Rebirth of the Capital Legend

"Indeed." Jia Yongxiang, the head of the trading team, responded with a smile, "The main trend has spread across the board, and the market has increased in volume at the same time. This shows that a lot of off-site funds have poured in, and it also shows that the trend of the main market trend of 'real estate' has become sustainable and has opened up the market's money-making effect.

As long as the main market trend can continue, the market's money-making effect can spread accordingly.

Then, more and more off-market funds will flow in, and the overall trend of the market will gradually improve.”

"It feels like overnight, we are back to the beginning of last year, when the bull market exploded, and the financial and infrastructure main lines were advancing in parallel." Song Shaopu paused, and then said, "But this time, the big finance did not move much. Although the market volume has increased a bit, this volume cannot support the parallel advancement of multiple main lines in the market, so... we still can't expect too much about how far the subsequent market will go!"

"It should be able to pass 3000 points and repair the gap caused by the circuit breaker at the beginning of the year, right?" Jia Yongxiang said, "In addition, the fundamentals of the real estate sector are indeed gradually improving. Even if the subsequent trend of the index cannot form a sustained rebound, the real estate sector should be able to move independently."

"That's not necessarily true," Song Shaopu said. "In our market, institutional funds have always been biased against the real estate sector, thinking that this sector is an industry sector with too high debt and leverage ratios, and its valuation level is discounted compared to other industries. If the valuation cannot be raised, it is difficult to say that it can develop an independent market in the case of a sluggish market by relying solely on the performance expectations driven by the fundamental changes."

"I don't think so," Jia Yongxiang said. "It is because the leverage ratio of real estate is too high that its performance is explosive enough during the industry's boom cycle. And there is no doubt that the current domestic real estate development industry has entered a boom cycle under the stimulation of a new round of skyrocketing housing prices.

Moreover, our domestic institutions are generally strict on the valuation of companies only during cyclical recessions.

And once we enter the boom cycle.

With the pursuit of many other funds in the market, especially retail investors and hot money, institutions will be relatively relaxed in valuation.

So, I think as the real estate boom cycle continues.

The entire domestic real estate sector, especially real estate developers with a national strategic layout and strong land resource reserves, will surely usher in a "Davis double-click" in valuation and performance. "

"I hope so." After hearing Jia Yongxiang's analysis, Song Shaopu nodded slightly and said hopefully, "If the market really moves as you said, it will definitely be a good thing for our fund."

"So, do we need to further reduce our holdings in other main market sectors and increase our holdings in core real estate stocks?" Jia Yongxiang asked. "After the continuous rise in the past few trading days, the core leading real estate stocks have basically rebounded by about 15%."

Song Shaopu thought for a moment and said, "Based on the market trend, the current active funds in the market are basically all concentrated in the core theme of 'big infrastructure'. Other market themes have no market at all. Not only are there no market, but because the funds are siphoned away by the 'big infrastructure' theme, they are not as good as the index performance.

Since the funds have made this choice, and market funds have formed consistent expectations in the main area of ​​"big infrastructure",

Then, there is no need for us to stick to the main sectors such as 'new energy industry chain', 'consumer electronics', 'petrochemicals', and 'big finance'.

Let’s adjust the portfolio further.

Adjust the main positions of our fund to the core theme of "big infrastructure".

but……"

Song Shaopu paused and continued, "Although we should focus on the main line, it is still necessary to diversify the specific stocks and branch line structures. There is no need to concentrate all positions on the core leading stocks of the real estate development sector. It is also possible to layout some other branch leading stocks of the real estate industry chain."

"Manager Song, you mean..." Jia Yongxiang said with some confusion.

Song Shaopu responded: "Which branch of the real estate industry chain do you think has the strongest future expectations? Which stock, or which stocks... will have the greatest potential for explosive performance and the biggest gap in expectations?"

Jia Yongxiang thought for a moment and said, "If we consider the future expectations, I think the current valuation is at the bottom. The steel, coal and cement sectors, which were suppressed by the serious overcapacity in the industry in the early stage and are currently benefiting from the 'supply-side reform' policy proposed by the state, have a larger gap in expectations relative to the future.

However, coal is deeply tied to the thermal power industry, and coal prices are strictly controlled by the National Development and Reform Commission and are more closely related to policies. Compared with the steel and cement sectors, which are more market-oriented, there is greater uncertainty.

So, if I had to choose...

Steel and cement, two upstream sectors closely related to the real estate industry, currently have the highest expectation gap and elasticity among the main lines of "big infrastructure".

Among them, the cement sector is better in terms of certainty.

After all, the steel sector has a serious overcapacity problem. Even with the stimulus of the real estate industry's recovery and the promotion of the "supply-side reform" policy, it is unlikely to see any effect in a short period of time if the overall fundamentals are to be completely improved. Moreover, the steel industry and major steel companies are basically the financial and employment pillars of local governments, and they basically have state-owned backgrounds.

These are all huge obstacles to clearing out excess capacity and shutting down production capacity.

Therefore, a fundamental reversal in the steel sector and an expected performance explosion are difficult to achieve in a short period of time.

On the other hand, in the cement sector, although many companies in the industry also have state-owned backgrounds, the clearance of excess production capacity has already begun. Moreover, cement has a transportation radius, control, and it is easier to clear out excess production capacity.

In summary, I believe that in the main line of "big infrastructure", the leading stocks in the corresponding core industries of the cement sector will have stronger fundamental transformation and performance explosiveness in the future, and will have stronger expectation gaps.

As for individual stocks...

Anhui Conch Cement, Beijing New Building Materials, Tianshan Cement... are all good.

Moreover, judging from the market trends in the past few days, these checks have obviously been recognized by various market funds, or many big funds in the industry who are foresighted.

I even suspect that Huayi Capital, which everyone is paying attention to, also holds positions in these stocks.”

"What about the construction sector?" Song Shaopu asked, "What about China Construction, China Railway Construction, China Communications Construction, China Metallurgical... these stocks? And what about the building materials and decoration sectors that are closely related to real estate, and their corresponding core stocks? Are these branches not flexible enough?"

Jia Yongxiang responded: "Although these branch sectors also have positive feedback with the cyclical trend of the real estate industry, it is obvious that the performance elasticity and expectation gap are not as good as those of steel and cement, which are upstream industries. Moreover, the performance of the corresponding core enterprises of these branch sectors lags behind the housing prices and the real estate development cycle. Since there is a lag... there is uncertainty. What we need now is more certainty.

In addition, if the main funds in the market concentrate on this main line for a long period of time in the future to hype and manipulate the market.

Then, we can operate smoothly according to the expected performance and before and after the performance performance. We can first complete the market of the core stocks of real estate development, steel, and cement, and then turn to the market of branch stocks such as construction, building materials, and interior decoration. It is also completely in time. "

In his opinion, the performance of these major core branches and related core leading stocks are not synchronized.

This means, then, that expectations are out of sync.

Naturally, the market trend and the stock price reaction will not occur synchronously.

In this case, the most correct approach is undoubtedly to layout and hype according to the order in which the performance of the industrial chain is realized.

"What you said does make sense." After listening to all of Jia Yongxiang's analysis, Song Shaopu nodded with a smile and continued, "Then let's proceed with the subsequent layout operations according to what you said. Continue to reduce the weight of other mainline stocks, and at the same time, increase the holdings of core real estate stocks and the core leading stocks of the 'cement' sector."

"Okay." Jia Yongxiang responded.

Then he issued corresponding trading instructions to all the traders in the trading room.

As the trading instructions are issued, the market trading time has entered the last 15 minutes of the closing period.

Only at the end of the trading session...

Various active funds in the market are still converging towards the main line of "big infrastructure", and the "cement" sector mentioned by Jia Yongxiang just now has undoubtedly become the focus of concentrated attack by many major funds in the market. The core stocks in the corresponding sectors have basically all seen daily gains of more than 6%.

"It seems that everyone's ideas... are relatively consistent!"

Noting that Conch Cement, a core weighted stock in the cement sector, had risen by more than 8% during the day and that the market was showing a trend of overall volume expansion, Song Shaopu smiled helplessly and said.

Jia Yongxiang responded: "In a bear market, the funds that remain in the market and continue to trade are all smart funds. They can basically sense the strongest market and fund following sentiment the moment the market starts to rise, as long as the expectations are the strongest.

However, from a long-term perspective, the current share price and valuation of Conch Cement are still at historical lows.

We don't have to care about the cost of building a position at these points.

As long as we take a long-term view and look back six months or a year later, a cost difference of a few percentage points will have little impact on performance. "

"Your thinking and pattern are quite good." Song Shaopu praised with a smile, "In that case, then buy it without any discrimination."

After getting Song Shaopu's approval, Jia Yongxiang nodded and told the traders not to worry about the cost issue and to build positions according to the trading plan just issued.

After hearing that they did not have to consider the cost of opening a position, traders quickly began to place buy orders.

And when a large amount of funds of the "Hua Rui Excellent Performance Growth No. 1" fund product flowed into the market through the keyboards operated by traders.

The 'cement' sector has attracted much attention from major market funds, as well as countless retail investors and hot money groups.

In the last ten minutes of the trading session.

A sustained upward trend of large volume and accelerated rise has been formed.

Finally, when 3 o'clock in the afternoon arrived and the two markets closed, the increase in the 'cement' sector, a 'big infrastructure' branch, even surpassed the increase in the 'real estate development' sector and closed at 5.89%. Among them, core stocks in the sector such as 'Anhui Conch Cement', 'Tianshan Cement', 'BeiXin Building Materials'... almost all closed at the daily limit.

"Haha, with today's trend, I can finally feel proud of myself."

Seeing the final closing results, both the index and individual stocks generally rose. Among the main hot money groups of Magic City and 'Magic City Super Short Gang', Xu Qiao couldn't help laughing.

"The main line of 'big infrastructure' has exploded." In the group, Lao Zhang couldn't help but sigh, "It's a rare big positive line, the market's money-making effect, this wave is really hit out, in one day, the market has released 800 billion in volume, the 'Hua Yi Capital' led by Brother Su is really amazing, in the absence of major market benefits, it really used its seat influence and huge capital advantages to create a round of main line market."

"The reason why the core theme of 'big infrastructure' has come out..." Old Wu took over the conversation and said, "Brother Su's 'Hua Yi Capital' has built up a large position in this main line. The influence of its seats is one aspect, but the most important thing is that the housing prices in major cities across the country have indeed recovered comprehensively. This is the fundamental reason that supports the A-share and Hong Kong stock markets, and many core real estate stocks are being hyped up by various funds. Brother Su just used his seat influence to light this fire."

"So, the biggest positive is the recovery of housing prices across the country, right?" Lao Zhang chuckled.

"The basic logic is definitely like this," Brother Chen responded, "but the most fundamental positive factor is the relaxation of the supervision of the property market in the national macroeconomic policy, and the stimulus of the 'supply-side structural reform' policy proposed by the top leaders. It is only with the stimulation of these two basic policies that the property market has rebounded and the current market trend has come about."

"Brother Chen..." After hearing Brother Chen's analysis, Xu Qiao thought for a moment and asked again, "Do you think this time, can we have a two-way linkage between the stock market and the property market?"

Brother Chen replied, "I think it's unlikely. The property market is going bullish, and we can basically see signs of that now, but the stock market... the tragic bull-bear transition last year and at the beginning of this year has caused tens of trillions of dollars of locked-in shares in the entire market, which may not be so easy to digest. So it's basically unlikely that the stock market will follow the property market in a bull market."

"I also think a comprehensive market is unlikely." Lao Zhang said, "Looking at the past market history, the bull-bear transition, the bear-bull transition, all need several years to digest. This round of market... My personal expectation is that it will only reach 3000 points at most. Once the Shanghai Composite Index can repair the gap at the beginning of the year when it was circuit-breakered, and return to 3000 points and touch the area of ​​heavily accumulated locked-in shares above, I think it is time to take profits and withdraw. In the current environment and market performance, I dare not have too high market expectations. Quit while you are ahead is the survival rule of a bear market." (End of this chapter)