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,$Hang Seng TECH Index (800700.HK)$the increase once expanded to 2%.$NIO-SW (09866.HK)$、$XIAOMI-W (01810.HK)$At one point, it rose over 6%, and XIAOMI-W's stock price reached a historical high during the day.$Hang Seng Index (800000.HK)$and$Hang Seng China Enterprises Index (800100.HK)$The increase also at one point exceeded 1%, which helped A-shares rebound momentarily. Meanwhile, huge fluctuations occurred in bond futures during the day, with the 30-year government bonds plunging at one point, but then quickly rebounded by capital. Other maturities of government bonds exhibited similar movements.

After the Hong Kong stock and A-shares fell across the board yesterday, a message signed 'Goldman Sachs Trading Desk' reported that yesterday, the trading department unexpectedly leaned towards Buy in terms of average nominal amounts (1.2 times). The fluctuating Bid mainly appeared during the afternoon trading session, but most came from overseas hedge funds rather than bulls.

A fierce contest.

Compared to the overwhelming short positions yesterday, the contest between long and short positions was quite clear in the morning session today. Against the backdrop of poorly performing external markets, Hong Kong stocks suddenly established a bullish tone in the morning.

In the morning opening, the Hong Kong stocks opened slightly higher, after a brief consolidation, began to rise. The Hang Seng TECH Index once rose more than 2%, and the Hang Seng Index once rose more than 1%.$CNOOC (00883.HK)$、$PETROCHINA (00857.HK)$Once leading with an increase of over 2%,$JIANGXI COPPER (00358.HK)$、$SHK PPT (00016.HK)$、$HENDERSON LAND (00012.HK)$Wait for individual Stocks to rise. The Hong Kong stock market's New energy Fund Sector is fluctuating and rising, with NIO once rising over 6%,$LI AUTO-W (02015.HK)$once rising over 3%,$GWMOTOR (02333.HK)$、$XPENG-W (09868.HK)$Follow the trend. Network Technology stocks surged, with XIAOMI-W performing strongly, at one point rising over 6%, breaking upward to reach a new high. As of the time of publication,$BABA-W (09988.HK)$Meituan and JD.com both rose about 2%.

During the session, there was also significant news from TENCENT. Information released by the Hong Kong Stock Exchange shows that by December 31, 2024,$TENCENT (00700.HK)$a total of 0.307 billion shares were repurchased throughout the year, totaling 112 billion HKD. Since the significant shareholder Prosus began selling TENCENT shares in June 2022, as of December 27, 2024, TENCENT's total repurchases have reached 187.6 billion HKD, surpassing the amount sold by Prosus during the same period, which was 174.5 billion HKD, completely offsetting the impact of the major shareholder's share sales. Moreover, as of December 31, 2024, TENCENT's total capital stood at 9.22 billion shares, a decrease of 0.26 billion shares compared to the beginning of 2024. From the end of 2021 to now, TENCENT's total capital has reduced by about 0.38 billion shares in three years, reaching its lowest level in a decade.

It is worth noting that during the trading process, the tug-of-war between bears and bulls was quite evident. As the Hong Kong stock market strengthened, A-shares also briefly turned positive. However, selling pressure remained heavy. Subsequently, A-shares weakened, and the gains in the Hong Kong market also narrowed. Meanwhile, the government bond market exhibited particularly 'interesting' behavior. The 30-year government bond futures once drove a significant drop in futures of all maturities, boosting equities. However, the government bond futures fought back later, causing equities to face resistance in their rebound. Currently, the seesaw effect between government bond futures and stocks is especially prominent.

How will equities develop?

From the current situation, when equity markets drop, there will indeed be funds entering the market for bottom fishing.

A message from the 'Goldman Sachs Trading Desk' indicated that Goldman Sachs' trading department unexpectedly favored buying in terms of average nominal amount (1.2 times). The fluctuating buying mainly occurred in the afternoon trading session, but mostly from overseas hedge funds, rather than bulls. However, given that the nominal amounts remain relatively low, this does not necessarily indicate a recovery in investment interest. In terms of sectors, they mainly bought Semiconductors, Autos, and Batteries; while Brokerage and Medical Care were the main objects for selling. Baijiu and real estate stocks showed slight bids in both directions, while high dividend themes failed to gain buying support here.

HAITONG SEC released a research report stating that looking back at 2024, the Hong Kong stock market is expected to experience overall volatility upward. They believe that the Hong Kong stock market is currently still in a high cost-performance range. In terms of valuation, it appears low compared to overseas Hong Kong stock valuations. From an emotional perspective, current trading volume in the Hong Kong stock market is shrinking, with a higher proportion of short selling. In terms of risk preference, the risk premium in the Hong Kong stock market is high, and expected volatility is declining. Looking ahead to 2025, the institution pointed out that the liquidity easing in the Hong Kong stock market is expected to continue, and from a macro perspective, the trend of interest rate cuts by the Federal Reserve remains unchanged. From a micro perspective, in addition to the incremental brought by the Hong Kong Stock Connect, foreign capital is also expected to stage a return. The overall direction for the recovery of the Hong Kong stock market's fundamentals is relatively certain, with the key to the recovery process being the speed at which incremental policies are implemented, while the USA's China policy may also disrupt the fundamentals.

Recently, Yuan Da, Deputy Secretary-General of the National Development and Reform Commission, also stated that considerations regarding the 2025 economic growth target must balance needs and possibilities and ensure alignment with medium to long-term planning, fully reflecting the needs to promote high-quality development and achieve the goals of the 14th Five-Year Plan. The effects of policies introduced last year will continue to show, and this year there is ample space for macro policies, coupled with richer tools and experience in macro regulation. This can provide strong support for achieving the targets. Overall, there is confidence in promoting continuous economic recovery this year and in achieving the tasks of the 14th Five-Year Plan with high quality.

Editor/Jeffy