Rebirth of the Capital Legend

"Sure enough, the investment style and hot spots of the market are still in the mid- and large-cap blue-chip stocks, as well as blue-chip stocks with good performance. The main capital groups in the market still prefer big stocks to small stocks, and the 'big infrastructure' line is indeed continuing to siphon active funds from other main lines of the market." After noticing the increasingly obvious and clear market trends, Xu Qiao, a member of the 'Magic City Ultra Short Gang' main hot money group, couldn't help but sigh, "I didn't expect that the small and medium-cap concept stocks in the entire market... still have no momentum for a sustained rebound. 'Baofeng Technology' and 'Quantong Education' had such strong daily limit yesterday, but today they didn't show any premium at all."

"I've said it before, the small and medium-sized concept stocks in the market, especially those in the Internet software, electronic information, and film and television media sectors, are completely a typical oversold rebound. There is neither sustainability nor money-making effect. The participating funds, except for some small and medium-sized hot money that are saving themselves, that is, retail investors who are greedy for bargains, simply don't have too many active buyers." Hearing Xu Qiao's sigh, Lao Wu smiled and said in the group, "The main investment style of the market has always been blue-chip stocks and white horse performance stocks. This has not changed since the end of the last bull market, from the beginning of the year to now."

"That's true." Brother Chen also responded at this time, "Now the main capital groups in the market prefer big stocks to small stocks in terms of the direction of capital purchase and the direction of market manipulation. Because small and medium-sized stocks do have liquidity problems, even if some small stocks have good fundamentals, large funds can enter but cannot exit."

"After going around in circles, I feel that apart from the 'big infrastructure' line, which has a relatively obvious money-making effect, the entire market is still dominated by sectors such as liquor, white appliances, medicine, electricity, consumption, and finance." Lao Zhang said, "It seems that many large capital institutional groups in the market have formed a concentrated group in these main sectors and have already taken control of the industry leading stocks of these main sectors. Many core stocks with weights of tens of billions or hundreds of billions are no different from small and medium-sized stocks with a scale of one or two billion."

"Indeed, institutions have already gathered together in these weighted mainline areas." Xu Qiao nodded in response, "Is this considered an extreme hype of a certain style?"

Old Wu responded: "Of course it counts. The market's risk aversion has fostered this kind of hype of blue-chip and white horse stocks. In fact, in my opinion, the current market investment style of focusing on hyping big stocks is essentially no different from the previous market investment style of focusing on hyping small and medium-cap concept stocks and various concepts flying around."

"There is no difference at all." Brother Chen said, "The only difference is that the concept speculation of small and medium-cap stocks was dominated by hot money in the market before, while the speculation of blue chip and white horse stocks is now dominated by institutions. However, the nature of speculation... has not changed. In fact, many so-called core blue chip and white horse stocks that are held by institutions are no longer cost-effective at the current position and valuation."

"That's right." Xu Qiao said, "The banking sector is particularly obvious. It was trapped at 5000 points, but it was released at 2800 points. The current position of the banking sector index is slightly higher than when the Shanghai Composite Index was 5000 points. Compared with the price at the peak of the last bull market, many leading stocks in the banking sector have not only not fallen, but have risen a lot. However, the index has been cut in half compared to that time. This is simply outrageous.

Of course, what's even more outrageous is...

It is obvious that the position of the banking sector index is already very high, and the valuations of related stocks have also been filled.

But the stocks related to this sector just won’t fall.

Moreover, once the market shows any risk of falling or extreme decline in sentiment, the major capital groups inside and outside the market continue to pour into the banking sector stocks for risk aversion, which is simply outrageous.

Can we still call the current high position of the banking sector index and the position of related stocks a safe haven? Isn’t this a typical case of chasing highs?

But even so, everyone can see that the current banking sector no longer has a valuation advantage.

Moreover, there are huge profits within the related stocks.

However, since the 'national team' holds large positions in this sector, public fund institutional funds also hold large positions in this sector.

This has led to a large amount of major funds in the market gathering in this sector.

Therefore, although the banking sector, after being controlled, seems to be a huge weighted sector with a size of nearly 10 trillion, in fact, not much funds are needed to push up the stocks related to this sector.

Moreover, due to the inertial force of the trend.

A lot of speculative funds are now beginning to speculate on the core stocks of this sector.

I feel this is very similar to when the Shanghai Composite Index was at 4000 or 5000 points, when a lot of funds had no choice but to invest and chase after the highs of mass entrepreneurship and innovation stocks.”

"It's still different from the time when a lot of funds chased high prices to buy mass entrepreneurship and innovation stocks." Although Old Wu also agreed that the current valuation of the banking sector is not low and does not have good investment value and cost-effectiveness, he still disagreed with Xu Qiao's comparison of a number of leading stocks in the banking sector with mass entrepreneurship and innovation concept stocks that rose five or ten times during the peak of the bull market. After a pause, he took over and said, "Although this sector index has basically filled the deep pit of several rounds of stock market crashes in the second half of last year, in fact, due to the slight increase in the performance of some core leading stocks in the banking sector, the valuation has been digested to some extent. Of course... compared with the original valuation, it is definitely much higher.

Although these stocks do not have the cost-effectiveness for investment at present, they do not have much valuation bubble element.

Coupled with the dominant control of the "national team" and the concentrated speculation of many public funds, it is understandable that under the power of the trend, the market continues to move upward in small steps by inertia.

I think the banking sector...

Of course, there are also similar weighted main-line sectors such as liquor, white appliances, medicine, electricity, consumption, petrochemicals, etc. that are highly correlated with its trends.

The current group-buying trend has not ended.

Not only has it not ended, it has not even reached the point where all capital groups in the market followed suit and started to rise in a shrinking volume.

In other words, I believe that the current market style will most likely continue under the trend force of these main sectors.

And we, although we need to keep a close eye on the core theme of "big infrastructure".

But there are motivations for doing the trading and ways to follow the trend.

We still have to comply with the underlying logic and follow the investment direction and market trend.

For small and medium-sized concept stocks, due to several rounds of stock market crashes last year, the adverse impact of the stampede caused by many stocks hitting the daily limit in succession has been too deeply felt in the minds of most investors.

At the same time, it also caused many institutional main funds that had heavily invested in these double innovation concept stocks to lose money.

Learned a painful lesson.

I remember that during the stock market crash last year, many public and private equity funds in the industry were forced to liquidate, and there were even quite a few structured funds that were discounted.

Such tragic experiences and lessons will inevitably affect many of the current major institutional groups in the industry.

Start to pay attention to the liquidity issue on the market.

Even liquidity issues are placed as the primary condition for investment.

It also makes many capital groups dare not intervene in the field of small and medium-cap concept stocks for heavy speculation. After all, small and medium-cap concept stocks with insufficient liquidity will directly hit the limit down for consecutive days due to an important negative news. When large funds encounter this situation, they can enter but cannot exit, and they are left with no tears to cry.

That is to say, the market has experienced an extreme style.

Under the corrective effect, it will inevitably shift towards another extreme investment style in the long run.

This is also the fundamental underlying logic behind why I believe that in the past six months, various market fund groups, especially many public fund groups that dominate the market, have concentrated on blue-chip and white horse stocks with high market liquidity and relatively stable trends.

These are the blue-chip and white horse heavyweight stocks in the market.

Although the stock price may not rise much in the short to medium term, it will not fall much under extreme circumstances.

Even if you are unlucky and encounter an extremely negative impact, there will not be a continuous limit-down trend, which will result in a situation where you cannot sell even if you want to. "

"Old Wu, what you mean is... that all the market trends and style changes are reasonable, right?" Old Zhang took over and said, "In fact, I think... we don't need to worry too much, nor do we need to study too deeply. We just need to keep an eye on the movement of the main funds and the market. We are doing short-term trading, not long-term investment of one or two years, so why do we need to worry about so much?

Given the current market situation...

Just focus on the 'big infrastructure' line, as well as the trends of several core leading stocks such as 'Oriental Yuhong', 'Gemdale Group', 'Huaxin Building Materials'...

The leading stocks have received good feedback and there is no problem in taking over funds on the market.

Then you can do more actively.

On the contrary, the leading stocks have poor feedback, and there is a more obvious loss-making effect on the market. Moreover, even with large trading volumes, the trend has been slow to recover.

Then you should be careful.

And now... I took a look and felt that although there were differences in the market trends of several core leading stocks such as 'Oriental Yuhong', 'Golden Land Group' and 'Huaxin Building Materials', the overall market was still relatively strong. There were large funds taking profits and leaving, and there were new major buying orders following up. The exchange of chips was relatively sufficient, and the turnover was also good. There was no extreme large-volume pattern.

This shows that with the support of the Su brothers' seat on 'Fuxing Road'.

These core leading stocks still have the possibility of continuing to rise and continue to be hyped.

Moreover, this possibility is very high.

And since there are no major problems with the performance of these core leading stocks, there is naturally no need to worry too much about the "big infrastructure" line at the moment.

At this point and with the current market trend, I think we are still optimistic.

The position should also be appropriately heavier.

As for the so-called weighted main lines such as liquor, white appliances, medicine, consumption, electricity, and finance, which have been embraced by the "national team" and "publicly offered funds", and their weighted leading stocks.

Anyway, I have no interest in it.

First of all, these weighted main lines are indeed still trending and are still maintaining a relatively good upward trend and fluctuation.

However, it is really difficult for these sectors to have stories and concepts to speculate on. In addition, retail investors have a poor tendency to follow the trend of these big players, and the intraday fluctuations of individual stocks are very small.

There is no opportunity for short-term trading at all.

Of course, the core leading stocks in these sectors are sufficient to serve as a safe haven for funds.

But we are not the safe-haven fund group in the market.

On the contrary, the "big infrastructure" line has a better market base. The big capital players are willing to continue to increase their positions and go long, and retail investors are also willing to continue to follow suit. Moreover, there are constant positive stimuli on and off the market, and there are various macro and fundamental stories to speculate on.

Moreover, the entire market... as a whole, the tide has definitely receded a lot in terms of small and medium-cap concept stocks.

But it’s not completely impossible.

Focusing on the core hot topic of "big infrastructure", whether before or now, the trends of stocks like "Shenhuo Co., Ltd.", "Pingmei Energy", "Tianshan Cement", "Beijiang Communications Construction", "Capital Group", "Yu Development", "Bayi Steel", "Linggang Co., Ltd."... are still quite good.

The money-making effect and sustainability have also been demonstrated.”

"Well, I agree with Lao Zhang's point of view." Xu Qiao said, "In fact, no matter what style you have, the most important thing is to focus on the core hot spots and follow the market. The core driving force behind the rise in stock prices is continuous buying. As long as the buying is strong, I think you can get involved in large-cap stocks or small-cap stocks."

In fact, his current account holds stocks.

There are both core blue-chip stocks with heavyweights, as well as several small- and medium-cap concept stocks in the main field of "big infrastructure", and the purchase amounts are not small, all in the tens of millions.

As several people discussed the market trend...

The market trading time continues to advance and it is already around 11 o'clock in the morning, close to noon.

After continuous fierce trading, in the current market trend, the various industry sectors related to the main line of "big infrastructure", such as real estate, building decoration, building materials, nonferrous metals, steel, coal and other sector indexes, have once again occupied the top positions in the list of increases in various industry sectors in the two cities, showing a leading trend.

Among them, the real estate sector has rebounded quite strongly from the initial adjustment, with the sector index rising by 2.11%, once again ranking first in the two cities' industry sector growth list.

As for Oriental Yuhong, Gemdale Group and Huaxin Building Materials, the three leading stocks that Fuxing Road has focused on increasing its holdings.

At this moment, the market's gains are maintained in the range of 6% to 7%, maintaining a strong shock pattern, and the intraday volume has obviously narrowed. The amount of major large orders during the day has also changed from a net outflow before 10 o'clock to a net inflow.

However, sectors such as Internet software, film and television media, which are mainly composed of small and medium-sized concept stocks, tend to be the main line sectors of the "technology" category.

The trend remains weak, and the downward fluctuation is more obvious.

Judging from the flow of major capital groups in the market and the tendency of investors to follow suit, there is no doubt that... after the initial divergence, the 'big infrastructure' main line is still continuing to siphon off buying capital groups and liquidity from other main lines in the market, showing a trend of 'one whale is born, all things fall'.