This article takes the active partial stock public offering fund as the representative description, in order to continuously increase the position in a certain sector to close to or more than 30%, and hold it for more than two quarters, which is called "hutuan". In 2006, with the continuous growth of public funds and insurance institutions, institutional investors have a greater and greater impact on the market.

Since 2006, there have probably been four very famous waves of hugging. They are:

• From 2007 to 2009, we call it the "golden age of finance" to increase positions and gather together financial real estate.

• From 2010 to 2012, increase the position and spend together for the "first consumption group".

• Add positions and join forces in the "Mobile Internet Wave" of Information Technology from 2013 to 2015

• Since 2016, we have continued to increase positions and spend together on the "second consumption group".

The first time to gather together: the Golden Age of Finance

1. The cause is the high growth rate of money.

The financial industry tends to perform well in the stages of high monetary growth and high credit growth. Looking back at the history of China's currency investment, nothing is more thrilling than the influx of "hot money" since 2006 and the "4 trillion" in 2009.

Now we need to go back to the simplest time.

On July 21, 2005, the people's Bank of China announced that from now on, China began to implement a managed floating exchange rate system based on market supply and demand and with reference to a basket of currencies, and the RMB began to appreciate for nearly 10 years. Hot money began to pour into China.

On the other hand, with China's accession to the WTO, the global manufacturing industry chain has accelerated its transfer to China, bringing a lot of foreign investment. At that time, China implemented a foreign exchange settlement and sale system, so every dollar of foreign exchange inflows eventually became a reserve asset of the central bank, which released the corresponding base currency on an equal footing. Therefore, the inflow of US dollars finally derives the base currency of the exchange rate × the amount of foreign exchange.

The period from 2005 to 2008 was the fastest expansion of the central bank's balance sheet since the data were available.

Accordingly, because of the strong investment demand, credit and broad money are derived at a higher speed on the monetary base.

With this credit expansion and a big bull market in the stock market, the performance growth rate of the financial sector doubled from 2006 to 2007. From 2006 to 2008, the performance of the financial sector is significantly better than that of listed companies as a whole.

Later, investors gradually summed up the rule that financial easing buys finance first. We concluded that from the interest rate of 10-year treasury bonds breaking through 3.5% from top to bottom to the recovery of social finance growth, which is what we call the financial easing cycle, the financial sector has excess returns relative to the market.

2. Clustered Finance-- the real growth stocks in those years

In 2006, as finance expanded sharply, non-Bank Finance led all sectors with a 300 per cent rise, followed by banks, which were hot growth stocks in those years. The surge in the financial sector in 2006 strengthened the belief in institutional positions, with public funds holding up to 40% of the financial sector at the end of 2006.

High performance growth has led public funds to firmly hold the financial sector, which remained at more than 40 per cent in 2007, and reached a peak of 48 per cent in the third quarter of 2007, when the Shanghai Composite Index hit 6000.

The sharp rise in the index in 2006 has also greatly increased investors' attention to public funds. In December 2006, the offering scale of a single active partial stock fund reached 41.9 billion, which also set a historical record for the issuance of active partial stock public offering funds. this scale has not been broken in the same type of products. There was a big explosion of public offering funds in 2007, with nearly 2 trillion stocks and hybrid funds in 2007, nearly four times the number at the end of 2006.

3. Crazy 530 music-"hugging-applying for purchase" positive feedback shows its power for the first time

By May 29, 2007, the rising index had risen from 998 points in June 2005 to 4335 points for two years, nearly quadrupling, and there were already some signs of bubble.

Although the market rose sharply in the first half of 2007, it was not particularly satisfactory for the relatively ranked public offering funds, as the banks with heavy positions ranked first from the bottom in the first half of the year and fourth from the bottom of the non-bank. Similar to the situation that occurred many times later, there are many people who think that the group should come to an end. But like every hugging group, the previous hesitation is always a better opportunity to increase the position, and the initial wavering is for tighter hugging, getting off again and again, regretting, getting on the bus again and again, constantly strengthening the belief in holding shares, forming the strongest hugging group, and ushering in the final bubble.

On May 30, 2007, the famous 530 event in the history of A-share occurred. On May 30, 2007, the Ministry of Finance decided to adjust the stamp duty rate on stock transactions from the current 1 ‰ to 3 ‰. Since May 30, the index has jumped short and opened low, falling for four and a half days, from a low of 4335 points to 3404 points, and nearly 1000 points in four and a half days, which is equivalent to a small stock market crash.

It was a painful adjustment for most investors, but it provided an excellent opportunity to build positions for 600 billion partial equity funds issued in the first half of 2007.

From noon on June 5, 2007, the market began to rebound, new funds continued to increase positions in finance, the financial sector changed the declining trend, accelerated the cycle of hand-in-hand, and finally, when it peaked in October 2007, it ranked third and fourth. And the stock of funds also continued to turn to finance, the allocation of the financial and real estate sector was once as high as 48%. So after 530, many industries have not risen much. There is a unique situation in the financial cycle. To October 16, 2007, led by the financial sector, the rising index was fixed at 6124 points.

In 2007, a concept was born-the A-share "Golden decade", which was called a footnote to the bubble valuation at that time.

4. "4 trillion" and the final hugging group

The 2008 financial crisis, the so-called financial crisis, of course, the financial sector was hit relatively hard. Non-bank finance fell by 68% for the whole year, achieving a "knee cut". Seven years later, the media index fell from 2647 to 528, a total of 77 per cent over a four-year period.

In the course of the decline, some investors naturally wanted to reduce their positions. By the end of 2008, the allocation of public funds to the financial sector was 14 percentage points lower than the peak in 2007.

Just when the hug of the financial sector was about to collapse, the "4 trillion" investment plan was born in November 2008; with so many projects to invest, it must be another expansion of the financial Xiaobai Maimai Inc.

Since the first quarter of 2009, the growth rate of social finance and M2 has blowout again, and by July 2009, M2 growth has reached 29.7%. "Society financing, financial prosperity", the financial group that is about to disintegrate quickly gathered again, and the allocation of the financial sector returned to 48% in the first quarter of 2009 and reached a record 49% in the third quarter of 2009. Non-bank finance and banks beat the index again when the shanghai index peaked from early 2009 to august, rising 131% and 114% respectively, ranking eighth and 11th, respectively. In the third quarter of 2009, among the top 10 heavy positions held by public equity funds, there were six banks and one insurance, while the other three non-financial stocks were ZTE Corporation, Guizhou Moutai and China Construction.

5. The beautiful era of finance disintegrated together.

In the third quarter of 2009, public offering funds were unswerving in their positions in the financial sector, and made many investors believe: why study stocks and buy banks and brokerages? However, behind this firm belief, a new force began to rise. And had a far-reaching impact on the investment in the next decade-- that is, consumption represented by spirits household appliances.

An accident happened in 2009, and when the 2009 annual report was released in the first quarter of 2010, investors were surprised to find that the food and beverage performance in the consumer sector grew by 88%, much higher than that in the financial sector. Although China Securities Finance and Food and Beverage rose by about the same rate throughout the year, it is clear that the financial sector mainly depends on higher valuations, while Food and Beverage is a solid performance.

In April 2010, another very important situation occurred, that is, the growth rate of new social finance announced in mid-April was-4.3% in the first three months of the year, the first negative turn since the third quarter of 2005. The second half of the sentence of "the rise of the society and the prosperity of the finance" is "the fall of the society and the decline of the finance". The latter half of the sentence has become another reason for the disintegration of the financial bloc.

The financial collapse began in the second quarter of 2010, and over the next year and a half, we saw the result of the collapse. By mid-April 2010 and mid-July 2011, the overall financial index had fallen by 20%, while the index excluding finance had risen by 2% over the same period. By the end of September 11, the financial index had fallen by more than 30%.

This example tells us that although we should not go to places with a large number of people, we should think twice about going in the opposite direction of the crowd.

Spending together for the first time

1. The change of thinking

From the beginning of 2009, the situation began to change. Although there is a large amount of credit, people are used to increasing their positions in finance, but a quarter has passed, and this time the situation seems to have changed, while the performance of the financial sector did not rise as expected. on the contrary, the performance of the consumer sector rebounded rapidly, becoming the fastest growing sector after 2009.

In 2009, Q3 released the second quarter report of 2009. At this time, the consumer sector did not show particularly good performance, and the positions of Guizhou Moutai, Luzhou laojiao and Midea Electric Appliances, which were increased by public funds, generally only increased by 10-20%. However, due to the economic crisis, most sectors still had negative growth in the first half of 2009, while the robust food and beverage and home appliance sectors have delivered 24% and 18.4% growth, while most people are still immersed in group finance. while waiting for the financial sector to grow as explosively as it did in 2006-07. A small number of investors have already smelled something different. Start laying out ahead of time.

The subsequent development exceeded everyone's expectations. The consumer sector was not only the earliest recovery in performance, but also remained the top two sector for about four years from 2009 to 2012, and the expected outbreak of financial sector performance was only a flash in the pan. Consumption is still the same growth rate of consumption, but finance is no longer the high-growth finance. Therefore, in retrospect, the third quarter of 2009 became the starting point for excess earnings in the consumer sector.

In people's minds, consumer demand such as food and beverages should be stable, but why is there so much performance flexibility?

In hindsight, the most important performance catalysis of the food and beverage sector is price increases. If we draw a chart between CPI+PPI and the profit growth rate of alcohol and beverages published by the National Bureau of Statistics, the correlation is very obvious. Whether it is the rise in PPI (rising prices of raw materials) or CPI (rising prices of consumption), the consumer goods represented by spirits will have the motivation to raise prices, and the price increases will be relatively smooth in a high inflation environment. Therefore, the performance highs of the food and beverage sector all appear when the CPI+PPI is relatively high. This investment logic is now familiar to investors, but in 2009, we still need to have a process of acceptance.

2. Digging holes for the first time

In October 2010, the United States announced QE2, the global commodity boom, in the face of the daily surge in cyclical stocks, many heavy consumers can not help but sell inflexible consumption to catch up with the cycle. However, the good times did not last long, and by the first quarter of 2011, the stimulus effect gradually declined, the economy continued to decline, and the cyclical recovery was expected to come to naught. By the time the 2010 full-year results were settled in 2011, even if commodities rose sharply in 2010, the overall performance of the resource goods sector still did not outperform the consumer sector.

Since then, a firm belief began to emerge-"stimulate the economy to buy spirits", but this is not a joke. In 2017, seven years later, when the prices of resource goods rose sharply again, institutional investors chose to increase their positions calmly in the face of the daily surge in threaded zinc and rare earths.

3. Firm consumption in a group

Starting in the second quarter of 2011, investors finally decided to buy back consumer stocks that had been abandoned, and the proportion of consumption allocated to consumption reached 31% in the first quarter of 2012, an all-time high, surpassing the possibility of waiting until the second quarter of this year.

Consumption is basically outstanding in the first half of 2011-2012, and the following picture can let readers feel the warmth of "huddling together". The index rose from April 30, 2011 to July 12, 2012, and only one industry rose in case of a quarter, and that is food and beverage. Other industries are feeling the pain of cyclical downturns. The period 2011-2012 has also been one of the most polarised since the bull market began in 2005.

The price of the product has increased and the performance has exceeded expectations. The second quarter of 2012 is the most comfortable time for the consumer sector represented by spirits. After the offensive in the spring of 2012, many sectors continued to fall, but only consumption continued to rise, and investors who abandoned consumer sectors such as spirits in the first quarter were once again taught a lesson. In the first half of 2012, the spirits sector bucked the trend by 32%. It was already an amazing achievement at that time. But unexpectedly, seven years later, in the first half of 2019, the liquor sector rose more than 70%. Now, compared with the liquor index in 2012, it is very small.

In addition to consumption, since the beginning of 2012, there has been a gradual signal of monetary relaxation. In February, another cut in May, interest rate cuts in June and July, easing comes again, and monetary easing buys finance. This law still exists. Finance has become another direction to increase positions, but unlike in 2006-07 and 2009, institutional investors who have attracted lessons are not as enthusiastic about the financial sector as before. The market is generally skeptical about whether the effect of "releasing water" on the economy is still so great. In 2012, "finance + consumption" has become the right choice. Today, seven years later, investors have made similar choices.

4. The disintegration of the first consumption group

July 12, 2012 is a very ordinary day, nothing seems to have happened. Guizhou Moutai has just paid a dividend of four yuan per share, just in time to increase the position with a happy dividend. Other sectors are still falling. The food sector is still the most calm and stable harbor.

"as long as you take consumption and finance, you can lie down and make money, so why study stocks?" The cycle has disappeared, and value investment finally dominates the market. Although there is occasional news of a reduction in the price of liquor and occasional calls to limit public consumption, many investors believe that it will not affect the overall situation.

We found a media report from the second quarter of 2012:

However, July 12, 2012 is the high point of the consumer index, and when the CSI consumer index breaks through this high again, it will be the fastest rising phase of the bull market in 2015. In fact, in terms of valuation, consumption in this position is not expensive. On July 12, 2012, the CSI consumption Index was valued at 26 times. Due to the excellent performance, even though the share price continues to rise, the valuation has not improved further.

Sometimes the operation law of the cycle has its inevitability, but it is some accidental factors that trigger the cycle operation. In November 2012, the "plasticizer incident" of liquor broke out. Historically, the emergence of food safety problems forced the industry to be more standardized, which should have little direct impact on excellent listed companies. After the plasticizer incident broke out, excellent liquor stocks did not react much. However, on December 4, 2012, the political Bureau of the CPC Central Committee held a meeting and examined and adopted the "eight regulations" of the political Bureau of the CPC Central Committee on improving work style and maintaining close ties with the masses. The three public consumption is restrained, which has another impact on the demand of the liquor industry. Starting in the fourth quarter of 2012, investors finally realized that things were not good and began to reduce their holdings in food and beverage stocks. For the first time, the embrace of consumer stocks began to unravel.

Like the previously mentioned collapse of the financial sector, the collapse of consumption also caused a lot of damage to consumer stocks, causing consumer stocks to significantly outperform the market index the following year. By the second quarter of 2014, the blue chip of Britney Spears in the consumer and financial sector had a new nickname-"Big stink". When the nickname was born, it also seemed to mark the arrival of another extreme emotion-just on the eve of the financial blue chip explosion.

We can see very clearly from the chart below that the fourth quarter of 2012 became the performance inflection point of the consumer sector represented by food and beverage, and the four-year performance advantage disappeared from 2009 to 2012. At this time, the information technology plate began to rise.

The huddle of Information Technology and the "Mobile Internet Wave"

1. The rise of the information technology plate

By the end of 2012, public offering funds allocated only 7.4% of the information technology sector, even less than the resources sector. it has been three years since the launch of the gem in 2009, and the information technology sector has added a lot of new targets. But three years is a critical time, which means that the ban will be lifted by major shareholders who opened the gem in 2009 and the ipo peak in 2010. On the one hand, the performance continues to decline, on the other hand, the lifting of the ban continues to hit. The gem fell from a peak of 1219 points in 2010 to 585 points by the end of November 2012, a decline of more than 50 per cent. The CSI is even worse, down 53%.

In the first quarter of 2013, when the situation suddenly reversed and everyone thought that the information technology sector had no hope at all, the overall performance of the information technology sector suddenly changed from negative to positive in the first quarter of 2013, reaching 32%.

In fact, if any investors who follow the electronics industry closely know that the second half of 2012 is a very important turning point for smartphones, IPHONE's revolutionary product, IPHONE 3Gs, has led to an increase in smartphone penetration since its release in 2008. In China, imitators and new entrants are increasing. In the second half of 2012, as many as 1400 products were released, and smartphones ushered in the spring. The explosion of smartphone sales has boosted the business performance of parts manufacturers. The explosion of smartphone sales, the popularity of 3G networks, and the subsequent release of 4G licenses in November 2013 have officially entered the 4G era. Others see 2013 as the first year of the mobile Internet. In addition, domestic security construction began to accelerate. Security, consumer electronics and communications equipment have become the troika of the electronics industry in a quarterly report. It also forms the basis of the bull market for the TMT sector from 2013 to 2015.

Another main line of hardware construction is the Internet and mobile Internet. Since the beginning of 2013, Internet Technology has started his 20-fold journey. As the leader of CDN in China, Internet Service Technology has become one of the biggest winners in the outbreak of the Internet and mobile Internet. At a time when investors are skeptical about the performance of gem, it continued to accelerate in 2013 and achieved 128 per cent performance growth after deducting 89 per cent of its non-net profit in 2012. It also led to an increase of 505% in online technology in 2013.

Applications other than hardware have become another breeding ground for Daniel stocks. Mobile games began to break out in 2013 with the increase in smartphone penetration, and a series of games such as "Angry Birds" and "Fruit Ninja" became popular in 2013. Playing all over the world. The outbreak of mobile games has also spawned two large Internet companies, Tencent and NetEase, Inc, to find the biggest profit growth. With the outbreak of smartphone sales, one of the biggest profit groups is mobile games. This simple and easy-to-understand logic seems very simple, but not all investors were so sure at that time.

In terms of A shares, mobile game new star palm fun technology, with mobile games and mergers and acquisitions, achieved 44% performance growth in the first quarter of 2013, with an annual growth rate of 80%.

As mentioned earlier, there are many accidental factors at the end of the cycle, and the beginning of the cycle is no exception, and there have been many new industrial trends since 2013. The 2012 Spring Festival "lost in Thailand" suddenly broke out, winning the top spot at the box office with a final box office of 1.267 billion yuan. Also let the issuer light media performance and share price sit on the rocket. Investors suddenly found the hot new growth point of film and television media.

In the first quarter of 2013, from a fundamental point of view, the information technology industry ushered in a hundred flowers to blossom, becoming the starting point of the cycle of the information technology industry.

All this should be attributed to technological progress and changes in residents' consumption habits.

On the other hand, Blue cursor took a different approach, creating another profit model-mergers and acquisitions. From the second half of 2012, Blue cursor's M & A business began to grow by leaps and bounds. In the first quarter of 2012, the goodwill on the company's report was only 280 million. By the end of 2015, it reached 4.6 billion, and the merger and acquisition statement made the company's performance grow year after year. In 2013, quarterly and annual reports recorded growth of 42% and 86%, respectively.

The success of Blue cursor brings a new atmosphere to the investment community, that is, in the next three years, the question that must be asked in the research of listed companies is "does the company have an extended growth plan?"

And cross-border mergers and acquisitions, M & A transformation is also ushered in a new beginning in 2013. There are some successful cases of transformation, such as Oriental Wealth's transformation from Internet companies to brokerage services and wealth management services, but the results of most mergers and acquisitions are not very satisfactory, especially the mergers and acquisitions that took place in 2015-2016. And a large number of mergers and acquisitions have brought a lot of goodwill impairment pressure and reduction pressure, which is also an important reason for the gem to decline for four consecutive years from 2015 to 2018.

We can sum up that the information technology industry ushered in multiple flashpoints in the first quarter of 2013:

• Smart phone-- on behalf of Ofeiguang and Goyle shares

• Security Construction-- representing Haikang and Dahua

• 3G-4G Network Construction-- on behalf of Optical Technology and ZTE Corporation

• Internet Infrastructure Construction-- on behalf of Network Speed Technology

• Mobile games-- on behalf of palm fun technology

• Film and Television-- on behalf of Light Media

Others do not list one by one, these performance industry leaders led the outbreak of the performance of the information technology sector, and finally, the information sector has become the fastest growing sector.

2. Embrace new industrial trends and mergers and acquisitions

Starting from the first quarter of 2013, institutional investors began to rapidly increase their positions in the TMT sector, and the proportion of positions increased rapidly to 24.4% in the third quarter of 2013, and the information technology sector outperformed others in 2013.

By the third quarter of 2013, the leader in the information technology sector had risen hugely, with stocks doubling everywhere. At this time, the problem arises. The CSI has climbed from 26 times at the bottom to nearly 60 times, and the gem index has climbed from 29 times to 60 times. Huge gains and expensive valuations have made many investors back down. By the end of 2013, positions in the information technology sector had fallen to 20.9%. The CSI also fell into two quarters of adjustment. In the first quarter of 2014, the 2013 annual report revealed that the performance was still excellent, the shock adjusted to June 2014, the valuation level was digested, and the valuation of the CSI returned to about 36 times.

Just as institutional investors began to increase their positions in the information technology sector for the second time, and began to wait for a big rise in the mood. But unexpectedly, the financial and real estate sector, which rose sharply in the fourth quarter of 2014, was left behind a long time ago. By the third quarter of 2014, the allocation of financial real estate was a record low of 8.35 per cent. At a time when all investors are desperate about the financial sector, hope is coming. Since mid-July 2014, the brokerage sector has led the financial sector to explosive growth. The brokerage index rose more than fourfold from the lowest to the highest. The reason for the surge in the financial sector is also very simple-monetary easing.

After a year of rest, the information industry and gem have erupted again since the first quarter of 2015, standing in the first quarter of 2015 to see the performance of all industries, except for the continuous rise and improvement in the brokerage yield market, other sectors are facing a lot of performance pressure in the economic downturn. At this time, the previously spectacular consumer sector, the performance turned into negative growth. The relative performance gap between the information technology sector and consumer services in 2014-2015 is just like the relative poor performance of consumption relative to the information technology sector in 2017-2018.

Since 2014, M & A has gradually become another contribution to the performance, fending off the macroeconomic downturn. Moreover, the construction of 4G accelerated in 2014, and in 2015, the trend of new industries became more and more clear, and the state also referred Internet + to a higher national strategy, giving a lot of resource support.

3. "huddle together-positive feedback on purchase" and IT valuation premium

Since 2015, the very classic "hugging-purchase" positive feedback has been staged again, but this time the protagonist has become a TMT-type product. The size of hybrid and equity funds has erupted again since 2009, nearly doubling from a year ago to 3.3 trillion in June 2015.

Popular style funds occurred frequently in 2015, with 50 partial stock funds of more than 5 billion and 10 of more than 10 billion. The sales of fund companies have never been so happy, because customers are robbing rather than buying. The people who manage these products are the winners of the heavy information technology sector over the past two years. Naturally, it does not hesitate to increase its position in information technology.

Public equity funds, private equity funds, and financing balances resonated in the first half of 2015, buying all kinds of information technology stocks crazily, and adding to the original heavy positions when subscribing. The CSI information index rose by 147% in the first half of 2015, and the gem index rose from about 1000 points to 4000 points, a four-fold increase. Valuations have both broken through 100 times.

At this level, only the 519 market in 1999 can be compared with the Nasdaq Internet bubble after May 1998.

At this stage, there is a very famous saying, "if you look at the fundamentals, you lose at the starting line" or "if you look at the valuation, you lose at the starting line."

The author had the honor to participate in a survey of a listed company in 2015, with investors from Taiwan on the left and mainland investors on the right. after the survey began, the left was asking about some technical terms that the author did not understand and the market space for various products, capacity utilization and gross profit margin. All the questions on the right are "is the company going to engage in employee stock ownership", "is the company going to carry out extended mergers and acquisitions", "what are the plans for that new business (which is still in the conceptual stage)?" finally, a researcher simply asked, "does the company have any demands on the stock price?"

As in 2007, valuations have been freed from gravity, and it doesn't matter how many times they are given as long as they can break through the original range limit. Therefore, at that time, the CSI and gem index valuations are more than 100 times exaggerated. But oddly enough, there was a discussion about whether the gem was expensive in 2014, but no one discussed it in 2015. However, it still has to be valued, so at this time, the most popular valuation method is the standard valuation method, that is, what is the market capitalization of companies in the same industry in the United States, then the market capitalization of this A-share can only be high, not low. And it was also the highest light moment for seller analysts at that time, pushing what went up.

All in all, 2015 was a very strange year, and all kinds of phenomena were bizarre, but no one in it found it strange. Therefore, as investors have to ask themselves questions all the time, are they numb to phenomena that should have been strange? If there is, it is likely to mean that some kind of risk is gathering.

Since July 2015, A shares have obviously adjusted and triggered some risks. the government has taken some stabilization measures and the adjustment lasted for a quarter until the end of September. Because of the rapid and huge decline, most institutional investors did not have time to reduce their positions. By the end of September, when the market finally stabilized, everyone's first reaction was, of course, information technology, which had a huge decline. By the fourth quarter of 2015, Investors who were still hesitant in front seized the last opportunity to increase their positions, and public funds held 35.43% of their positions in the information technology sector, a record high.

4. Disintegration of the group: another unexpected trigger

In January 2016, the market unexpectedly adjusted again. Standing in the first quarter of 2014, due to the merger of mergers and acquisitions in 2015, the growth rate of the gem in the first quarter of 2016 is still as high as 40%, while the performance of the information technology sector is also 40%, which is still higher in all sectors. most investors still choose to stay together in information technology, but things have changed. The growth rate of social finance, which continued to be sluggish from 2015 to 2015, reached 40% in January 2016. "is monetary policy loose again? "Don't you want to increase your position in finance? But the lessons of 2009 and 2012 tell us that a rebound in social finance growth does not mean that the financial sector will be the strongest sector, consumption after 2009 and information technology after the second half of 2012. In the first quarter of 2016, the overall performance growth rate of the consumer sector has rebounded from single digits to 14%.

The collapse of the logic of M & A, coupled with the gradual fading of mobile Internet dividends, the performance growth rate of information technology index has entered a downward trend. Starting from the first quarter of 2016, institutions began to continue to reduce their positions in the information technology sector, and the group began to disintegrate. The agency began to look for new directions. Of course, there is no accident, after the collapse of the group began, information technology and gem ushered in a lost 3 years. The CSI fell 44 per cent from 2016 to 2018, while the gem index fell 54 per cent for three years in a row. For those once brilliant tenfold shares, many share prices are "ankle chopping", with declines of more than 70% everywhere.

The second consumption group

1. Mirror image seven years later

Seven years is an important periodic operation law of A shares. The upward and downward cycles of the economy from 2009 to 2012 are very similar to those from 2016 to 2019, so the stock market is also very similar to the mirror performance. Among them, nothing is more similar than the performance of the consumer sector.

The growth rate of social finance also expanded sharply in the first quarter of 2019 and the first quarter of 2016, and the expansion of credit meant that the economy would pick up, but after several rounds of stimulus, people no longer have high expectations for the impact of credit lending on the performance of the financial sector. Therefore, the learning effect of investors makes investors directly skip the financial sector and increase their positions in consumption. in addition to the quarterly improvement in the performance of the home appliance sector, other consumer sectors remain stable, and institutions wait and see in the next few quarters of 2016.

The uninvited guest in 2015 was the Shanghai Stock Connect. Since its opening in 2014, due to the relatively small fluctuation of funds from 2014 to 2016, there is little sense of existence, and the cumulative purchase balance at the end of 2015 was only 87 billion. Starting from 2016, northward funds began to continue to increase their positions in A shares. However, little attention was paid to it in 2016, because by the end of the year, only 45 billion of the capital had been bought northward.

Except for the significant reduction in positions in the information technology sector in 2016, other industries have more or less increased, but the direction is not clear. Since the circuit breaker rebounded, construction materials have benefited from infrastructure expansion, food and beverage ranked second, and home appliances also rose well.

Starting in 2017, food and beverages, which have been silent for a long time, finally began to attract the attention of investors seven years later. However, there are several questions that must be answered. First, how to solve the problem of liquor demand after the three public consumption is suppressed? Second, how to solve the ceiling problem faced by household appliances? Third, how to solve the problem of stable demand for consumer goods without performance flexibility? Finally, a new concept is back in vogue-"consumption escalation".

However, there is an one-year gap between 15 and 16 years, and the increase in residents' income will not increase too much. how can it be upgraded so quickly? Open the familiar excel report and pull the CPI+PPI data to find that this indicator has continued to decline and remained below 1% since December 2011. It began to turn negative to positive in July 2016 and continued to climb. PPI rebounded, raw material prices rose, we have to raise prices, right? As the economy improves, incomes improve and demand increases, we have to raise prices. However, after all, "rising prices" is not as elegant as "consumption upgrading". Therefore, behind the rebound in consumer performance, as usual, is still inflation.

Starting in 2017, the agency finally reached an agreement on consumption and began to significantly increase its food and beverage holdings, from 18.3% in 2016 to nearly 30% in the second quarter of 2018. There are also a large number of consumer attributes in the medicine which is added to the warehouse, and the consumption group is basically formed.

2. "diving" that missed consumption twice.

Similar to the wave of consumer huddling that began in 2010, there were two "diving" between 2017 and 2018, the first in the second quarter of 2017, when the consumer sector began to stagnate after a sustained rise, and commodities bottomed out in the third quarter of 2017. it's very similar to the rebound in the third quarter of 2010, or a seven-year mirror image. Commodities, represented by steel, zinc, cement and rare earths, began to rise sharply, with stocks in many cycles doubling in just over a month. However, the lesson of seven years ago is still in sight, and most institutional investors refrain from chasing cyclical individual stocks and still choose to wait.

However, it turns out that cyclical stocks are not a long-term solution for institutional investment, and consumption is the best choice. after a period of hustle and bustle, domestic institutions began to join hands to fund northward in the third quarter of 2017. by the end of January 2018, the valuation of the consumer sector had reached a new height.

The second "diving" began in June 2018, and the new rules on capital management began to be implemented in the first half of the year. Deleveraging intensified, credit tightening signals were obviously pre-sent, new social finance grew negatively, while deleveraging had a greater impact on private enterprises, causing people to worry about employment. At this time, trade frictions between China and the United States began to heat up, and exporters made things worse. On July 20, the General Office of the CPC Central Committee and the General Office of the State Council issued the National Taxation and Local tax Collection and Management system Reform Plan, which makes it clear that social insurance premiums will be uniformly collected by the tax authorities from January 1, 2019. It is considered by analysts to have a negative impact on consumption. The combined effect of the above events suddenly made the market suspicious of consumer demand.

At this time, the performance growth rate of alcoholic beverages indeed began to slow down from the high level.

Since June 2018, the consumer sector began to adjust substantially. At this time, many determined investors in the consumer sector have chosen to give up, and the allocation of the consumer sector will be significantly reduced by the end of 2018.

This time the adjustment is so big, but it is still not the end of the consumer boom cycle-just like in 2011. Guizhou Moutai, which had only single-digit growth in a single quarter after the release of three quarterly reports in 2018, fell to the limit the next day. The headline of some media reports is-"Today's" King of shares "the end of an era when Guizhou Moutai fell to the limit? "". Unexpectedly, this is not only the end of an era, but the beginning of an era. Therefore, the author concludes that we must be cautious about those particularly eye-catching bullish and bearish reports with similar titles such as "Golden Age", "Golden decade", "the end of an era", "xxx Model" and "Chinese version of xxx".

When Maotai got up from the pit, it only took half a year to rise from 500 yuan to 1000 yuan. Liquor leads the consumer sector to become the most beautiful scenery in the first half of 2019.

At present, everyone is familiar with the concept and belief is the "core asset", what is the core asset? This is a very good concept, describing a group of leading industries with large market capitalization, heavy foreign positions and high ROE stock portfolios, but the concepts really implied in core assets must be those rising good leading targets, foreign investors in heavy positions have plummeted, market capitalization has fallen, ROE high has plummeted in 2018, these will be subconsciously removed from the concept of core assets, "core assets" is essentially a stock selection issue.

Which company can always guarantee that its performance will always be the best and its stock price will rise forever?

3. When will the group collapse?

But the case of the collapse of the previous three groups gives us a good reference. We need to return to a few questions.

First of all, has there been a turning point in poor performance?

Judging from the high-frequency data, if we use national statistics to announce the profit growth rate of wine, beverages and tea minus the growth rate of computer communications and other electronic equipment manufacturing industry, this gap is similar to that of 2011-2012 and is still relatively high. Is there any sign of narrowing in the future? Need to be further observed, although the author deduces from the perspective of the science and technology cycle, the third quarter may be the bottom of the performance of the information technology sector, but how long this bottom lasts is still difficult to judge. Therefore, objectively speaking, it still seems to be a very reasonable choice for investors to spend together.

Compared with the relative performance of food and beverage consumption (represented by food and beverage), information technology and financial real estate in the past few quarters, the food and beverage sector is still the highest, and the performance of the financial sector has improved in the context of the sharp rise in the market in the first quarter. The year-on-year performance of the information technology sector has also improved. The performance gap between consumption and finance and information technology has begun to narrow.

Therefore, the second and third quarterly reports are very critical, and if this poor performance persists, consumption may still continue to huddle together, but whether it is the downward growth rate of food and beverage performance, or the sudden upward performance of information technology or finance, it may give investors a reason to give up group spending and embrace new sectors.

And back to the catalytic factors of the three major sectors, for consumption is inflation expectations, which is still maintained at a relatively high level, but there is a possibility of downside; finance is monetary policy loose, which is currently on the loose side; and information technology is a new technology trend. at present, 5G has accelerated construction, but new technological trends and popular products have not appeared as obviously as in 2013. However, according to the law that the progress of communication technology drives new products and new applications, the third quarter may be the bottom of the current round of information technology sector performance.

Since mid-July, listed companies will continue to publish semi-annual reports, which gives us a very important observation window.

Second, has "hugging group-applying for purchase" already happened?

The current data do not quite support this point. the data we see is that since the beginning of this year, active partial public offering funds have issued 110 billion, while the total share has only increased by 54 billion, and the stock has actually shrunk. Ki-min showed unusual calmness in the face of this surge in the market this year. It may still not be out of the shadow of the 2018 slump. However, most of the products that can issue new products or have net applications have performed well in the past two or three years. Therefore, this time, "group-purchase" may be more structural, "consumer" products and managers may have more applications. Therefore, this structural redemption of other products to purchase high-performing fund products may be one of the driving forces for the current valuation improvement in the consumer sector.

Third, is the valuation at its peak?

The first thing to note is that valuation is never the most important factor in determining stock prices. We have already seen the financial stock bubble in 2007, and the information technology bubble in 2015, if it triggers the positive feedback of "huddle-purchase", as long as it breaks through the reasonable valuation range, valuation will become unimportant. If consumer stocks continue to rise and individual investors begin to apply for public funds on a large scale, it is not impossible for China's consumer sector to have a "beautiful 50" in the United States in the 1970s. However, if investors calm down and take a look at the current valuation of the consumer sector, objectively speaking, it is already at a relatively high level since 2012.

Conclusion-flowers are similar year after year, but people are different from year to year.

1. Summary of the history of holding groups according to our definition, continuously increasing positions and holding a plate close to more than 30% are regarded as holding groups.

In the 13 years since 2006, a similar situation has occurred four times, namely:

• 2007Q1-2010Q1 Group Finance lasted for 13 quarters

• The first consumption group of 2009Q3-2012Q3 lasted 13 quarters.

• 2013Q1-2016Q1 held together in IT for 13 quarters

• 2016Q1-the current second consumption group has lasted for 13 quarters.

But if you officially start with 2017Q1, the characteristics of each group and its impact on the stock price have only lasted for 10 quarters, we summarize as follows:

First, because institutional investors have regular performance appraisal mechanism, ranking pressure, product issuance operation mechanism and similar true value investment concept, institutional investors always identify the sectors with the highest performance growth and gradually adjust to centralized shareholding, which is the root cause of the emergence of "huddling".

Second, the performance-driven model of each sector has its own reasons and logic. The excessive issuance of currency Xiaobai Maimai Inc is the driving force behind the improvement and sharp rebound in the performance of the financial sector. Rising inflation is the driving force behind the substantial improvement in the performance of the consumer sector, while new technologies and M & A trends are the driving force behind the substantial improvement in the performance of the information technology sector.

Third, before each real collapse of the group, there will be 1-2 diving, but after the assessment of the performance trend will be back together, and more firm than the last time, therefore, the excess income of the group sector is accelerated after each fall.

Fourth, hugging the group to the later stage has given many investors the belief that "the sector will always rise and always win." This belief will be reflected in different simple and catchy concepts in the following. Whenever a concept with a very high degree of recognition is passed on by word of mouth, special care should be taken, because this belief-based investment concept has gone beyond the scope of performance. it's easy to make investors numb and lose sensitivity to new information and changes.

Fifth, the problem of huddling together has become a difficult problem that investors will always face. For the successful product managers who take the lead in holding heavy positions in the industry, this dilemma lies in whether or not to reduce positions. Will all previous efforts be wasted? Of course, this is a happy annoyance, but what is more troublesome is what we call the "star dilemma." in short, the more you want to achieve good performance, the more you have to hold that group, and it must be the most firm and lasting. But the more determined it is, the more difficult it is to make timely adjustments when the style and industry change. For investors who fail to hold heavy positions in time, the question is always-do you want to chase, or do you want to chase a little more? Then, in the end, I always regret chasing less.

Sixth, in the process of hugging, there will be the classic positive feedback of "hugging-applying-buying-buying Baotuan-continuing to win-attracting more stock funds to join the clutch". This classic positive feedback will always lead to valuation premium. but often the emergence of valuation premium this wave of market is the best wave.

Seventh, the root cause of each collapse is the emergence of a better performance sector, so don't be fooled by false concepts, find the strongest performance sector, and reposition it. It is more important to find the meso and macro variables that drive performance change than to find the sectors with better performance.

2. Nine revelations are simplified. From the history of organizational grouping, we can sum up nine revelations:

①, institutional investors always prefer the sector with the fastest growth in performance rather than a particular sector.

②, timely identification of the strongest performance sectors and the fastest participation in huddling are the best investment choices for institutional investors.

③ and "hugging" often experience one or two diving, but before giving up, you need to ask the soul, "has the performance trend been destroyed?"

④, each hug diving makes hugging more firm, so the excess rate of return in the process of hugging is accelerating.

⑤, judging from the history of the past four huddles, a general trend can last for 13 quarters or more, so lengthening the assessment period for fund managers will help improve fund performance rather than the other way around.

⑥ and valuation are not so critical factors in group investment. It is mostly futile to try to judge the inflection point through overvaluation and undervaluation. The core lies in the existence of the reward of "hutuan-purchase" mechanism, and the valuation of Huotuan plate can be very high.

⑦, do not buy the disintegrated plate against the wind on the left, and the criterion for assessing whether a sector is completely abandoned by institutional investors is not that everyone is "not optimistic", but that no one is looking at it at all.

⑧, when some hot, catchy, flawless concepts replace the fundamental investment framework of "performance-valuation", you need to be particularly careful. When a plate no longer needs research to make money, it is precisely necessary to play a twelve-point spirit.

When the inflection point of ⑨ and trend appears, there will be some things and phenomena that have never happened before, which may be positive or reverse. Therefore, when something you have never heard of comes up, it is likely to become a key variable in trend determination.