Chapter 191 This year is a great year for investment
Monday, February 5, 2024.
The Shanghai Composite Index fell for three consecutive days starting from January 31, directly falling from over 2,800 points to below 2,800 points, and then below 2,700 points, finally setting a new low of 2,635.09 points.
The Shenzhen Component Index also continued to hit a new low in five years of 7683.63 points, and the ChiNext Index closed at 1482.99 points, also continuing to hit a new low in five years.
Today, for the first time in several years, thousands of stocks hit the daily limit.
Among Li Feng's selected stocks, there was a sea of green, with one plummeting curve after another, which was shocking. Some stocks were sold for only a few million yuan before they hit the limit down.
In addition to oil, coal and the Chinese-character sector in the stock market, other sectors, especially small-cap stocks, have plummeted!
Some say it's due to the transfer of margin trading, some say it's due to malicious short selling, some say it's due to the liquidation of Xueqiu's structured investment products, and some say it's due to the collapse of a large number of margin trading accounts...
There is no consensus.
In the stock forum, there were cries of despair one after another, day after day, without stopping.
"It's over, it's over, the stock market has crashed, the stock market has collapsed, there's no saving the stock market!"
"2900 points, 2800 points, 2700 points, now it's 2635 points, breaking the epidemic bottom of 2646 points!"
"Let the stock market be destroyed! There's no hope!"
“This round of market crash is even more difficult to endure than in 2018 and 2016, and it makes people feel desperate!”
Yes, if we look at the long-term trend, this round of plunge, if we start from 2021, the Shanghai Composite Index has fallen from 3418 points to 2635 points, a drop of nearly 800 points, more than 20% off.
The Shenzhen Component Index has fallen from 16,293 points to 7,683 points, more than halving. The ChiNext Index has also fallen from 3,576 points in 2021 to 1,573 points today, more than halving.
Li Feng looked at the market, unmoved, picked up a cup of tea and took a sip.
Beside her, Zhao Xinyue glanced at the green patch on the computer screen and said, "What's going on? Will the price continue to fall? Why aren't you worried? Sigh... why does the stock market always fall..."
"Didn't you say we're at the end of the bear market and the beginning of the bull market? This end of the bear market is going to last way too long! If it keeps falling like this, how many people are going to die! Look at this forum, what a mess it is!"
Li Feng turned around and analyzed, "I'm not a god, and I don't know how low it will fall. I only know that at this point, I must hold a position in the market. The risk of being short now is very high!"
"As for why I'm so calm, this market may seem dangerous, but compared to the 2015 bear market, it's nothing. Back then, thousands of stocks hit their limit down for several consecutive days, but now it's only happening once. How far is that?"
"Not to mention, the GJD trading skills in the stock market are now many times more sophisticated than they were back then. Previously, they directly bought large-cap stocks and constituent stocks, which led to a lot of moral hazard. Now, they are precisely rescuing the market by only buying ETFs."
"Furthermore, there's no such massive over-the-counter leverage as there was back then. Back then, leverage was often five, ten, or even more than ten times, with a scale of trillions. That was truly a mountain of pressure."
"Also, the index was at 5178 points back then, and now it's at 2635 points. There's not much room for further decline."
After a pause, Li Feng continued:
"At this point, short sellers need to sell, and future bulls also want to buy at a lower price, so the fluctuations are very intense. By repeatedly setting new lows, breaking the psychological expectations and bottom line of investors, and breaking the psychological defenses of some investors, the purpose of turnover in the bottom area is achieved."
"We just need to watch the show quietly."
Tuesday, February 6, 2024.
The Shanghai Composite Index soared 3.23%, opening at 2680 points and rising all the way to finally close at 2789 points.
The Shenzhen Component Index soared 6.22%, or 495 points, and the ChiNext Index soared 6.71%, or 104 points.
Many stocks hit the daily limit yesterday and hit the daily limit today. It was like going to the ICU and then the KTV. There is no greater sorrow or joy in the world than this.
Those who bought yesterday are smiling from ear to ear, while those who sold yesterday are devastated.
Rumors abounded about this dramatic change.
The most convincing thing is that GJD has shifted its rescue target from large-cap stock ETFs to small-cap stock ETFs.
In the evening, good news really came.
There are several of them at once.
First, more than ten fund companies including E Fund, GF, Hua Xia, and Southern announced that they would suspend the addition of new transfer and financing, and the scale of existing transfer and financing would be gradually settled.
Second, Central Huijin Investment Co., Ltd. stated that it has recently expanded the scope, scale and intensity of ETF holdings.
In the evening, Li Feng's WeChat vibrated wildly.
Xiao Bo sent a message and asked, "Li Feng, there were two pieces of good news released today. What do you think?"
"Xiao Bo, do you still remember the favorable policies issued to rescue the market in 2015? Yesterday, a large number of small and medium-sized stocks hit the daily limit, and liquidity has been somewhat exhausted. These favorable policies only ensure that market liquidity will not be exhausted. The future market trend still depends on the macroeconomic trends and the performance of the corresponding sectors..."
"We must not just focus on the current fluctuations, but look to the long term, just like when we were in the 2015 stock market crash, we had to look ahead to the big market trends in 2016..."
"This is the only way to be proactive and take the initiative in investing, thereby increasing your investment returns."
"Then what do you think about the future market?" Xiao Bo continued to ask.
Li Feng looked at the K-line chart of the Shanghai Composite Index, thought for a moment, and said, "We must look at this round of plunge dialectically. The deeper the fall, the more thorough the adjustment, and the greater the room for upward movement."
"I used to think this would be a great year for investment, but after this round of plunge, especially after it fell below the epidemic bottom of 2646 points, this possibility is even greater!"
"This year, after we select the stocks in the sector, we should patiently hold on to them and wait for them to rise!"
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