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Newsletter commentary Jan 2024
The reality of the market reminds us of the difference between desires and actuality. We should strive to find the counteracting forces to market declines while remaining cautious of market inertia until the market's pricing ability is restored.
2024 - 02 - 02 -
Newsletter commentary Dec 2023
We emphasis that one point where our views differ from the market is the interconnectedness between the market's weakness over the past three years and the excessively high valuations of blue-chip stocks at the beginning of 2021. While the subsequent geopolitical factors and turning points in the real estate sector also played a role, the impact of the high valuations was underestimated. However, this issue has now been largely resolved now.
2024 - 01 - 02 -
Newsletter commentary Nov 2023
In our view, the pressure that some investors feel, tethered to US bond yields, is likely to ease after the interest rate differential narrows. There may not be dramatic changes or sudden shifts, so it may be prudent to focus on finding suitable companies for investment rather than being swayed by short-term market fluctuations.
2023 - 12 - 01 -
Newsletter commentary Oct 2023
China’s stock market is substantially huge and policy changes now have a more delayed impact compared to the past. The real estate sector, which used to be the primary driver for economic regulation, has already undergone adjustments, in the past, the probability of changing one’s faith and belief overnight has decreased. To the extent that the pursuit of high-quality development, the probability of sudden policy shifts has decreased. However, our view is that a gradual recovery and improvement in the market are highly likely. Over the course of three years, the overvaluation from 2019-2020 is gradually being absorbed. Furthermore, certain industries for instance electronics are showing signs of bottoming out. The profitability of Chinese stocks is expected to gradually recover, which will be the most effective way to attract both domestic and foreign investors.
2023 - 11 - 03 -
Newsletter commentary Sep 2023
During times of real change, production capacity is the true reflection of productivity, rather than the monetized prices. Prices often experience disorderly fluctuations. For example, during a pandemic, the ability to manufacture masks and vaccines reflects actual capacity, not the amount of nominal currency held. The productivity of the Chinese economy will ultimately be reflected in prices.
2023 - 10 - 09 -
Newsletter commentary Aug 2023
In August, during the previous weekend, the China Securities Regulatory Commission (CSRC) introduced regulations to standardize share reduction measures, coordinate the balance between the primary and secondary markets, and the stock exchanges lowered the financing margin requirements.
2023 - 09 - 06 -
Mid-year outlook July 2023
Firstly, I will introduce the changes in our company and the investment process and fund’s performances of the first half of the year. Then, I will report on our current views of the market, and finally, I will answer any questions you may have. We have a topic for our discussion today that reflects our current view of the market – “Calmness, But Not Lying Flat”. Investing in Chinese assets has entered a new stage that is in line with the development of the Chinese economy and capital markets. At the same time, we do not agree with the very pessimistic views that have been prevalent in the market recently. We still believe that Chinese assets are rooted in the most creative Chinese economy and have bright potential. While the Chinese economy faces challenges, most of these challenges already existed before, and our ability to solve them is stronger ever than before.
2023 - 08 - 02 -
Newsletter commentary July 2023
In July, the market experienced a major turning point. As per our mid-term investors’ calls lately titled "Calmness, But Not Lying Flat", we believed that the market was too pessimistic, and that much of the pessimism was self-reinforcing and self-fulfilling, as different interpretations and assumptions about objective difficulties determine various emotions. We believe that in the next stage, with the improvement of the market, many things will also be reversed.
2023 - 08 - 02
