Chapter 151 Review and find problems
"My experience tells me that once you have this feeling, you will suffer a great loss."
"Go, go, go, get out of here! You're a contrarian indicator, how can we expect anything good from you?" Lao Zhang said, "In my opinion, Reporter Li still isn't confident enough about the investment target, so he asked us to check it out."
"Isn't that nonsense?" Li Dian said, "If you were confident, would you have asked us to come?"
Old Zhou said, "In my opinion, we should be careful in situations like this. When we invest, we don't look for how much we can make, but how long we can survive... When we invest, we must be conservative, conservative, and conservative again..."
"Tsk, are they all like you, conservative till death? No one buys, no one sells, then how can the stock market remain open? We might as well just close it down!" Li Dian retorted.
Old Zhang interjected, "Actually, this kind of equilibrium situation you described has occurred many times over the past twenty years. It's called a monkey market, bouncing up and down, circling around a equilibrium point. Ultimately, it still requires an external force to drive its direction."
"Nonsense, who doesn't know that external force is needed to break the balance? The key is where this external force is, is it good or bad?" Li Dian said.
"If I knew, wouldn't I become a god?"
"You don't know, what are you talking about?"
"I just like to talk, can you still control my mouth?"
Oh my god, the three of them are arguing again, this is the second time.
"Hey, uncles, let's talk more about the stock market and stop bickering..." Li Feng hurriedly shouted to separate the three people.
Unfortunately, before they could say a few words, the three of them started arguing again.
Helplessly, Li Feng had to stop the topic, took out a box of Pu'er tea that had just arrived, and drank with the three of them for a while before ending the meeting.
Although the three elders didn't say anything directly, Li Feng could tell from their words: "Be careful."
You have to walk your own path with your own feet, and you have to make your own investments yourself.
Other people's opinions can only be used as a reference.
Li Feng put down his teacup, sat down in front of the computer again, and began to review the situation quietly.
In the overall situation, interest rates are tightening, but there is no rate hike. Real estate is being regulated, but the property market has not stalled and is still in a balanced state.
In terms of industry, under policy regulation, the real estate cycle has passed its golden period, and it is indeed necessary to avoid uncertainty, but the financial cycle is still somewhat unclear. There is room for market interest rates to go up and down. The liquor cycle has been on the rise for three years since 2014 when the entire industry was almost in the red, and it is now halfway through.
In terms of individual stocks, the ChiNext Index has plummeted four or five times, and has been halved and fallen by another 10%. The risks have been almost released, and the Shanghai Composite Index is only at 3,300 points, which is not considered high.
China Merchants Bank, PE10.
Due to the high leverage and high debt characteristics of banks, the PE given is not high, whether domestically or abroad.
Generally speaking, a PE below 7 is undervalued, 10 is reasonable, and 15 is overvalued.
China Merchants Bank has now returned to double-digit growth and no longer relies on external financing to expand its scale.
This valuation is reasonable now.
Ping An of China, PE18.
The insurance industry is somewhat different from the banking industry, or more complicated, as it requires calculating the value of new business while also considering investment returns.
In last year's interim report, China Ping An's interim report excluding non-recurring items increased by 38.8% year-on-year, and the third quarter report excluding non-recurring items increased by 41.1% year-on-year.
This is due to both a significant increase in equity returns and a surge in life insurance business.
To a certain extent, life insurance business and the liquor industry also belong to the consumption upgrading sector. Both company financial statements and industry statistics show that in the process of economic take-off in developing countries, the insurance industry is one of the industries that benefited the most.
This is also the reason why many tycoons not only invest in real estate but also get involved in the insurance industry.
A survey by a professional research institute shows that in 2016, my country's per capita insurance premium was only US$337, which is about ten times lower than that of Japan, South Korea, the United Kingdom, the United States and other countries.
There is huge room for growth.
During the economic cycle from 2014 to 2017, Guo Jia created a large amount of currency using real estate as a medium, and distributed the currency directly to the very end of consumption through various industries.
The sharp increase in wages for migrant workers is the best example.
To a certain extent, stimulating the economy through real estate is the most inclusive and fair way, because the value it creates, or the currency derived from it, can be directly transmitted to the grassroots and benefit the most people, allowing almost everyone to share in the pie of economic growth.
However, other industries, such as high-tech, Internet, and even manufacturing, can only cover a limited number of people.
Therefore, in this economic cycle, more people have benefited from economic growth, so they have money in their hands, and there is potential and motivation for consumption upgrades.
Only when you have money can you consume.
According to Ping An of China's growth rate, the current price-to-earnings ratio is not expensive.
Kweichow Moutai, PE36.
Kweichow Moutai is an evergreen in the A-share market and a well-deserved leader in the liquor industry. It is shrouded in countless halos, such as "high gross profit margin", "addictiveness", "financial collection attributes", "consumer goods" and so on.
Because it's so good, it also enjoys a valuation that other stocks don't.
Now it is PE36, and some have seen it higher.
But Li Feng set the purchase price of Kweichow Moutai at around 15PE. Now its PE is 36 times, which is also within a reasonable range.
After all, according to Kweichow Moutai’s third-quarter report last year, revenue exceeded 100 billion yuan and profits increased by 19.09%.
The key lies in whether prices can be raised, production can be expanded, and consumption can continue to upgrade.
Gree Electric Appliances, PE 13 times.
Typically, companies in the real estate industry chain are greatly affected by the rise and fall of the real estate industry because their main business is concentrated in the air-conditioning business.
Moreover, in 2016 it also wants to enter the new energy industry and carry out diversified layout.
After reviewing this, Li Feng hesitated.
Although Gree Electric Appliances' price-to-earnings ratio is not high, only 13 times, and its dividends are high, and its interim report also increased by 48% year-on-year, as long as it maintains this growth rate, its price-to-earnings ratio will be around 7 times next year, and around 4 times thereafter.
However, stock trading is not like doing math problems, and it cannot be done by such simple linear calculations.
To be honest, Gree Electric Appliances' main business is tied to the real estate industry.
Now, the real estate industry across the country is being regulated, and its impact cannot be ignored.
It is cheap, but the prospects of the real estate industry are declining. The overall industry environment is not good, which will directly affect the company's operating performance, and it is difficult to maintain the current performance.
Even if the business deteriorates and performance declines, the price-to-earnings ratio will directly become 20 times or even higher.
"The tide is turning! How could I have made this mistake again?! I can't bet against that hand! I lost in 2007, and I lost again later. Why haven't I learned my lesson and am still betting against it? Weren't the losses I suffered the first two times big and tragic enough?!"
Li Feng's heart trembled and he slapped his right cheek.
"Fortunately, it's not too late."
Li Feng quickly opened the market trading software, cleared his position with one click, and recovered 4.05 million yuan in funds.
In an instant, he felt a lot more relaxed.
Now, together with the sale of China Evergrande, he has recovered 5.1 million yuan.
There are only two stocks in the account, Kweichow Moutai and Ping An of China, which is about half of the position.
At this time, Zhao Xinyue and Lin Menghan came back carrying large and small bags.
Hearing that Li Feng had sold Gree Electric Appliances, Zhao Xinyue spoke frankly and said:
"Just sell them all so you don't have to worry about it every day. Look at you, you haven't been out for several days. Look at your hair, it's all greasy and shiny."
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