Chapter 120 A New Cycle, the Beginning of a New Era
Thursday, January 4, 2016
In the blink of an eye, several months passed.
The Shanghai Composite Index fluctuated up and down, slowly climbing from over 3,100 points to around 3,500 points, an increase of more than 400 points, or about 13%;
The ChiNext Index rebounded sharply, from its lowest point of 1,779 points to 2,714 points. In just three months, it rose by nearly 1,000 points, an astonishing 52% increase!
Yinzhijie, a hot stock on the ChiNext board, hit a high of 101.52 yuan on June 3, and then plummeted to 19.68 yuan on September 15 after two rounds of stock market crashes, a 50% drop.
Then, it continued to rise, and after several daily limit increases, it reached 55.18 yuan, an increase of 180% from the lowest point!
Another "wonder stock", Anshuo Information, hit a high of 230 yuan on May 13, but after two rounds of stock market crashes, it plummeted to 33.85 yuan on September 2, a 15% discount.
Afterwards, it rebounded from the lowest point of 33.85 yuan to a highest point of 86 yuan, an increase of an astonishing 154%!
In addition, Quantong Education hit a high of 99.43 yuan on May 18, and then went through two rounds of stock market crashes, falling to 20.36 yuan on September 2, also a 20% discount.
Afterwards, it rebounded from the lowest point of 22.27 yuan to the highest point of 51 yuan, an increase of 130%!
This kind of situation is common in the GEM.
Many stock investors are immersed in it, as if the bear market a few months ago was already several years ago.
Many investors who avoided the stock market crash in July and August were itching to get their hands on some money and rushed in again to try their luck.
Major stock forums are filled with beautiful visions of 2016.
"The top ten brokerage firms predict that investment opportunities next year will be in internet, technology, cybersecurity and other stocks."
"Brothers, I've caught three daily limit ups in five days, go for it!"
"The ChiNext has made a strong comeback, the king has returned, and it is unstoppable!"
However, in the trading room of Jingu Building, Li Feng looked at the familiar data, shook his head, and sighed: "It's so similar!"
Beside her, Zhao Xinyue was confused and asked, "What do you mean? What does it mean?"
"It's like the last bull market, and also like the last bear market," Li Feng said, lost in memories.
"During the last bull market, the super bull stock in both cities, China Shipbuilding, also saw its price drop from its peak of 300 yuan in 2007 to 30 yuan in 2008, a 90% drop. Yunnan Copper was even worse, dropping from its peak of 98 yuan in 2007 to 6.8 yuan in 2008, a 70% drop. And China Aluminum, which dropped from 60 yuan to 5.9 yuan, also a 90% drop."
"Later, in 2009, the market rebounded by more than double... Then, there was a bear market that lasted for several years..."
"It's another cycle, but this time, the bull market has changed from an all-out bull market to a one-sided bull market for tech stocks."
"So, I've repeatedly emphasized that a sharp rise will inevitably lead to a sharp fall. When a major bear market arrives, you absolutely cannot go against the trend. Look, under this trend, under this kind of decline, any effort will be in vain."
Zhao Xinyue listened, thought and watched.
These star stocks from a few months ago, with that K-line chart of the letter A that plummeted, are a bit chilling, that's a 20% or 10% drop!
Anyone who is greedy will go in alone and come out with only the ankles left.
Immediately, she saw the increase in the value of these stocks over the past few months and asked, "Then why have they increased again in the past few months?"
"Major players are selling, retail investors are trying to catch rebounds, and so on and so forth. In short, don't touch it," Li Feng said calmly. "Once the bull and bear forces shift, it will be the beginning of another round of plunge. The bull market of the ChiNext is over. What remains is only a long bear market, just like the last round..."
“Now, you want to look at blue-chip stocks?”
Lin Menghan turned her head and asked with blinking eyes.
She was wearing a brown hat and loose casual clothes, and her face was very rosy. After more than three months of rest, Lin Menghan's brain injury had almost healed.
Li Feng raised his head and said:
"Yes, a new cycle has begun. We must seize it! This is no less than the bull market of 2015. It's a great opportunity to make a fortune!"
"Really?!" Zhao Xinyue's heart was beating fast, and she asked greedily, "Is the bull market coming again?! So soon?! What stocks should I buy?!"
Li Feng solemnly corrected him, "To be precise, it should be the second half of the bull market, coupled with the arrival of a major economic cycle."
"I once said in Chapter 113 that the end of each year is the most critical time for investment. Come, let's take a look at the most important economic policies at the end of this year!" Li Feng said as he pulled up a document.
Lin Menghan and Zhao Xinyue gathered together and started reading.
"Here's the most important thing," Li Feng said, tapping on the computer screen with a pen. "Next year's five major tasks are to reduce overcapacity, reduce inventory, deleverage, reduce costs, and address shortcomings."
"This one, specifically, is about destocking," Li Feng analyzed. "The real estate market needs to destock, but how? The only way is to encourage home sales."
"We have already conducted research a few months ago. First-tier cities like Shanghai, Shenzhen, and Guangzhou have already started this model. We have also said before that our Guo Jia has a characteristic: if he is caught, he will die, and if he is released, chaos will break out."
"Once the housing market officially starts, it will spread from first-tier cities to second- and third-tier cities, and there will be a nationwide commotion, a sensation, and a huge uproar," Li Feng said excitedly.
"I've told you before that real estate is the mother of the economy and the engine of currency. Once it moves, the entire society will move, and a new era is about to begin!"
"Not only will the real estate industry chain be affected, but it will also lead to inflation in currency derivation. Just wait and see, it won't be long before your salary goes up!"
"Really?!" Zhao Xinyue was very happy when she heard about the salary increase.
Li Feng smiled and said:
"By then, not only will your salary increase, but the prices of everything will also increase. In the end, you'll still be able to buy the same amount of things. For example, the egg-filled pancake at the door is three yuan now. By then, if your salary doubles to six thousand, the egg-filled pancake will also double to six yuan."
“Isn’t this a lie?”
"It's just deceiving people. Inflation is a whip. Anyone who holds cash but doesn't spend or invest will be subject to seigniorage," Li Feng continued. "So, now that hyperinflation is coming, we can't hold on to cash anymore. We need to buy assets to hedge against inflation."
"In a couple of days, we'll go house hunting. As for the stock market, we'll see if the newly introduced circuit breaker policy works well for the local market."
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The previous 100,000 words were about the leveraged bull market and stock market crash in 2015. Experiencing a bull and bear market is a compulsory course for stock investors and must be written.
The following article, about 70,000 to 80,000 words, will describe the housing craze in 2016. Because real estate is the mother of the economy, for stock investors, this is an obstacle that cannot be avoided and must be written about.
I hope to make progress together with you all.
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