Since the beginning of this year, the market volatility has intensified, and many private equity net worth has fallen endlessly. How to face the fluctuation of stock price has become a difficult problem in front of major private equity. There are the “position reduction” school represented by Dan bin and the “position increase” school represented by Jinglin assets. How on earth did they make the decision? The reporter interviewed a number of private placement companies to understand the latest situation.
position reduction and even clearance faction: risk control risk, cautious response to market fluctuations
In this wave of decline, many private equity positions have been reduced or even cleared. The most concerned by the market is undoubtedly Dongfang harbor. After falling into the rumor of short position, Dan bin, chairman of the company, revealed that the position of Dongfang harbor is relatively low, about 10%. He said that after 08 years of Baijiu crisis, the selling principle added a “systemic risk” to sell away temporarily. This year’s Ukraine crisis and subsequent derivatives risks are the focus. Of course, it also includes some other thoughts. Dan Bin’s company, Dongfang harbor investment management company, said that after predicting the market risk at the beginning of the conflict between Russia and Ukraine, they generally took relatively strict risk control measures, put risk control first and carefully deal with the sharp fluctuations of the market.
Not only Dan bin, according to the reporter, a number of private placement have also done the operation of reducing positions. Some, like Dan bin, think that risk control comes first.
Tan Wei, manager and senior strategist of Chongyang investment fund, said that in the market environment with increased uncertainty, on the one hand, they will control the overall risk exposure of the portfolio, on the other hand, they will adjust the portfolio and tilt to individual stocks with high certainty, so as to enhance the ability of the portfolio to resist fluctuations in these two ways.
Wang Panfeng, investment manager of Oriental marathon, said that pullback management is a part of portfolio management. The risk control system set up by the company will urge the investment manager to reduce the position in time based on the needs of pullback management when the net product value drops due to large market fluctuations, which is a risk control matching the investment strategy.
Fengjing capital said that the risk control line should be moved forward. When the retreat reaches a certain degree of deviation, it should take the initiative to reduce its position, leaving room for fault tolerance for the possible downward space and tail risk of the back market, so as to avoid being reduced when it is close to the early warning line and may also be at the actual low level of the market.
Some private placement think that investment opportunities are scarce.
Zhang Zhenyu, the investment manager of Xuanyuan investment, told reporters that they had reduced the position of growth stocks in early December last year and reduced the overall position again after new year’s day. These are based on the logical attribution of the huge rise of growth stocks last year and the understanding of the law of market operation. In addition to the logic of the industry itself, he believes that there are two variables that can not be ignored for growth stocks to have such a brilliant performance last year: there are few post boom tracks in the whole industry, and the continuous accumulation of funds leads to the trend of funds; The liquidity of China’s outflow is significantly better than the pessimistic expectation of the market during the Spring Festival of 21 years, resulting in a high tolerance of valuation. However, these two variables or driving forces have changed around December, or even negative feedback. Therefore, they took some combination optimization measures in time and achieved some results.
Leisurely investment said that after about October 2021, the company increased short protection of stock index futures. Entering 2022, the long exposure of stocks was almost completely closed; Then it further reduced its stock position. First, the expansion of the market value of A-Shares in the past three years is equal to the sum of the previous 27 years. After an explosive growth invisible bull market, it has risen too fast to rest. From a macro perspective, digesting the three-year increase will be more or less lethal. In addition to the macro profit taking, the deteriorating international environment, the big bear market of Chinese stocks and the rising US dollar interest rate have also produced the resonance of adverse factors.
stick to or even add positions: high cost performance in the medium and long term
Of course, there are also many private equity companies that stick to or even increase their positions against the market.
Gao Yuncheng, general manager of Jinglin assets, recently revealed that they did not panic to sell stocks in the crash, but increased their positions in promising enterprises at almost the lowest point. He believes that after many rounds of large market fluctuations and policies of various industries, he believes that the cycle of fundamental changes should be considered longer and the weight of medium and short-term factors should be reduced. Making investment decisions based on this can not reduce the volatility, but historical data prove that better investment results can be obtained with high probability in a relatively long investment cycle. Because the stock market is not a zero sum game market, our final income comes from the sharing of the management and employees of the invested enterprise every year.
Zhang Kexing, chairman of gray assets, believes that the current market is in the early stage of liquidity expansion, or even at the beginning, and the growth of social finance is slow. For example, the valuation level of Shanghai and Shenzhen 300 and Wande quana, I think it is at the bottom of history. Facing the market shock in this position, we took the initiative to choose to gradually increase our positions in some very cheap stocks at a low level.
Hu Lubin, manager of Dahe investment fund, also said he would stick to it. “For the companies we currently invest in, although the recent stock price performance is very bad, it has not changed their position and value in my heart at all. They have made incredible achievements on a good track and built a deep moat by relying on excellent products. For these companies, I don’t want to sell them at all. I will exchange every penny of investors for their shares. Based on my understanding, this is natural and reasonable Natural things. Again, it’s not about faith, it’s about reason. We just hold them patiently and thankfully and wait for the flowers to bloom. As for stock price fluctuations, we face them calmly and calmly. ” He spoke bluntly. He believes that we should adhere to rationality, carry out in-depth research on the operation of relevant industries and companies, adhere to the cognitive guidance brought by the research, and buy and hold when the price is lower than the value. Of course, there will be mistakes in doing so, but this is the best response they can do.
Xie Nuo Chenyang purchased and added positions by himself. Liang Wenjie, investment director, told reporters that recently, Xie Nuo Chenyang increased the position of the company’s stock fund with his own capital of 20 million yuan. In short, they think they can achieve a better rate of return.
The chief research official Lei of Xingshi investment also said that there are few timing actions in the near future. On the one hand, they pay more attention to the research of fundamentals and pay more attention to the targets with multi-layer driving factors in fundamentals; On the other hand, they also pay attention to the matching degree of fundamentals and valuation. At present, the market as a whole is in the stage of high cost performance in the medium and long term, with medium and long-term investment value.
Zhou Qing, director of Lianhai asset investment, believes that the recent market shock is large, but through analysis, they believe that the core main line logic has not fundamentally changed, and the external problems are global stagflation and the interest rate increase cycle of the Federal Reserve; Internal demand is the superposition of demand and policy expansion cycle; The impact of other events did not bring significant changes in allocation, but only minor adjustments at the micro level, including timing of equity assets. No major adjustment was made at the configuration level. “Through historical analysis, after the rapid decline of the market caused by liquidity impact in the past, there is usually a repair in 2-4 weeks. Therefore, a certain timing adjustment of positions has been made at the level of short-term trading strategy.” Zhou Qing said frankly.
high sell low buy school: focus on the value of timing
Some private placement attempts to integrate the above-mentioned practices of reducing positions and increasing positions, and make a difficult action of selling high and absorbing low in the stock market.
Zhongrui Heyin told reporters that at the beginning of the year, Zhongrui predicted that 2022 would be neutral, with more internal and external uncertainties, but there were policy hedging and multi-dimensional structural opportunities. Therefore, the timing of the overall position was chosen: maintain semi position and decentralized shareholding. “Taking the recent market as an example, on March 14, Zhongrui further reduced its position to less than 40% based on the short-term downward trend without obvious marginal improvement, and the emotional interpretation was more extreme. It was scattered among multiple high-quality targets. In this way, even if affected by the market sentiment, the net value continued to decline at the beginning of the week, but the decline was relatively limited, and it had more cash in hand, so it could attack and retreat.” Its representation.
On March 16, the financial Commission released the information on stabilizing market expectations. Zhongrui believed that this was not only a marginal improvement in the negative expectations of the internal economy, but also an expected hedge against external disturbance factors. Therefore, Zhongrui quickly turned to the offensive situation in the short term and increased its position to 70%.
After rising sharply for two consecutive days in the short term, Zhongrui reduced its position again to about 50% before the closing on Thursday. Zhongrui believes that the information transmitted by the financial commission is more about the stability of market confidence and expectations. Therefore, the market has a high probability of stopping falling and rebounding in the short term, but it is not enough to support the continuous general rise or upward trend of the market. There is still uncertainty about the internal and external negative factors. The short-term outlook of the future market is interpreted by probability differentiation and wide shock bottom. Therefore, Zhongrui chose to reduce its position after benefiting from short-term position increase, continue to adopt defensive position allocation, wait and see its change, and choose the opportunity to move.
According to the reporter, Zhongrui Heyin is very concerned about the value of timing, and wants to control risks and obtain excess returns.
trend timing or value
private placement: the two do not conflict
Recently, the news of private placement boss Dan Bin’s rare short position spread all over the investment circle, which also triggered some discussions on timing in the market. In the view of some private placement, the difficulty coefficient of trend timing is very high, which is more like a “double-edged sword” in operation. If the operation is correct, the profit is huge, but if the judgment is wrong, it may cause large losses or miss opportunities. For the relationship between trend timing and value investment, private placement believes that they do not conflict. Although they are similar in decision-making behavior, they are essentially different, and the driving factors behind them are different.
the difficulty coefficient of timing is high
is more like a “double-edged sword”
Calmly investing frankly, stock timing belongs to the sub problem of asset allocation. It is very difficult to allocate large-scale assets. We should not only have long-term practical experience and good past performance in stock investment, bond investment and even commodity investment, but also invest human and material resources to establish a special macro tracking and analysis framework. The most important thing is that the effectiveness of the configuration method must be verified through multiple bull and bear transformations. The development cycle of this strategy is particularly long, which is a typical large investment and slow to take effect. Not only is it difficult for small investors to master and use, but many large stock institutional investors have given up stock timing. Nevertheless, leisurely investment has tasted the sweetness of macro investment in history, and will continue to do well.
Zhongrui Heyin stressed that timing needs a judgment framework that can stand the test of time. Zhongrui’s timing framework has been gradually established, continuously improved and optimized in Zhongrui’s investment in recent 30 years, and the elements within the framework need to be tracked and updated in a long-term, continuous and high-frequency manner. Most investors may be able to make good timing at some time, but it is difficult to be effective in the long term, because the market is changing, and it is difficult to be effective without a complete timing system and updated timing strategies following market changes. Therefore, timing is difficult for most individual or institutional investors.
The definition of “timing” by Zhang Kexing, chairman of gray assets, is based on valuation liquidity, and makes a comprehensive evaluation of the trading volume, turnover rate, valuation level and market sentiment of the market. He believes that timing is essential for any investor. Timing is an important auxiliary to investment and needs comprehensive evaluation. Select stocks around the “good company and good price”, combine the transaction level with the market level, superimpose macro and liquidity to conduct comprehensive evaluation, and select the optimal trading time point, which has certain guiding significance for position change.
In the eyes of some private placement, trend timing is more like a “double-edged sword”. According to Tan Wei, manager of Chongyang investment fund, although it is very difficult to choose the time, if the operation is correct, the income is also huge. He told reporters that Chongyang’s judgment on timing is more about significant opportunities and risks, rather than frequent operations at the daily level. When the market is facing major opportunities or risks, if we can start from the thinking of reverse investment, the medium and long-term yield is very considerable.
Fengjing capital believes that macro timing is often not used frequently, and once it is done accurately at the right time, it will bring great benefits; On the contrary, frequent timing based on macro and risk events may also cause loss and damage the stability of positions, which is difficult to grasp. From the perspective of customer holding product experience and awe of market uncertainty, private placement products do need to be timing and risk controlled to a certain extent.
Zhongrui Heyin said that the disadvantages of timing vary from person to person. Usually, once the timing is wrong, it may cause large losses or miss opportunities to make money. However, timing errors are incidental to the probability of the strategy itself. The strategy system composed of comprehensive research and judgment of value and trend and position control can effectively improve the winning rate of timing and effectively reduce the loss or empty impact caused by timing errors.
In terms of operation, Zhou Qing, director of Lianhai asset investment, told reporters that there are usually two methods of timing strategy. The first is to predict the inflection point of asset trend, which usually requires the upper information and investment logic to judge the lower assets, and the strategy system is also from top to bottom. The other is partial trend following timing, which directly analyzes the technical form through the price movement trend of the underlying assets. The research logic of the two methods is quite different, and the strategy used to one method can not be applied to the other. The key of timing strategy is risk control, including rhythm control and position control. If there is a problem with risk control, it may lead to more than expected pullback. Therefore, there are high requirements for the depth and accuracy of the strategy.
However, the chief research official Lei of Xingshi investment believes that not all investors are suitable for timing. Because most people can not master timing skills well, it is difficult to run out of medium and long-term excess returns, and even cause unnecessary losses. If you choose timing, reducing the timing frequency may be a better choice.
“Whether investors choose the time or not mainly depends on their risk and return preference and their own ability, but few people have the ability to choose the time. The biggest problem facing timing is that they can not only sell, but also buy, because only by buying can they bring lasting benefits to investors, and they can sell, but they will lose less at this stage. When can the positions sold now be bought back? This is a question.” Zhang Zhenyu, the subjective equity investment manager of Xuanyuan investment, for example, said that many players who were short in 2018 fell into the bull market in 2019 due to path dependence and were gradually forgotten. This “timing ability” made them miss the three-year bull market, poor performance and stagnant scale. Success is also Xiao He, failure is also Xiao He. Therefore, Zhang Zhenyu believes that compared with timing, the best choice for investors may be to appropriately hedge the phased impact brought by the stock market through an effective asset portfolio.
Wang Panfeng, investment manager of Oriental marathon, also believes that most investors should not have the ability to choose the time. They often outsmart themselves by selling in the bottom area or buying in the top area. Liang Wenjie, investment director of Xie Nuo Chenyang, suggested that timing is difficult for professionals, and ordinary investors are not recommended to choose timing.
trend timing or value
private placement: the two do not conflict
In the view of most private placement, although the decision-making of timing and value investment is similar in behavior, the driving factors behind are different, which are essentially different.
Fang Lei pointed out that the core of value investment is to select stocks, buy stocks with market value lower than intrinsic value and certain safety margin, and sell these stocks when the market price is significantly higher than intrinsic value. The basis of investment decision is more from the fundamentals of the company. Although the timing of buying and selling stocks in value investment is similar to the timing behavior, there are differences in the driving factors behind it.
Wang Panfeng said that compared with the market-based timing operation, the value-based operation is called “price selection”. These two logical expressions are “high selling and low absorption”, but the essence is different. Value investment focuses on the relationship between stock price and internal value. Theoretically, it reduces positions when the stock price is overvalued and increases positions when the stock price is undervalued. However, it is difficult to make accurate operation in the process of practical operation.
“In our opinion, the essence of value investment is to judge the value. When the asset price is obviously lower than the value of the asset value, you can buy; when it is seriously higher than the asset value, you should sell or avoid. This is different from simply choosing the time in the market.” Liang Wenjie also pointed out.
In fact, timing can be understood as a market approach, while value investment can be understood as a fundamental approach. Some private placement believe that although the two methodologies are not homologous, they can be complementary in some aspects and can be combined with each other in practice.
The investment philosophy of Zhongrui Heyin is to combine value research with trend timing. In nearly three decades of practice, Zhongrui believes that a single value investment or trend investment strategy has advantages, disadvantages and limited market. Pure trend investment is mainly applicable to the market with high volatility and clear trend, and it is relatively inefficient in the market with low volatility; Pure value investment is relatively inefficient when the market trend is clear and downward, but their advantages and disadvantages can complement each other. Zhongrui believes that the combination of value research and trend timing can make the investment strategy more universal and sustainable. In practice, the value research defines the direction and target for Zhongrui’s investment, and the timing of the trend provides an important reference for Zhongrui to flexibly adjust its position, control risks and obtain excess returns with the change of market rhythm.
Tan Wei said that in fact, timing and value investment are not contradictory. When a company’s stock price is seriously deviated from the value, it can be regarded as the “reasonable operation” of a stock price. The market is composed of individual stocks. When most listed companies seriously deviate from the “reasonable value”, the position adjustment in response to the overall fluctuation of the market constitutes the macro timing. Therefore, timing is a tool for practical value investment.
Zhang Zhenyu pointed out that the difficulty of pure value investment is extremely high, which requires very accurate long-term judgment of enterprise operation, and discounting the cash flow of 5 years, 10 years or even more to evaluate its connotative value. However, the development of things is dynamic, and the contradictions accompanying its development process are also dynamic. Xuanyuan’s investment method is more to think about the main contradictions in the development of industries and enterprises at each stage, to think about the interpretation of contradictions and the pricing method of the market through the resumption, to evaluate whether these contradictions have been reasonably priced, so as to establish our portfolio. In fact, this process has organically combined the market scene and fundamental factors.
international turbulence private placement pays more attention to macro research
do a good job in portfolio risk management
Since the beginning of this year, the turbulence of the international situation has had a great impact on the stock market. The reporter learned that, in fact, more and more private equity institutions have begun to pay attention to macro tracking research to guide investment, and some private equity have incorporated geopolitics into the macro framework. Most private placements adjust positions mainly by studying macro and judging liquidity. Private placement believes that macro timing is very important, but the difficulty is not small. It is more practical to do portfolio risk management based on market valuation level, industry and individual stocks.
private placement pays more and more attention to macro tracking research
there are private placements that incorporate geopolitics into the macro framework
Tan Wei, manager of Chongyang investment fund and senior strategist, said that the portfolio construction process of Chongyang investment is a combination of top-down and bottom-up. Macro judgment plays an important role in the top-down analysis and will play a role in economic fundamentals, liquidity, capital market system and investors’ risk appetite. “Chongyang has a strategic research department, covering macro research, including international macro situation analysis. In this field, the strategic research team has established a perfect research and analysis framework, and the research results directly affect the decision-making of fund managers.”
BOC investment believes that macro research plays a very important role: on the one hand, as a platform hedge private equity fund company, its investment scope involves the global market. In today’s capital globalization, macro research on Asia and global economy can provide some guidance for the company’s investment; On the other hand, macro research is also helpful to help fund managers establish a global vision, guide the direction of long-term investment and build a reasonable asset portfolio. “Bocom investment introduced Dr. Zhang Zhiwei, chief economist, in 2019. He is mainly responsible for macro strategy research and put forward macro suggestions to fund managers on the bocom platform from various aspects such as interest rate, exchange rate, macroeconomic situation, economic situation outside China and the rotation of style sectors, so as to broaden international vision.”
Lei, chief research official of Xingshi investment, said that the company has a special macro research department to judge the macro environment at home and abroad, “We believe that there are differences in the performance of various sectors under different macro environments, and macro analysis can provide support for top-down industry selection. China’s credit environment, economic fundamentals, overseas liquidity and other macro factors have a great impact on the trend of the stock market. For example, in the second half of 2021, China’s economy showed the characteristics of ‘quasi stagflation’, and funds began to pursue high-profile sectors, showing that the growth sector is relatively strong; but entering 2022 The growth sector fell more sharply in, mainly due to the tightening of overseas liquidity. “
Calm investment also attaches importance to the role of macro asset allocation. Whenever the macro judgment changes, it will adjust the asset allocation accordingly. “As early as 2012, we set up a special research team, did a lot of data accumulation, and formed our own research framework, including the research and tracking of international macro.”
By tracking the macro and private placement, we mainly judge the liquidity and other conditions to determine the position. Zhang Kexing, chairman of gray investment, said that in the investment process, the macro judgment is at the top level. In controlling the position and selecting the industry, the company depends on the judgment of the macro environment and regulatory policies, especially whether the liquidity cycle is expanding or contracting, which directly determines the position of the whole stock portfolio, which is very important. “We have a fund manager in charge of macro tracking research. The purpose is to timely grasp the changes in policies, liquidity or marginal changes outside China, which can make us more flexible in position control and take the initiative.”
Zhongrui Heyin said that the three elements of the company’s market research and judgment framework are macro, liquidity and valuation level. Through this framework, we can get the medium and long-term outlook for the future market, and determine the proportion of “value” and “trend” in Zhongrui’s strategy and the position center in the medium term.
“Macro judgment guides our medium and long-term market judgment more, and it is also one of the main weights affecting the overall position of the company. At the same time, it will judge and choose the timing of the medium and short-term trend in combination with the market capital, liquidity characteristics and some short-term factors. Zhongrui has a special research team responsible for macro and bond research. We believe that China’s stock market investment is mainly based on China’s economic fundamentals, and international macro research is helpful to investment Benefits, but not the main contradiction. “
Private placement also began to pay attention to the impact of overseas macro. Zhang Zhenyu, investment manager of Xuanyuan investment, said that the company’s investment framework is divided into macro, meso and micro parts. Among them, macroeconomics mainly solves the problems of liquidity and style. “Geopolitical issues have been less considered in this framework before, and the market has indeed been disturbed by these factors recently. Our current approach is to try to decompose the influence of geopolitics into variables within the framework to understand and judge. For example, whether Geopolitics will lead to the slowdown of economic development, the intensification of inflation, the rise of interest rate center and so on.”
Zhou Qing, director of Lianhai asset investment, said that at present, a team is specially responsible for the macro model and has built a top-down strategy system, including macro main model, portfolio generation system, event impact model, transaction model and other elements. “Under our macro analysis framework, the current international situation has a certain impact on large categories of assets, but the core contradiction lies in global stagflation. Other factors affect assets by affecting global stagflation. Therefore, we need to grasp the impact of various events on the main line. At present, the uncertain impact of the Russian Ukrainian conflict is more critical, which may affect the difficulty of global governments in dealing with stagflation, and then affect large categories Medium and long term trend of assets. “
In addition, Liang Wenjie, director of Xie Nuo Chenyang investment, said that the company has long adhered to “PE thinking to invest in the new economy”, paying more attention to stock selection and price selection than timing. “Historically, the relationship between changes in the macro environment and specific micro enterprises is not so direct, so our macro research does not directly guide investment, but we need to know the relationship between specific industries and macro economy, which will be very helpful for good investment.”
private placement: timing is very important but too difficult
more practical portfolio risk management based on industry and individual stocks
Most private placement think timing is very important. Zhongrui Heyin said timing is one of the effective ways to control investment risk and earn excess returns. The strategy of combining value research with trend timing can give full play to their advantages, making the strategy relatively universal and sustainable to adapt to various markets.
Tan Wei told reporters that timing is mainly reflected in two dimensions in Portfolio Management: first, when the market as a whole is in an obvious opportunity or risk area, grasp opportunities and avoid risks through the adjustment of the overall position of the portfolio; Second, the individual stock level follows the principle of reverse investment, which is essentially a timing of individual stocks, but this timing does not mean frequent trading, but the reverse operation when individual stocks are obviously undervalued or overvalued.
Zhou Qing believes that timing will be used more and more in future investment, mainly because it is increasingly difficult to obtain alpha in recent years. If you completely refuse to obtain benefits in beta, the expected income center will continue to decline. Therefore, it will force the strategy iteration to continuously add timing or elements similar to timing. Timing has a strong predictive component, so it will put forward higher requirements for the ability to grasp the left side of the strategy.
But, frankly speaking, “Timing is generally not used. We believe that stock timing is a sub problem of asset allocation in a large category, which is quite difficult but also very important. Asset allocation decision is at the core of the company’s investment decision. From the actual operation effect, from 2012 to now, the adjustment of asset allocation scheme has helped us tide over many crises, including money shortage in 2013, the peak of stock market in 2015, the impact of circuit breaker in 2016 and 2020 The impact of the spring of 2021, the stock core asset bubble and the callback of the beginning of this year.
Zhang Zhenyu said that in terms of timing, the position change is relatively flexible, mainly based on the risk return ratio of the portfolio subject. “This helped us avoid the bear market for 18 years, and suffered less from the impact of the epidemic twice in 20 years. This is not the ability to choose the time. We do portfolio risk management based on our understanding of the market, industry and the operation and development law of the company.”
However, more private placement find it difficult to choose the time, and it is more practical to do portfolio risk management based on market valuation, industry and individual stocks. Fengjing capital said that timing based on macro is indeed quite difficult. Especially in the past two or three years, the traditional timing system based on growth inflation interest rate valuation has been greatly challenged in the context of economic restructuring, epidemic and international conflicts. Take the current round of adjustment as an example, in the light of China’s policy easing, ample liquidity and no obvious overheated bubble in the market, the sharp drop caused by a series of overanticipated risk events overseas has led to a sharp fall, which is probably difficult for most investors to predict accurately in advance.
Wang Panfeng, investment manager of Oriental marathon, admitted that timing is very difficult. Doing well will add icing on the cake, but it is often self defeating. It is more practical to operate based on the needs of portfolio pullback management and the overestimation and undervaluation of individual stocks. The team has always attached great importance to the research of international benchmarking, and also has some allocation to US stocks.
Zhang Kexing also believes that timing is of course very important, but it is not only “timing”, but also depends on the valuation level of the whole market. Whether the macro liquidity of the market is in the expansion or contraction cycle, we should also comprehensively consider the profit trend of the whole A-share enterprise, including the valuation level and profit ratio of industries and individual stocks, so as to help judge the stage of the market and better adjust the position.
Fang Lei said that Xingshi adopts the investment concept of fundamental trend. Fundamental factors are more important than timing factors. It actively looks for driving factors at multiple levels such as the company, industry and macro, and selects the investment target with clear upward fundamental trend. “Although there are investors and private institutions in the stock market who can get good returns by timing, we believe that timing cannot be the only determinant of investment decision-making if they want to achieve the investment goal of medium and long-term absolute return. Generally speaking, timing at the macro level is very difficult and the success rate is not high. Timing is more reflected at the individual stock and industry levels. When the driving factors at the industry and company levels change , the intrinsic value of the company will also change. At this time, we need to consider whether the valuation is reasonable. If the valuation is reasonable or undervalued and the company’s fundamental trend is good, it will consider buying; If the valuation is overvalued, it will be sold gradually. “
