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,

Yesterday, the Asia-Pacific market was in a weak market, but today it rebounded strongly.$Nikkei 225 (.N225.JP)$The index rose more than 3.5% at one point, closing up 3.4% at 36833.27 points. The Taiwan Weighted Index closed up 3%. Major stock indices in Hong Kong and South Korea all rose more than 1%. Meanwhile, the currencies of various strong Asia-Pacific countries fell across the board, and the recent negative correlation between exchange rates and equities became more apparent.

So, what is the logic behind this? Firstly, looking at the structure of the rise, since last night$PHLX Semiconductor Index (.SOX.US)$Surging, leading to a strong trend in the chip and consumer electronics sectors in the Asia-Pacific market today. Secondly, from an economic perspective, Japan's August producer price index rose by 2.5% year-on-year, lower than the expected 2.8% and last month's 3%. This data is one of the key indicators closely watched by the Bank of Japan, and the Bank of Japan has hinted at further interest rate hikes in the coming months. However, Bank of Japan Policy Board Member Naoshi Tamura stated that the pace of interest rate adjustments depends on price and economic conditions. The Bank of Japan may not necessarily raise interest rates in 2024, and the timing of rate hikes cannot be predicted.

A single action triggers a thousand waves.

If, last night$NVIDIA (NVDA.US)$Saved the US stocks, it can also be said that it saved the Asia-Pacific market today.

On September 11, Huang Renxun, the founder of NVIDIA, stated at the Goldman Sachs Technology Conference in San Francisco, USA, that the demand for NVIDIA's latest Blackwell chip was excessively high, leading to strained customer relations, and efforts are being made to resolve this. This reveals the unabated popularity of AI chips. The stock surged by over 8% last night, directly driving the Philadelphia Semiconductor Index to soar.

Today, at the opening of the Asia-Pacific market, the stock indices of related markets surged directly. As of the close, the Taiwan Stock Exchange Weighted Index rose by 3% to 21653.25 points. Hon Hai Precision Industry Co. rose by 4.7%.

The Nikkei 225 index surged by over 3.5% at one point, closing with a 3.4% increase at 36833.27 points. The Tokyo Stock Exchange index rose by 2.4%. Tokyo Electron Ltd.'s semiconductor-related stocks surged by nearly 5% at one point.$Advantest (6857.JP)$Once rose 9%,$Renesas Electronics (6723.JP)$Once rose 3.47%.$SoftBank Group (9984.JP)$With a stake in chip design company Arm, it once surged more than 8%.

The South Korean KOSPI index rose more than 2%, small cap stock Kosdaq rose 3%, SK Hynix rose more than 8%, Samsung Electronics rose nearly 2%. At the same time, the Hong Kong stock market$Hang Seng TECH Index (800700.HK)$,$Hang Seng Index (800000.HK)$And.$Hang Seng China Enterprises Index (800100.HK)$All rose by more than 1%. Overall, the major markets in the Asia-Pacific region are almost all in the red.

On the other hand, today's exchange rate market, after experiencing yesterday's early frenzy, the exchange rates of various countries in the Asia-Pacific region are starting to decline, especially the yen exchange rate. The USD/JPY has already broken free from its lows and has shown significant rebound today. It is worth noting that this is happening under hawkish comments from relevant Japanese officials. It is quite obvious that the equity market is still significantly affected by the movement of the yen exchange rate.

Market instability

In fact, the recent market has been quite unstable. Rises and falls are often triggered by certain statements, rather than determined by the fundamentals of companies and industries. This often means that, before the interest rate cut by the USD, various market expectations are filled with instability. The reasons for this instability come from three aspects: first, due to the excessive trading of interest rate cuts previously, the market is at a high valuation, and some funds have the need to cash out; second, the interest rate cut may bring changes in the prices of carry trade funds, such as yen arbitrage transactions that may reverse as a result; third, as the demand of peripheral macroeconomics weakens, the economic fundamentals are also in an unstable state.

From a technical perspective, the trend of the Japanese yen is most critical. Some analysis suggests that the market expects the start of the Fed's interest rate cut cycle to be slower than previously expected, but this will not prevent the yen from strengthening against the US dollar. Japan's 6-month forward rate has almost returned to the level after the last interest rate hike by the Bank of Japan, indicating that the market believes there will be almost as many rate hikes in the next 6 months as there were at that time. Therefore, it is no coincidence that the yen reached a high point in 2024 on Wednesday, as the correlation between the yen and the 6-month forward rate is the highest in years.

The slight rise in the US core CPI led to traders reducing their bets on a Fed interest rate cut, and now traders only expect a 25 basis point rate cut in September. However, the total amount of rate cuts included in this round of easing by the US has increased, and the market believes that the Fed will accumulate a total rate cut of 244 basis points in the nine meetings up to September next year. All of this means that even as the interest rate differential between the two countries continues to widen in the coming months, the yen-dollar exchange rate will continue to rise.

However, expectations from statements by some Bank of Japan and Japanese economic officials are not particularly clear. BOJ hawkish committee member Naotoshi Tamura said on Thursday that the interest rate must be raised to at least 1% by the end of next year, strengthening the bank's determination to normalize monetary policy, and this is also the first time a member of the Bank of Japan has publicly announced an interest rate target. The possibility of the 2% inflation target set by the Bank of Japan remains close, meaning that the interest rate must be raised to a level close to economic neutrality by the end of 2025.

He also stated that it is necessary to raise interest rates in a timely and gradual manner. The current market view on the interest rate path is gradual interest rate hikes. Interest rates will be adjusted based on the certainty of the price target. It will be necessary to raise interest rates by examining the economic and inflation situation. The Bank of Japan may not necessarily raise interest rates in 2024, and the timing of the rate hike cannot be predicted.

Yesterday, Bank of Japan Policy Board member Junko Nakagawa stated that if the economic and price performance meets expectations, the Bank of Japan will continue to adjust the degree of policy easing. This was an important reason for the sharp fluctuations in the Japanese market that day.

On the other hand, it is clear that the market has high hopes for artificial intelligence. It seems that only the rapid development of artificial intelligence can break the global economic stagnation. Therefore, the rise of artificial intelligence last night not only boosted the US stock market, but also rallied the major stock markets in the Asia-Pacific region today. Artificial intelligence is undoubtedly an important industrial trend, but it's also worth observing whether there will be ups and downs along the way.

Editor/rice