Chapter 252 Real estate riot, Shanghai Composite Index reaches 3100 points!
Monday, April 29, 2024.
Today, the Shanghai Composite Index finally broke through 3,100 points after half a year!
Ultimately, the Shanghai Composite Index closed at 3113.04 points, up 0.79%! The ChiNext Index soared 3.5%! Trading volume in both markets exceeded one trillion yuan for two consecutive days.
During the trading session, the real estate sector was in turmoil.
More than 20 real estate stocks including Vanke A, Gemdale Group, Rong'an Real Estate, and China Fortune Land Development hit the daily limit, the real estate ETF soared 8.14%, and Hong Kong real estate stocks also collectively rioted, Vanke A soared more than 18%, Sunac soared more than 25%, and even more so, Shimao Group soared more than 55%!
Strong cyclical stocks plummeted collectively, with coal, oil, nonferrous metals and shipping all falling sharply.
The market hit a new high, and countless investors breathed a sigh of relief.
The depression that had been hovering over the wealthy room for half a year had unknowingly dissipated, and almost everyone had a smile on their face.
"Look at this technical pattern. Two consecutive days of strong gains with large volume have broken through 3100 points. With this trend and this volume, this wave will at least exceed 3200 points!"
"Don't be too happy too soon. If there's a massive drop in volume in a few days, you won't be able to figure it out."
"Nonsense! How long it is horizontally is how high it is vertically. Once it breaks through, it will definitely be higher than this!"
"Do you believe what you said?"
On the other side of the VIP room, two veteran stock investors were arguing with each other.
Xiao Bo listened for a while, then looked at the dish again, feeling a little bitter in his stomach, and sighed:
"It really fits the saying, 'Thirty years in the east, thirty years in the west.' Look at this market, it's about to soar, but strong cyclical stocks are plummeting. It's like taking a laxative, it's so uncomfortable..."
"Who doesn't eat dumplings during the Chinese New Year? At this stage, it's a good idea to make some adjustments," Li Feng said with a smile, clicking on the trading software.
"A single flower does not make a spring; a hundred flowers in full bloom make the garden full of spring. Only when everyone rises can there be a real rise. In fact, this kind of sector rotation is the norm in the market. Relying solely on one sector is pathological and will not last long."
"The key point now is that the timing of this market rally is quite sensitive,"
Li Feng frowned and thought,
"The May Day Golden Week holiday is approaching. According to the A-share market's practice, at this sensitive time, both institutions and individuals usually put their weapons in storage and put their horses aside. However, at this moment, the market has taken off, and this market is likely driven by Hong Kong stocks."
"Is there some conspiracy? Is the Hang Seng Index going to cause trouble during the May Day holiday?" Xiao Bo also frowned and asked.
"There must be something wrong when things are abnormal. This is possible, but no one can predict the future. Let's just wait and see." Li Feng continued.
At this time, Lao Chen next to him also came over and said, "Li Feng, the real estate sector is in turmoil today. Is there any big news?"
After listening to this, Li Feng browsed through the financial information a few times. It was still some old news. Basically, Chengdu, Jiangsu and Shanxi respectively announced the news of continuing to relax real estate supervision.
However, the relaxation of real estate regulations has been going on for a long time, and these so-called reasons are nothing more than so-called benefits fabricated by securities firms.
If these are really the positive factors, then the collective riot in the real estate sector is probably just a farce, an oversold rebound.
Of course, if there are other heavyweight policies to be introduced, it will be enough to support a small rebound.
However, the overall downward trend of the real estate industry cycle has not been reversed at all, and people's expectations for buying houses have not changed. No matter how many policies are introduced, they can only delay the impact of the real estate industry on the economy.
A true cyclical reversal takes time to develop.
Li Feng thought for a moment and said, "I don't understand the collective riot in the real estate sector at the moment, so I dare not and cannot participate."
"What about the liquor sector?" Xiao Bo was still obsessed with the liquor sector.
Li Feng glanced at Xiao Bo, smiled knowingly and said, "Actually, to be honest, I'm also obsessed with the liquor sector. I'm almost drooling just thinking about it."
"Kweichow Moutai, in particular, is truly liquid gold. Its gross profit margin is even higher than that of gold mining, reaching around 90%, yet it is still in short supply. It is truly a truly good stock, and I'm afraid it's unique in the A-share market."
"It's just that I really don't think it's time yet."
"Not yet?" Xiao Bo raised his brows and said, "In the past few days, the first quarter reports of the liquor industry have basically been released. The quarterly reports of the leading liquor companies are generally good. Only some third-tier liquor companies have poor performance. Some liquor companies even have double-digit growth..."
"Look at the time. The liquor industry has been adjusting for three years. In terms of space, some liquor stocks have been discounted by 20% or 30%. Kweichow Moutai has also discounted by 35% from its peak. If we trade time for space, it should be enough..."
"Furthermore, high-quality liquor companies, such as Wuliangye, have a dynamic PE ratio of 10, while Kweichow Moutai's is only 22 times, and Luzhou Laojiao's is only around 15 times. Even if we talk about value investing, no matter which year in history, these prices are not high, right? If you buy now, you will only lose time, not money."
Li Feng heard this, shook his head and said:
"From an analysis of individual stocks, both qualitatively and quantitatively, the PE ratios of liquor stocks are indeed not high. Even the PE ratio of Wuliangye is historically low, making it a good buying opportunity."
"However, my investment system prioritizes macroeconomic trends first, industry trends second, and individual stock analysis only third."
"Right now, the macroeconomic situation is good, but I'm still worried about industry trends."
"I still believe that liquor is a cyclical industry. It hasn't experienced an industry-wide depression, or a clearing of inventory (overstocking), so it doesn't support an industry-wide reversal. I think it's unlikely that the entire industry will have a smooth landing and overcome cyclical fluctuations, especially given reports that the liquor industry's channels are increasingly overstocked..."
"So, I won't consider liquor stocks at this stage, even if their PE ratios are at a historically low level and even if I missed this investment opportunity."
"I even think that at this stage, I'd rather take a chance on real estate stocks than liquor stocks. The chances of success are higher because the risks of one are more fully exposed, while the other is not. Uncontrollable risks are infinite and immeasurable."
"But...it would be such a pity if I missed it..." Xiao Bo said regretfully.
Li Feng sighed awkwardly, "If you missed it, you missed it. There are countless opportunities in the stock market. We can't seize every opportunity and catch every bull stock. We only invest in cycles we understand, only buy stocks we can clearly see, and make money within our own understanding."
“We can’t make money beyond our knowledge, and even if we do make it by chance, we’ll return it to the market sooner or later.”
The market has reached a new high. If you are happy, please give one to show your love.
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