Chapter 150 It’s time again, winter sowing time
After closing WeChat, Li Feng began to observe the market again. Thousands of thoughts flashed through his mind, but he shook them off one by one.
Most of these sudden thoughts are worthless. They are just the instinctive reactions of investors when facing market fluctuations. Only a very rare few of them are worth continuing to think about.
Today, the amount of his capital has reached tens of millions, which is completely different from the previous tens of thousands, hundreds of thousands, and millions.
A slight fluctuation will result in the loss of hundreds of thousands or even millions of funds, which is the income of ordinary people for several years or even several lifetimes. It requires a big heart and a pair of eyes that can see through the vanity of the market.
In the blink of an eye, more than a month passed.
Tuesday, January 2, 2018.
In the trading room of Jingu Building, Li Feng, Zhao Xinyue and Lin Menghan sat together around the tea table, each holding a laptop.
Li Feng stood up, picked up a whiteboard marker, and wrote "2014-2017" on the whiteboard next to him. He said, "Looking back now, this economic cycle actually started in 2014 with the relaxation of real estate regulations. During this period, a large amount of currency was created through real estate, triggering de facto inflation, and residents' consumption upgrades were a natural consequence."
"The stock market is essentially a monetary phenomenon, so we now have to keep a close eye on monetary policy and real estate policy."
"Xinyue, can you tell me first, what are the current real estate policies like?"
This was already the second time she had analyzed the Central Economic Work Conference. Zhao Xinyue was already quite experienced. She lightly clicked on the computer, pulling up several sheets of data, and said:
"Now, more than 110 cities across the country have issued various regulatory policies, totaling more than 200 times. On average, each city has introduced at least two regulatory measures. In particular, the regulatory policies in September and October last year were the most stringent in history."
"Moreover, regulation is no longer limited to first- and second-tier cities; third- and fourth-tier cities have also begun to introduce real estate regulation policies."
“Also, the expected yield on the 10-year Treasury bond that you often look at has risen above 4.”
Li Feng nodded and said:
"I've said before that an initial, moderate rate hike wouldn't affect the stock market. What we're worried about is the cumulative rate hikes that create a high-interest rate environment. This is because some institutions and individuals implementing a stock-bond rebalancing strategy will shift funds from the stock market to the bond market."
"The greater the rate hike, the greater the transfer. Although we haven't raised interest rates domestically, real interest rates have been rising."
"The current situation is very similar to 2011. That year, with the implementation of real estate regulations, capital in the market was tight and the stock market entered a bear market for several years."
"Therefore, the market outlook for next year is not optimistic."
Lin Menghan added, "This Central Economic Work Conference prioritized risk prevention and did not specifically mention destocking real estate."
"Also, Kweichow Moutai's PE is now 36 times, Ping An of China's PE is 18 times, China Merchants Bank's PE is 10 times, and Gree Electric Appliances' PE is 13 times."
Li Feng nodded and said:
"Objectively speaking, there hasn't been a major shift in monetary policy, the financial cycle hasn't completely ended, and the real estate cycle is coming to an end. The sector leaders, such as Kweichow Moutai, Ping An Insurance, China Merchants Bank, and Gree Electric Appliances, haven't risen much, and their PE ratios are within a reasonable range, neither undervalued nor overvalued."
"If I were to use two words to objectively describe next year's market, it would be balance."
"We're not going to hold on to our shares?" Zhao Xinyue understood what Ya meant by hearing the music.
"Let's not touch most of the holdings for now and see if the fund company can continue this game. After all, the fund we just raised still needs to build positions, but China Evergrande must be sold," Li Feng emphasized.
"Why? Isn't it very cheap? The PE ratio is still in single digits now. Moreover, I heard that the land reserves alone are worth trillions of market value!" Zhao Xinyue was surprised.
"Because it's risen too much, too fast," Li Feng added, "We have to trust common sense. Trees don't grow to the sky, and what goes up quickly must come down. It's very cheap, but real estate regulations are being intensively implemented. If the real estate market falls into the same predicament as in 2012-2013, wouldn't it be like a caged tiger?"
"By then, the billions of land reserves it holds will become a huge burden. After all, if it can't build houses, it can't convert them into cash."
"Impossible," Zhao Xinyue said. "Guo Jia won't ignore it when the time comes. Didn't you say real estate is the mother of the economy? If that time comes, Guo Jia won't ignore it. Didn't he relax the rules in 2014?"
Li Feng said firmly:
"Whether Guo Jia is in charge or not is their business. It's their money that's being gambled, but I won't gamble with my own money. I won't let my investment be subject to such great uncertainty."
"After all, it really is my money."
"You are always right." Zhao Xinyue began to pout.
Li Feng explained: "I'm not selling blindly. You should have heard of Murphy's Law."
"If something could get worse, then it is most likely to get worse. And there are thousands of investment opportunities in the stock market. Why do we have to put ourselves in such a huge uncertainty?"
"As the saying goes, a gentleman does not stand under a dangerous wall."
After saying that, Li Feng smiled and immediately opened his account and sold all his shares in China Evergrande. The transaction price was 28 yuan, which was seven times the purchase price of 4 yuan.
The original capital of 150,000 yuan directly turned into 1.05 million yuan!
"Are you okay? If you're okay, let's go shopping..." Zhao Xinyue pulled Lin Menghan away again.
The two men left, but Li Feng couldn't leave. He knew that the main investment strategy still depended on him.
He was in the trading room, watching the market and drinking tea, cup after cup, always feeling that something was wrong.
That’s right, there must be something I didn’t notice.
But when I thought about it carefully, and reviewed it on the whiteboard with a whiteboard marker, I still couldn’t find it.
This made him feel a little anxious, and he walked around the room again and again.
Still at a loss.
"As the saying goes, a doctor cannot cure himself. Why not ask Lao Zhang and the others to come and chat for a while? It's been a long time since we last saw each other." After pondering for a while, Li Feng called Lao Zhang and made an appointment to meet in the afternoon.
When the three of them arrived, there was bound to be another round of quarrels, laughter and scolding.
Old Zhou drank his tea and laughed at Li Dian, saying:
"I'd rather let you speculate on the short term than just hold on to it. Look, over the past few years, not only have I earned the interest, but the stock price has also gone up."
"What do you know? Stock trading is all about mindset and happiness. I only trade a few tens of thousands of yuan worth of stocks. As long as I have a good mindset and a strong spirit, and live a few more years, I'll never have to worry about food and drink for the rest of my life, thanks to my 20,000 yuan monthly pension!"
Li Dian was stubborn and made convincing arguments.
Lao Zhang advised: "Lao Li, why don't you follow me to trade stocks? At least I can guarantee that you will lose less..."
"Get lost—I don't like your tricks!"
These three old kids have been quarreling for several years and will probably continue to quarrel for many more years.
The three have been in the A-share market for more than 20 years. They are veteran investors among veteran investors and have their own way of survival.
Lao Zhang is a risk-averse person and mainly uses low-risk investment and arbitrage as his main means of making profits.
Lao Zhou is different. He is a super long-term investor. In his words, he is using the method of making interest on his coffin capital.
Li Dian is the most special. He treats A-shares as playing mahjong and as entertainment. He only trades with a few tens of thousands of yuan. If it is not enough, he uses his pension to supplement it. He trades short-term and medium-term. What he wants is a good experience, a happy mood and a refreshed spirit.
What a good attitude.
The quality of life is also great.
Not to mention their stock trading skills, just talking about their stock trading experience and knowledge, these three are definitely the best in the stock market.
It would be most appropriate to call these three people over to check for me.
"Uncle Zhang, Uncle Li, Uncle Zhou, today I..." Li Feng expressed his doubts while serving tea.
"This..." Li Dian's eyes lit up and he blurted out.
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