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

In today's morning session, the A-share and Hong Kong stock markets suddenly broke their tranquility. The A50 index surged sharply, with an increase of over 1% quickly. Around 11 AM, the three major A-share indices collectively rose over 1%, with the chinext price index up nearly 2%. Low stock price stocks, AI applications, large finance, and large infrastructure are leading the gains, with more than 4,000 stocks in A-shares rising. $Hang Seng Index (800000.HK)$ Intra-day increase of nearly 2%,$Hang Seng TECH Index (800700.HK)$Increase of over 2%.$WUXI APPTEC (02359.HK)$At one point, it rose nearly 10%.$WUXI BIO (02269.HK)$It rose over 7%.

So, what bullish factors are stimulating this? Analysts believe that on one hand, recent bullish factors continue to accumulate; on the other hand, the market has reached the time window for two major meetings at the end of the year, and there may be an expectation for stimulating policies to be introduced.

China's assets surged collectively.

On the morning of December 6, A-shares and Hong Kong stocks were still relatively calm, but the market suddenly erupted. The A50 index surged sharply, quickly exceeding a 1% increase, which soon boosted the sentiment across all market.

Then, A-shares launched a broad rally, with the Shanghai Composite index rising over 40 points at one point, and all three major indices collectively rising over 1%, with the chinext price index increasing nearly 2%.

Hong Kong stocks also strengthened. The Hang Seng Index rose over 1%, and the Hang Seng Tech Index rose over 2%. Hong Kong stocks saw significant gains in big finance.$YIXIN (02858.HK)$Increased by over 11%,$NCI (01336.HK)$Increased by nearly 7%,$CPIC (02601.HK)$、$ZA ONLINE (06060.HK)$、$CHINA LIFE (02628.HK)$Waiting for multiple stocks to rise.

Foreign media reports that the biosafety law states that USA lawmakers are considering changes to the bill, with the compromise version including increased administrative review processes for relevant companies, rather than an automatic ban on biopharmaceutical companies cooperating with Chinese companies. Wuxi Apptec rose nearly 10%, and Wuxi Bio rose over 7%.

At the same time, the US dollar fell against the yuan from a high level, and the offshore yuan clearly strengthened.

The funding situation has again become ample. On December 6, most short-term Shibor rates decreased. The overnight rate decreased by 0.1 BP to 1.478%; the 7-day rate decreased by 0.2 BP to 1.686%; the 14-day rate increased by 0.2 BP to 1.801%; the 1-month rate remained unchanged at 1.711%.

What has happened?

So, what exactly has happened? Analysts believe the direct reason may be that the time window for two major important meetings at the end of the year is approaching.

Citic sec previously released research reports indicating that based on their review of the schedule for the Central Economic Work Conference from 2015 to 2023, it is usually held in mid-December. The comprehensive incremental policies and a series of positive statements from the policy level since the end of September have significantly boosted expectations, contributing not only to achieving this year's economic growth target but also providing a relatively optimistic guide for next year's market expectations. Although traditionally, the Central Economic Work Conference usually does not announce specific targets for economic growth or deficit rates, they believe that this year's conference will still maintain a positive tone for increasing counter-cyclical adjustments. The economic growth target for next year is expected to remain around 5%, while the deficit rate is likely to be raised to 4%; special government bond quotas may reach 3 trillion yuan, with 1 trillion yuan used to replenish commercial banks' capital and 2 trillion yuan potentially used for national major project investments and consumer subsidies; finally, the scale of new special bonds may exceed 4 trillion yuan.

Soochow securities believes that future developments will focus on three main logics:

Logic 1: The pace of the Federal Reserve's interest rate cuts: 1) From the perspective of interest rates and exchange rates, under the framework of the nominal growth rate difference between china and the usa, the decline in dollar interest rates and the easing of exchange rate pressure may alleviate domestic policy constraints; 2) In terms of capital flows, the pace of the Federal Reserve's interest rate cuts affects the capital return from three paths: trade settlement, northbound funds, and dollar funds; 3) From the perspective of fundamentals, the pace of interest rate cuts plays an important role in improving the profitability of manufacturing and investment returns; 4) From the perspective of market style, if the pace of the Federal Reserve's interest rate cuts accelerates, it will be bullish for growth style. We expect that by 2025, dollar interest rates will oscillate downwards.

Logic 2: The Trump trade: Trump winning the US election would achieve a "trifecta" and form a cabinet with distinct hawkish characteristics, and his policy proposals will be implemented more quickly during this term. It is expected that Trump will impose higher tariffs and implement a broader range of technology blockades, which will drive china to further focus on domestic demand policies and strengthen the logic of technology independence and controllability.

Logic Three: Domestic Macro Policy: Our country is currently experiencing the pains of transitioning to high-quality development, with issues such as insufficient effective demand and expanding fiscal gaps becoming evident. This still requires fiscal efforts; next year will be a year of significant fiscal activity with increasing policies expected.

In summary, under the background of Trump's victory accelerating the rise of trade protectionism and the weak recovery of the domestic economy, 2025 will be a year of significant fiscal policies, with incremental policies expected to be continuously intensified; at the same time, the Federal Reserve's interest rate cuts will create bullish effects on A-shares from three dimensions: policy space, fundamentals, and liquidity.

Editor/rice