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,

Today, the sector with the largest increase in the Hong Kong stock market is no longer brokerage and real estate, but semiconductors. The semiconductor sector is the top gainer in the Hong Kong stock market rankings, among which$HG SEMI (06908.HK)$rose by 285.54%,$SOLOMON SYSTECH (02878.HK)$increased by 70.37%.

As of 1:19 UTC on the 19th, Microsoft 365 subscription services are no longer available to some users, and the software giant also reported that its Azure cloud has encountered problems in the central United States. By 01:30 on July 19th UTC time, the M365 status page displayed that 'through our traffic redirection work, service availability is gradually returning to a healthy state,' and Redmond has 'identified potential root causes that may be causing impact. Our team is currently verifying these findings and our mitigation strategies to ensure that the problem is resolved as soon as possible.'

According to Asdak Finance, today, CMB International released a research report stating that the central government recently introduced stimulus policies, resulting in a significant increase in the Chinese market (A-shares and H-shares), with substantial increases in the semiconductor and communication sectors. By the end of September 2024, the semiconductor sector index rose sharply by 15.5%. From September 23 to September 30, the average price increase of semiconductor A-share groups and light/telecom groups was 37% and 32% respectively. CMB International expects the semiconductor industry to have a chance of revaluation. The market momentum may continue in the short term, especially for semiconductor stocks listed in Hong Kong.

In fact, the semiconductor industry's recovery momentum is evident, with revenue recovery across multiple sectors, and the AI wave is leading the industry into a new cycle of prosperity. Looking at the main themes of speculation in previous bull markets, the year 1999 saw the internet wave, 2007 saw the nonferrous metals wave, 2015 was the mobile internet wave, and this time it may be all about AI.

Grand Scene of Semiconductors

On the last trading day of the week, the semiconductor sector in the Hong Kong market emerged as a dark horse, being the sector with the largest increase in the Hong Kong market today, and today's increase exceeded the gains of the past three trading days. This means that the semiconductor sector truly took off today.

From the performance of individual stocks, $HG SEMI (06908.HK)$ the increase once exceeded 300%, with a trading volume of 0.265 billion Hong Kong dollars.$CONTEL (01912.HK)$Increased by nearly 100%, $SOLOMON SYSTECH (02878.HK)$ The increase is over 70%,$BRAINHOLE TECH (02203.HK)$,$CE HUADA TECH (00085.HK)$,$SHANGHAI FUDAN (01385.HK)$,$HUA HONG SEMI (01347.HK)$The increase also reached over 20%.

The large-scale semiconductor market in Hong Kong this time may be related to the previous small price increase on the one hand, and on the other hand, it may be related to a research report. CMB International released a research report stating that the recent stimulus policies introduced by the central government led to a significant increase in the Chinese market (A-shares and H-shares), with substantial increases in the semiconductor and communication sectors.

CICC is bullish on Hong Kong semiconductor stocks, which are expected to have upward potential driven by market sentiment revival and inflow of funds.$SMIC (00981.HK)$(No rating), $HUA HONG SEMI (01347.HK)$ Buy and$ZTE (00763.HK)$Buy may be more favored by funds due to its large market cap and good liquidity. In terms of A-share semiconductor sector, CICC continues to recommend$Zhongji Innolight (300308.SZ)$Buy and$NAURA Technology Group (002371.SZ)$Buy as the top choice.

Is it an indispensable theme?

From the current situation, semiconductors seem to have the potential to become an indispensable theme. Looking back at each round of bull markets, there is always a theme. For example, in 1999, due to the internet wave on Nasdaq, a domestic internet speculation wave was also triggered, and many high-growth stocks emerged from the internet. In 2015, the mobile internet wave was driven by smartphones like Apple and Huawei, and many GEM stocks achieved multi-fold annual growth in that market. Now, the US stock market has already seen a classic wave of AI market, and the chip industry is highly correlated with artificial intelligence. Based on this logic, the probability of semiconductors taking on a leading role in future market trends will significantly increase.

Looking at the current development status of the industry itself, the fundamentals of the semiconductor industry are also trending positively. In July 2024, global semiconductor industry sales were $51.3 billion, an 18.7% year-on-year increase, achieving four consecutive months of year-on-year growth. In August 2024, China's integrated circuit import value was $33.083 billion, up 11.7% year-on-year; import quantity was 49.8 billion, up 16.7% year-on-year, with a 14.48% increase month-on-month. In August 2024, China's semiconductor equipment import value was $2.957 billion, up 3.8% year-on-year; import quantity was 5921 units, up 27.4% year-on-year, indicating a recovering market sentiment. Furthermore, from April to July 2024, 64Gb NAND Flash and DDR4 prices are stable at high levels. Currently, NAND prices are up 22.83% compared to the low point in 2023, and DDR4 prices have increased by 30.39% compared to the low point in 2023.

From the market performance perspective, semiconductors have previously underperformed the electronic industry index and.$CSI 300 Index (000300.SH)$It can be said that whether from the fundamentals, stock price performance, or market outlook, semiconductors have the potential to rise suddenly. Today, it may be just the right timing for this.

Editor/Jeffy