Chapter 78 Value Investment

In the first few months of the 2016 New Year, the broad market index experienced an unprecedented series of crashes due to the circuit breaker mechanism in the midst of the turmoil, which caused panic among all the investors involved in the holdings. All the retail investors involved in the stock market watched the market value of their stocks shrink day by day, and once again shattered the market.

The continuous irrational killing and falling of the market has attracted the attention of the high-level, so a series of new policies have been released continuously. First, the circuit breaker mechanism was abolished, and then a new chairman of the China Securities Regulatory Commission was appointed, and then it continued to strengthen the rescue of state-owned background funds. After a series of bailouts entered the market, the stock index gradually stopped falling and stabilized, and slowly walked out of a new pattern of slow bulls.

But not all stocks have come out of the quagmire of decline, Zuo Yuliang found through the study of the market that the really large and beautiful companies have gradually been favored by funds, especially the leading stocks of liquor consumer stocks took the lead out of the more obvious slow bull market.

There are two leading stocks in China's famous liquor stocks, one is Kweichow Moutai and the other is Wuliangye. The former Zuo Yuliang knew that it was also a good stock, but because its absolute price was too high, in terms of stock speculation psychology and their capital volume, they really couldn't afford to play it, so everyone retreated to the second best and bought all of them into the sub-faucet of Wuliangye. In fact, Zuo Yuliang also knows that as long as Kweichow Moutai is strong, Wuliangye will not be bad.

Later facts also proved that the stock market in 2016 was a local slow bull market, which was called a structural bull market in the fashionable topic at the time. Most of the bull stocks this year are from the top few stocks in the industry, which is in line with the promotion concept of value investment. And the vast majority of underperforming stocks are still on the path to value return. Continue to kill layer by layer, and continue to lose weight. In this kind of market, if you can't feel the change in the direction of the market, once you buy the wrong stock, you will end up in an embarrassing situation where you only earn the index but not make money.

What makes Zuo Yuliang realize the change in the style of this market trend is the one-stop pattern of Wuliangye gradually coming out.

The three short-term moving averages of 13, 34 and 55 set by Zuo Yuliang protect the stock price of Wuliangye and continue to push up; the medium-term moving averages of 120 and 240 are steadily arranged by bulls, and once they fall to this position, they take the lead in warning and strive to ensure that the stock price jumps up; and the long-term moving averages of 377 and 610 are walking on the road to the light openly, which is reassuring to look at.

"Brother Zuo, it has been said on the Internet that this round of market is a structural market? Can you explain it? Why can't I understand what it means?" asked Hu Weiyong in a message.

"I want to consult Liu Pengfei about this, and use his political perspective to explain it to you. Zuo Yuliang sent a message and said.

"Brother Zuo, I haven't studied this question in college! But Hu Weiyong asked, and I also looked for relevant definitions on the Internet, and posted it for everyone to discuss and discuss, which may be beneficial!" Liu Pengfei finished sending the message and posted the information he collected to the group.

"The so-called structural market refers to the rise of some stock sectors, while the vast majority of stock sectors follow the market trend of small gains or no rise at all. The so-called structural market is a relatively comprehensive market or a general rise and fall market. It refers to the fact that in a certain time period, some sectors continue to rise, while most sectors do not rise or even fall. ”

"It's still Liu Pengfei's explanation that is good, and it's clear and concise. Hu Weiyong sent a message and said.

"Then I still have a question that I don't understand, how can the market get out of this kind of market?" Hu Weiyong continued to send messages and asked.

"What you should think of is a lack of money. The flood rise is over, and only the truly valuable stocks in the market will be favored by the follow-up funds!" Liu Pengfei explained.

"The market has already shown some clues, and I have observed that it is mainly manifested in the 28 phenomenon. Only 20% of stocks in the market are rising, and the remaining 80% of stocks are still on the road to decline. The bear market I judged would last four years was a nightmare for investors who held eight classes of stocks that were in the midst of a return to value. Zuo Yuliang sent a message and said.

"Another point is that the rise in the second class of stocks is also a process of plate rotation. I observe that the leading stocks in the lithium battery sector are leading the trend at the moment. Cao Yinqiu sent a message and said.

"Isn't it more difficult for us to make money if we rotate like this?" Hu Weiyong sighed in a message.

"This is natural, but we must have a certain number in our hearts, as long as we choose stocks well, don't chase them indiscriminately, and we can't catch up. Zuo Yuliang sent a message and said.

"If you want to eat stocks, it's best to eat industry leaders. For example, Kweichow Moutai and Wuliangye in the liquor category, SAIC in the automobile stocks, and Yunnan Baiyao in the pharmaceutical stocks are all leaders in the industry, and some of them are still unique national brands, and they should have better room for the development of the industry. Liu Pengfei also sent a message to analyze.

"In addition, we still have to pay attention to the analysis of what are the main funds that have entered the market this year, which I think is also very important. After all, stock prices are meant to be backed up by money. Zuo Yuliang sent a message and said.

"Theme stocks are always the most dynamic speculative objects in the market. But for us small retail investors, it is very difficult to grasp the rotation of theme stocks. Occasionally, I bump into a bull stock, and most of it depends on luck! My Wanda Information is also a technology leader, but the stock price is getting lower and lower now!" Cao Yinqiu said.

"In my opinion, from 5,000 points, since March 2016, individual stocks have generally been cut in half. It should be said that value stocks have highlighted their comparative advantages, and I judge that this type of stock should be the target of new entrants to start building positions next. Liu Pengfei sent a message and said.

"It seems that Menglong and Yinqiu are still keen on the hype of theme stocks! I still recommend paying more attention to stocks where foreign capital enters the market and starts to build positions, which is a good stock selection idea. Zuo Yuliang sent a message and said.

"Our own native-born investors and predators are actually super short-term speculation experts, and they really don't have much concept other than designing intrigues and speculating on garbage-themed stocks or collusion with inside information. They are especially good at luring retail investors into taking orders, and this kind of money is simply a giant beetle in the stock market! Sooner or later, it will have to be picked up by the management. Liu Pengfei sent a message and said.

"Why do big funds want to buy into the leading enterprises in various industries in a group? Their ability to investigate and analyze enterprises is not known to be hundreds of times stronger than ours! With such a good example, why are we always willing to chase down the loss-making stocks and junk stocks that we usually speculate in stocks? In addition, the stock prices of the leading enterprises in the industry have also fallen in this round of killing, but the more such enterprises fall, the greater the attraction of funds! In other words, the funds that have been taken over at the bottom have virtually become a strong support for resisting the decline of stock prices! This is also the reason why such high-quality stocks have fallen far weaker than the broader market! In the future, everyone will still have to carefully choose stocks!" Zuo Yuliang continued to send a message and said.

"Brother Zuo's analysis is reasonable, it seems that this stock really can't be speculated, otherwise, in the next market, the loss will be serious. Chen Menglong sent a message and said.

"Actually, I figured out some of the truths in our daily life, why do people always have to look at a beautiful woman on the road? The reason is that she can bring people a feeling of beauty! And every time we buy stocks, we lose this aesthetic vision, obviously it is a high-quality stock, excellent performance and efficiency, but it is not eye-catching, it is obviously a star stock, but it wants to speculate on the garbage stock, who do you say you blame for losing money?" Zuo Yuliang sent a message and said.

Through this simple discussion, as well as the huge losses caused by this round of killing, coupled with the trend demonstration effect of Wuliangye Slow Bull, several short-term speculation followers in the group also slowly realized the value of buying leading stocks. In the later stock buying operation, their understanding of leading high-quality stocks has undergone a qualitative change, and this kind of stock has gradually become their first choice for buying stocks.

This is a triumph of ideas, the future stock market, must be good stocks will move better, bad stocks will move worse.

It seems that on the journey of seeking the truth of stock investment, the majority of shareholders also have to go through a long spiritual baptism before they can understand the profound meaning of value investment.