Chapter 128 Buy at the bottom of the cycle, sell at the top of the cycle
I saw that the price of Kweichow Moutai rose from around 200 yuan in January and February to around 250 yuan in mid-May, an increase of 25%!
During the same period, the Shanghai Composite Index remained unchanged and was still hovering around 2,800 points.
The trend of Kweichow Moutai is truly unique and stands out from the crowd.
"Oh! Why didn't I choose such a good stock?" Li Dian slapped his thigh and said regretfully.
Next to him, Lao Zhang, who came with him, teased him, "Even if you choose it, you won't be able to hold on to it."
"Why can't I hold it?!"
Li Dian glared, puffing his beard as he retorted, "Look at this pattern. It's definitely the bottom of the three moving averages, and the Seven Star Platform is showing a surprising trend. And you're looking at the theme. Oh, addictive, fast-moving consumer goods, high gross profit margin... Luck, luck, no, I have to add a few more stock selection criteria tonight... Next time I come across a bull stock like this, I'll definitely find it the first time..."
Li Dian stared at the K-line chart of Kweichow Moutai and kept groaning, like a child who had lost his favorite toy.
Lin Menghan, who was standing next to him, couldn't help but laugh. She consoled him, "Uncle Li, you don't have to regret it so much. Li Feng has been following and buying this stock since 2013. That's a full four years now."
"What? Three years? You waited for three years?" Li Dian was shocked. "You two waited for three years? Don't lie to me."
"Uncle Li, how could I lie to you?" Lin Menghan poured a cup of tea for Li Dian and said, "I know this matter best. At that time, I..."
Lin Menghan recalled how she discovered the sluggish sales of liquor and the reversal of logic three years ago, how Li Feng analyzed the situation of the liquor industry, how the liquor industry developed further, and how he took the initiative to ambush after confirming the recovery of Moutai last year.
While listening, Lao Zhang pulled up the monthly charts of Kweichow Moutai, Wuliangye, Jiugui Liquor and other liquor stocks, as well as the annual reports and consulting services from those years. As he looked at them, he couldn't help but gasp.
Kweichow Moutai's price plummeted from its highest point of 226 yuan in 2012 to 118 yuan in 2013, a sharp drop in price. What is even more worrying than the drop in price is that Kweichow Moutai's performance only grew by 1.41% in 2014.
Wuliangye's situation is even worse. Its stock price fell from 39 yuan in 2012 to 14 yuan in 2014. After being halved, it was reduced to 70%. Its profits also declined. In 2014, its net profit was only 5.835 billion yuan, a year-on-year decrease of 26.81%!
Jiugui Liquor was the worst hit. Its price plummeted from 61 yuan in 2012 to 10 yuan in 2014. After being halved, it was halved again and then 30% off. In 2013, it lost more than 36 million yuan, and in 2014, it lost more than 97 million yuan!
According to statistics, in 2014, the liquor industry as a whole experienced negative growth, more than 100 liquor companies suffered losses, and Shuijingfang, Jiugui Liquor, and Huangtai Liquor faced the crisis of delisting!
In this desperate situation, Li Feng actually started to go against the trend and began to buy.
How much courage does this require?!
Lao Zhang closed his eyes, digested the information, and recalled:
"Old Li, don't just think about how prosperous liquor stocks are now. You also have to think about how miserable they were back then. You should still remember the plasticizers and the restrictions on 'three public consumptions,' right?"
Li Dian took a sip of tea, his eyes paused, and he recalled:
"Back then, it was a huge event. I remember when the Jiugui Liquor incident took off, it hit the lower limit for four or five consecutive days. It was hit with the Infinite Soul-Breaking Sword, which cut it in half... After that, who drank baijiu anymore? No one cared about it anymore. They said it was a sunset industry, a declining business. Who would have thought that after all these years, it would be hyped up again?"
"Speculation? Uncle Li, this is not speculation. The cycle of liquor stocks has come. If you don't believe me, look at this set of data." Li Feng took out a set of data that he had sorted out before and showed it to Li Dian.
Li Dian took a look and said in surprise, "Oh, it's true. I never expected that a few years later, liquor stocks would become popular again. Reporter Li, tell me, what are your thoughts on stock trading?"
Li Feng thought for a moment and said, "It's a cycle, it's a cycle. We should buy at the bottom of the industry cycle and sell at the top of the industry cycle!"
“Everything is cyclical.”
"Good, good one, everything is cyclical, reporter Li said it very well!" Old Zhang praised.
Li Dian touched his chin and asked, "Reporter Li, which cycle are you optimistic about now?"
"Of course it's the liquor cycle," Li Feng said frankly. "The worse the liquor industry suffered in the last cycle, the better it will perform this time. And you two should also know that I mentioned in an article I posted on the forum a few days ago that a real estate cycle is coming."
"Once this cycle arrives, the entire society will be mobilized. If nothing else, at least everyone's basic salary will increase significantly, which will directly drive up the price and sales of Kweichow Moutai. After all, the main consumers of Kweichow Moutai have now become individual consumers."
Li Feng analyzed it carefully, and the more he analyzed, the more reasonable it seemed to him.
These are the two major engines of cyclical recovery and consumption upgrading.
Moreover, Kweichow Moutai's concept is very unique in the entire A-share market: a leading fast-moving consumer goods company, a luxury product, addictive, high gross profit, and low debt...
In short, it basically has all the concepts that others have, and it also has things that others don't have.
I believe that as the news of this first quarter report continues to ferment, more shareholders and institutional investors will definitely enter the market and push the stock price up step by step.
As he thought about it, Li Feng couldn't help but think of changing his own holdings.
Unfortunately, another major holding, Gree Electric Appliances, has suspended trading, saying it plans to acquire Yinlong New Energy for diversified development.
To be honest, Li Feng really doesn't like this kind of cross-border diversification, because diversification means that the original growth model has fallen into trouble and has to take the risk of entering an unfamiliar industry.
This is very dangerous.
On the one hand, the profits of the core business are getting thinner and thinner, and on the other hand, it is facing competition from giants in unfamiliar industries. If it is not careful, it will fall into the quagmire.
In fact, now that the real estate cycle has arrived, as long as Gree Electric Appliances is patient and makes good air conditioners, it will be able to steadily reap this wave of dividends and achieve a double harvest of profits and stock prices.
"It's so hard!" Li Feng looked at Gree Electric Appliances and the pages of suspension announcements and sighed.
After thinking for a long time, Li Feng reduced his real estate observation position by 40,000 yuan and bought 200 shares of Kweichow Moutai.
When you have a good grasp of the situation, any extra money you can earn is valuable.
Seeing Li Feng talking, Li Dian placed an order.
He glanced at Kweichow Moutai's share price and muttered, "Reporter Li, if you add to your position at a high price, you'll lose it all. Why not wait until the market stabilizes before adding more? And look at the share price! It's so high, and the number is so unlucky: 250!"
Old Zhang sighed and said, "Old Li, why don't you understand? Reporter Li deals with cycles, which are large-scale fluctuations. How can he only focus on the overall market? He's not on the same page as you. You do your accounts weekly and monthly, while he does them annually and every few years. Why are you so worried?"
There was a hint of sarcasm and anger at the boy's lack of fighting spirit in his words.
Li Dian was displeased when he heard this, turned around and scolded:
"I'd love to. I just like short-term trading. It's so exciting. I don't smoke or drink, so why can't I trade stocks? I only make 50,000 or 60,000 yuan a month. If I lose, my pension makes up for it. If I make a profit, I'm happy. As long as I live a few more years, I can rely on my pension for everything."
"You have it. You have everything. Even in your dreams."
Lao Zhang and Li Dian started arguing again. It was obvious that they had different investment styles.
In the elderly stock trading group, Li Dian likes short-term trading and never gets tired of it. In his words, stock trading is all about fun; Lao Zhou is a super long-term investor. In his words, the bank will not go bankrupt, so I buy bank stocks and regard it as depositing money in the bank, and I will earn dividends until I die.
But, what is Lao Zhang’s style?
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