Chapter 287: If you have a weak heart, don’t play with strong cyclical stocks
Yesterday's news:
1. The maximum temperature in Pakistan soared to 52.2 degrees Celsius, and the temperature in New Delhi, India rose to 52.3 degrees Celsius, the highest temperature on record. The government held an emergency meeting to deal with the water crisis.
In the next three days in my country, heavy rainfall will continue in the south, temperatures will be low in some parts of the northeast, and temperatures will drop in many places in central and eastern China (thanks to the Qinghai-Tibet Plateau, our ancestors chose this great place).
This year, solar flares have erupted continuously, triggering geomagnetic storms, which will definitely have an impact on the climate on Earth. It is very likely that the world will experience even more abnormal climate in the future.
Second, to control the "Philadelphia Corridor" and to have the first reading of the bill in Parliament to identify UN agencies as "KB organizations."
It's getting crazier and crazier.
3. Federal Reserve’s Bostic: “The fourth quarter may be the time for the Fed to cut interest rates.” “Patience is needed, and consumers are not very sensitive to high interest rates.”
Now, the one-year interest rate in the United States is as high as over 5%, and the mortgage rate is around 7%. It is really ridiculous to say that consumers are not sensitive to high interest rates.
If you don’t cut interest rates, then continue to hold your urine and see if your economy can hold up for a long time.
4. Moutai’s new chairman Zhang Deqin said: “Three obediences.”
"When output and quality conflict, output shall be subordinate to quality. When efficiency and quality conflict, efficiency shall be subordinate to quality. When speed and quality conflict, speed shall be subordinate to quality."
Kweichow Moutai now has a market value of 2 trillion yuan, making it the undisputed stock king in the two markets and the most perfect investment target in the minds of countless "value investors". Of course, the shareholders' meeting it holds is also a pilgrimage site for countless investors.
Many people have discussed the good things about Kweichow Moutai from many aspects, discussed its greatness, described how bright its prospects are, and looked forward to it achieving greater success.
However, I have always insisted on my point of view that at this price and point, Kweichow Moutai does not have much investment value.
It is an obvious fact that in the past two years, high-end liquors on the market have been directly or indirectly reducing prices in disguise (supply exceeds demand), and various rumors about inventory pressure on high-end liquors have been heard constantly.
However, Kweichow Moutai has continued to grow.
There doesn't seem to be any problem.
But think about it again, in recent years, Kweichow Moutai first launched the direct-sale model of I Moutai, then launched the small bottle of Feitian, and also launched Moutai ice cream and Moutai coffee. It can be said that in order to achieve growth, they have racked their brains (increasing volume and cross-border).
At this sensitive time, Zhang Deqin’s proposal of “three obediences” inevitably gives rise to speculation.
There are two strategic choices before him:
First, just like the previous chairman, continue to increase sales and launch various joint products to maintain positive growth. Keep lifting this ever-growing dumbbell and don't be afraid of hardship or fatigue for a few more years.
The consequence is that if he fails to move forward for a year, Moutai's performance will plummet during his tenure.
The second is to shrink the business appropriately, retract the fist, and then strike out again.
The consequence is that the performance is temporarily affected.
However, this result can be attributed to the predecessor, and since the performance base has become lower, it will be beneficial for him to boost Kweichow Moutai's performance again during his term in the following few years.
According to the conventions in the capital market and human nature.
I'm more inclined to think he'll choose the former.
I will continue to pay attention to the development trend of the liquor industry. If the liquor industry experiences a collapse-style adjustment opportunity like around 2014, it may be possible to consider entering the liquor industry around the end of next year at a suitable price.
Today's market:
Today, the Shanghai Composite Index opened at 3103 points, and then began to fall step by step, directly breaking through 3100 points!
During the trading session, the chemical and shipbuilding industries were active, with China Shipbuilding rising by more than 5% and China Heavy Industry rising by more than 2%.
However, the non-ferrous metals sector, which had been performing so well a few days ago, plummeted! The non-ferrous metals ETF plummeted 2.6%!
Among them, Hunan Gold, Huaxi Nonferrous Metals, and Zhuye Group all hit their limit down in one go, while Northern Copper, Xingye Silver and Tin, Huayu Mining, and Zhangyuan Tungsten fell by more than 6%.
Copper industry leaders Luoyang Molybdenum Co., Ltd. and Zijin Mining Co., Ltd. both plummeted by more than 4%, China Aluminum Co., Ltd. opened high and closed low, falling by more than 1.66%, and stocks such as coal, oil, and gold also weakened.
In addition, the real estate sector also weakened collectively, with the real estate ETF plummeting 2.4%, Gemdale Group falling more than 5%, and Vanke falling more than 4%.
Old Chen looked at the fluctuations of these strong cyclical stocks and didn't want to say anything anymore.
The fluctuations in these stocks are simply unbearable for humans.
Either the price will rise so much in the next few days that you feel anxious and want to jump out; or the price will fall so much in a few days that you feel scared and want to sell it.
In a word: If you have a weak heart, don’t invest in strong cyclical stocks.
Q&A with stockholders:
"I'm standing on top of the bull market":
I would like to ask, the stock market does not react much to good news, but reacts strongly to bad news. What stage is the stock market in at this time?
I don’t know about that either.
Specifically, we need to analyze individual stocks in combination with the macro trends and the trends of the entire industry. Short-term rises and falls do not mean anything.
"Song Haonan who loves wild chrysanthemum tea": I would like to ask the author, is there a future for the panel cycle, such as BOE?
To be honest, I don’t understand this industry and it is not within my area of competence.
“All dharmas are empty, but cause and effect are not empty”:
This market is a real slog for those who favor the "full bottle" or "half bottle" of hot spots. Even blue chip stocks might be fake.
As of today, the Shanghai Composite Index has increased by less than 4% annually. For most retail investors, they have not made any money, and some are even continuing to lose money.
As for the performance of blue chip stocks, it is again recommended to give priority to stocks of state-owned enterprises and central enterprises. They have relatively low moral risks, no desire or impulse to commit fraud, formal management, and can enjoy good care from national policies. They are the truly protected industries at this stage.
In the future, as the performance of these stocks continues to improve, under the guidance of policies, dividends will definitely increase. At that time, they will become stocks in the high-dividend sector, and their valuations will rise to a higher level.
There will be two updates today. Fellow investors, please click on the reminder button and I will give you a free "Generate Power for Love" as an encouragement.
Your support is my motivation to update.
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