Without a single surprise, the market soared as expected on the first trading day after the holiday.
For this round of market movement, veteran investors expressed they couldn't quite understand it; fund managers also warned of risks, hinting that a correction was imminent. Therefore, what everyone is most concerned about is whether this round of market movement is indeed a bull market, and how long this reversal or rebound will last. Will there be a sudden crash?
Before answering this question, we should ask ourselves why this round of market movement occurred.
As is well known, this round of market movement began with the central bank's speech on September 24th. Initially, the market did not respond positively until the central bank announced a swap facility of 500 billion yuan for the first phase and a special re-lending facility of 300 billion yuan, which then led to a significant market surge; two days later, the Politburo's economic meeting was held, making significant adjustments to real estate policies.
In short, this seems to be both a leverage bull market and a policy bull market. Of course, because there are more fiscal policies on the way, it may also be an advance reflection of the economic fundamentals.
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Indeed, regulatory authorities have an expectation for the stock market, hoping for a slow and healthy bull market. However, given the predominance of retail investors and the institutionalization of retail investors, this expectation is unrealistic. Therefore, it is foreseeable that the more intense the rise in the past few days, the more exaggerated the subsequent fluctuations will be.
At present, global funds are frantically shifting towards China. Some say this is the power of the Dongfeng-31AG intercontinental ballistic missile; others say it is due to the huge gap between Chinese and American tech giants, where the profitability and profit potential of Chinese tech giants have been greatly underestimated; still others say this is a new round of residential wealth relocation, from the real estate market to the stock market.
Regardless of whether these are correct or not, there are a few undeniable facts in today's China:
First, the asset prices in the real estate market have returned to 2017 levels, having significantly dropped; second, stock market assets are also at the bottom of the range, especially core high-quality assets, which have become very cheap; third, expectations have been sufficiently pessimistic; fourth, crises between China and the U.S., as well as between China and Europe, have been fully released.
Therefore, this is once again a time to test our cognition.In 1992, amidst severe inflation and the prevalence of arbitrageurs under the dual-track system, the "Chinese Economic Collapse Theory" emerged. However, the crisis was successfully resolved as the trend of going into business swept across the country. In 1997, with the outbreak of the Asian financial crisis, the "Chinese Economic Collapse Theory" resurfaced, but China's accession to the World Trade Organization led to a boom in import and export trade. In 2008, the global financial crisis struck, and once again, doubts about China's economy were rampant, but China emerged from the quagmire and achieved a decade of medium to high-speed growth.
In a nutshell, Chinese wisdom, experience, and the people's pursuit of wealth and a better life have allowed China to overcome crisis after crisis. Note that in the past three instances, those who believed in the nation's fortune and dared to bottom fish were rewarded with the dividends of the era.
Therefore, the present may be the fourth era of dividends, and it is also the first opportunity for the post-90s and post-00s generations to change their destiny!
From 2018 to 2024, especially in the past three years, the more constrained we felt and the more our assets were suppressed, the more powerful the upward momentum will be. Of course, there is a prerequisite: our economy and our national fortune must continue to rise.
In July of this year, the "Decision on Further Comprehensively Deepening Reform and Promoting Chinese Modernization" was reviewed, passed, and announced. It includes a statement: "Improve the policies and governance systems that promote the development of strategic industries such as new generation information technology, artificial intelligence, aerospace, new energy, new materials, high-end equipment, biopharmaceuticals, and quantum technology."
It is clear that the top-level design has outlined the development blueprint for the next few years, which is also the biggest gold mine in the market to come.
Many people in the post-90s and post-00s generation have the support of their parents from the post-60s and post-70s generations. Coupled with their higher level of education, stronger technical abilities, and broader horizons, theoretically, as long as they strive according to the top-level design, they will be more likely to succeed.
Of course, "dividends" are always created by oneself.
Just like in this round of the market, old stock investors seem timid, but the younger generation only believes in one word: action.
You might say that young bulls are not afraid of tigers, and they will be better off after being beaten by society a few times. However, the wealth effect generated by the stock market has proven that the younger generation is not lying flat but has more pursuits. Isn't that worth affirming?The post-1950s and post-1960s generations experienced "from nothing to something," competing on who had the boldest courage; the post-1970s and post-1980s generations mainly focused on "following," trailing behind the United States-led pack, continuously imitating before innovating; however, the post-1990s and post-2000s generations need to create something that has never existed before, engaging the whole world in our division of labor in technology, and leading global innovation.
Therefore, with the shift in policy and top-level design, the post-1990s and post-2000s generations are bound to create a new chapter, and under this chapter, welcome their first era of dividends.
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