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.

Author: Wang Lulu.

Today, the Japanese stock market has gone crazy. As of the close, the Nikkei 225 index rose by 0.81%, hitting a historic high; the Japanese TOPIX index rose by 0.92%, reaching 2898.47 points, breaking the historical peak set in December 1989 during the bubble period. Unlike the Nikkei 225, which represents some stocks, the trend of the TOPIX index can better represent the overall market. The index's setting of a historical high indicates that the Japanese overall market is fully counterattacking and hitting a historic high.

Currently, the global market is betting on the Fed's rate cut in September, and stock markets throughout Asia are rising across the board. South Korea's stock market has risen sharply, with the Seoul Composite Index up 1.11%, reaching a new high since January 2022; the Taiwan Weighted Stock Price Index rose 1.51% to 23,522.53 points, hitting another historical high. The S&P/ASX 200 index in Australia rose by 2.66% to close above the 1000 New Taiwan Dollar mark for the first time; India's S&P Sensex30 index rose to 80392 points at one point, refreshing its historical high again.$Taiwan Semiconductor (TSM.US)$Overnight, multiple updated data released in the United States showed that the labor market is cooling down more than expected, and there are signs of slowing economic growth, which has led to an increase in the likelihood of rate cuts, rising from 63% to 66.5% according to the CME FedWatch Tool.

Witnessing history.

Today, the Japanese stock market is soaring across the board. As of the close, the Nikkei 225 index rose by 0.82% to 40,913.65 points, hitting a historic high; the Japanese TOPIX index rose by 0.92% to 2898.47 points, breaking the historical peak set in December 1989 during the bubble period.

Unlike the Nikkei 225, which represents some stocks, the trend of the TOPIX index can better represent the overall market. The index's setting of a historical high indicates that the Japanese overall market is fully counterattacking and hitting a historic high.

Nomura Asset Management Co.'s chief strategist Hideyuki Ishiguro said that because Japan is getting rid of deflation, Japanese stock market valuations are still low compared to the United States.

As of the close on July 4th, all 33 industry classification indices of the Japanese stock market rose, with the automobile manufacturing industry leading the way.

Toyota Motor rose 1.35% to 3370 yen.$Toyota Motor (TM.US)$Insurance and banking stocks are one of the best-performing sectors since mid-April, because the market speculates that higher interest rates will help improve loan profitability. Japanese bank stocks continue to rise, while insurance companies are expected to be boosted by bond investments to improve profitability.

For the reason for the sharp rise in the Japanese stock market, some analysts have stated that due to the impact of ultra-low borrowing costs, high corporate profits, and the Tokyo Stock Exchange promoting improvements to corporate governance, global funds are pouring in and bullish on the Japanese stock market.

Yuuki Suda, a cross-asset strategist at Nomura Securities, said that rebalancing transactions by global investors are one of the driving factors behind the rise of the Japanese stock market. Goldman Sachs' report also stated that Japanese companies still hope to show an attitude externally and are responding to the pressure for corporate governance reform exerted on the Tokyo Stock Exchange.

Another driving force for the rise of the Japanese stock market is the improvement in the profitability of listed companies. Since the global financial crisis, Japanese companies have accelerated their overseas business layout. The productivity and sales rate of Japanese companies’ overseas business have both increased significantly, which has allowed listed Japanese companies to maintain an increase in profit level while the growth rate of the Japanese economy is limited.

There are almost no signs showing that the Bank of Japan's shift to a tight monetary policy has suppressed the risk appetite of Japanese stock investors. Instead, many Japanese investors believe that Japan's economic fate has turned to the good side with inflation expected to return.

According to data, the earnings per share (EPS) of the Nikkei 225 index gradually increased from 2013 to 2023. Compared with the EPS of 442.1 Japanese yen in 2012, EPS rose by 58.2% to 699.4 Japanese yen in 2013. By 2023, the EPS of the Nikkei 225 index had risen to 1214.4 yen, an accumulated increase of 73.6%.

The main reason for the continuous growth of profitability of Japanese listed companies is that after the global financial crisis in 2008, Japanese companies accelerated their overseas business layout. The productivity and sales rate of Japanese companies' overseas business have both increased significantly, and overseas performance has gradually surpassed exports.

The auto manufacturing industry led the way with every industry classification index of the Japanese stock market rising.

Nomura Asset Management Co.'s chief strategist Hideyuki Ishiguro said that because Japan is getting rid of deflation, Japanese stock market valuations are still low compared to the United States.

Since 2013, the Bank of Japan has implemented a policy of "quantitative and qualitative easing", and ultra-loose liquidity has been a major boost to the Japanese stock market for the long-term bull market from 2013 to the present. The Bank of Japan and foreign investment continued to buy, and the Tokyo Stock Exchange vigorously promoted the reform of corporate governance, which also helped to improve the company valuation of listed companies.

All lines rose.

Currently, global markets are betting on the Fed's rate cut in September, and Asian stock markets have risen across the board.

In addition to the soaring Japanese stock market, the Korean stock market has also risen sharply. As of the close of the day, the Seoul Composite Index of Korea surged by 1.11%, reaching a new high since January 2022 and refreshing the closing high since 2024. Among them, chip stocks rose, and Samsung's stock price soared 3.4%.

On July 4th, South Korean media reported that Samsung Electronics' HBM3e chip had passed the product test, and Samsung will soon negotiate with Nvidia to produce and supply HBM on a large scale. However, Samsung later denied the report that its HBM3e chip had passed the main customer test.$NVIDIA (NVDA.US)$

The Taiwan stock market also continued to rise, and as of the close, the Taiwan Weighted Stock Price Index rose 1.51% to 23,522.53 points, reaching a new all-time high. Among them, "Taiwan stock king" TSMC rose 2.66%, closing price exceeded TWD 1,000 for the first time and rose more than 70% since the beginning of the year. In terms of news, there are rumors that TSMC's most advanced 3 nanometers will brew a price increase of about 5% in 2025, and 5 nanometers may also raise their quotes.

At the same time, the S&P/ASX200 index in Australia expanded its intraday increase to 1.1%; the S&P Sensex30 index in India rose to 80,392 points, once again breaking historical highs since the beginning of the year. Market analysts predict that by the end of 2024, the NSENifty50 index of India may rise to 26,000 points, which means there is an increase of more than 8%.

Since the beginning of 2024, the benchmark NSENifty50 index in India has cumulatively risen by 12% to more than 24,000 points, reaching historical highs. Market analysts predict that by the end of 2024, the NSENifty50 index of India may rise to 26,000 points, which means there is an increase of more than 8%.

On the news front, with the general election in India basically settling down, many strategists and investors have said that the budget plan to be issued by the Indian government may stimulate consumer spending and infrastructure construction in India, which is a good sign for Indian companies.

Investors are now turning their attention to the government’s budget plan to be released later this month, which will list Modi’s policy priorities under the new coalition government. It is expected that the government's top priority will be to take various incentive measures to support consumption, while continuing to promote capital expenditure in infrastructure.

Analysts point out that under this expected outlook, non-essential consumer stocks in the Indian stock market will benefit the most, followed by financial and commodity stocks.

Another reason why stock markets in many places have risen sharply is that the expectation of a rate cut by the Fed is rising. On the evening of July 3rd Beijing time, several latest data released by the United States showed that the labor market is cooling more than expected, the US economic growth is showing signs of slowing down, and the expectation of rate cuts is rising. The Fed observation tool of CME shows that the probability of a 25 basis point interest rate cut in September has risen from 63% to 66.5%.

Editor / Feynman