Picture source @Visual China
text | Brocade
Bai Juyi has a poem with a rather puzzling theme, called "Flowers are not flowers":
"Flowers are not flowers, fog is not fog. Come in the middle of the night, go in the morning. Come like a spring dream How long will it take to see the clouds and nowhere to be found?"
This artistic conception is particularly suitable for the stock market in 2023.
The market atmosphere in 2023 can be said to be a big bear market. The market median is 2.60%. The bears are those institutions with heavy positions. The decline of hybrid fund and stock fund index is around 9%.
Many years later, if we recall the major events that happened this year, we may find that many major events in the capital market and even the macroeconomics in the future will occur in this year.
01 The unexpected start and the floating theme investment
The beginning of 2023 is particularly fantasy.
a stocks have a tradition of spring agitation. Around the Spring Festival, the old is removed and the new is replaced, liquidity is loose, everyone's mood is relatively high, and they tend to perform better. Not only China, the United States also has a Santa Claus rally, also known as the December effect. Historically, the performance of December is generally better than the other 11 months.
Generally speaking, the Chinese Spring Festival falls in February, so there is a February calendar effect. The Spring Festival of 2023 is in January, so the restlessness is earlier than usual.
Even with expectations, the sharp rise in the market in January still caught many people off guard, especially the technical experts, who were rushing to get on the bus for fear of missing out.
stands at the starting point of 2023, so it is logical to enter the market as soon as possible.
Because the economic cycle is upward. The Kitchin cycle has been upward since January 2023, but the cycle from 2019 to 2022 was relatively strong, which caused the subsequent cycle to weaken a lot.
Moreover, there is a continuous influx of foreign capital. Expectations often precede stock prices. At the beginning of the year, the market believed that the U.S. interest rate hike was coming to an end. After a full year of bear market in 2022, the call for A-shares to usher in a bull market has become louder.
Not only is the mood rising, there are also some signs of trouble in the capital market.
The asset integration that military industry researchers have been looking forward to reached a climax on January 11.
As the crown jewel of the military industry, the J-20 fighter jet made its first flight on January 11, 2011. For many military fans and military workers, this day is their second birthday. Over the years, there has been a lot of excitement about various plans for Chengdu Aircraft to go public. In the end, there was only the sound of the stairs and no one came. On the evening of January 11, 2023, which happened to be the 12th anniversary of the first flight of the J-20 fighter jet, Chengdu Aircraft Group finally finalized the listing of China Avionics Test through a backdoor package. The
incident shows that the military industry will usher in large-scale asset injections, which will undoubtedly drive a wave of military-themed markets and heat up the market. Indeed, in the first two months of 2023, the military industry as a whole performed well, but that's it. The
market has been hot for just one month, but there are signs of stalling in February, and the index can no longer rise.
At this time, the ai and robot themes came on stage.
In November 2022, the artificial intelligence conversation robot chatgpt was released and quickly became popular. The number of registered users exceeded 1 million in just 5 days. By the end of January 2023, chatgpt’s monthly active users had exceeded 100 million, becoming the fastest-growing consumer application in history.
As a result, when most stocks entered a volatile platform, computer stocks that had been marginalized ushered in a long-lost surge of momentum. The maximum increase from the bottom of the Cambrian period was 3 times.
On the basis of AI, Musk created another IP called robot. The market situation lasted from the beginning of the year to the end of the year, and stocks continued to use Musk's concept.
Buffett once wrote in a letter to shareholders: "Weeds gradually wither as flowers bloom. Over time, only a few winners can create miracles."
According to this investment thinking, AI and robots , most likely weeds.But this is not important. One question that investors who missed this wave of computer market are still reflecting on is why they missed this wave of AI market. Even if they can't eat the fish head, they can still eat the second half. .
To this end, strategy researchers from Zheshang Research Institute have developed a U.S. stock mapping strategy to study the hot topics of U.S. stocks every day to predict the next market direction of A-shares.
Another theme that spans the whole year is Huawei, especially in the second half of the year.
On August 29, 2023, the US Secretary of Commerce visited China. Without any warning during this period, Huawei mate60 pro was officially launched on the Huawei Mall. Since then, Huawei themes have spread like wildfire in the electronics and automotive industries. The catalysis of the
theme will only gain momentum along with the industry cycle.
From a cyclical perspective, the year-on-year sales growth rate of China's semiconductor industry has indeed bottomed out. This data is also proven by the synchronization of global semiconductor sales and U.S. semiconductor utilization rates. However, for A-shares, looking at the picture is relatively superficial. The market Persuasive representative events are needed. Huawei happens to play the role of such a starting gun.
02 Some people resign and return to their hometown, while others rush to the exam room at starry night
Speaking of US stocks and comparing them to A-shares, this is an unpleasant topic.
There are countless reasons to be bullish on A-shares, but being bullish on US stocks only requires results. Buying U.S. stocks means always winning, always winning.
We always say that a tree cannot keep rising to the sky, but the US stock market keeps rising.
This world is still governed by economic laws. In 2001, Buffett said in an article in Fortune magazine that the ratio of the total market value of the stock market to GNP is better to buy when 70%-80%, when it is 100%, the valuation is reasonable, and when it exceeds 200%, it is better to buy. It's like "playing with fire and burning yourself". We use gdp instead of gnp, and the U.S. stock market has long entered the stage of playing with fire and burning itself. No matter which caliber of market capitalization is used to calculate it, the value of the Buffett indicator for U.S. stocks in 2023 must be above 200%.
What can be compared is that the current value of Buffett's indicator for A-shares is less than 80%.
Behind the U.S. stock market is an artificial capital account surplus created by years of current account deficits. The U.S. stock market is where global capital flows. The Indian stock market, which has been hotly discussed recently, is essentially the same as that of the United States.
In 2023, we have seen two faces of foreign capital in A-shares. Some of
are being withdrawn. BlackRock, the world's largest asset management company, liquidated a Chinese stock fund, and then the Norwegian sovereign wealth fund announced that it would close its Shanghai representative office and move its Asian center to Singapore. As recently as November, Vanguard Group, one of the world's largest public fund management companies, closed its Chinese company and exited the A-share market.
Some are quietly moving in, especially the oil giants in the Middle East. In September, Mubadala Investment Company, the UAE's third largest sovereign wealth fund, opened an office in Beijing.
It is true that some people resign and return to their hometown, while some people rush to the examination room at night. This world is so magical.
This reflects the different choices of financial capital and industrial capital.
Wen Tiejun once said that industrial capital participates in international competition on a national basis, while financial capital has no motherland and will go wherever it is profitable. Since financial capital cannot make money in the Chinese stock market, why don’t we wait for the Spring Festival if we don’t withdraw? This is not the case with industrial capital. The industrial cycle is relatively long and the requirements for the environment are relatively stringent. After experiencing the epidemic and the Russia-Ukraine crisis, global industrial capital has reached a consensus that China is the most suitable region for industrial capital in the world.
The global market in 2023 will show this result: financial capital will flee the United States, and industrial capital will go to China. That's why you can see such a post-modern result.
Industrial capital and financial capital are not incompatible. It is even difficult to say that they are distinct.
Secondary market asset management institutions such as public funds and private equity are born with financial capital, because their KPI is to assess the annual rate of return, and you cannot ask them to engage in industry. Angel investments, these primary market institutions that take a long time to enter and exit, have the nature of part of industrial capital, but obviously the component of financial capital is larger.
A-share retail investors, no matter how small their individual influence, are essentially part of financial capital just like public funds and hot money. Even Buffett has two sides. Buffett has acquired many real economy companies and they are all doing very well, such as See's Candy and aviation parts supplier PCC. Charlie Munger, Buffett's old partner, who passed away on November 28, made the decision to buy BYD that year. It was obviously based on the thinking logic of industrial capital rather than financial capital.
These sovereign wealth funds in the Middle East, although they also have the attributes of financial capital and are not actually engaged in industrial operations, are essentially representatives of industrial capital.
The idea of Middle East funds is more like a company's diversified investment around its main business. The typical representative of
is Saudi Arabia.
On the evening of March 27, 2023, A-share Rongsheng Petrochemical issued an announcement that it would transfer 10% of the total share capital to AOC, a wholly-owned subsidiary of Saudi Aramco, at nearly double the closing price of that day, which is 24.3 yuan per share. %+1 share.
Saudi Aramco pays RMB 24.6 billion on sight, just like getting up in the morning and going downstairs to buy breakfast.
Small money is really sweet, so the concept of "Saudi valuation" has appeared in the market.
As the world's largest oil producer, the Middle East is bound to the refining and chemical companies in the world's largest demand destination, which is naturally a win-win situation.
The next goal of Middle East Capital is obviously new energy, and the core logic is to hedge.
The pricing of industrial capital and financial capital can be said to be polar opposites. From the logic of industrial capital, there are obviously too many things that money cannot buy. General Motors' current market value is less than 350 billion yuan, and Volkswagen is even smaller, less than 300 billion yuan. According to the speed of China's wealth accumulation, if we could just buy it outright, would we still need to work hard to develop an independent automobile industry?
In 2010, Geely Automobile acquired Volvo for US$1.8 billion. From today's perspective, this acquisition was a bit tasteless, but at the time, it meant that Geely had a globally integrated fuel vehicle industry system. It can be said that in the field of fuel vehicles, until today, BYD, Great Wall, Chery and Changan are far from reaching such a height.
For industrial capital, the quotation is not important, but whether you are allowed to buy or not is the most important.
A very important trend in Middle Eastern capital in 2023 is to invest heavily in Chinese new energy vehicle companies. Typical examples include Gaohe and Weilai, both of which have received huge equity investments from the Middle East. Since new energy has become the general trend, and the Middle East is the leader of old energy, it is natural logic to invest heavily in new energy as a hedge.
BYD, which is about to become the world's leader in new energy, has a market value of only 600 billion yuan for Middle Eastern capital, so being cheap is like giving it away. The most expensive representative of
is naturally Apple.
Apple’s stock price is the result of financial capital blowing bubbles. In order to make Apple's stock price more attractive, Apple's management has reduced capital expenditures and increased its dividend ratio. And, most importantly, objectively Huawei's absence in the past few years has also put Apple in a competitive position. A market capitalization of US$3 trillion is equivalent to one-third of the total market capitalization of China’s stock market.
From the perspective of industrial capital, an Apple that has lost its ability to innovate is obviously extremely overvalued.
For companies with global competitiveness, in today's world of capital globalization, pricing is naturally global.
The valuation of these leading listed companies has a lower limit provided by industrial capital and an upper limit provided by financial capital.Industrial capital can obtain the admission ticket, which itself contains the value of an option, so the actual value is underestimated. However, in the global allocation of financial capital, leaders are scarce and naturally require a premium. The premise of
is who can become the leader with global competitiveness.
You in front of the screen can count with your fingers which of the current A-share listed companies can be internationally competitive, worthy of global pricing, and able to reap the dividends of global capital.
It’s hard to say Kweichow Moutai, but BYD is definitely one of them.
03 Changes in economic structure
Change is the biggest economic theme in 2023. The primary manifestation of
is the transformation of economic fundamentals from a production-based society to a consumption-based society.
China's current industrial structure is a typical production-oriented society. A typical characteristic of a production-oriented society is that investment contributes a relatively high degree to GDP growth. Investment mainly drives manufacturing, so the proportion of the tertiary industry is relatively low.
Since 1978, the median contribution of consumption and investment to GDP growth has been 56.9% and 41.1% respectively. From an international comparison perspective, China's investment in driving GDP is relatively high. In developed countries in Europe and the United States, the contribution of consumption to GDP growth is generally around 80%.
The transformation from an investment-driven production-oriented society to a consumption-driven society is a clear sign. But how to turn around, how to catch this overwhelming wealth, no one knows.
The popularity of two cities in 2023 demonstrates this transformation process to us.
One is Zibo Barbecue, which was very popular in the first half of the year. Behind the popularity of Zibo Barbecue, the warm hospitality and arrangements are superficial, but the most important thing is the ultimate cost-effectiveness. Only through comparison can we identify, and it all depends on peers. In the process of Zibo's popularity, the frozen meat stuffed into teeth luxury barbecue all over the country suffered a round of Internet violence. In the era of traffic, attention is precious, but everywhere is uncharacteristically silent, for fear of getting angry. Sichuan Barbecue was just about to show up, but it was sprayed by locals and couldn't take care of itself.
The other one is Harbin at the end of the year. Before this, investment in Shanhaiguan was the curse of the Northeast. This old concept has become "ridicule the Northeast, understand the Northeast, and become the Northeast" in 2023. After the Russia-Ukraine crisis, thanks to Zesheng, the economic situation in Northeast China greatly improved, and even the original Vladivostok seaport became a reality 163 years later. A large number of tourists came one after another. Harbin's landmarks Ice and Snow World, Sophia Church, and the country's unique large bathhouse were crowded with little potatoes from the south.
Harbin’s popularity is also due to its cost-effectiveness. The morning market prices in Northeast China have already become a household name on Douyin before. The dishes in the restaurant are huge and the prices are ultra-low. The 68-a-portion pot of steamed pork has attracted nearly the entire Internet. The crusade has made people living in big cities such as Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, and Chongqing feel a touch of sadness.
Another manifestation of the transformation into a consumer-oriented society is that labor has a higher say in relation to capital.
Regarding the issue of energy return, there is an eight-word common sense in basic international economics: "open market, international pricing." The three elements of productivity are technology, capital and labor. In an era when investment determines growth, capital takes away the biggest piece of the pie. With consumption-driven growth, the importance of labor remuneration has obviously increased.
Dong Yuhui’s incident at Oriental Selection, on the surface, seems to be the sympathy of the whole society for beating workers, but in fact it is a correction for the long-term disadvantage of employees relative to capital.
The phenomenon of fat people coming to Xuchang Supermarket is also the epitome of this reversal. Pangdonglai, which has never been able to open in Henan, represents a new type of labor-capital sharing relationship. 95% of the entire profit will be given to employees, and the employer's share is compressed to the extreme. Although this relationship is difficult to promote, it clearly puts pressure on other business organizations.
For a long time, traditional companies have often been unable to defeat Internet companies, because Internet companies not only give money but also equity. However, Huawei is a mountain that Internet companies look up to because Huawei's labor union holds 99% of the shares and all employees are theoretically shareholders.
Princes, generals and prime ministers, would you rather have the kind? Our nation has never lacked ambition. More and more executives will finally understand that in a wolf culture, you have to feed your employees, not draw a cake. With enough money, people who are not talents will become talents.
But not all employees can have higher incomes, at least not in the real estate and financial industries.
The Central Financial Work Conference and the Central Economic Work Conference held in the second half of the year mentioned the political and people-oriented nature of financial work, as well as the purity, professionalism and combat effectiveness of the financial team. Since it is the nature of the people, how can it be divorced from the masses of the people? From the perspective of requirements, the purity of the financial team must be placed before professionalism and combat effectiveness. This is also the first time that this statement has been made.
04 The improvement of the investment environment in China’s stock market
In the stock market in 2023, the index will move sparsely. Problems that were commonplace in the past will appear. Some things will not weigh four ounces if they are not put on the scale. Even if they are put on the scale of a thousand pounds, they will not be able to stop it.
Listed companies pay large dividends before their IPOs, reduce their holdings of restricted stocks in various ways, and their market value peaks when they go public. These issues that were originally not paid much attention by the market were discovered by the market one by one during the bear market. Although we live under the same roof, everyone has different interests. The existing market is too biased towards financing parties.
So we have the Beijing Stock Exchange market at the end of the year.
Since the interests of the old place are intertwined, let’s start over in a new place.
The core logic of the Beijing Stock Exchange that allows investors to make money is that it will most likely be positioned as a primary and a half market.
For companies with many A-share IPOs, listing is a substantial node. Recommended securities firms, law firms, and accounting firms have completed most of the work. Listing is regarded as "the prince and princess living happily together."
The biggest difference between the Beijing Stock Exchange and the Shanghai and Shenzhen Stock Exchanges is the low IPO valuation. To put it simply, for listed companies, compared to Shanghai and Shenzhen listings, the Beijing Stock Exchange IPO has not brought substantial changes to the company. Listing on the Beijing Stock Exchange is a starting point, not an end point. For relevant intermediaries such as securities firms, the Beijing Stock Exchange IPO does not have much service fees. Possible transfers, refinancing, follow-up investments, etc. after listing will be the bulk of future income.
This means that the Beijing Stock Exchange will become a typical primary and a half market. After the IPO, the interests of listed companies, intermediaries and investors are the same. Of course, Beijing Stock Exchange stocks have higher risks, but as a quasi-primary and semi-market, low valuation is the basis for investors to make money in this market.
Although the fact that it does not make money makes everyone very angry, only when the stock market is under pressure will the whole society be forced to reflect, and a system to ensure the long-term prosperity of the stock market will be put in place, and the original excessive tendency to one party will be corrected. interest system.
At the end of the year, we at least saw the slowdown in IPOs and equity refinancing, the patching of the loopholes in the disguised reduction of restricted shares, and the impetus for long-term funds to enter the market.
The economic difficulties in 2023 are largely related to real estate. But the leverage economy represented by real estate is already a thing of the past, so you can just miss it for a while.
From the perspective of major asset allocation, the bull market in 2015 corresponded to the low point of the housing price index. In the future, the proportion of the real estate economy in residents' major asset allocations will decline, which will inevitably usher in a bull market in the stock market. This time is not far away from us.
Well, predicting the stock market is actually similar to fortune telling. But at least there's no need to be pessimistic now.
