Interpretation of the title: "flying through the clouds is still calm" comes from Mao Zedong's "seven wonders · photos of immortal cave in Lushan Mountain taken by Comrade Li Jin". On September 3, 2019, Xi Jinping General Secretary delivered an important speech at the opening ceremony of the training class for young and middle-aged cadres of the Central Party School (National Academy of administration), emphasizing that in the face of various difficulties and tests, we should strengthen our faith and maintain our concentration, so as to "not be afraid of floating clouds to cover our eyes" and "fly through clouds calmly" in the face of various major struggles and tests.
In 2022, the stock market fluctuated greatly, the market fluctuated and the adjustment year, the external "chaos and cloud flying", the currency cycle dislocation, geopolitical conflict and the recession fog of "stagflation". The internal 5.5% growth target, increased efforts to stabilize growth, increased monetary easing and high certainty, and the allocation of "big finance" (bank and real estate chain) is expected to run through the whole year. Looking forward to the second quarter, the trend of external chaos and internal stability continues, the inflection point of global liquidity interest rate has been formed, the capital flows back to low-risk assets and developed markets, and global investors have a phased aversion to overvalued varieties. The pressure of internal economic growth is great, and corporate profits are in a downward cycle, which makes the overall market bottom in the second quarter and the opportunity is dominated by "big finance". After the basic price in of external "chaos", the directional significance of global capital flow in the Korean stock market, and the recovery of internal economy and profits, the market is expected to meet the counter offensive moment of "Normandy landing" and "infinite scenery in dangerous peak".
Reflections on roe growth and valuation system (great stagflation in 1970s, enlightenment of 3000 stocks in US stocks in 20 years). In the 1970s, the "great stagflation" came into being. How to price the stock market? In terms of the general situation, "stagnation" is the most destructive to the valuation of risky assets in the "inflation" environment. "Inflation" makes wealth depreciate passively all the time, so the risk assets whose profits outperform inflation are sought after and valued high during the recovery period, such as "beautiful 50" in 68 and 72-73; However, when the profit of risky assets tends to "lag" and lags behind inflation, it will kill the valuation, such as 69 years and 73-74 years. In terms of style, the roe uplink high roe strategy is effective, while the downlink low roe strategy is effective. In the upward period of roe, enterprises' profits diverge, inflation transmission is smooth, and industries and companies whose profit growth rate is higher than inflation outperform the market, that is, the high profit strategy is effective; In the period of roe downturn, corporate profits converge, so the valuation returns to the mean. Previously, the killing of high growth rate and overvalued assets was the most obvious, that is, the undervalued strategy was effective. In terms of the industry, macro fluctuations have increased and Merrill Lynch's clock has turned perfectly. The 1970s was a period of high inflation, low inflation, and low inflation, while the 1970s was a period of high inflation, low inflation, and financial stagnation.
Configuration suggestions take "big fast and small slow" as the main idea "Big fast" means that "big finance" should be allocated early and quickly. The "big finance" (bank and real estate chain) with high correlation with internal certainty, high correlation with steady growth and low correlation with external positions will help to maintain a calm net value in the "chaotic cloud flight". Since the recommendation of "it's the turn of big finance" on January 3, the second quarter may be the last better window period for the additional allocation of "big finance" this year. We should not focus on the "slow growth" of VraR and service chain, but on the "slow growth" of VraR and service chain.
Risk tips: risk-free interest rate rises, macro-economy fluctuates sharply, industrial policy risks and market fluctuations exceed expectations, global capital return to the United States exceeds expectations, China US game exceeds expectations, inflation exceeds expectations, financial regulatory policies tighten beyond expectations, etc
