Rebirth of the Capital Legend

However, in this increasingly obvious differentiation trend, the trend of the strong getting stronger in the core main line areas has not changed.

Stocks such as Oriental Yuhong, Beijiang Communications Construction, Ganfeng Lithium, Tianqi Lithium... etc.

As market trading hours continue to progress, the amount of active buying continues to increase, while the selling pressure is gradually decreasing.

Especially when the market trading hours move into after 11 am.

When most of the stocks in the market showed a trend of shrinking volume adjustment.

Among the three core areas of the market, such as the large-scale infrastructure main line, the new energy industry chain main line, and the smart phone industry chain main line, the corresponding core leading stocks are obviously stronger than before 11 o'clock. Among them, the two stocks, Dofluoro and Beijiang Communications Construction, have risen to a level of nearly 8 points, showing the momentum of hitting the daily limit.

"Awesome! It feels like amidst the market's divergence, buying capital is converging further towards the three core sectors of major infrastructure, the new energy industry chain, and the smartphone industry chain. Furthermore, the corresponding core leading stocks are clearly trending stronger."

Faced with the situation where the on-site capital groups are further concentrating on the core main line, the discussion heat of countless retail investors gathered on major stock investment exchange platforms across the entire network has not only not subsided, but has become more and more heated and intense.

"I told you, as long as you buy the core leaders, it's hard to lose money."

"Beijiang Communications Construction's stock is still strong and is about to hit the daily limit again."

"I feel like Beijiang Communications Construction's stock is likely to see a significant turnover and hit the daily limit today. The market trend is clearly too strong. Every intraday sell-off will turn out to be a good buying opportunity later on."

"The infrastructure investment line is indeed very tenacious. Many times I thought it was going to undergo a major adjustment, but it continued to rise."

"Otherwise, how can it be said to be the core theme of the market?"

"It seems that the momentum of the major infrastructure sector after 10:40 today wasn't driven by active market capitalization. It was more likely driven by Hong Kong stocks."

"Yeah, I feel the same way. Today, the Hong Kong stock market's major infrastructure investment is clearly performing even stronger than the domestic market."

"That's the trend of domestic real estate stocks, not the overall trend of major infrastructure projects."

"What's the difference?"

"The difference is that in the Hong Kong stock market, it's clear that stocks related to construction decoration and building materials are significantly weaker than those in the real estate sector. However, in the domestic market, this phenomenon seems to be reversed. The performance of some industry leaders and core concept stocks in the construction decoration and building materials sectors is significantly stronger than that of individual real estate stocks."

"That's because mainland real estate stocks are quite undervalued in the Hong Kong stock market, at least much lower than those in the domestic market. Since there's undervaluation, when industry fundamentals undergo a major reversal, naturally the gap in expectations and the potential for growth will be significantly larger. Isn't that abnormal?"

"Yes, I think so too. Look at the leading real estate stocks in the Hong Kong stock market: Hengda Real Estate, Rongchuang Real Estate, Country Garden, China Resources Land... Their valuations are generally more than half lower than those of industry leaders in the domestic market, such as Poly Real Estate, Gemdale Group, and China Merchants Shekou... Logically speaking, these real estate stocks in the Hong Kong stock market would have to double in value to catch up with the valuations of their domestic counterparts."

"That's not a good comparison, is it? Then why is there always a certain price gap and valuation difference between the Hong Kong and A-shares of Kewan Real Estate, which is listed on both exchanges? I think the significant difference in valuation between the two markets is still determined by liquidity. Hong Kong stocks have lower liquidity than A-shares, so their valuation is naturally lower. Generally speaking, any trading market in the world, when liquidity is abundant, has a certain liquidity premium."

"Really? But is there sufficient liquidity in A-shares right now?"

"Why not? Compared to the Hong Kong stock market, there's relatively ample liquidity."

"I think this is correct. When we look at liquidity, we shouldn't just focus on large-cap stocks with high weight, but rather on small-cap stocks. In the Hong Kong stock market, the liquidity of small-cap stocks is indeed much worse than that of A-shares. In fact, many small-cap stocks in the Hong Kong stock market have no liquidity at all. The daily trading volume ranges from hundreds of thousands to millions. This phenomenon is basically the norm."

"Isn't that because there are so many stocks in the Hong Kong stock market? There's simply not enough liquidity to go around."

"Isn't it the same with our A-shares? The current number of stocks is almost 3000."

"I don't think it's a liquidity issue. If it's a liquidity issue, then why is there no price difference between the Hong Kong and A-share prices of Conch Cement? In fact, sometimes the Hong Kong stock price seems to be slightly more expensive. How do you explain this?"

"Is Conch Cement a special case? In the entire Hong Kong and A-share markets, how many stocks have no price difference?"

"It's indeed a special case, but I think this special case can also explain something."

"I think the core capital groups that dominate the two markets are different, so the valuation levels and valuation methods will naturally be different. Relatively speaking, in the Hong Kong stock market, there are fewer retail investors and more institutional investors, and many of them are overseas investors, especially overseas institutional investors. In contrast, in the A-share market, it is completely dominated by retail investors, while institutional investors are relatively dominant. Retail investors naturally pay attention to emotional speculation and do not have such a clear understanding of fundamentals, so valuations are naturally inaccurate. In an institutionally dominated market, valuations will definitely be relatively cheap because there is limited room for speculation and most of the chips are held by institutions, so not many people can manipulate them."

“Even though the main capital groups dominating the market are different, the actual logic is also different, right?”

"I also think that the dominant capital groups in the two markets are different, but there is no denying the large-scale infrastructure line. Today's mainland market is driven by the Hong Kong stock market."

“It’s time to start a new wave.”

"Judging from the performance of a number of domestic real estate stocks in the Hong Kong stock market, will these domestic real estate stocks continue to rise?"

"It's highly likely that the price will continue to rise. Otherwise...why are institutions still flocking to this sector?"

"Fortunately, the new energy industry chain has attracted a lot of active capital groups. Otherwise... the large-scale infrastructure sector would most likely be even stronger."

"The new energy industry chain isn't siphoning off the active capital flows from the major infrastructure projects, right?"

"I also think it's clear that the new energy industry chain is siphoning off active capital and buying capital from emerging industry chains related to sectors like film and television media, internet software, and internet applications. It has little to do with major infrastructure projects."

"That's not the case. The major infrastructure project has been affected to some extent."

"For example?"

"For example, if Huaxin Cement hadn't been siphoned off some of its buying capital by the new energy industry chain, I think this stock would have been able to recover today."

"This stock can break out? What makes you think it can?" "Yeah, what makes you think it can? This stock has already been overtaken by Beijiang Jiaojian and has completely lost its leading position in the market. Why would anyone still have illusions about this stock? If it's because it was affected by the new energy industry chain and didn't follow the expected trend, then Changying Precision is actually more wronged. If it weren't for the new energy industry chain siphoning too much active funds from the smartphone industry chain, Changying Precision would definitely have had a high probability of hitting the daily limit today. Now... huge fluctuations, whether it can break out is really unknown."

"Well, it's true that it's a pity to hold Changying Precision's stock."

"I feel like this stock isn't dead yet? Changying Precision clearly still has a chance!"

"I agree. This stock might even hit the upper limit this afternoon. And judging from the trading time over the past hour this morning, the turnover and the sharp market fluctuations are still very healthy."

"As long as Lixun Precision's stock doesn't collapse, I feel there's a good chance Changying Precision's stock will have a chance, right?"

"The trends of these two stocks are complementary to each other."

"Yes, they complement each other."

"Lixun Precision's stock is definitely not going to collapse today. Judging from the market trends this morning, institutional investors are actively increasing their holdings of this stock. Furthermore, judging by the current large order volume, the number of intraday large orders for this stock continues to show a large net buying trend."

"Lixun Precision's stock has become the core leader of the entire smartphone industry chain."

"Yes, this stock's performance is really strong. It can be bought as a core leading stock."

"However, expectations for Apple's new product launch have almost fully materialized by now, right? Based on past historical trends, the closer the launch gets, the harder it is to maintain expectations. I feel that the smartphone industry chain, after this sustained rebound, should be nearing its peak by now."

"There's still a long way to go, right? We're just getting started. Looking at the K-line patterns of the major leading stocks in the smartphone industry chain, aren't they just breaking out of the bottom?"

"What's the point of the K-line pattern? Previously, the K-line patterns of the film and television media, internet software, and internet applications sectors were also very good, but they didn't work out, did they?"

"Well, that's true, but it's still okay as a reference."

"How can they be the same? What are the expectations for the film and television media, internet software, and internet applications sectors? What are the expectations for the current smartphone industry chain? The two are completely different, and it's difficult to compare them. Anyway, I think the trend of the smartphone industry chain is very stable, and it's worth continuing to be bullish and going long."

"There's nothing wrong with being bullish or going long, but it's limited to core leading stocks, right?"

"Of course. If you don't buy core leading stocks and buy fringe concept stocks, isn't that a pure loss?"

"When market liquidity is certain, core leading stocks will definitely be prioritized."

"Speaking of which, is this Huawen Online stock completely ruined? I hesitated in the morning and didn't have time to sell it. Now my profits have been recouped. Should I sell it?"

"Of course I'll sell it. If I don't sell this stock now, when will I sell it?"

"The sentiment and market trends for Baofeng Technology were so positive, but in the end, they couldn't show any signs of improvement. This means that Huawen Online is doomed. If this stock really wanted to be strong, it wouldn't have opened low or flat in the morning call auction. It would have had to open strongly and high with explosive volume. What a pity... Its call auction trend was moving in the worst-case scenario. If that's the case, what's the hesitation? The core leading stocks in the market basically fluctuate every day. There are nearly 3000 stocks in the two markets. Wouldn't it be better to buy other leading stocks? Why insist on sticking with Huawen Online, a once-famous leading stock?"

"Well, that makes sense. Looks like we need to cut our profits decisively!"

"In today's market, if you have a certain profit, you must decisively cut your losses. Otherwise, you will eventually fall back down. Long-term thinking is useless!"

"It's not that long-term thinking is bad, but it's bad to be a long-term investor in certain short-term stocks."

"It's like this."

"We should just do what the market tells us to do. The current market feedback is that core leading stocks are stronger than ordinary stocks in the main sectors, and the risks are lower."

"In fact, the idea of ​​grouping together the core weight leaders is also a good idea."

"The liquor and white goods sectors?"

"I'd like to, but one lot of Qianzhou Moutai is now over 30,000 yuan, and my total capital is less than 30,000 yuan. How can I follow this?"

"Is there no other leading liquor and white goods stocks? Do you have to buy Qianzhou Moutai?"

“Other stocks feel almost the same!”

"The trends are pretty much the same. The liquor sector tends to rise and fall together. Moreover, if we expect a reversal in the liquor sector, then buying Qianzhou Moutai isn't very cost-effective. Qianzhou Moutai's market capitalization is simply too large, and expecting it to rise too much... is unrealistic."

"Wuliangye and Luzhou Laojiao are good, and I feel the increase will not be lower than that of Qianzhou Moutai."

"These two stocks are certainly good, but the market cap is so large that they don't rise much!"

"Of course, you can't expect the core leading stocks with high weight to rise as much as small and medium-sized stocks or micro-cap stocks. Just buy them and hold them slowly. I think at this position, you can't lose money."

"That makes sense. In fact, I like to buy this type of stock because it's safe."

"Safety is only relative. I think stocks that have a concerted effort from capital are actually safe. The best defense is offense."

As countless retail investor groups discuss…

As trading continued, the market trend clearly showed that, driven by leading stocks in key sectors, investor sentiment and investor confidence were gradually recovering as midday approached. Simultaneously, the indices were also slowly rising, either narrowing their losses or even rebounding to recover the ground lost in the morning. (End of Chapter)