Rebirth of the Capital Legend

"That makes sense," Li Jinshi said. "As long as this institutionally-led situation can be sustained over the long term, there's room for maneuver."

Chen Guiyun nodded and said, "Yes, we are not afraid of the market style switching, but we are afraid of insufficient sustainability. If the market main line switches back and forth, it will be difficult to do business. In the current situation, the sustainability of the major core main lines of the market is still sufficient. I feel that as long as we focus on the core leading stocks, the rate of return is still acceptable."

"Right now, the market is in the midst of a rebound cycle within its medium- to long-term trend," Liao Guoxiang said. "Since we're in a rebound cycle, the market's tolerance for error is naturally high. It's indeed relatively easy to focus on hot core stocks and conduct market manipulation. However... this situation may not last long. After all, the current macro liquidity situation still has some issues."

"Yes, indeed." Li Jinshi said, "But a temporary rebound is enough."

Following the discussion among several speculators of the main speculators of the "Fushan Group"...

At this moment, many of the main institutional groups are also discussing the rebound and reversal of market trends.

In the Jufeng Future Growth Fund Product Trading Room within Jufeng Asset Management, Yu Xiaolu, after a brief review, expressed different insights and thoughts on the market trends, especially the major market trends. She said, "Mr. Lu, it feels like the market's main trends and overall ecosystem are completely different from before. In the current market, it's clear that the trends of individual stocks led by institutional funds are generally stronger than those led by hot money. I feel this style shift is likely to become the main theme of future market development."

"Yeah, I think so too." Lu Xiangxiang nodded and said, "But from a future perspective, I think this change in market style is actually a good thing."

"Yes," Yu Xiaolu replied. "With institutional funds taking the lead, the market trends and individual stock trends will naturally shift from short-term thinking to medium- and long-term thinking. This will be conducive to the continuation of the core market trend and will also help shift the market investment trend from previous concept speculation to value investment. As long as the market forms a healthy investment trend, subsequent market trends will be much easier to perform."

"Right now, the core market focus is still on major infrastructure projects and the new energy industry chain, right?" Lu Xiangxiang said. "We've suffered a lot of losses in the new energy industry chain before. I originally thought it wouldn't see much improvement this year, at least until policies are implemented next year and new favorable policies emerge before a new trend emerges. I didn't expect... the new subsidy policy to be released so soon, and all the capital groups in the market are so unanimous in their views on this area, creating a unified rush to buy, making it impossible for us to adjust our positions and buy on a large scale right away."

"Yeah." Yu Xiaolu nodded and said, "Now...is Mr. Lu optimistic about the new energy industry chain again?"

Lu Xiangxiang said, "With the new policies in place, there's no reason not to be optimistic, right? The new energy industry chain, considering future trends and prospects, is actually quite promising. This is also the kind of industrial transformation our country must make in order to overtake other countries' automotive industries. Therefore, once the fundamental trends of the entire industry reverse, there's still significant room for growth in this area."

"But the buying point is not clear at the moment," Yu Xiaolu said. "Maybe we have to wait until short-term capital groups concentrate their speculation and there is a relatively large market divergence in the new energy industry chain before there will be a suitable buying point. That's my feeling anyway."

Lu Xiangxiang nodded and said, "That's about right. Right now, it's not the right time to continue chasing high prices."

"However, if we want to adjust our positions..." Yu Xiaolu said, "we'll have to reduce some of our positions in the major infrastructure projects. What do you think of this project, Mr. Lu?"

Lu Xiangxiang said, "Looking at the trend, the major infrastructure investment is definitely not over. However, I feel that the medium- and short-term industry expectations and performance explosion expectations should be almost fulfilled. In terms of medium- and short-term explosive power and expected space, the major infrastructure investment is clearly inferior to the new energy industry chain."

"Then should we reduce our positions and lock in profits?" Yu Xiaolu asked.

Lu Xiangxiang said: "I think I can reduce my position appropriately to take some profits and free up some positions."

"Okay." Yu Xiaolu nodded and said.

"In addition to the major infrastructure and new energy industry chains, the smartphone industry chain is also performing well in today's market." Lu Xiangxiang paused and said, "However, I personally believe that this industry chain's room for flexibility and trend sustainability may not be as strong as the new energy industry chain."

Yu Xiaolu said, "The smartphone industry chain's relatively strong performance today is mainly due to the impact of the subsequent Apple press conference. I feel that the smartphone industry chain has relatively fewer institutional investors than the major infrastructure and new energy industry chains. However, this line is indeed one of the more stable market trends. If we have sufficient positions, we can actually diversify some of our positions into this core line."

"Forget it." Lu Xiangxiang thought for a while and said, "Let's prioritize the main line of major infrastructure and the new energy industry chain. We can't bite off more than we can chew. If the positions are too dispersed, the performance will not be very good."

"Well, okay." Yu Xiaolu continued to nod.

And just as the two were discussing the subsequent position arrangements...

At the same time, inside Noah Capital, in the trading room of the "Blue Chip Hybrid Select" fund product, Li Shangfeng, the trading team leader of this fund product, also noticed the unusual performance of the smartphone industry chain today. He said, "Mr. Wang, it seems that the smartphone industry chain is gradually becoming the core of the market. There are more and more signs of increasing attention and institutional capital. Moreover, looking at the fundamentals, it seems that the smartphone market is gradually showing signs of a fundamental reversal, a bit like a reversal of difficulties."

"The smartphone supply chain is indeed performing very strongly today," said Wang Shujie, the fund manager of the 'Blue Chip Mixed Selection' fund. "However, we'll have to wait and see if its sustainability and underlying logic are recognized by market participants. If so, we can gradually adjust our portfolio in this direction and diversify our holdings." "It's not just the smartphone supply chain," said Li Shangfeng. "The new energy supply chain is also performing very strongly, with two consecutive days of limit-up moves. It seems that most of the core leading stocks in this sector will open significantly higher tomorrow. Given this trend, it feels like the fundamentals of the entire new energy supply chain have clearly reversed after the new policies were implemented. I'm thinking... shouldn't we adjust our portfolio towards the new energy supply chain? At least we should allocate a portion of our holdings there?"

"Let's wait until there's a divergence in the market on this line before we decide," Wang Shujie said. "Right now, it's hard to start with this line. The stocks I want to buy have all hit their daily limit, and the stocks I don't want to buy don't seem very valuable. Furthermore, due to Huayi Capital's large-scale buying spree, I have a feeling that many of the core leading stocks in the new energy industry chain will be pushed to an exaggerated level by many short-term investors in the market. Before that, there won't be many good buying opportunities for other investors."

If the market conditions continue to develop in this way, the new energy industry chain will lose its value in terms of adjusting positions and buying.

On the other hand, looking at the smartphone industry chain, I feel that the consistency expectations are not that strong.

Furthermore, most Apple industry chain stocks are not currently trading at high levels, and are therefore a good investment opportunity.”

"The sustainability and certainty of the smartphone industry chain is probably not as good as that of 'major infrastructure,' right?" Li Shangfeng said. "Relatively speaking, the trend of 'major infrastructure' should be stronger than that of the smartphone industry chain, and the certainty of market manipulation is also higher. Moreover, although many leading stocks in corresponding industries have risen slightly, their current valuations are still very cheap compared to expected future changes."

"The major infrastructure sector has always been the focus of speculation among various active capital groups in the market," said Wang Shujie. "We also have a considerable position in this sector. I think we can continue to hold positions in this sector, but there is no need to increase positions at high levels on a large scale in the hope of higher market potential and trends. The current major infrastructure sector is the main focus..."

Corresponding core concept leading stocks and industry leading stocks.

The trend is a bit like the liquor and white appliance sectors in the first half of the year. Due to sufficient certainty, there are few pullbacks in the trend, and it is relatively less cost-effective.

If there is no cost-effectiveness, other funds will naturally not go deeper easily."

"I think there's a clear difference from the liquor and white appliance sectors at the beginning of the year, right?" Li Shangfeng said. "First, the magnitude of the industry's reversal is even more dramatic than that of the liquor and white appliance sectors. Housing prices across the country right now are generally nearly double what they were a year ago, right?
Such a high room price increase and such a rapid expansion of the market industry scale.

It doesn't make sense that the core leading stocks and core concept stocks in the entire real estate industry chain only have room to rise by an average of 50 to 60 percent.

At least, compared to the increase in housing prices, the stock price has to double, right?

The general doubling of the price is still at least 34% away. I believe this 34% increase is relatively certain, and is a major reason why other major investors are still willing to invest in the core leading stocks of the relevant real estate industry chain at relatively high prices.

"Even if there's room for a 30-40 percent increase with a relatively high degree of certainty," Wang Shujie said, "this flexibility is still insufficient. Relatively speaking, the two main lines of the new energy industry chain and the smartphone industry chain have higher market recognition and higher expected room for growth."

Of course, I am not pessimistic about the major infrastructure projects.

I just think that whether it is the development of the offline real estate market or the development of online stock prices, there should be a reaction range with a relatively long time span.

Since the time span is likely to be very long.

Therefore, the market trend of related stocks cannot be achieved overnight.

The most likely scenario is that there will be a rise followed by a pullback, and then it will continue to rise, over and over again.

Furthermore, market trends tend to favor the new over the old. The market has been hyping up major infrastructure projects for quite some time, and people are feeling a bit fatigued. Even if the market remains flat without a correction, the potential for short-term growth is very limited. Meanwhile, the new energy industry chain and the smartphone industry chain, which were directly stimulated by Apple's new product launch, have only been hyped up for a short time, and many major investors haven't had time to invest yet. Therefore, their potential for short-term growth is definitely stronger than that of major infrastructure projects.

"Mr. Wang, there's some truth to what you said." Li Shangfeng nodded and said, "But the strength of the smartphone industry chain still can't compare to the new energy industry chain? The new energy industry chain has clearly become the hottest sector in the market, fueled by the previous news. However, at this stage, there really isn't a suitable buying point for this sector. If we want to enter this sector, we'll have to wait patiently."

Wang Shujie nodded and said, "Then just wait patiently for a while. There's a saying that goes, 'It's better to have less than too much.' We can't just rush into adding or adjusting positions. Otherwise... it's easy to be swayed by the market, leading to poor performance. Also... we need to keep a close eye on Huayi Capital. Although we don't usually follow their trading strategies, they still have a huge influence on the market. Even if we don't follow them, we must be aware of their general movements and their thinking behind holding positions."

"Hmm." Li Shangfeng nodded and said, "Mr. Wang, from what I see now, 'Huayi Capital' is mainly focusing on the main sectors of liquor, white goods, major infrastructure, and the new energy industry chain. And judging from its holdings, liquor and white goods seem to be its largest holdings. However, I don't quite understand... why are most major institutional investors in the market not very optimistic about the performance of liquor and white goods, and why are their expectations for the future of these two sectors not high?" (End of Chapter)