Chapter 163 The last safe haven is gone

Summer went and autumn came, and in a blink of an eye, several months had passed.

The capital market is full of uncertainties.

The Federal Reserve raised interest rates by 25 basis points on June 13 and September 27, and it seems that it will continue to raise interest rates.

The Sino-US trade war is becoming more and more intense and has entered a white-hot state with no signs of stopping.

The United States has gone back on its word, torn up all the negotiation results that had just been reached, and continued to exert "maximum pressure" and press forward step by step.

On July 6, the United States imposed a 25% tariff on $34 billion worth of Chinese goods. my country immediately retaliated by imposing a 25% tariff on 545 types of goods originating from the United States, also worth $34 billion.

On August 23, the United States once again imposed a 25% tariff on $16 billion worth of Chinese goods, including steel, electrical goods, machinery, instruments and equipment. In retaliation, my country imposed a 16 billion yuan tariff on Harley motorcycles, orange juice and other goods also worth $16 billion.

On September 24, the United States imposed a 10% tariff on $200 billion worth of Chinese goods. In retaliation, my country imposed tariffs on $60 billion worth of American goods!

The trade war between the world's two largest powers, one wave after another, is like a dark cloud hanging over the market, making it a bit suffocating.

In this atmosphere, the Shanghai Composite Index also retreated step by step, from more than 2,900 points to more than 2,700 points, and then broke through more than 2,600 points!

It has been falling unilaterally all the way, with almost no decent rebound.

Funds that were slow to realize the situation began to flee in droves. Faced with this decline, every stock forum and every retail investor still in the market were panicked.

A bearish post, very informative.

"The Federal Reserve is raising interest rates, the trade war is intensifying, and funds are starting to take sides. Capital is rapidly fleeing. We can't hold on any longer! Everyone, run!"

"The last trade war brought Japan down. This time, the outlook is not optimistic. I'm a sly guy. Brothers, hold on. I'm leaving first."

"I didn't expect that after two years of bullishness, it would fall back to where it was four years ago. There's no bottom for the bear market. Now every indicator of the Shanghai Composite Index points to one word: decline..."

It’s also very exciting to read more posts.

"It's already fallen to 2,500 points. How much lower can it go? To zero?"

"Value, value, and value. Blue-chip stocks are our Guo Jia's core assets. Only by holding them for a long time can we make stable profits!"

"Traitors! Spies! Traitors! Anyone selling stocks is a traitor shorting the stock market! Buy, buy, buy!"

There was chaos in the market.

Far away in the "Vulture Fund" company in S City, Liu Jihua was busy sweating profusely.

"Mr. Liu, Mr. Liu, Mr. Zhang called and said he wanted to redeem 10 million yuan of funds, and Mr. Liu also said he wanted to redeem 20 million yuan of funds..." a clerk said in a panic.

Thirty million is not a small amount. Once it is redeemed, it may cause a chain reaction.

Not only will the company have to sell shares to cope with redemptions, it is very likely that other big investors will also have to redeem their shares.

If that happens and a redemption wave is triggered, it will be troublesome.

"Keep calm, keep him calm, and send them that chicken soup article about value investment." Liu Jihua said calmly.

"They've already issued it, and they all said they won't fall for it and are determined to redeem it."

"Hmm—then, I plan to immediately announce that our fund is purchasing its own funds! Then, we'll continue shifting positions to defensive sectors to stabilize the fund's net value and prevent a wave of redemptions!"

As he said that, Liu Jihua walked into the general manager's office.

With the efforts of institutions to maintain their positions, the liquor and pharmaceutical sectors remained standing amid the trade war. Even though the market fell below 300 points from more than 3,500 points to around 2,600 points, these two sectors, as traditional defensive sectors of institutions, did not fall much.

The liquor sector, led by Kweichow Moutai, saw a surge in demand, reaching a new high of 803 yuan.

However, just when all the safe-haven funds that were hoping for a lucky break were hiding in this sector.

Monday, October 29, 2018.

Kweichow Moutai released its third-quarter report, with revenue reaching 54.969 billion yuan, an increase of 23.56% compared with last year, and profit reaching 24.734 billion yuan, an increase of 23.77% year-on-year, but all data showed a significant decline compared with last year.

Among them, the profit in the third quarter was only 89.69%, which was only a pitiful 2.37% increase compared with the same period last year, which is shocking.

This is far from the year-on-year growth of about 30% expected by many people. It is simply the expected profit being halved again and again.

The market was in an uproar.

Kweichow Moutai is the undisputed king of stocks in the market, the leader among blue-chip stocks, and the perfect target in the eyes of value investors.

Once this unexpected financial report was released, it was like a bombshell dropped on major stock forums, causing a huge uproar.

"The stock king is fading, and even raising prices won't be enough to maintain rapid growth!"

"With the bear market here, is the liquor industry's cycle over?"

"It's over! The last Noah's Ark in the A-share market is leaking! Run!"

In the extreme panic, everyone is panicking and running around. Those who run fast may suffer less loss or no loss and can escape, but those who run slowly will have to stay and pay the bill. The consequence of the rush to sell is that no one can sell anything.

The crowd that rushed to flee blocked the safety passage directly, with people pressing on each other and flesh touching flesh, forming a straight line.

As soon as Kweichow Moutai opened, it was pressed firmly on the lower limit. Then the orders became larger and larger, reaching 80,000 orders, and billions of funds were directly blocked at the lower limit.

Kweichow Moutai's price plummeted from 610 yuan the previous day to 549 yuan, a drop of 10%!

This is the first all-day limit down for Kweichow Moutai in its 17 years of listing, and its market value evaporated by nearly 80 billion yuan in one day!

The next day, Kweichow Moutai plummeted another 4.57%! From 549 yuan, the stock plummeted to 510 yuan, nearly falling below 500 yuan, thanks to a surge in trading volume exceeding 10 billion yuan!

If calculated from the high of 803 yuan in June, Kweichow Moutai has fallen 36.4% in just a few months!

Liquor companies such as Wuliangye, the second largest liquor company, and Luzhou Laojiao, the third largest liquor company, also fell by more than ten points in two days.

"Impossible! How could Kweichow Moutai's performance drop so much all of a sudden? Impossible!" In the Shuixie Huadu community, Lin Menghan lay on the bed, staring at the market information on her mobile phone, her face full of disbelief.

She was wearing a pink pajamas and her round belly was bulging. The baby was more than nine months old and the due date was approaching.

"There must be something wrong," she said, rolling over with difficulty and continuing to browse Kweichow Moutai's third-quarter report. "Yes, it must be because of the price increase, so they have to adjust the sales model... This is a mistake, an absolute mistake... How can the market be so blind!"

Half an hour passed after she studied it. Suddenly, she looked at her account and felt a pang of pain in her heart:

"In just a few days, hundreds of thousands of yuan vanished, and in just a few months, over a million yuan was gone... In the past, this would have been decades of my salary..."

"Should I have listened to Li Feng earlier? No, no, this is just an accident. Kweichow Moutai is definitely a company that can survive both bull and bear markets. I believe..."

Heartache, regret, self-blame... contradictions, struggles, reflections... waves of pain came over her, making it difficult for her to bear...

In the struggle between heaven and man, a trace of pain appeared on her face.

Suddenly, she felt a cramp in her lower abdomen and a stream of blood suddenly gushed out.

"Li Feng, Li Feng, Li Feng! Quick! Quick!"