Rebirth of the Capital Legend

Of course, it is not just the vast number of retail investors gathered on major stock investment exchange platforms across the Internet who think so. Li Jinshi, one of the main speculators of the "Fushan Group", who has carefully observed the market trends in the morning and the emotional expressions of investors across the Internet at the moment, also thinks so.

"The film and television media, Internet software, and Internet application sectors all achieved a reverse trend today, and 'Huawen Online' exceeded expectations and hit a four-day high. At the same time, the real estate, building decoration, building materials, nonferrous metals, steel, coal and other related sectors in the 'big infrastructure' main line, as well as the liquor, white appliances, medicine, consumption, electricity, finance and other sectors in the weighted main line, all fell into adjustment. At the same time, the 'Oriental Yuhong' check also began to rise weakly, and the profit-taking selling pressure became heavier..." Li Jinshi said, "All these signs... seem to indicate that the capital group in the market is gradually shifting its positions from the previously strong 'big infrastructure' main line and the weighted main line to the core sectors of the 'emerging industrial chain' main line. Moreover, judging from this situation and emotional feedback, it seems that the overall investment direction of the market and the leading main line direction are indeed gradually changing. At least today's leading and reversed film and television media, Internet software, and Internet applications sectors can continue to be the focus of attention."

"The market sentiment is indeed concentrated in the film and television media, Internet software, Internet applications and the entire small and medium-sized and micro-cap 'emerging industrial chain' main line field." Chen Guiyun took over and said, "However, whether the investment trend will shift to the small and medium-sized and micro-cap fields, I feel that we have to continue to observe and wait until the market trend changes clearly after the sentiment subsides before we can draw a conclusion?
Now, we can only say that under the guidance of short-term emotions, the speculation trend is concentrated in the small and medium-sized and micro-cap sectors.

What we really need is a major shift in trend, or a change in overall style.

I am afraid it depends on the specific intentions of some major institutional funds in the market to adjust their positions, as well as their positions in the main field of 'emerging industrial chains'. "

"Old Chen is right." Liao Guoxiang nodded and responded, "The current explosion of small and medium-sized stocks is just a concentrated speculation of funds under the guidance of emotions. We have to wait and see whether the real trend will form. However, if the sentiment is good, the market has a large room for error. Although there is still some uncertainty about the continuous trend of the main line of the entire 'emerging industrial chain', I think... we can also try to build a position for trial and error.

If the overall market trend changes in the future, the expected profit margin will not be small.

If it is just emotional speculation, the main capital groups in the market still do not have a high degree of recognition of this main line, and no new trend of large capital forming a group has been formed.

Under such strong emotional control, it is highly unlikely that you will lose money. "

"Well, logically speaking, it is true." Chen Guiyun said, "But today, in terms of the 'emerging industrial chain' line, especially in the three sectors of film and television media, Internet software, and Internet applications, I am afraid there is no buying opportunity. The sentiment of these three sub-sectors has been fully fermented, and there is a high probability that there will be no expectations within the day."

"Looking at the market sentiment at noon and the comments of many retail investors on major stock investment exchange platforms across the Internet..." Li Jinshi took over and said, "Although the sentiment of these three sub-sectors has been fully fermented, there is still room for improvement. In fact, we can create derivative concept sectors of these three sub-sectors, such as 'cyber security', 'short video production', 'online education', 'mobile games' and other concept directions. I feel that the capital groups that will hype these three sub-sectors in the future are likely to dig deeper into the logic of this direction."

"It feels like there are no new concepts." Chen Guiyun said, "Compared with the bull market last year, some of the concept stories in the film and television media, Internet software, and Internet application sectors do not seem to have changed much. I think the market likes to hear new stories at any time.

Just like real estate, building decoration, building materials, nonferrous metals, steel, coal... these are traditional sunset industries that were previously looked down upon by various financial groups.

Now, with the country's promotion of "supply-side structural reform" and "new infrastructure", as well as the so-called strategic layout of "Maritime Silk Road in the New Era", and the boost from the current booming real estate market across the country, a new underlying logic has naturally been formed, and there are sufficiently strong expectations for the future.

There are also previous main lines such as 'smartphone industry chain', '5G communication', and 'new energy industry chain'.

It is also the support of the industry's tailwinds and the expectation of a broad future that attract the main institutional funds in the market to gather together.

Logically speaking, from the perspective of expectations...

It is obvious that the three main sectors that were concentratedly speculated in the last bull market, namely film and television media, Internet software, and Internet applications, have no new stories to tell.

Without new stories or new concepts to support it, it will be difficult to open up room for imagination for the stock price rebound.

Therefore, I think the current logic of these three lines is still an oversold rebound, and it is still a simple emotional game, and it is difficult to form a trend change.

If we really talk about trend changes, it is the traditional industry sectors such as real estate, building decoration, building materials, nonferrous metals, steel, and coal, whose trend reversal is more certain and more likely to be recognized by a number of major institutional capital groups in the market.

Moreover, let’s analyze it from the perspective of the market trend.

Today, the major sectors of film and television media, Internet software, and Internet applications have been able to explode across the board, forming the current hot hype situation.

This was also due to the unexpected performance of 'Chinese Online' in the early trading session.

The underlying logic behind the explosion of the "Huawen Online" check is actually the "oversold rebound" logic point. As for "online education", there is nothing new about it. This concept was also concentrated and deeply speculated by funds in the last bull market. At that time, the "Quantong Education" check increased by more than 20 times with the help of this east wind.

But the facts have proved that although the future of "online education" has great potential, it is logically flawed.

In other words, this expected logic will not work.

Ultimately it is expected that no substantial changes in performance will be achieved.

So the check for "Quantong Education" quickly fell back after increasing more than 20 times.

Since the underlying logic of the concept of "online education" is problematic and expectations cannot be deduced to performance changes, it is difficult to support the "Chinese Online" check to reach too high a height. There is a high probability that the market sentiment will recede in the short term, and this check will be almost over.

Essentially, the logic behind the check from 'Huawen Online' and the check from 'Oriental Yuhong' are completely different.

The check of 'Oriental Yuhong' is a change in the underlying logic, which can ultimately be deduced to a change in performance. In other words, in addition to the concept speculation, everyone generally expects that with the continued explosion of the real estate market, the business scale of this check will be cashed accordingly and the performance will be significantly improved.

In other words, the performance transformation and the logic change are intended to correspond to each other.

If this check can double its performance due to the boom in the real estate market, or if the future performance growth can continue to grow, then its current valuation will still be underestimated.

I think this is the fundamental reason why the main institutions in the market and "Fuxing Road" have been increasing their holdings of this stock.

This is also one of the fundamental reasons why the stock price remains so strong even after it has almost doubled.

The different underlying logic and performance orientation of the two will naturally lead to different trends and different height spaces for the two core leaders.”

"It seems that you, Lao Chen, are more optimistic about the 'big infrastructure' line." Li Jinshi said with a smile, "Admittedly, the underlying logic of the 'big infrastructure' line is better and clearer at the moment, but this line has already seen a large short-term increase, and many leading stocks in core industries have generally increased by 30% to 50%. This general increase, no matter how good the underlying logic is, has basically fulfilled this year's performance growth expectations, right?
What's more, in the market environment of stock game, under the influence of emotions that have lasted for so long, and under the inducement of the continuous rise in money-making effect.

This main line is promising, and almost all the funds that should enter the market to go long have already come in. In other words...the entire "big infrastructure" main line field is not saying that there is a problem with the underlying logic, but that there are too many people sitting in the sedan chair on the capital side, and not many potential people to carry it.

Of course, I am not saying that I am pessimistic about the "big infrastructure" line.

The entire offline real estate market is still hot and the rise in housing prices has not stopped.

The main logic and underlying logic of the entire "big infrastructure" are still very smooth.

However, after two consecutive months of continuous growth, the number of profit-taking funds deposited in the field of "big infrastructure" has indeed become quite large.

In a market environment of stock game, such a huge profit margin.

Without adjustments and cleanup, it will be difficult to form a new force for sustained upward movement, and it will also be difficult for a larger group of active buying funds to lift the price.

From a funding perspective, the "big infrastructure" line currently does not have the momentum for sustained growth.

So when this line stops to rest, where will these active capital groups in the market, or the speculative funds flowing out of the "big infrastructure" main line, go?

In the next part, you may take profit and exit.

But the vast majority will continue to trade on the market.

As long as you continue to trade, you will face other choices in the main speculation direction.

Among the main lines of the current market, the 'big infrastructure' main line is needless to say. The weight main line is actually facing more severe pressure from profit-taking.

After all, there are sectors such as liquor, white goods, medicine, electricity, and finance.

Basically, after the previous three rounds of stock market crashes, a large number of capital groups began to form a group.

Among them, the main sector like "finance" has almost filled the deep holes of three rounds of stock market crashes through the behavior of major institutional funds banding together in the past six months, and returned to the high point of last year's bull market.

In other words, the major sectors and core leading stocks in these weighted main areas.

Although the performance is good and sustainable, the corresponding expectations and valuations have been fully reflected in the trend of its stock price.

What's more, the market cap of these individual stocks is already large.

When the selling pressure from profit-taking is heavy and the valuation is already relatively expensive, it is difficult for other funds to continue to enter the market to support the stock and continue to group together to chase high prices and speculate.

When the main line of "big infrastructure" and the main line of market weight are unable to support the active capital groups in the market.

Where will these funds go? I think... they will most likely focus on the "high-low switching" within the market, and concentrate on the oversold mainline sectors that have not yet ushered in the industry cycle reversal and outbreak nodes.

However, the underlying logic of these sectors is indeed not very smooth and their performance is generally poor.

However, its chip structure and capital situation are relatively good.

It is because of their poor fundamentals that people generally have low expectations for individual stocks in these industry sectors. Only with low expectations can they create room for exceeding expectations. Only by creating room for exceeding expectations can they generate exceeding expectations profit effects and attract continued involvement of on-site capital groups, as well as continued follow-up from other retail capital groups.

Just like everyone thought that the check of 'Huawen Online' would most likely stop at the third board, everyone believed that this check could not have greater room for growth than the core leading stock 'Oriental Yuhong'.

And this check quickly hit a new high, forming a strong closing trend in the early trading session.

It is precisely because everyone’s expectations for this check are not high.

Therefore, when the 'Huawen Online' stock performs beyond expectations and opens up the space for consecutive gains, it will have such a strong driving effect on the market's film and television media, Internet software, Internet application sectors, and related concept sectors, and will also attract such a large number of speculative funds flowing into the direction of small and medium-sized stocks and micro-cap stocks.

In fact, changes in market conditions often occur rapidly.

It is relatively difficult for us to grasp long-term continuous changes.

Therefore, instead of analyzing the underlying logic and its impact on performance and valuation, it is better to follow the information on the capital side and speculate in line with the changes in market capital flows. This is easier and I think the certainty is relatively higher. "

"I think both of your analyses are correct." In the midst of the difference in opinions, Liao Guoxiang pondered for a while and responded, "It's just that one is the thinking logic of the medium and long term, and the other is the thinking logic of the short-term market trading. From the trading level, following the active capital flow of the market and seeking emotional premium profits from the capital torrent is indeed easier than using the underlying logic to earn profits from valuation and performance improvements. The certainty is also higher. However, from an investment perspective, the profit space gained by deducing from the underlying logic and earning profits from valuation increases caused by performance improvements and future expectations is much richer."

Li Jinshi heard what Liao Guoxiang said and asked with a smile: "Then... Brother Liao, under the current market development node, what do you think is better?" (End of this chapter)