Chapter 183 2022: A new version, a new god
As spring goes and autumn comes, the flowers turn red and then fade, fade and then turn yellow, and then turn yellow and fall.
In 2021, the Shanghai Composite Index fell all the way from its highest point of 3509 points to 3397 points, then rebounded. By the end of the year, it was only 3639 points, with an annual increase of 4.8%. However, the highs of many stocks can never be returned to their previous levels.
2022 is finally here.
Li Feng sat quietly in his study, analyzing the market trends for the year. Lin Menghan brought him a plate of fruit and asked, "How are we going to operate in 2022?"
"Clear the inventory and take a break!" Li Feng said, putting down the printed copy of the 2021 Central Economic Work Conference in his hand.
"Clearing out the inventory and taking a break? Why?" Lin Menghan asked in surprise.
Li Feng flipped through a stack of documents he had compiled and explained, "Because the inflation figures for 2021, which hit a 40-year high, have forced the Federal Reserve to raise interest rates. Rapid and intense inflation has led to rapid and intense interest rate hikes, which in turn has led to an upward trend in the US dollar index and a further tightening of international monetary liquidity."
"In addition, domestic fiscal and monetary policies are primarily focused on 'stability' and must be coordinated across cycles and counter-cycles, so don't expect a massive money injection. At the same time, as real estate policies take effect, the monetary amplifier of the real estate market will shrink further, leading to a de facto tightening of monetary policy."
"The stock market is a manifestation of currency. International and domestic fiscal and monetary policies are not optimistic, so it is better for us to hold short positions."
"Menghan, do you remember that the stock market plummeted in 2018 due to the Federal Reserve's interest rate hikes, the tightening of our domestic fiscal and monetary policies, and the trade war?"
"That time, I lost hundreds of thousands of dollars. This time, I don't want to make the same mistake again."
Having said this, Li Feng liquidated all his stocks with one click.
A gentleman does not stand under a dangerous wall. When the winning rate is very different, clearing the position or even going short is the best solution.
2022 is destined to be an unforgettable year.
This year, the Russo-Bird War officially broke out, and the Shanghai Composite Index plummeted 15.12%!
The blue-chip stocks have officially entered a killing mode, and countless funds have suffered huge losses. In the energy and metal sectors, there are mixed gains and losses. Stocks that have soared in 2021 have plummeted, and some stocks that have plummeted in 2021 continue to plummet.
The most eye-catching sector is undoubtedly the coal sector, which stands out and closed up 13.02% for the whole year!
Leading stock Shaanxi Coal Industry closed up 62.29%! It has already pulled four consecutive annual positive lines. What's even more exaggerated is that even so, its PE is only 7.7.
Another leading coal stock, China Shenhua, closed up 32.73% for the year! It also posted four consecutive annual gains. Its PE ratio is also very low, around 9.5, and its dividend yield is around 9%.
Other small-cap coal stocks have at least doubled and at most tripled since 2021.
Zhao Xinyue was so envious that she drooled. She couldn't help but mutter:
"If we bought coal stocks, that would be great. Not to mention more, if they doubled, we'd make at least a few million. Oh, we'd have everything!"
Li Feng extinguished her thoughts and said, "We can't earn money that is not within our understanding. Even if we earn it accidentally, we can't keep it."
"What we should do now is not regret or complain, but learn lessons and reflect on why we didn't seize this sector. Looking back now, the most important reason why the coal sector has been able to survive is because of its high dividends, low valuation, and it is not affected by the epidemic. As it belongs to the energy sector, it directly benefits from the rise in international energy prices."
"If we look back further, we can trace it back to the supply-side reform that began in 2015. After several years of supply-side reform, the remaining companies in the coal industry are almost all cash cows. Coupled with the high inflation cycle, their performance has skyrocketed!"
"Looking back further, it was because I was still selecting stocks based on the 2007 bull market, when non-ferrous metals saw a significantly higher increase than coal stocks. So this time, I still chose non-ferrous stocks and ignored coal stocks, still failing to keep up with the times."
"We must learn from this lesson and not be complacent or complacent. Each cycle has its own particularities."
"Are we still buying coal stocks now?" Zhao Xinyue asked.
"I won't buy it. I am a left-side trader. If I rashly enter the coal sector now, both the holding cost and the holding mentality will be affected. Let's continue to build positions in the nonferrous metals and shipping sectors in 2023. I only know so much, and there are no other opportunities to develop. Let's just continue to stick to our own circle of competence." Li Feng said helplessly.
"Nonferrous metals?" Zhao Xinyue couldn't help but ask. "I heard that nonferrous metal prices plummeted in 2022. Many mining companies suffered huge losses. How dare you buy them? What if they fall further? I heard the Federal Reserve hasn't stopped raising interest rates yet and will continue to do so in 2023."
Upon hearing this, Li Feng couldn't help but flip through a stack of information he had compiled in 2022.
Over the past year, facing the most severe inflation in 40 years, the Federal Reserve has also carried out the most aggressive interest rate hike in 40 years. It first raised interest rates by 25 basis points in March, 50 basis points in May, and then raised interest rates by 75 basis points in June, July, September and November respectively, and raised interest rates again by 50 basis points in December, ultimately raising interest rates to between 4.25% and 4.5% within a year.
It set the highest record since 2008.
Against the backdrop of the Federal Reserve's aggressive interest rate hikes and the surge in the US dollar index, international commodities saw mixed gains and losses. After the Shanghai copper price fell from 78,270, it plummeted to a low of 53,400 in July 2022, before rebounding to 70,000 for adjustment.
After Shanghai Aluminum fell from 24765 to 17025 in July 2022, it basically fluctuated around 18500.
Shanghai tin had the largest amplitude, falling from its highest point of 395,000 to 154,160, and then fluctuated around 200,000.
The plunge in commodity prices has led to a sharp drop in the performance of listed companies.
China Aluminum Corporation's net profit attributable to shareholders of the parent company in the third quarter of 2022 was only 4.567 billion yuan, a decrease of 13.95% compared with last year, and its stock price plummeted by 26.09%!
Tin Industry Co., Ltd.'s third-quarter report for 2022 was only 1.345 billion yuan, a decrease of 25.08% compared to last year! The stock price plummeted 27.31% in 2022!
Zijin Mining's gold and copper production soared, compensating for price with volume, and achieved a net profit of 16.667 billion yuan in the first three quarters of 2022, an increase of 47.47% compared with 2021, which also ensured that it closed up 5.13% in 2021.
Of course, there is no worst, only worse.
After the blue-chip track stocks plummeted in 2021, they continued to soar in 2022.
Ping An of China plummeted 39.97% in 2021 and fell another 1.50% in 2022!
After Gree Electric Appliances plummeted 36.06% in 2021, it fell another 4.03% in 2022!
China Merchants Bank fell 20.18% in 2022!
Kweichow Moutai fell 13.76% in 2022, Wuliangye fell 22.97% in 2021, and then fell another 17.60% in 2022! Jiugui Liquor plummeted 34.54% in 2022.
The decline in real estate stocks was even more tragic, leaving the situation in a mess, just like the education and training stocks that were brutally slaughtered last year.
Vanke fell 7.52% in 2020, 27.20% in 2021, and another 2.15% in 2022!
China Evergrande fell 23.64% in 2020 and another 89.15% in 2021, directly falling from its highest point of 27 yuan to 1.59 yuan, which is not even a fraction of its original value.
Country Garden fell 8.43% in 2020, 34.40% in 2021, and 60.42% in 2022. The annual line fell for three consecutive days, directly falling from the highest point of 19.16 yuan to 2.67 yuan, a drop of more than 80%.
Sunac China suffered even worse, falling 36.63% in 2020, 55.80% in 2021, and 61.12% in 2022. It fell from its highest point of 49.55 yuan to 4.58 yuan, which is less than a fraction of the original price.
Li Feng printed out two copies of the real estate stock decline information, one to Zhao Xinyue and the other to Lin Menghan.
Lin Menghan was shocked after seeing this, but she didn't expect that in just a few years, the company that was once at its peak and dominated the national real estate sales has fallen to this state.
She couldn't help but start searching for Cheng Haifeng, the stock god at the Stock God Carnival that year.
However, I found that the stock god has disappeared from the Internet, and in the posts he left behind, there are many people who come to criticize, curse and mock him.
"Oh my god, the stock god has disappeared. I wonder how much he made from selling books?"
"A trillion yuan isn't a dream? It can only be a dream. Sunac China now doesn't even have a fraction of that... It's on the verge of delisting. What a black mouth!"
"MD, you're a liar. I bought your book, got scammed by you, and lost my money!"
Li Feng couldn't help but sigh when he saw this: "The lofty words and aspirations are still there, and the rivers and streams will flow forever..."
In the long river of the stock market, investors come and go, and many of them are just passing by. There are also some stock gods who emerge and stand tall in this long river. They are all trendsetters of the times.
The times made them what they are today.
But the river flows endlessly, the stock market flows on, the times change, and the trends shift. In this era, you are a trend-setter and a stock god, but in the next era, you may be knocked to the ground by the waves of the times, sink into the river, and surge into the sea.
This is the power of the times and the power of cycles.
Just like playing games, each version has its own god.
If you cannot keep up with the times and follow the cycles, no matter how powerful your means are, you will not be able to go against the trend.
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