Chapter 296 The Most Basic Logic
Thursday, June 13, 2024.
Yesterday's news:
1. The U.S. CPI rose by 3.3% year-on-year in May and zero growth month-on-month. The core CPI rose by 3.4% year-on-year and 0.2% month-on-month.
American data is like a blind box. You don’t know what will come out of it. Whenever you think you understand what it means, you are wrong.
In a sense, the purpose of this data manipulation is to dispel investors' expectations, but from a conspiracy theory perspective, this behavior is most conducive to the transfer and proliferation of capital by big capitalists.
Now, against the backdrop of the EU cutting interest rates and the UK about to cut interest rates, the United States has no choice but to put down the big basin of water called the US dollar that is weighing on its head.
Because if you don't release it, settlements in many regions of the world will be dominated by the euro and the RMB, which is extremely detrimental to maintaining the hegemony of the US dollar.
I don’t know if the big capitalists in the United States are ready.
2. The Moscow Exchange will stop using US dollars and euros for transactions.
In the past few years, due to various reasons, Europe and the United States have started a cycle of interest rate hikes, and a large amount of capital has begun to flow back to the United States and Europe.
After holding on for a few years, although inflation did not drop much, the economy was beginning to collapse. There was no choice but for the EU to start cutting interest rates, but the world situation at this time had changed drastically.
As an important global economy, Russia has completed the de-Americanization of its assets. At the same time, assets in many other regions have also completed the de-Americanization and de-Europeanization to varying degrees in recent years.
It is conceivable that in this round of monetary easing in Europe and the United States, a large amount of capital flowing out of Europe and the United States can no longer find as many containers to accommodate these currencies as in previous years.
This will inevitably lead to excessive money chasing relatively fewer assets, such as bulk commodities such as grain, coal, oil, and nonferrous metals, or other domestic real estate, corporate equity, etc., which will lead to another round of accelerated price increases of such assets, which will in turn lead to a new round of large-scale inflation.
This is also the most basic logic behind my choice to invest in strong cyclical stocks.
3. The Houthi armed forces in Yemen once again attacked a cargo ship in the Red Sea, and Lebanon once again attacked Israel, as well as Syria.
In the land of four wars, the smoke of war rises again and cannot be stopped.
4. It is reported that at the end of June, some insurance companies will stop selling "3.0%" increasing whole life insurance and start selling 2.75% increasing whole life insurance on July 1.
Against the backdrop of a cycle of interest rate cuts and a downward credit cycle, and with my country's economic growth rate shifting to medium-to-low speed, insurance companies have already lowered their expected returns once, and are now starting to lower the returns on increasing term life insurance.
This is sad, cruel, but realistic.
In the past few years, insurance companies have reaped the benefits of the times, especially those led by Ping An of China. They have been racking their brains to pursue high-risk, high-return investment projects and over-financializing. They have not only acquired banks and securities, but also acquired a large number of equity in the real estate industry and entered into industries such as P2P.
While performance soared, it also laid hidden dangers for the future.
In this wave of de-financialization, China Ping An is the first to bear the brunt. First, its real estate equity investment collapsed, forcing it to cut its arms to survive. Now it is facing the reality of an interest rate cut cycle and a decline in expected returns.
If its investment strategy does not change from the previous excessive pursuit of financial liberalization and high-leverage industry investment to an investment model based on "value-like investment" characterized by high dividends, it will suffer in the future.
Moreover, we are now in the context of building a financial powerhouse, and the financial system, including securities, institutions, insurance, banks, etc., needs to be overhauled and reshuffled. Ping An of China is involved in everywhere and is laying mines everywhere.
Therefore, in this cycle, Ping An of China is a typical example worthy of attention.
It also determines that when the credit cycle comes again in the future, it is necessary to invest more prudently in the insurance industry.
5. The EU imposes taxes on my country's electric vehicles, ranging from a minimum of 17.4% to a maximum of 38.1%.
Something expected.
Surprisingly, the tax rate levied is not too high. In the future, my country's automobile industry should export to the EU by two means. One is to build factories and joint ventures within the EU, such as in Hungary, Morocco and other countries, and sell back to the EU. The other is to produce in my country and then export directly.
As for Germany's opposition to the levy, it is just a pretense. In the automotive field, the era of its fuel vehicles is about to pass. It is more likely that it is making such a statement in order to protect its other industries.
Today's market:
Today's Shanghai Composite Index continued yesterday's trend, fluctuating back and forth between 3,000 and 3,100 points.
On the market, kerosene and nonferrous metals, which were active yesterday, fell back, while the shipbuilding sector rose, with China Shipbuilding rising more than 3% and China Heavy Industry rising more than 1%.
As of today, the Shanghai Composite Index has risen by less than 2% this year, and its trading volume has shrunk significantly in recent days. The market seems to be waiting for some breakthrough news.
Boring and uninteresting.
Q&A with stockholders:
1. “Thanks for your comment”:
Hello brother, China's new energy vehicles are booming, and the performance of related accessories is also good, but the stock price has not improved much. Please help analyze this sector.
I have talked about this issue in my previous article.
During a period of high inflation, many commodities will increase in price.
Many companies, such as these parts companies, cannot reasonably and effectively pass on costs to downstream companies if they do not have a monopoly position and have not established high-end brands. As a result, their profits are eroded by the rising prices of upstream means of production, such as kerosene, copper, aluminum, iron and other bulk commodities, and they are asked by downstream OEMs to cut costs and prices, and also have to face competition from their peers.
This is a huge challenge to performance.
2. "Yang Guang of Wutong Palace":
Dear author, I have found that many small stocks have shown a rebound trend in the past two days, especially Concord Electronics, which has reached 7 boards and has created space. Will small and medium-sized stocks have a wave of profit-making effects next?
I don’t know about this. Whether it is investment or speculation, you have to find your counterparty.
If you want to invest, you must make a good forecast of the stock's future performance, buy when the performance is at a low point, or when it recovers and the stock price is still low, and sell when the performance is at its peak and the market is bustling.
If you want to speculate, you have to tell a good story, find a good concept, draw a good K-line, get the volume right, etc., and find, or deceive the fool around you, so that he will take your order with hope when the stock price is high.
3. "Lu Mi Xi_":
Why do stocks fall when dividends are due, and why do institutions not want the dividends?
No, there is no need to think too much. The impact of dividends on stock prices is not particularly large. The key lies in expectations.
If it is expected that you are the future Yangtze Power, which will pay continuous, stable and high dividends, investors will naturally raise the PE to more than 20 times and make up or tell countless stories. However, if it is expected that you are a stock that is about to be ST, then it will naturally lead to continuous limit downs.
Look at the long term, don't focus on the moment.
Before I knew it, a boring morning is about to pass. If you have time, fellow stock friends, please click on the reminder for an update and get a free copy to show your love.
Your support is my motivation to update.
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