The interpretation of the Russian-Ukrainian crisis: "sometimes go to the end of the water to seek the source and flow, and sometimes sit and watch the ever-changing clouds."Recently, Russian President Putin announced the recognition of the people's Republic of Donetsk and the Luhansk people's Republic and announced the presence of troops and delivered tough speeches. At the same time, the United States announced that the US military's defense readiness had been upgraded to level 3 (on a par with the Cuban missile crisis) and began to impose financial sanctions on Russia. Affected by this risk event, the global market fluctuated sharply: the price of crude oil jumped to nearly $100 per barrel, the stock index of major global capital markets such as Europe and the United States generally fell by about 2 per cent, and the Russian MOEX index at the center of the incident fell nearly 10 per cent for two consecutive days.

The reason why the Russian-Ukrainian crisis has caused such great volatility in the global market lies at the core of two concerns among global investors: 1) the market is worried about Russia and Ukraine, and even the risk of war; 2) the market is worried about Putin's move. Unprecedented sanctions will be triggered by the United States and Europe, such as removing Russian crude oil from the global crude oil supply system, which will change the supply and demand of commodities such as crude oil and exacerbate global inflation.

But we believe that investors need not panic at this time, and the best part of the Russian-Ukrainian crisis may also mean that it is coming to an end. Regardless of the Russian-Ukrainian crisis itself, the two major risks that the market is worried about-- the risk of war and the risk of strong Russian energy sanctions-- will not happen. Or in all previous crises that are "close to war", the historical law of "countertrend investment strategy" and the highest rate of return at the most frightening moment may indicate that the risk assets represented by stocks "hit bottom" in stages, while the price of crude oil or high probability "peaked" in stages.

We will analyze the game strategies and the "equilibrium point" of interests of all parties in the Russian-Ukrainian crisis, the rate of return of the "countertrend investment" strategy in the four great power games "close to war" in history, and the logic of the great power game behind the effectiveness of this "countertrend investment" strategy.

一、Russian-Ukrainian "big chess game": what are the players on the table thinking?

1. Russia: maintaining the status quo of the Minsk Agreement and promoting Putin's domestic "prestige"

The reason for the outbreak of the Russian-Ukrainian crisis can be traced back to the political unrest in Ukraine in 2014, when Putin marched into Crimea while supporting the de facto independence of Donetsk and Luhansk in eastern Ukraine, which is dominated by Russians.In fact, these areas have been controlled by Russian forces since 2014, but in the past few years, Russia has never publicly admitted that they are controlled by Russia, claiming to be the work of local "pro-Russian militias".In 2015, under the coordination of the West, Ukraine was also forced to sign the Minsk Agreement, which effectively recognized the independence of eastern Ukraine (including the withdrawal of Ukrainian government forces from the region, consent to local autonomy, etc.).

Since the political situation in Ukraine gradually stabilized in 2015, Ukraine has been calling for the revision of the Minsk Agreement for the sake of its own national interests. at the same time, it has been trying to move closer to NATO politically and has made some progress in militarily attacking local forces in the above-mentioned two areas of eastern Ukraine. This is constantly troubling the domestic support ratings of Russia and Putin.

Therefore, in this Russian-Ukrainian crisis, although Putin has put forward such grand goals as "NATO stops its eastward expansion, deploys it back before 1997, and abandons any military activities in Ukraine, Eastern Europe, Transcaucasus, and Central Asia." but its real"bottom line proposition"Or it is still:Prevent Ukraine from joining NATO and maintain the "status quo" of the de facto independence of Donetsk and Luhansk.Russia had hoped to use diplomatic channels with the United States and Europe to force Ukraine to continue to accept the "status quo" under the Minsk Agreement, after diplomatic efforts were fruitless, or through the public recognition of the independence of the two regions and the presence of Russian armed forces, in order to deter Ukraine from taking further action.

For Mr Putin, his more important aim is to boost his prestige at home:In recent years, with Russia's economic downturn, its official approval rating has fallen by 20% in 2020 compared with its all-time high. At the same time, opposition demonstrations such as Narvani have also had an impact on Russia. Behind Putin's seemingly tough speech on Ukraine, he attributed the root causes of the Ukraine problem to "the erroneous practice of the former Soviet Union" and "the treachery of NATO", which was also aimed at cracking down on his domestic "left" and "right" political opponents.

It is precisely because of Putin's basic political goal of raising domestic prestige, and the objective reality that Russia's strength is obviously inferior to that of the Western camp, that it may deter the West and boost domestic morale by creating tension.But will do everything possible to avoid a real war that breaks through the "bottom line" of the West and has a fatal impact on the stability of its regime.For example, during the crisis, Putin repeatedly stressed that "trying to introduce Russia into war is a Western conspiracy."At the same time, after achieving the political goal, he withdrew quickly and honorably, that is, the strategy of "approaching war" rather than "substantive war".So what is the "bottom line" of the West facing Russia?

two。 The United States: regaining dominance over Europe by exaggerating the crisis

For the United States, because of its current strategic focus has completely shifted to focus on the Asia-Pacific region. It does not want to be too distracted by Eastern Europe, so it is its core strategic interest to give Ukraine some support on the basis of accepting the Minsk Agreement, that is, maintaining the "status quo."Therefore, Ukraine's attempt to join NATO itself is difficult to be accepted by the United States.Maintaining the "status quo" is the common position of Germany, France and other European countries that have closer ties with Russian interests.Its core starting point for threats such as tough energy sanctions against Russia is to prevent a possible further Russian invasion of Ukraine and change the "status quo".

As far as the Russian-Ukrainian crisis is concerned, on the one hand, Biden hopes to take this opportunity to show toughness to save his precarious domestic support rating since the withdrawal of troops from Afghanistan last year. On the other handWith the help of the exaggeration of Russia's "invasion" of Ukraine, it has strengthened the panic of European countries and their dependence on the United States, taking the opportunity to bridge the gap in US-European relations caused by Trump's "America first" in 2016 and regain dominance in European relations.

As the party with the greatest damage to the actual interests of the Crimean crisis and the Minsk Agreement in 2014, Ukraine is the "breaker" who most wants to "break the status quo" in this crisis, but its weakest reality makes it also hope that by exaggerating the crisis, it will try to bring the United States and other West directly into the crisis in order to achieve a "break the situation".

二、The "best part" and "end" of the Russian-Ukrainian crisis: the United States and Putin may achieve the "equilibrium point" of "win-win".

Through the analysis of the fundamental interests and demands of the participants in the Russian-Ukrainian crisis, it is not difficult to find out that the "best part" of the current Russian-Ukrainian crisis is not only the beginning of the "drama" such as all-out war and strong energy sanctions that the market is worried about. on the contrary, it is the "final chapter" before the "curtain" ends. The fundamental reason is that the interests of all parties have achieved a "balance" at the current time, and if we go further, the interests of all parties will bear unbearable losses.

1. As far as Putin and Russia are concerned, behind the tough statement is only the recognition of a "fait accompli".The incident strengthened Putin's authority as a nationalist at home and effectively dealt a blow to his potential domestic political opponents. Although its ambitious goal of requiring NATO to return to 1997 has not been achieved, it has prevented Ukraine from joining NATO and prevented Ukraine from taking continuous military recovery actions by publicly declaring its recognition of the independence of the two regions and the presence of Russian armed forces. so that it can "get out" gracefully enough.And because, as the Ukrainian prime minister put it, only "Russia legalizes its own army, which has actually existed in Donbass since 2014." There is no further attack on the expansion of Kiev and other acts, so as to avoid touching the "red line" of the United States and Europe.

It should be pointed out that this behavior, which is after all contrary to the existing "international law system", has increased Russia's isolation in the international community, especially in the Western world, which may also be regarded as a price to pay.

two。 In the case of the US: as long as the status quo is maintained, tough energy sanctions will not be imposed. By showing toughness this time, on the one hand, Biden helps to improve his domestic image of weakness after the Afghanistan incident. More importantly, the United States has seriously weakened the "pro-Russian faction" within the European Union through the serious lack of sense of security of the European Union, especially the Eastern European member states, about the so-called "Russia's desire to restore the territory of the Soviet Union" under this crisis. restart the internal coordination mechanism of NATO, direct the deployment of troops from Denmark, Spain, Italy, France and other countries to Eastern Europe, and then strengthen control over the European Union in an all-round way. It also led Germany to take the initiative to cancel an important obstacle to US-European relations-Russia's "Nord Stream II" natural gas pipeline project.

Since maintaining the "status quo" is a consensus in the interests of all parties except Ukraine, what Russia is doing has not changed the "status quo".It's just an "openness" to a fait accompli. Therefore, Europe and the United States will not impose severe sanctions on Russia.(only symbolic sanctions, just as the current sanctions are only imposed on investment restrictions and relevant officials in Luhansk and Donetsk.Therefore, after the announcement of the US sanctions, the Russian stock market and the US stock market rose sharply, while the price of crude oil fell sharply.The White House and the British government said that "if further Russian invasion occurs, there will be tougher sanctions."

As a party whose interests have been damaged, Ukraine is still the loser of this crisis. The tense situation has led to a substantial withdrawal of foreign investment, the economy has been deeply affected, and the goal of changing the status quo of the Minsk Agreement has not been achieved, but Ukraine's relatively weak strength, as well as religious and ethnic contradictions in eastern Ukraine, have to accept the status quo in stages, so after the declaration by Russia, the president of Ukraine It also means "we want peace".

Of course, it should be pointed out that it is difficult for Ukraine to accept the current "status quo" for a long time because of its own national and national interests.Therefore, in the medium to long term, new conflicts and confrontations may continue to emerge in eastern Ukraine.

三、"sometimes go to the end of the water to seek the source and flow, and sometimes sit and watch the ever-changing clouds of rising clouds"-- the impact of the four "approaching wars" crises on the capital market in a historical review

In the above, through logic, we deduce the "equilibrium point" of the interests and games of all parties in the Russian-Ukrainian crisis, pointing out that the "best part" of this "close to war" crisis is approaching the "end". The war that the market is worried about and Russian energy sanctions will not occur, so the prices of related risk assets may "hit bottom" in stages, while prices such as crude oil may "peak" in stages. So under the similar risk of "approaching war" in history, does the real performance of the capital market follow this law?

1. The impact of Russia's annexation of Georgia and Crimea on crude oil under Putin: oil prices peaked when the crisis fell

First of all, starting from the two conflicts between Russia and neighboring countries in the past 20 years, and the threat of sanctions from the West, we study the law of the trend of crude oil prices under geo-risks. it can be found that when Russia's war in Georgia in August 2008 and Russia's annexation of Crimea in March 2014, the best part of the crisis basically hit the ground when the price of crude oil peaked.

The reason is: by combing through the Western sanctions against Russia after these two crises, we can find that the Western sanctions are only personal sanctions against some Russian officials and local sanctions in the areas involved. The strong energy sanctions that the market had feared had not happened.

The reason behind this is that Putin "accurately" chose the "blank" zone ignored by the West at that time and avoided the Western "red line", such as the use of force in the "indirect zone" of Georgia in 2008. this is due to the West's indifference to the region. The "proxy offensive" in Crimea and eastern Ukraine in 2014 drew on the hesitation of the West amid the chaos of regime change in Ukraine and the chaos of history and law.

For the price of crude oil, due to the fermentation process of the previous crisisStrong energy sanctions and expectations of crude oil supply shortages due to overdraftAnd has hoarded a large number of "profit stocks", so when the crisis hits the ground and the sanctions are significantly lower than expected, the excessively high oil prices and the unbalanced bargaining chip structure will drive the oil prices to "peak" and there will be adjustments at the level of more than two years.

two。 The impact of four "close to war" crises on capital markets: what are the odds of "countertrend investment strategy" winning?

In terms of the nature of the crisis, the confrontation between the West and Russia in this Russian-Ukrainian crisis is much stronger than that in Georgia in 2008 and Crimea in 2014. If we say that the West was indifferent or unprepared in the first two events, then in this crisis, the United States raised its defense readiness to level 3, on a par with the Cuban missile crisis.The tit-for-tat state of "approaching war"So how will the global capital markets perform in this crisis of "approaching war" in history?

In fact, there were four times during the Cold War: the first Berlin crisis in June 1948, the second Berlin crisis at the end of 1958, the third Berlin crisis in mid-1961 and the Cuban missile crisis in October 1962. By observing the performance of US stocks in these periods, we can find that:

1) first of all, fromGeneral trend angleLook, in addition to the first Berlin crisis, which broke out shortly after World War II, causing global investors to worry about the outbreak of World War III, which in turn triggered the adjustment of US stocks for nearly a year or so, the other two Berlin crises and the Cuban missile crisis affected the Dow Jones index for 1-2 months at most."event shock"Has not changed the overall bull market of US stocks.

2) secondly, fromEvent transactionFrom the point of view of the four "close to war", there is one.The Law of "counter-trend Investment Strategy" with obvious winning rateThat is, inWhen the crisis is at its best, the best "buying point" is when the market is most panicked.Followed by a "V" reversal:We found that at the best "buying point" for one month, the average returns for one quarter and half a year were 8.79%, 11.11% and 15.01%, respectively.

As the saying goes, "sometimes we go to the end of the water to find the source and flow, and sometimes we sit and watch the ever-changing clouds that rise."In the four "approaching war" crises, the "most panic moment" of the best buying point specifically refers to：

• During the first Berlin crisis, on June 24, 1948, the Soviet Union completely cut off water and land transportation and freight transport between the western occupied areas and Berlin.

• During the second Berlin crisis, on November 27, 1958, the Soviet Union unilaterally issued an "ultimatum" demanding that Britain, the United States and France withdraw their troops from West Berlin within six months.

• During the third Berlin crisis, in early July 1961, Soviet leader Khrushchev announced the suspension of demobilization and an increase in military spending by 1/3. In a speech, he threatened to wage war and flatten West Berlin. Us President Kennedy made a tough reaction. The policy of appeasement must not be repeated, asking Congress to increase the defense budget by $3.25 billion, recruit some reservists and the National Guard, and expand civil defense and construction of air defense measures.

During the Cuban missile crisis, on October 23, 1962, the Soviet government issued a statement that it "resolutely rejected" the interception of the United States and that the threat to the United States would "carry out the fiercest counterattack." at the same time, the nuclear missile forces of the United States and the Soviet Union entered the highest alert.

Among the four crises that are "close to war", the reason why the most panic moment in the world has become the "buying point" with the highest return of "countertrend investment strategy"In essence, it is due to the rapid alleviation and reversal of the crisis itself after the most frightening moment:For example, the first and second Berlin crises ended with the concessions of the Soviet Union and the lifting of the blockade, the third Berlin crisis ended with the Soviet Union's defensive measures to build the Berlin Wall, and the Cuban missile crisis ended with the withdrawal of Soviet nuclear missiles deployed in Cuba.

3. The profound mechanism behind the high success rate of "counter-trend investment strategy": the game strategy of "approaching competition" and "replacing defense with attack".

We believe that this kind of investment law is not accidental, behind which there is a profound great power game strategy and logic of "close to war".

1) first of all, in the context of the mutual destruction of the nuclear war, as a relatively weak party, whether it is the Soviet Union during the Cold War or the current Russia.Policy makers are well aware of the "disastrous consequences" of a real all-out war between great powers on the stability of domestic regimes, so they will try their best to avoid a real war.Since the real war will not break out, the impact on the endogenous fundamentals of listed companies in US stocks will be relatively controllable, will not change the general trend of US stocks, and with the advance of the Cold War, the market has gradually priced "the background of the increase in confrontation between great powers".Therefore, the impact of the four "close to war" crises in the form of "Cuban missile crisis" on the capital market often presents the "event impact" of periodic downward risk preference.

2) secondly, the four "approaching wars" of the Cuban missile crisisEssenceCan be regarded asIn the confrontation between great powers, the weaker side is the game strategy of "replacing defense with attack".In the game of great powers such as the Cold War, in the face of the aggressive offensive of the more powerful United States and the Western camp, such as: before the Cuban missile crisis, the United States deployed nuclear weapons in Turkey and other areas close to the hinterland of the Soviet Union. Before the Russian-Ukrainian crisis, NATO continued its "eastward expansion" and support for Ukraine, as the relatively weak side of the Soviet Union and Russia. Only by resorting to showing tough determination and will to go to war can the West attach importance to its own strategic demands and enhance the prestige of its leaders at home. In this process, it is bound to be accompanied by the continuous escalation of the situation, until it causes a certain degree of "panic" in the western society as a whole. As far as the capital market is concerned, risky assets are bound to usher in a certain degree of impact and adjustment in this process.

Through "replacing defense with attack", certain strategic goals have been achieved, such as: after enhancing the political prestige of leaders, etc.What decision makers think about is how to escape with dignity in a "winner's posture", which often requires a tougher posture and, in essence, "just right".For example, in the Berlin crisis, Khrushchev built the Berlin Wall, and in this Russian-Ukrainian crisis, Putin ensured a decent and tough posture by recognizing the "fait accompli" of the independence of the two states in eastern Ukraine. maintain the minimum geopolitical status quo.This is also the mechanism behind the crisis itself, which is "close to war", reaching the "best part", that is, approaching the "end", and the high success rate of "counter-trend investment strategy"-- the most frightening moment in the capital market is easy to form the "best buying point".

四、Conclusion: "the end of the curtain" and "the beginning"

"the end of the curtain" under "the best part":To sum up, regardless of the logical deduction from the interests and game strategies of all parties in the Russian-Ukrainian crisis: the interests of all parties have achieved a "balance" at the present time, and the "best part" of the Russian-Ukrainian crisis is approaching the most panicked at present. it also means that it may "end" at any time, therefore, the market is most worried about the all-out war and the risk of strong sanctions against Russian crude oil will not occur.

Or from the impact of previous great power games that are "close to war" on the market: when the market is most panicked, the "reverse investment strategy" of buying equity and other risky assets and selling crude oil can always achieve obvious excess returns. All indicate:At present, the high probability of risky assets such as stocks has hit bottom in stages, so investors in the equity market need not be pessimistic; on the contrary, commodities such as crude oil, which are the most excited at present, may peak at stages, and investors should be moderate and cautious.

The "beginning" of the era of Great change:Although the Russian-Ukrainian crisis itself is about to come to an end in the "best part", from a medium-to long-term perspective, because the existing international law system and the post-Cold War geopolitical order have suffered a clear impact in the Russian-Ukrainian crisis for the first time, therefore, the Russian-Ukrainian crisis may herald aThe new era of "great change"The arrival of:The game between great powers is intensifying, the sense of insecurity between countries is increasing day by day, and the weight of security in the supply chain of each country is more and more higher than the economic efficiency itself.

In this sense, the current Russian-Ukrainian crisis is both "the end" and the "beginning", while the "beginning" of the "era of great change" is also under the Russian-Ukrainian crisis.The real medium-and long-term investment opportunities in the capital market are the domestic materials in the upstream of semiconductors, the software ecosystem of Huawei's domestic chips, the mainframe factory in military industry and other domestic alternatives and supply chain security.The relevant subdivision of the plate may usher in more policies, resources, funds and other support in the new "great change" era, which deserves the focus of investors' attention.

Risk hint: Russia-Ukraine crisis has exceeded expectations of the "black swan", crude oil, the stock market and so on because of other factors change trend more than expected.