Rebirth of the Capital Legend

“I agree with what Lao Liao said.” Li Jinshi nodded and said, “The fact that Beijiang Jiaojian stock was able to stabilize the market today, quickly recover its losses during the rapid sell-off, and even continue to reach new highs shows that its potential capital support is strong enough to withstand the selling pressure from profit-taking in the current market.”

This, coupled with the 'major infrastructure' theme, already indicates a relatively clear expectation and trend.

Once the profit-taking pressure within the stock of Beijiang Jiaojian is released in a concentrated wave, the shareholding structure can be stabilized again.

So, given the certainty of the 'major infrastructure' sector and the positive sentiment in the Hong Kong stock market, this is a good starting point.

It is highly likely that these active short-term funds in the market will continue to speculate on Beijiang Jiaojian stock. Moreover, I believe that if a relatively stable accumulation platform can be formed at this position, then when the trading volume of this stock shrinks again, the upward potential is likely to double.

After all, compared to the leading stock in the main theme of Oriental Yuhong, there is not much room for growth.

In fact, the upward potential for Beijiang Jiaojian stock is quite broad. Furthermore, the market's current enthusiasm for the infrastructure sector is unlikely to subside in the short term, given the continued boom in the real estate market and rising housing prices across the country.

Moreover, besides these factors...

The stocks following Beijiang Jiaojian are currently in a complete tier, and there is no widespread trend of concentrated losses. In fact, stocks like Taihe Shares, Shougang Group, and Tianshan Cement all surged or closed at their daily limit today.

Since the subsequent wave of follow-up stocks is complete and can continue to rise sharply.

As the leading stock in the hottest core concept of this line, and also the stock with the highest market recognition, the most consecutive limit-up days, and the highest profit-making effect in this wave of major infrastructure-themed speculation, there is no reason for it to be abandoned by various speculative funds before these follower stocks.

Actually, the rapid drop in the price of the Beijiang Jiaojian project today...

This is a good time to buy.

Unfortunately, the plunge was too short-lived, and before anyone could react, a large influx of bargain hunters quickly pushed the stock price back up.

Otherwise, in that position.

I'll need to buy at least ten million worth of shares to increase my position in this stock.

"Haha, Lao Li, you've got quite the ambition. Beijiang Jiaojian isn't a big company. If you put in 10 million, other speculative funds and retail investors probably won't dare to enter and prop up your stock." Chen Guiyun laughed and said, "I also agree with what Lao Liao said. Judging from the current trend, as long as the speculative sentiment and bullish sentiment of major funds in the infrastructure sector don't collapse, as long as the core leader that has opened up higher speculative space, namely Oriental Yuhong, doesn't experience a concentrated sell-off by major funds, and doesn't result in extreme losses, and as long as 'Huayi Capital,' which is still holding shares in the infrastructure sector, doesn't engage in large-scale selling on the stock exchange's daily trading list."

As long as the off-market real estate market remains hot and housing prices continue to rise.

Therefore, the upward trend of Beijiang Jiaojian stock should not be over yet.

However, the initial profit margin is considered low-risk arbitrage, while subsequent gains may involve some uncertainties and risks.

However, when comparing all the stocks in the market as a whole.

The profit/loss ratio for betting on Beijiang Jiaojian stock is still quite high, meaning it remains a worthwhile investment opportunity.

Of course, this is in comparison to the stock of Beijiang Jiaojian.

Currently, within the major infrastructure sector, I still favor Taihe Shares, which is currently at a lower price and shows stronger positive news and potential growth.

“Taihe Shares is currently quite popular in the market,” Li Jinshi said. “And it seems that there are quite a few funds that are optimistic about it. There are so many people who are optimistic about it at the first and second limit-up levels, and the popularity is so high. I feel that it will be difficult for this stock to replicate the trend of Beijiang Jiaojian. After all, the more consistent the expectations at the low level, the more difficult it is to form a concentrated and intense exchange of shares. Without a concentrated and intense exchange of shares, it will be difficult to clean up the various hidden shares and the historical trapped shares in the market on a large scale.”

These chips, at low prices, are not being cleared out through continuous and drastic trading.

Once a stock reaches the third or fourth consecutive daily limit up, it will be difficult for subsequent funds to withstand concentrated profit-taking and historical trapped positions.

In other words, if a divergence occurs later, there will be a large increase in trading volume.

Without significant turnover of shares at low prices, it's difficult for the price to continue rising. In most cases, a single divergence will bring the market to an end.

In fact, the reason why Beijiang Jiaojian stock was able to stand out during the continuous hype surrounding major infrastructure projects is that...

It was also thanks to this stock that, in the first two months, when the major infrastructure theme had just started, there were several waves of sharp rises and falls with intense turnover, which cleared out all the hidden positions and historical trapped positions in the market, and only then did it emerge with the combined efforts of various short-term funds.

If it weren't for those initial waves of sharp rises and falls with intense trading activity...

I estimate that the stock of Beijiang Jiaojian will not reach its current level.

Moreover, I remember that during this wave of speculation in the stock of Beijiang Jiaojian, there was quite a lot of divergence in the market during the first, second, and even third limit-up phases of the stock's performance. In other words, there was not a very consistent expectation for this stock at its low price.

On the contrary, it was after five consecutive limit-up days that the market reached its highest short-term consecutive limit-up streak.

It has only recently become a leading concept in the market, creating a relatively consistent expectation of speculation.

I've always felt that overly consistent expectations aren't a good thing for a concept-driven stock. Didn't someone say before that divergence is a better buying opportunity? Excessive consistency often means there's no potential for unexpected profits.

I think it's unlikely that Taihe Shares will reach the current level of Beijiang Jiaojian. If funds continue to speculate on the major infrastructure theme and cannot avoid Taihe Shares... then this stock will inevitably experience a period of violent fluctuations and extreme turnover.

In other words, if this stock can eventually emerge as a leading stock in the core concept of major infrastructure projects, it will be a positive development.

"Therefore, there should be even better entry points for this stock in the future."

"I think there's nothing wrong with Lao Li's analysis," Liao Guoxiang said. "Taihe Shares does need to be observed for a while longer; this isn't a very good time to buy."

"What about Pingmei Energy stock?" Chen Guiyun asked. "What's everyone's opinion on this stock?"

Liao Guoxiang thought for a moment and said, "The reason why Pingmei Energy's stock hit the daily limit today should be due to the strength of the coal sector. However, the sustainability of the coal, non-ferrous metals and steel sectors still needs to be observed. So it is hard to say whether this stock can continue to rise. It just seems that its valuation is very low and the expectations are also acceptable."

"What about the Apple supply chain?" Chen Guiyun asked again. "Although the overall trend of the Apple supply chain is recovering and rising today, there is still a lot of divergence in the performance of the core stocks within the sector. Lixun Precision and Changying Precision are relatively strong, while Goertek, OFILM, Lens Technology, Xinwei Communication... these stocks seem to be rebounding weakly. The main funds are not increasing their positions continuously, and the willingness of the funds to take over is not very strong."

Liao Guoxiang said, "All the expectations for Apple's recent new product launch have already been reflected in the market. Without new expectations, it is indeed difficult for the entire Apple supply chain to replicate the previous trend. As for new expectations... they will most likely depend on whether there are any unexpected new products at Apple's new product launch, or on the consumer feedback after the launch."

"Yes, that's true." Chen Guiyun nodded and said, "Generally speaking, it seems necessary to avoid the Apple supply chain in the near future. However, it's still necessary to maintain positions in the core stocks that are showing strong performance, as long as the trend remains good. Lao Liao... you should still have your position in Lixun Precision, right?"

Liao Guoxiang said, "Of course. As for Lixun Precision stock, there are no major problems with its current trend, and its internal shareholding structure is still well locked. Its market performance continues to outperform the broader market. Under these circumstances, there is no reason to sell and take profits."

“I now have serious doubts about Lixun Precision’s stock. There must be a fund called ‘Huayi Capital’ among the main controlling shareholders.” Li Jinshi said, “Comparing the previous trends of Lixun Precision and Oriental Yuhong, the overlap and similarity between the two stocks are too high.”

Liao Guoxiang said, "Whether or not 'Huayi Capital' is controlling the stock is anyone's guess. But regardless of whether they are, as long as Lixun Precision's stock trend remains stable and there is no large-scale selling by major funds, it is still worthwhile to maintain a position and remain optimistic. Moreover, the Apple supply chain... as long as Apple's consumer base continues to firmly support the brand and its overall market sales continue to steadily increase, it will be a long-term benefit for companies that have entered its supply chain. With Apple as their backing, everyone's life should get better and better."

Moreover, there is one point that I think many major domestic institutions have not considered.

That is, these supply chain companies that have been trained by Apple can also supply domestic mobile phone manufacturers after their technology matures.

After all, Apple does not have exclusive or monopolistic relationships with its suppliers.

In other words, with the upgrading of the smartphone market and the growth in demand, the future performance of these companies in the industry chain should show relatively certain growth.

Not to mention the new demands for wearable devices, electronic devices in new energy vehicles, and so on.

These potential new benefits and new demands exist.

I think the smartphone industry chain has a lot of potential and room for future growth, and it's worth being optimistic about in the long term.

Of course, some of these expectations will inevitably not be fulfilled.

Its trajectory has been quite tortuous.

However, in this process, we must not be swayed by short-term emotions, nor should we be blinded by a single leaf and fail to see the overall macroeconomic trends.

"I've always been quite optimistic about the smartphone industry chain," Li Jinshi said. "It's just that I feel the truly strong companies in this sector aren't exactly cheaply valued. Also, the overall investment trend in the market isn't really on the technology front. Currently, technology stocks not only can't enjoy valuation premiums, but they'll also be subject to some valuation suppression due to the continued decline in other technology-related sectors like film and television media, internet software, internet applications, and electronic information."

Therefore, I believe that, given the overall investment trend in the market has not changed significantly.

At this point, heavily investing in the smartphone supply chain is a bit too early and a waste of market opportunities.

After all, in the process of holding chips, there are other factors besides the profit or loss results of holding the chips themselves.

The opportunity cost of holding the stock cannot be ignored.

If the opportunity cost of holding a stock is too high and too many other opportunities are wasted, then even if you outperform the market, it won't be a very good result.

Relatively speaking, I still prefer to focus on the major infrastructure projects, which have higher certainty and generate more hype and buzz.

Of course, the current market trend has indeed shifted somewhat from the main theme of large-scale infrastructure construction to resource and cyclical stocks, and speculation has begun on the ferrous metals cyclical sector.

However, I don't quite understand this field.

After all, the cyclical changes in the ferrous metals sector are greatly influenced by the macroeconomy and the futures market.

There are many uncertainties in this area, and I simply don't have the ability to see and grasp them clearly. Therefore, even if funds are transferred into this main area for speculation, I most likely won't dare to take on a large position; I can only observe.

“Yes, recognizing your own capabilities and focusing on familiar main sectors is a good trading strategy,” Liao Guoxiang nodded and said. “In this market, no one is omniscient or omnipotent, and no one can grasp all the core trends. Grasping the opportunities you can is enough. The key is to persist in the long term and achieve continuous compound interest.”

"Old Liao is right." Chen Guiyun wholeheartedly agreed. "There's never a shortage of trading opportunities in the market. The key is to recognize your own capabilities and act when expectations are relatively certain. Protecting your principal and controlling drawdowns are paramount in trading. Many investment masters in this world are remarkable because of their control over position sizing and investment drawdowns. As the saying goes, 'A five-fold return in a year is not uncommon, but a five-fold return in five years is extremely rare. The key to long-term, stable profits in this market is the key to success. Otherwise… if you can't control your drawdowns and constantly experience wild swings, you'll eventually be eliminated by the market." (End of Chapter)