Chapter 173 Winter Sowing Time, No Opportunity, Just Wait
As spring turns to summer, the Shanghai Composite Index has been fluctuating around 3000 points since it hit a new high of 3288 points this year in April.
Monday, July 22, 2019.
The Science and Technology Innovation Board officially opened for business on the Shanghai Stock Exchange.
It took only eight months from the time it was first proposed in November last year to its opening in the market, which is extremely fast.
You should know that it took a full ten years for the GEM to be conceived and officially listed.
Without the pressure of the Sino-US rivalry, there would be no motivation for scientific and technological progress.
The Science and Technology Innovation Board must succeed!
The threshold for the Science and Technology Innovation Board is 500,000 yuan, and it takes at least two years to open an account. There are no price limits in the first five trading days after listing, but there are temporary suspension system restrictions. When the price increase or decrease reaches 30% and 60% of the opening price, it will be suspended for ten minutes. After two temporary suspensions, there will be no more restrictions on stocks.
After more than five trading days, the increase or decrease is 20%!
In the trading room, Li Feng looked at the trading rules of the Science and Technology Innovation Board and couldn't help but sigh: "The threshold for leeks is high, and the sickle for cutting leeks is also fast... But in the struggle between major powers, there must be a vanguard..."
Then, he turned around, looked at Zhao Xinyue and asked, "What did your mother say?"
"I talked for a long time, and my mother said it was at least two million. I have inquired about it. The betrothal gift in our place is only a few hundred thousand at most. I told her it was at most one million, otherwise I would not recognize her as my mother." Zhao Xinyue said.
"Two million is two million. I'm not a stingy person. Look, I've earned it back in just half a year." Li Feng smiled and was about to take out his mobile phone to transfer the money.
Zhao Xinyue stopped him and said:
"Why are you in such a hurry? I'm pregnant now. I'll go for a prenatal checkup in a couple of days and get a report. I'll show it to my mother and see what she says."
"This..." Li Feng was speechless for a moment.
Summer goes and winter comes, and before I knew it, another half year has passed.
The Shanghai Composite Index seemed to be controlled by an invisible hand. After fluctuating, it closed safely at 3050 points, with an annual increase of 22.30%.
Thursday, January 2, 2020.
Li Feng moved the trading room to his home to make it easier for him to take care of Zhao Xinyue. She was 38 weeks pregnant and had two weeks left before her due date. In another room, Li's mother, Wang Xiurong, who had arrived early, was also there.
"Today is Laba Festival. Let's drink Laba porridge in the evening." Wang Xiurong said in the kitchen.
"Mom, don't add sugar to my food. My blood sugar is a little high. The doctor told me to drink less porridge and eat less sugar. Please add more whole grains." Zhao Xinyue and Wang Xiurong have been getting along for a few months and seem to have become much more familiar with each other.
She lay on the bed in the bedroom, looking at the bright sunshine outside the window, stroking her pointed belly with her hands, teasing the little guy who was punching and kicking inside her belly, making her belly bulge and concave.
A face full of happiness.
In the past few months, Li Feng paid a betrothal gift of one million yuan, and the household registration book was mailed over. The two have been registered as an official couple.
Today, she has a car, a house, a child, a job and a husband, and her life is already half complete.
"Okay, okay, you have to eat more. There are two of us. It's winter now. How about I stew some cabbage, pork and vermicelli noodles, heat up some steamed buns, and steam some sweet potatoes?"
Wang Xiurong was busy in the kitchen, thinking, "The porridge needs to be cooked earlier, the tofu needs to be bought first, and the steamed buns need to be heated later..."
She has been here for a few months. Although she is not used to it, she is very happy. After all, her son is getting married and will have a child soon. Finally, one of the major events in her life is complete.
Also, I heard that there is a girl who gave birth to a child for my son. I must take this matter seriously and find time to visit her often to maintain a good relationship.
Li Feng had just arrived at Zhao Xinyue's room with his laptop when Lin Menghan called him via video.
"Li Feng, why hasn't this year's annual investment strategy meeting started yet? It's already afternoon..."
"Open it, of course. I've been waiting for you. I'll open it right now." Li Feng said as he opened his laptop and clicked on the document that had been prepared long ago.
"As usual, let's first look at the macroeconomic situation. The Federal Reserve has officially entered the interest rate cut channel, cutting rates three times in July, September, and October 2019, bringing the interest rate level to between 1.5% and 1.75%. China also cut the reserve requirement ratio by 0.5 percentage points across the board and by one percentage point in a targeted manner on September 6th. Judging from the expected yield on 10-year Treasury bonds, it has also entered the interest rate cut channel, and it is expected that there will be a high probability of an interest rate cut in 2020. It can be said that 2020 should be a year of continued loose monetary policy, and there is no need for pessimism on the macro level."
"But now that China and the United States are arguing fiercely, the Central Economic Work Conference has repeatedly emphasized the need to seek progress while maintaining stability and not to flood the market with money. So, expectations for the stock market shouldn't be too high. The Shanghai Composite Index is likely to remain around 3,000 points next year."
"However, what is particularly noteworthy is that the Central Economic Work Conference held in December once again mentioned 'housing for living, not for speculation' in terms of real estate policy, and stressed the need to stabilize land prices, housing prices, and expectations."
After a pause, Li Feng emphasized, "Please note, this is a new term. Stabilizing land prices is about stabilizing local income from land sales. Stabilizing housing prices is about stabilizing everyone's main wealth pool. Stabilizing expectations is even more important. The expectation of ever-increasing housing prices is still prevalent among the public. Stabilizing expectations here should be about dispelling this expectation of ever-increasing housing prices."
"Therefore, we must stay away from the real estate sector and its entire industrial chain, including Ping An of China, which has invested heavily in real estate companies."
"As for the industry, the real estate cycle, the mother of the economy, is clearly coming to an end. The economy is about to enter a recession. Many industries are about to reverse their cycles and should not be touched. This includes the liquor sector, which has been bullish for five years since 2013. Kweichow Moutai's price-to-earnings ratio has reached 33 times, which is too low a risk."
At this point, Zhao Xinyue couldn't help but ask, "How's the pork sector? Because of African swine fever and the industry cycle, pork prices have been going crazy lately, to 27 yuan per pound. The price of roujiamo on the street has gone from five yuan to six yuan each."
Li Feng pulled out the K-line chart of the pork sector (BK0503) and patiently explained:
"Speculating on expectations, performance, and growth. Look, the pork sector has risen from 1789 points on February 1, 2019, to 3782 points on April 25, more than doubling. The best period of speculation on expectations is over. If you enter now, it will be speculation on performance and growth... You also know that I like left-side trading and will not take risks in high-level games."
"Then which sector should we buy? You have rejected the real estate sector, you have also shot down the financial sector, you look down on the liquor sector, and you don't want to buy the pork sector. What should we do?" Zhao Xinyue continued to ask.
"I'd rather wait than buy if I'm not sure. For a few months in early 2018, I was terrified all day and all night, unable to sleep soundly. I don't want to go through that again," Li Feng said. "Not only would it be physically unbearable, but I'd also suffer financially."
"Waiting?"
"Yes, wait with an empty position. Opportunities are not always available. When there are no opportunities, you have to wait patiently for them to come," Li Feng explained. "For those opportunities with low winning rates, it is better to miss them than to enter them, otherwise it is very likely to result in losses."
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The progress is accelerating and we are quickly entering the critical year of 2020.
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