Chapter 207: There is a lot of money outside the market, and inflation is more ferocious than a tiger
Tuesday, March 19, 2024.
Overnight, Nvidia announced the launch of the most powerful AI chip in history, with energy consumption and cost improved 25 times compared to the previous generation. Nvidia opened high and closed low, the US AI sector generally rose, and the hype of US technology stocks intensified.
Domestically, the biggest news is that Evergrande Real Estate has inflated its revenue by 560 billion yuan over two years. The central government has decided to fine Evergrande 4.175 billion yuan, Xu Jiayin 450 billion yuan, Xia Haijun 15 million yuan, and Pan Darong and Pan Hanling 9 million yuan.
In addition, penalties also include warnings and market bans.
According to statistics, in the past two years, Evergrande Real Estate has been subject to execution for a total of more than 40 billion yuan, and has more than 500 billion yuan in overdue debts and commercial bills.
If these inflated revenues are deducted, it is very likely that Evergrande Real Estate has never made a profit in recent years.
You should know that these statements have been audited by PricewaterhouseCoopers, one of the four famous auditing firms.
History is a little girl who can be dressed up by anyone.
Isn’t the financial statement also a little girl who can be dressed up by anyone?
When you are young, beautiful and have a promising future, these institutions will naturally welcome you with a smile, provide you with money, issue you various reports, help you to get all the connections, and dress you up beautifully so that you can greet guests in style.
But when you are old and ugly, and at the end of your rope, these same institutions will start to cut off your support, turn their backs on you, and some will leave, some will pursue your loans, and some will collect debts.
When a wall falls, everyone pushes it.
Therefore, when investing and speculating in stocks, you must have your own judgment and should not be superstitious about these institutions, let alone the various reports issued by these institutions.
You have to know that these institutions are the top predators in the financial world, and their food is the nutrients contributed by one leek after another.
Before I knew it, it was 9 o'clock and the Shanghai Composite Index was about to open.
Old Chen sat in front of the computer early, but felt a little uneasy.
Because the futures prices of bulk commodities were all good last night, especially copper, aluminum and tin, which were quite strong, which made him a little worried. Non-ferrous metals rose again today.
However, he does not hold positions in these sectors.
However, although his own failure was heartbreaking, his friend's success was even more worrying.
I quickly glanced at today's information and the Shanghai Composite Index opened.
Today, the market seemed a bit deflated, opening low at 3077 points. This made Lao Chen feel relieved, thinking to himself, "Finally, I have a chance to get on board..."
He made up his mind and bought 10% of China Heavy Industry.
I just finished buying and felt something was wrong on the market.
Among theme stocks, the intelligent manufacturing sector is very active. Ai Ai Precision has closed the limit again, and Zhongda Li De and Yuhuan CNC have also closed the limit...
Among the mainstream theme stocks, the non-ferrous metals sector seems to have not started to adjust yet, while the coal sector has gone against the norm and has strengthened.
Is the adjustment of the coal sector coming to an end?
Oops, should I buy some coal?
After a slight hesitation, starting at 10:00, the Shanghai Composite Index began to rise without any warning, directly setting a new high in recent days, breaking through 3090 points!
Baosteel Rare Earth, a stock in the rare earth concept sector, suddenly hit its daily limit, while Tin Industry shares surged by over 5%. The coal sector surged across the board, with Shanxi Coal International, China Coal Energy, Huaibei Mining, Shaanxi Coal Industry, and Pingmei Group all surging by over 3%.
It is true that talented people emerge in every generation, and the old are replaced by the new.
Is it going to break through 3100 points?
Old Chen's eyes were fixed on the computer screen.
A few seconds later, the Shanghai Composite Index suddenly fell again, from 3090 points to 3078 points. Although it was only a dozen points, it was like a hammer hitting his heart.
After all, he now has a position.
He hurriedly looked through his selected stocks and found that the shipbuilding sector remained motionless. On the contrary, copper stocks such as Zijin Mining, Western Mining, and Luoyang Molybdenum, which had been strong in the early stage, were weakening all the way. He even found that some consumer stocks were rising unnoticed, such as Wuliangye, Midea Group, Luzhou Laojiao, etc.
Let’s observe it for a while.
Old Chen calmed down and decided to wait a few more days before making a decision.
The same question appeared in Xiao Bo's mind.
He looked at the ups and downs and oscillated market, and couldn't help but ask Li Feng, who was still concentrating on fishing next to him, "It keeps rising, rising, when will the Shanghai Composite Index break through 3100?"
"It's too slow to walk."
Li Feng laughed and said, "Are you anxious? Don't be anxious. Those who missed the opportunity are more anxious than you."
"You have time, come and look at a set of interesting data," Li Feng said, pulling out a set of data from his mobile phone and introducing it.
"On March 15th, our central bank released a set of data showing that the broad money supply, M2, was 299.56 trillion yuan. Four days have passed now, and it must have exceeded 300 trillion yuan."
"This is a milestone event."
"You know, the last time M2 exceeded 200 trillion was in January 2020. It took just over four years for M2 to go from 200 trillion to 300 trillion..."
"The last time, the GDP exceeded 200 trillion yuan from 100 trillion yuan (March 2013 to January 2020), it took less than seven years..."
"Going back further, from the first breakthrough of 100 trillion yuan (1956-2013.3), it took a full 57 years..."
"What does this mean? There's a lot of money on the sidelines, inflation is fiercer than a tiger, and inflation is ongoing and accelerating."
Xiao Bo was a little surprised after hearing this. After thinking about it, he couldn't help but ask:
"Everyone knows that money is becoming increasingly worthless and depreciating, but why haven't we noticed any inflation in recent years? In fact, for several months at the end of last year, the CPI was actually negative."
Li Feng analyzed:
"I personally believe that although M2 is growing, real estate, an important tool for creating money, is collapsing, causing credit contraction. This has led to a very strange situation: on the one hand, liquidity is easing, but on the other hand, CPI has not risen, and funds are idling among banks."
"The disappearance of the wealth effect has made ordinary people afraid to spend. If they have money, they either pay off their loans early or save it without spending. Therefore, it is now very necessary to improve the stock market and use the stock market as a reservoir, a new tool for creating a wealth effect, to replace real estate."
“The best way to go is to go slow.”
"However, the amount of funds outside the market is so huge that once the stock market shows a profit effect, it will cause these deposits to move out and rush into the market, which will in turn push up the stock market. In the end, this is the only reason for the stock market to rise."
"It seems that the best way to proceed is to follow the path from the end of 2018 to the beginning of 2019, to move slowly, to rise gradually, to rise in rotation, to have a long bull and slow bull market. Only in this way, when everyone rises together, can we rise high and go far."
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