the guidance of Brother Su, I estimate that the core theme of "big infrastructure" can be finally realized.

It’s just that the fermentation of the main sentiment, the follow-up of the main funds, and the reversal of the entire main market trend may not be so fast and rapid. "

"According to what you said... it means that retail investors outside the market haven't reacted to this rebound yet and haven't had time to enter the market yet?" Xu Qiao said with a grin, "If that's the case, then the room for this rebound in the market is very worth looking forward to."

"The recovery of market investment confidence is gradual," said Chen. "Now, with only a few trading days left before the full outbreak of the core theme of 'big infrastructure', many retail investors off the market, especially those who have experienced several dangerous stock market crashes before, must still be hesitant. Even those who dare to enter the market decisively, I estimate that their current positions are not high.

In other words, the market's potential for further buying is still sufficient.

As long as the bullish sentiment and confidence can continue to build up, I think there is room for further improvement in market volume.

There is still room for the market to develop and spread further.”

"In fact, it's not just the 'big infrastructure' core theme..." Old Wu paused and said, "I don't know if you've noticed that after the market opened in the afternoon, in addition to the 'big finance' sector, the main sectors such as petrochemicals, security lenses, consumer electronics, etc. have also seen very good trends, especially the leading stocks in related industries. The trends are relatively strong, and they are basically driven by proactive large orders that have been bought all the way up."

"Old Wu, what you mean is that... the market is spreading and deepening from the main line of 'big infrastructure'?" Xu Qiao listened to Old Wu's words and roughly understood what he meant. "And Old Wu, you also want to say that the current market's investment style is shifting towards large-cap stocks, blue-chip stocks with high weight, and blue-chip stocks with high performance?"

"Smart." Old Wu praised, and said, "Xiao Xu, you have a very high market sensitivity."

Xu Qiao laughed and said, "I have noticed this change in investment style before, but I am a little skeptical about its sustainability. After all, 90% of investors in our A-share market are retail investors, and it is a financial market dominated by retail investors.

Then, it is difficult for its market investment style not to be biased towards the investment preferences of retail investors.

What are the investment preferences of retail investors?

Naturally, they will chase rising and sell falling, frequently engage in short-term trading, like to hype up concept leaders, like to make a small investment for a big return, prefer flexibility and hate stability.

This is also the fundamental reason why the market has always been guided by concept speculation.

Now, it feels like the investor group structure in the market has not changed much from before, and there are many cases of concept-themed speculation. It is hard to say how long this temporary investment style, which is mainly based on large-cap blue-chip stocks and high-performance white horse stocks, can last. "

"Although the vast majority of investors participating in market transactions are retail investors, you have forgotten the most important point." Old Wu took over and said, "It is not the retail investors who have the power to set prices and control the market.

You just said that the problem with retail investors is that they are mainly emotional, easily follow the trend, and like to chase rising and sell falling prices.

Moreover, most retail investors do not have a clear understanding of the market, and do not understand the trading logic and fundamentals. They just buy based on the market trends.

Since the market pricing power is not in the hands of retail investors, but in the hands of institutions.

So, when institutions come together and change their investment styles, they create and guide new market trends and investment styles.

When the money-making effect comes, retail investors will also follow suit.”

"Old Wu is right." Brother Chen responded, "The rise and fall of stock prices, the switching of styles, and the final landing point are still determined by funds. The major institutions in the industry naturally have the advantage of capital volume, and naturally have the pricing power of stock prices. When most institutions begin to favor the speculation of blue chips and white horses, a new market investment style will naturally be formed."

"I know that the market tends to go from one extreme to another," said Lao Zhang. "It is indeed difficult to invest in small-cap stocks with pure concepts in the market now. No wonder I frequently lost money before. It turns out that the investment style of the market has changed. Big funds like to speculate on blue-chip and white horse stocks."

"This trend should have started to change after the stock market crash, when the 'Hua Yi Yuan Zheng No. 1' fund product managed by Brother Su started to build large positions to guide the liquor, white goods, and pharmaceutical sectors, right?" Xu Qiao said, "It seems... we are also the ones who are slow to realize it."

“Looking back on the past, it is indeed true,” said Old Wu.

"Well, no matter how this investment style and investment trend are formed," Lao Zhang said, "we just need to follow the trend."

"What Lao Zhang said is absolutely correct." Brother Chen replied, "That's right. We can't dominate the investment style and trend of the market, so we can only follow the trend. Since the market style has changed from the previous style of focusing on speculating on small-cap stocks to the style of focusing on blue chips and white horses, we can just follow the change."

"I used to look down on people who always talked about 'value investing'," Xu Qiao said. "I didn't expect that I would become one of them now."

Old Wu laughed and said, "We don't call this 'value investing'. At most, it can be called 'value speculation'."

"To be precise, we are all trend traders," said Brother Chen. "In fact, no matter what investment style there is, there is no difference between good and bad. As long as you can make money from the market, any investment style and any investment philosophy are correct."

"Haha, I like what Brother Chen said." Lao Zhang laughed, "That's right, no matter what means are used, as long as we can take profits from the market, it's fine."

"In fact, the previous concept speculation model is not impossible." Xu Qiao thought for a while and said, "It's just that now we have to focus more on the core and the main line. Look at the recent trading days, except for 'Golden Land Group', 'Poly Real Estate', 'Conch Cement', 'Huaxin Building Materials', 'Shenhua Coal', 'Huaguo Construction', 'Huaguo China Railway'... these weighted core stocks have relatively smooth trends, 'Shenhuo Shares', 'Pingmei Energy', 'Tianshan Cement', 'North Xinjiang Communications Construction', 'Capital Group', 'Yu Development', 'Bayi Steel', 'Linggang Shares'... these related concept hot small-cap stocks, aren't they also going well? It's just that the tolerance rate for short-term speculation is definitely lower than before.

But this is not caused by a change in the overall investment style of the market, but is the result of insufficient market liquidity.

Subsequently, with the continued entry of OTC investors and the influx of incremental funds from various sources, when the liquidity of the entire market has recovered, it feels that the previous model will still work.

And, for the vast majority of people.

It is still difficult to change the existing trading model. I believe that there will always be active hot money in the market, and there will always be a large number of retail investors who chase hot spots and continue to follow suit. "

"We can do it," said Old Wu. "But as you said, the margin for error is getting smaller. I think when we trade in the market, we still have to follow the market trend and the style of concentrated market funds. After all, only when funds are over-concentrated will there be liquidity premium and valuation premium, and only then will there be a larger margin for error."

"Well, trading is about doing things with high probability." Brother Chen responded, "We will go wherever there is a higher probability of making money. Don't forget... We are the smartest speculators in the market. A mature and top market trader cannot be trapped by his own trading model, but should follow the market trend as much as possible. This is the same for both investment and speculation."

"Even Brother Su has changed his investment style." Lao Zhang said, "We can definitely follow suit. To be honest... in the past six months, the market performance of large-cap stocks is indeed much better than that of small-cap stocks, and this trend is obviously getting stronger and stronger."

After saying this, he didn't wait for the others to respond.

The remaining funds on hand have been used while the market's bullish sentiment continues to ferment and diverge.

It has entered the core leading stocks of the two major technology sectors, 'Consumer Electronics' and 'Security Lenses', which are experiencing concentrated movements.

It is said that when there is a switch in market style, you should either not believe it or believe it early, and the worst thing is to avoid indecision. Although he is good at blue-chip and white horse stocks, he is not very in-depth in fundamental analysis. However, since the market trend is changing like this, and Su Yi, whom he is familiar with and trusts, is in charge of the main fund product "Huayi Expedition No. 1", which is currently shifting its positions to this style, then he has to take the opportunity to get enough chips, and then think about right and wrong, as well as the switching of specific targets.

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