Analysis of the same points of bull stocks

China’s securities market has been a market of ups and downs in the past 20 years. Although in early June 2015, the Shanghai Composite Index had reached above 5,000 points, far from 2007 The 6124 point in 2017 is not far away, and there is no shortage of bull stocks on the market. It is not uncommon to see big bull stocks that have increased by more than 10 times. In 1999, Internet stocks represented by Founder Technology (600601), Zhongguancun (000931) and Haihong Holdings (000503) were so bullish. The market was extremely depressed from 2002 to 2005, but the "Five Golden Flowers" represented by automobiles, steel, petrochemicals, energy and electricity, and finance also emerged. In the great bull market from 2006 to 2007, bull stocks were everywhere, and there were very few stocks that did not rise more than five times. From 2010 to the first half of 2014, China's economy struggled to transform, but the GEM doubled in 2013. In the second half of 2014, the Shanghai Composite Index finally emerged from the quagmire and reached the 3,000-point mark. Big bull stocks such as LeTV (300104), Huayi Brothers (300027), and Oriental Fortune (300059) emerged. In the first half of 2015, the market continued to prosper and rose sharply. The Shanghai Composite Index once stood at 4,500 points, the GEM reached the 4,000-point mark, and the small and medium-sized board also approached the 10,000-point mark. The rising tide of stocks lifted all boats, and there were more bullish stocks. Although most bull stocks are fleeting, some long-term bull stocks have also emerged, such as Kweichow Moutai (600519), Yunnan Baiyao (000538), Gree Electric (000651), Longping Hi-Tech (000998), etc.

Looking at these bull stocks, we can draw the following conclusions.

First, bull stocks can basically be divided into two categories: cyclical stocks and growth stocks. Banks, securities companies, insurance, real estate, non-ferrous metals, coal, automobiles, steel, infrastructure, etc. have all had great success in the Chinese stock market, but some of them later returned to their original stock prices. In my opinion, these types of stocks are typical cyclical stocks. , when the cycle is improving and the industry is improving, the stock price surges sharply, and there are periodic bullish trends, some lasting for several months, and some lasting for two or three years. For example, from 2006 to 2007 and November 2014, brokerage stocks once became the leader, but between 2008 and 2013, the share price of CITIC Securities (600030) fell from 37 yuan to 8 yuan. During the stock market crash from June to September 2015, CITIC Securities (600030) fell from more than 30 yuan to around 13 yuan, which is not a small drop. Therefore, to grasp the periodic bullish trend of cyclical stocks, the most important thing is to keep track of the industry cycle, design an exit path, and try to avoid riding a roller coaster. For example, for non-ferrous metal stocks, I think it is too early for the prices of commodities such as gold and crude oil to bottom out. It is too early to intervene now. It is not too late to wait until commodity prices have basically bottomed out before investing in non-ferrous metal stocks. Once the fundamentals continue to improve, a sharp rise in stock prices will be expected. Another type of bullish stocks are growth stocks. Growth stocks generally have smaller share capital and unique industries, and are mostly distributed in fields such as medicine and high technology. For example, Porton Holdings (300363) and Uoxin Travel (002707), which were listed in January 2014, most of them have core capabilities and rapid growth in performance. Some outstanding growth stocks can overcome the bulls and bears and become the real king of the market.

Secondly, there are bull stocks on behalf of others. Society is constantly developing and changing, and it is constantly metabolizing. Every year, different stocks will have a wonderful time. During the investment process, we can appropriately ignore the fluctuations of the index and look for listed companies that will shine in the future. After the market is highly prosperous, a huge bubble appears and then begins to collapse. In fact, such years are extremely rare like the big bull market in 2015, and investment opportunities will be very few or none at all. For example, in 2008, in most years The market is an oscillating market, but bull stocks emerge in large numbers.

Third, everything has a cycle. Asset prices are closely related to the degree of economic prosperity. It is very important to correctly understand the current position of the economic cycle and judge the direction of the economic cycle. Preserving and increasing the value of wealth depends on having a relatively accurate sense of the big cycle. If you comply with the big cycle, the accuracy of your investment decisions will naturally increase. There are always many small cycles nested in the big cycle. If you make a mistake in the small cycle, as long as you are right about the big cycle and hold it with firm confidence, in the end you will always make the right decision. It is possible to make money by solving the problem. On the contrary, if you are wrong about both the big and small cycles, it is wiser to stop the loss in time than to fight to the end.

The same investment creed, whether persisting or correcting mistakes, will yield completely different results in different situations. Therefore, there is no perfect creed in the world, only the creed that is most suitable for the current environment. It is difficult to accurately grasp the ups and downs of small cycles. After several cycles, winning or losing will not accumulate much excess income. Once you choose the right big cycle, the benefits of continuing to hold will be higher. This is the old saying The principle of "cover the bull market". Looking at the long-term trend of commodity prices, the Bull Period lasts for more than ten years. In the long run, small cycles really don’t matter. Therefore, don’t pay too much attention to the outcome of your investment in one or two years. A short-term decline does not mean anything to investment. This is a long-distance race that is much further than a marathon. Maintain a good attitude and continue to respond to the big cycle. Looking at it, the winner comes at the end.

Fourth, use cycles to explain the stock market, and everything will be relieved. The Shanghai Composite Index has been in a long-term downturn from 2007 to the first half of 2014. The main reason is still the macroeconomic downturn and the traditional economic downturn, which continues to be downturn. The outstanding performance of GEM is still determined by fundamentals. The period of economic transformation requires the vigorous development of emerging industries represented by the Internet and new technologies. Although listed companies on the GEM are facing adverse macroeconomic trends, their industry prosperity is extremely high. Coupled with the high efficiency of private enterprises, it is only natural for them to be bullish. Therefore, in my opinion, we can invest at any time, because no matter how the economy is running, we can always find industries with high or even extremely high prosperity now and in the future. From this point of view, it is not very advisable to invest based on the index. .

Cycles can generally be divided into industry cycles and corporate cycles. Any industry, no matter how good it is, cannot break away from its own cycle, nor can it skip this cycle. For example, the liquor company from 2013 to 2014, even the share price of Kweichow Moutai (600519) was cut in half. Wine is even worse. Enterprises themselves also have cycles. Guo Guanglu, founder of Fosun Group, believes that corporate leaders have cycles, because they always have to be replaced, and there are always times when they are in a good or bad mood; for another example, when the company is going well, Problems will surely accumulate slowly, and when a company is faced with many difficulties, they are likely to break out again in the face of adversity, so there will definitely be ups and downs in corporate development.

Fifth, the process of starting from scratch is the process of breeding bull stocks. Human society is a history of constant development and continuous creation, which is reflected in the capital market. Whenever there is a major social progress or a certain social trend goes down, a group of bull stocks will emerge. In the 1900s, , TVs, refrigerators and other home appliances began to enter thousands of households in China, creating big bull stocks such as Sichuan Changhong (600839): Later, with the popularity of automobiles, computers, and mobile phones, related listed companies became the kings of the market. Of course, one day the industry matured The period has passed, and the long-term settlement of most related stocks will become inevitable.

Peter Lynch, a famous fund investment manager, said: "In fact, many ten-trust stocks come from companies that everyone is very familiar with." Ten-fold stocks in ten years are not far away, but close by. This is true for the United States, and so is China.

Kweichow Moutai (600519) has doubled in ten years, Luzhou Laojiao (000568) has doubled in ten years, Shuanghui Shares (000895) has doubled in ten years, Chengde Lulu (000848) has doubled in ten years, Shanghai Jahwa (600315) has doubled in 10 years, Dong'e Ejiao (000423) has doubled in 10 years, Yili (600887) has doubled in 10 years, Yunnan Baiyao (000538) has doubled in 10 years, and Tasly (600535) has doubled in 10 years. Sinopharm (600511) has doubled in ten years, Gree Electric (000651) has doubled in ten years, and Oriental Fortune (300059) has doubled in three years.

Thousands of people know and have used the core products of these listed companies. However, how many people would think that these companies are listed companies, and their stocks have risen 10 times or even more than 20 times in the past ten years?

Many investors often ask me the same question: What can I buy recently? How can we find big bull stocks that may rise 10 times? Everyone wants to get something for nothing, but the result is very unsatisfactory, because the stocks I mentioned may not necessarily rise in a short period of time, and may even fall.

For example, I paid attention to Shanghai Jahwa (600315) in 2012. I also told many investors that although the stock rose sharply in 2012, it has been adjusting in 2013 and 2014. How many people will stick to it? As a professional As an investor, I know Shanghai Jahwa (600315) very well, and I also know why it has not risen in the past two years. Anyway, I have enough confidence to continue to hold on. This also echoes Buffett's words: If there is a stock, you can If you don't want to hold it for three years, it's best not to buy one share. Big bull stocks are not far away like the dream lover in fantasy, but close to us, in our daily lives

There is no lack of beauty in life, what is missing is the eyes to discover beauty, life There is no shortage of ten-fold stocks in the market, but what is lacking are caring people who pay attention to what they eat, drink and use good products. The companies that produce these good products are often listed companies, and the probability of their stocks becoming as big as bulls in the future is To find extremely high stocks, you need to love life, instead of looking at the K-line every day and analyzing the main trends. Investment is by no means everything in life, but it is closely related to life. If you love life, love to travel, and spend more time with your family Watch movies, go to restaurants, go shopping in supermarkets more, care more about the elderly, and accompany them to see doctors and buy medicines. In this way, you can not only enjoy the fun of life, but also increase your chances of finding big bull stocks near you.

I conclude that big bull stocks generally have the following characteristics: First, most of them are repetitive consumer goods. Both Yunnan Baiyao (000538) and Kweichow Moutai (600519) are repetitive consumer goods. Although Kweichow Moutai (600519) almost halved in 2013, once the expectations are confirmed in the future, it can still be bullish for a long time. Although Oriental Fortune (300059) is not a repeat consumer product in the traditional sense, the huge number of clicks is enough to attract people's attention. The second is an industry leader with a wide "moat". Whether it is Shuanghui Development (000895), Yili Shares (600887), Shanghai Jahwa (600315), or Fuling Zhacai (002507), they are the absolute leaders in the industry. Unless their market positions change in the future, they will continue to Bull walking can be expected. Third, the products are of high quality and deeply loved by the people. Whether it is Tongrentang (600085), Yunnan Baiyao (000538), Dong'a Ajiao (000423), Kweichow Moutai (600519), Wuliangye (000858), or Shanghai Jahwa (600315), they are all household names. As long as their products continue to It is a high probability event that a product will become popular and best-selling in society, and its stock price will remain strong or even continue to rise. Their biggest risk is that mainstream consumption habits change and the product gradually withdraws from the mainstream of consumption.

Based on the current development status of China’s economy, although the economy still faces downward pressure in 2015, the crisis seems to still exist; leading new technologies are also being nurtured, but have they reached the breaking point and launched a new wave? prosperity remains to be seen. Generally speaking, the macro cycle is still in a low and volatile pattern, and China's economy is still struggling to transform, but there has been some improvement. The rise of Alibaba, Tencent, JD.com, etc. is proof of this. Internet companies such as Alibaba and JD.com have experienced rapid growth in just a short period of time. In more than ten years, the market value has exceeded that of most central enterprises, which was something that was unimaginable before. On the contrary, the adjustment of traditional industries represented by real estate will not happen overnight, and the reduction of overcapacity will also be long-term.

In the Chinese stock market before the second half of 2014, although the Shanghai Composite Index and the CSI 300 were still hovering at low levels, the ChiNext Index rose by more than 100%. Such a sharp differentiation between the indexes in China This has never happened before in the history of securities, and it is something that investors did not expect at the beginning of 2013. What also surprised investors was that in the second half of 2014, the stock prices of listed companies in traditional industries soared, and the Shanghai Composite Index once exceeded 3,000 points. The lesson learned from this is that we must respect the market, because correctly predicting the number of market moves is Impossible, and in the future, under the general environment of relatively loose liquidity and rising residents' demand for equity asset allocation, it is a high probability that large-cap stocks, small and medium-sized stocks, traditional and emerging industries will all prosper together

< p> However, if we analyze from the known facts, we may draw the following three relatively clear conclusions: The first conclusion is that no matter whether the stock market rises or falls in the future, there will always be some industries that will outperform the market. The first is The technology, media, and Internet sectors are TMT.

Intuitively, the scale of investment in production capacity in China's infrastructure has exceeded world standards, and it is unlikely that it will exceed expectations in the future. However, investment in the TMT industry is quite lagging behind. Therefore, industries related to concepts such as smart cities, electronic medical care, and the Internet of Things were in 2013. By 2014, both performance and stock price performance were excellent. Analyzing the proportion of the TMT sector in the total market capitalization in terms of quantity, the United States exceeds 20%, while China only accounts for about 5%. Second is the pharmaceutical and medical sector. In terms of age structure, China’s per capita medical and medical expenditure is estimated to increase by 70% in the five years between the ages of 45 and 50. It is a major trend that more and more people in this age range will be included in the future. Therefore, although China’s general consumption (such as pork, clothing, etc.) is relatively surplus, medical consumption expenditure in the United States accounts for more than 16% of GDP, while China only accounts for less than 5%. Therefore, it is highly likely that the pharmaceutical and medical sector will outperform the market. Third, In the environmental protection sector, Japan invested first and then controlled pollution in the 1970s. Its environmental protection industry output value accounted for nearly 8% of GDD. China is still working hard to reach 2%. The second conclusion is that no matter whether the industry is good or bad, investment The returns of industry leading stocks will be relatively high. The main reason is that the industrial concentration of China's economy is relatively low. A substantial increase in industrial concentration in the future will be inevitable. It is natural for leading enterprises to occupy a larger market share. This has two impacts on business operations. First, Enterprises with high efficiency must transform enterprises that cannot maintain efficiency, otherwise the efficiency growth of the entire industry will be too slow. Since 2013, mergers and acquisitions of private enterprises with flexible mechanisms have become an important source of performance exceeding expectations. In fact, the growth of the GEM since 2013 is largely due to mergers and acquisitions. It is precisely because of its strong expectations for continued mergers and acquisitions. The price-to-earnings ratio will remain high. Second, enterprises in emerging industries that focus on technological innovation have grown rapidly, and have shown the characteristics of the strong always becoming stronger from the beginning. If China's economic aggregate can successfully surpass the United States, there should be a number of leading companies equivalent to the US Dow Jones 30 or S&P 500. From the perspective of industry attributes, it is reasonable that the Shanghai Stock Exchange 50 and the Shanghai and Shenzhen 300 will not match it, but The emergence and continued growth of these new blue chips that can replace the traditional SSE 50 and CSI 300 is likely to be the most exciting story in the future of China's capital market.

"Grasp the cycle and look for bull stocks"