Exponential two profitable bull market strategy Money Tips

Category: Money tips Release Date: 2006-09-23

Source: Guangzhou Bandung

Abstract: Index-based bull market is growing more difficult to profit, but in such a structural bull market in order to survive, you must have a proper stock-picking ideas, using the concept of valuation differences and assets into stock-picking will be able to more Good to meet the needs of the market features.

With the macro-control in the context of a cyclical industry, the impact on the market runs deep and sustained, the majority of stocks on the market will face a greater risk, which is the exponential difficulty of the bull market profits are increasing the main reason. However, if we can survive such a structural bull market, you must have a proper stock-picking ideas. We believe that the use of valuation of assets into the differences and the concept of stock picking will be able to better adapt to the future market environment.

1, the macro regulation and control most of the stocks face a greater risk

We believe that the macro-control can only be said to be paying off, but the next step will be a substantial deepening of macro-control effects, most of the industry and the risk of individual stocks are increasing:

1, the macro-control to deepen

Although the macro-control policy has been introduced, but we believe that the current macro regulation and control can only be said to be paying off, its a lot of substantial adjustments in the delayed impact of the market for two reasons: First, the personnel adjustments are clear effects of policy implementation key. In previous articles we have mentioned before, due to the interests of local interests and the central game, and the Central game between the interests of the various departments and personnel became the central macro-control flow to block the implementation of one of the main factors, under the policy on so that the macro-control measures into a thunder and rain and little of a "slogan." However, as Chen Liangyu, a series of associated events and the subsequent impact of large curtain is pulled back personnel changes substantially, contributing to macro-control will be really implemented. 2, the macro-control policies and measures refinement makes its effect will be more apparent. Macro-control policies is only accompanied by a series of practical and concrete measures, and be able to be more regulation in place related to overheating of the real field, a real impact on the market.

2, most because of the high valuation of individual stocks face a greater risk

In the macro-control and industry context of cyclical operation, and the investment in fixed assets are highly relevant to the industry, the performance of listed companies will be an overall slowdown in growth, which in turn inevitably will affect their industries upstream and downstream, which means most of the industry and the valuation of stocks should be reduced accordingly. However, there is the overall market valuation is not low, which means that a considerable number of individual stocks are actually facing considerable adjustment pressures.

Second, exponential increase in difficulty of the bull market profits

We have said that, due to ICBC and so a greater impact on the index of large cap blue-chip distribution, heavyweight "command" index of the situation will become increasingly clear that tape is expected to blue-chip tape, especially Bank of China and ICBC, led by bank shares such as lead under steadily increased. In other words, from the index point of view, there is certainly room for a bull market.

However, in this exponential under the surface of the bull market, but most of the high valuation of stocks continued to drop. In fact, the recent disk also shows this information, such as banks have significant impact on the index plate while momentum rainbow, but many individual stocks are at progressively lower. For example, the basic index of 20 cities received 70% of the stocks flat there is a decline, which means that most investors in the index will in fact smooth operation of the process of loss.

3, the two profit strategy

Good performance in the index stocks are facing greater risk, however, the structural bull market, using the strategies to circumvent the market risk to obtain a better yield? We believe that in the present context, the full use of systematic differences in the valuation of the valuation of assets or investments into the concept of arbitrage will be profitable in the future are two effective ways.

1, the valuation differences in arbitrage

A-share market in the internationalization process of the valuation system and the international accelerate convergence, there will be a lot of structural arbitrage opportunities. To use the current set of international valuation system to the valuation of A shares and concluded that some types of stocks have been underestimated, and some were overestimated, and this arbitrage opportunity exists.

Such as the current A-share market on the valuation of large-cap stocks generally lower than small-cap stocks, which is a relic of the shadow of Zhuanggu. However, in the overseas stock market, the texture of the fine large blue-chip generally able to obtain a premium above the average market valuation, as China's stock market institutional investors in particular are keen on investing in large blue-chip development and growth of the fund, this valuation of irrational bound by the market to correct, so I anticipate an arbitrage opportunity for investors.

2, asset injection

Greater opportunity to come from asset injection.

After the split share structure reform, asset injection will make a major shareholder and shareholders of listed companies to share the flow of the market value of listed companies, the benefits of growth, the interest of all demands with a more extensive "mass" basis. In this context, A-share market for quality is increasing the attractiveness of the assets of listed companies to benefit from the added value of assets into the market has been far from Zhuanggu of false financial restructuring can be compared.

Many industry-tradable share reform and the restructuring of the industry background, and even there the whole industry a large number of assets of listed companies into a feast, giving investors a substantial profit opportunities.