Source: Brokerage China Author: Qu Hongyan Recently, China Yangtze Power hit a historical high and once again showed the slow bull stock trend of "tripling in ten years". The slow bull market has left behind many passers-by and brought good returns to the steadfast investors. It is "rare for those who triple in one year to be like carp jumping over the dragon gate, while those who double in three years are few and far between." On the other end of the investment world, however, violent collapses are also deafening, with many financial products suspected of "Ponzi schemes" ceasing payments, leaving investors with no hope of recovering their investments. Both positive and negative cases illustrate the importance of forming a suitable mentality towards money in one's lifetime; otherwise, sooner or later, you will divorce yourself from your money. "I call this the money mind, a person's IQ can reach 120, 140, or even higher levels, and perhaps some people's minds are good at doing one thing, while others are good at doing another. They can do things that most ordinary people can't do. But I know some very smart people who make very foolish decisions because they lack the money mind." Buffett once said so. The so-called money mind refers to believing in common sense, believing in compound interest, being cautious and rational, thinking independently, prioritizing security over return, not dealing with people with questionable character, not easily guaranteeing for others, not believing in windfall profits, and not trying to cross legal norms for extra benefits. In today's world of ubiquitous information, everyone's wealth may become the "prey" of those with ulterior motives. Only with the money mind, can one form good behavior habits and shield oneself from separating from one's wealth. Do not entrust your wealth easily. Wealth is easy to lose but hard to accumulate, and trust is a vital reason leading to the rapid loss of wealth. "Do not allow anyone else to manage your business unless you can watch their every move closely and understand their behavior; or you have strong reasons to believe in their character and ability. For investors, this criterion determines when you can let someone else make investment decisions for you." Graham's criterion written eighty years ago is so clear. Almost all the investors who lost their wealth in the financial products have violated the above two criteria. They did not have the ability to closely supervise the whereabouts of their funds, nor did they have sufficient reasons to believe in the character of the product issuers. They easily invested their own wealth solely based on others' glib tongue and a piece of commitment paper. They did not act as gatekeepers of their own wealth and ended up with nothing left even if the government punished the wrongdoers. "An ounce of prevention is worth a pound of cure." This is a phrase Munger often says. Destiny must be in one's own hands, and investors with a suitable money mind will try their best to find suspicious points in their investments to protect the safety of their principal. For example, whether the manager is trustworthy, whether the underlying assets are profitable, whether oneself can timely monitor the risks in the investment process, and whether the sales staff is obtaining large commissions. As long as any unreliable signs are found, these investors firmly will not invest their money. Do not desire to get rich quick. As in the capital market and anywhere else, making money is not easy, and desiring to get rich quick will lead to quick loss of wealth. In the capital market, the desire to get rich quickly often leads to investors over-allocating specific stocks, industries, or assets at the worst time. For example, buying high-risk stocks that can gain huge returns once an adventure succeeds, but the chance of success is very small, also known as "whispering stocks" by legendary fund manager Peter Lynch. "They often tell investors a story with explosive effects. These 'whispering stocks' have a hypnotic effect on people, and it is easy for you to believe that the story the company tells has an emotional appeal that can easily confuse you." This is like hearing a very tempting "sizzling" sound, making you salivate, but you did not notice that there is no steak on the grill. In the eyes of investors who lack the money mind, stable yield provided by blue chips such as China Yangtze Power cannot meet their demands. However, historical experience clearly shows that buying stocks lacking in safety solely based on imagined high yields is unwise. The long-term average investment return of general stocks is 9%-10%, which is also the average investment return of stock indexes in history, a benchmark to measure one's investment performance and the benchmark to measure fund investment performance.

The largest bull stock in the world.$NVIDIA (NVDA.US)$Recent volatility is bigger than small-cap stocks. The stock has been falling recently and rose by nearly 7% last night. Behind this volatility, Mario Iachini, Senior Vice President of Vanda Research, who tracks individual investor behavior, said that individual investors may buy the stock during recent declines.

However, there are also two major negative signals. First, data from Ortex Technologies, a data analysis company, show that the shorts betting on a decline in Nvidia's stock price have made a total profit of $4.97 billion in the past three trading days. This profit effect may widen the volatility of Nvidia. Second, Cathie Wood (Sister Wood), the "tech goddess" and founder of ARK ETF, made significant progress in the stock market on June 25, 2024. Data showed that ARK sold 33,834 shares of Nvidia, worth nearly $4 million.

However, there are still differences in the market.

According to Steve Eisman, one of the prototypes of the protagonist in the movie "The Big Short", Nvidia's three-day consecutive decline, with a decline of more than 10%, is not a big deal. So, can Nvidia sit on the altar for a long time?

Nvidia, Three Major Trading Information

Last night, Nvidia, which has recently fallen sharply, suddenly rose. Behind this volatility, there came information from three major trading levels.

Firstly, Mario Iachini, Senior Vice President of Vanda Research, who tracks individual investor behavior, said that individual investors may buy the stock during recent declines. This may also be an important reason for the big rebound of Nvidia.

Secondly, Trade Alert's data shows that in the past three trading days, the number of Nvidia call options (usually used to bet on rising stock prices) was 1.4 times the number of put options. In the previous 10 trading days, the ratio of call options to put options was 1.6 times. At the same time, data from Ortex Technologies showed that the shorts betting on a decline in Nvidia's stock price have made a total profit of $4.97 billion in the past three trading days. Ortex said that on Monday, shorts made a profit of $2.4 billion from Nvidia's 6.6% decline, the highest single-day profit since it began publishing data in 2019. Some market participants attribute Nvidia's correction to investors withdrawing from booming AI stocks and entering other industries as 2024 approaches its midpoint.

Thirdly, Cathie Wood (Sister Wood), founder of ARK ETF, recently sold 33,834 Nvidia shares, worth nearly $4 million. This sale occurred during a widespread evaluation of the semiconductor industry by the market and may reflect ARK's strategic adjustments to its investment portfolio.

It is worth noting that the sharp rise last night occurred against the backdrop of the continuing rise of the Fed's reverse repurchase. Analysts believe that if this indicator continues to trend upward, it will still exert some pressure on the entire Nasdaq sector, and "Internet Red Bull Stock" such as Nvidia may still be attacked by shorts.

Big Short becomes a "fan"

However, it is interesting that there is still a lot of disagreement in the market about this stock. Steve Eisman, a senior fund manager at Neuberger Berman, who became famous for shorting subprime mortgages before the financial crisis and is now holding a lot of Nvidia stocks, said in an interview with Bloomberg on Tuesday that he regards Nvidia as a long-term investment and believes that it will play a pivotal role in the next few years. Eisman said: "If you look at Nvidia's technical lines, you can hardly see any corrections. Nvidia's stock price is the least of your worries. I learned one thing when I managed a hedge fund, that shorting a stock just because of the price is undoubtedly looking for death. If someone is willing to continue buying a stock when it is very expensive, it is because they believe in the subject matter of the stock, and as long as the subject matter does not change, such as Nvidia, I do not care about its price."

Eisman said that if you look at Nvidia's technical lines, you can hardly see any corrections. He said that Nvidia's stock price is the least of your worries. He said, "I learned one thing when I managed a hedge fund, that shorting a stock just because of the price is undoubtedly looking for death. If someone is willing to continue buying a stock when it is very expensive, it is because they believe in the subject matter of the stock, and as long as the subject matter does not change, such as Nvidia, I do not care about its price."

Eisman, who became famous for shorting the US real estate market before the financial crisis, is one of the protagonists in the movie "The Big Short" and is the real-life prototype of Mark Baum.

From a fundamental perspective, Nvidia's data center GPU (including AI-oriented GPU) shipments reached 3.76 million chips, an increase of 1.12 million chips compared to 2.64 million chips in 2022. In 2023, the global shipment of data center GPU will reach 3.85 million chips, which accounts for as much as 98% of the market share and is close to the market share in 2022.

In other words, in the data center GPU market, AMD and Intel (mainly data center GPU Max series, excluding Gaudi ASIC chips) have a total shipment of only 90,000 chips in 2023. In terms of data center GPU sales revenue, Nvidia also occupies 98% of the entire market in 2023, reaching 36.2 billion US dollars, more than three times the 10.9 billion US dollars in 2022.

The latest report from market research firm Jon Peddie Research shows that the global discrete graphics card (AIB) shipments in the first quarter of 2024 increased by 39.2% year-on-year to 8.7 million units, and Nvidia also maintains a steady 88% market share. Obviously, not only in the data center GPU market for AI and HPC applications, Nvidia has a monopoly advantage, and also holds a monopolistic position in the consumer GPU market.

Is there no end?

It is precisely because of Nvidia's monopoly position that it has also attracted some troubles.

Earlier this month, according to reports from many US media, the Federal Trade Commission (FTC) and the Department of Justice will launch an antitrust investigation into Microsoft, Open AI and Nvidia to examine the influence of these powerful companies in the artificial intelligence industry. The New York Times first reported this investigation, and a person familiar with the matter also confirmed to CNBC that the investigation does exist.

According to sources, the FTC will lead the investigation into Microsoft and Open AI, while the Department of Justice will focus on Nvidia. The investigation will focus on the company's behavior rather than its merger and acquisition activities. The report said that the Department of Justice and the Federal Trade Commission reached this agreement in the past week and are expected to finalize it in the next few days.

In addition, some big names have commented that if OpenAI's GPT-5.0, which will be released at the end of this year, does not meet expectations, Nvidia may face serious challenges. Moreover, when retail investors participated in Nvidia's split, insiders also sold stocks worth $750 million. Currently, Nvidia is still in a high-growth stage, so although its P/E ratio is not low, its PEG is still in a low position. Therefore, many people are bullish, and there is reason to be.

Editor/tolk