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: Shi Qian. Will this be the arrival of the "real wolf"? The consumption tax rumors suddenly spread in various investment groups yesterday after the close of trading. There are reports that a trillion-level consumption tax reform will be approaching, and luxury goods and high-end services may be the first to test. As of the close of trading this morning, consumer stocks suddenly rebounded collectively, and retail and duty-free areas led the rise. Among them,
This morning, the Euro Freight Index futures (hereinafter referred to as Euro Freight) main contract plummeted by 8.77%, to 2140.9 points, and once fell below 10% in the morning. At the same time, the Hong Kong stock market plummeted across the board, A50 futures, and the RMB also quickly declined. A-shares were relatively strong in the morning, but there have been some changes in the market situation. So, what exactly are the unfavorable factors that have ambushed?
On the morning of September 2nd, the latest data shows that the August Caixin China Manufacturing Purchasing Managers' Index (PMI) rose to 50.4%, up from the previous value of 49.8%. Detailed data shows that the manufacturing sector has returned to expansion, but external demand has shrunk for the first time this year. In fact, economic data in Europe and the United States in July fell below expectations, leading to a continuous weakening in global restocking momentum. The composite PMI for the Eurozone in July was 50.1%, below market expectations. In July, the US manufacturing PMI was 49.6%, a decrease of 3.9 percentage points from the previous period, falling below the boom-bust line of 50% and entering a contraction range. This may be the main reason for the sharp decline in the Euro Linehaul Index.
Once dropped more than 10%.
In the morning, there was another sudden development in the market. The Euro Linehaul main contract extended its decline to 8.77%, with the decline once falling below 10%.
This variety reached its highest point of 4763.6 points on July 4th. Since then, it has been declining all the way, and as of now, in less than two months, the decline has exceeded 50%. It is worth mentioning that the stock markets in Europe, the US, and Japan also peaked and fell almost at the same time, showing a certain degree of correlation with the trend of the Euro Linehaul, possibly related to the economic fundamentals in the periphery.
Today, along with the decline in European shipping, the stock market also fell. After experiencing a volume rebound in the last two trading days of last week, the stock market fell again today, with a gradual increase in the decline of A shares in the morning, and the market pattern once again tilting towards large-cap blue chips. Agricultural Bank of China, China Petroleum & Chemical Corporation and other stocks experienced a significant rebound, which intensified the selling pressure on small and mid-cap stocks.
It is worth noting that despite the good performance of the overseas markets last Friday, the Hong Kong stock market did not perform well in early trading today.$Hang Seng Index (800000.HK)$,$Hang Seng China Enterprises Index (800100.HK)$And.$Hang Seng TECH Index (800700.HK)$The morning session's decline once exceeded 1.5%. The A50 futures index fell more than 1%. The offshore renminbi against the US dollar also saw a decline of 100 basis points.
What is the reason?
So, what is the reason for the market crash? According to recent data, overseas demand has indeed weakened. On the morning of September 2nd, according to the Caixin China General Manufacturing PMI report, in August 2024, driven by increased demand and slight acceleration in production, China's manufacturing sector saw a slight increase in business activity, returning to the expansion range. The August Caixin China Manufacturing Purchasing Managers' Index (PMI) announced on September 2nd recorded a reading of 50.4%, an increase of 0.6 percentage points from July, but still the second lowest since November 2023. However, export orders were weak that month and showed a slight contraction for the first time this year, with companies reporting a deterioration in the external environment.
In addition, after seasonal adjustment, the PMI for South Korea's manufacturing sector, the fourth largest economy in Asia compiled by S&P Global, was 51.9% in August, higher than July's 51.4%. The growth rate of new export orders was the narrowest in six months. Official trade data released last Sunday supported the survey results, indicating that South Korea's exports continued to grow for the 11th consecutive month in August, but the growth rate has slowed due to a slowdown in demand for computer chips. This morning, the stock markets of export-oriented economies also did not show strength.
In fact, the economic data from Europe and the United States in July has already weakened more than expected, and the global restocking momentum continues to decline. The composite PMI for the eurozone in July was 50.1%, lower than the previous and market expectations. The manufacturing PMI for the eurozone recorded 45.8%, unchanged from the previous month and has not exceeded the stagnation line so far this year. The services PMI recorded 51.9%, although above the stagnation line of 50%, but this index has declined for three consecutive months.
In July, the manufacturing PMI in the United States was 49.6%, a decrease of 3.9 percentage points from the previous period, below the stagnation line of 50%, entering the contraction range. Looking at the sub-indices, the manufacturing import, employment, new orders, and new export orders indices are all below 50%, with employment and new orders indices showing a significant decline. The import index has risen slightly from the previous month, but only by 0.1 percentage point.
CITIC Securities Futures believes that considering the latest inventory data in the United States, the total inventory in May increased by 1.76% year-on-year, compared to a previous value of 1.16%. In May, manufacturing inventory, commercial inventory, wholesaler inventory, and retailer inventory in the United States increased by 0.87%, 1.61%, -0.51%, and 4.97% respectively, compared to the same period last year. They believe that currently, the restocking momentum in Europe and the United States is weakening, and demand is relatively weak.
In June of this year, the European Central Bank lowered the three key interest rates in the eurozone by 25 basis points, but the European economy has not completely alleviated the pressure caused by previously high interest rates on production and consumption, and the momentum of economic recovery continues to weaken. This data shows that the European economy continues to be sluggish, and the manufacturing sector is under considerable pressure in the face of supply chain issues, fluctuating energy prices, and economic uncertainties. In the second half of the year, influenced by trade protection policies of various European countries, China-Europe trade will face challenges, so the impact on the container shipping market needs to be closely monitored.
Editor/rice