On January 13, the well-known 10 billion private placement Chongyang investment held the second session of the new year's strategy meeting online - looking at the market of "Chongyang S4" in 2022: review, reflection and prospect.
Wang Qing, chairman and chief economist of Chongyang investment, as well as Wu Weirong, Qian Xinhua, Wang Shijie and Tan Wei, four fund managers of Chongyang investment, shared their experiences and feelings in the investment experience of the past year, and answered hot issues such as Hong Kong stocks, new energy and quantitative investment concerned by investors one by one.
The exchange lasted two hours. Here are some wonderful views.
1. Investors can't easily say success until their natural life is over and they completely quit the industry. Investment is faced with uncertainty all the time, so we need to be vigilant all the time.
2. If the investment is a marathon without an end point, professional athletes can stick to it all the time. For long-term success, they must adhere to training all the year round, continue to optimize, and find the most suitable and correct method.
3. The difference between value and growth is only that the short-term value of "value stocks" accounts for a higher proportion, while the long-term contribution of "growth stocks" is higher.
4. Even if the Fed enters the interest rate increase cycle in the next three years, we are still in a low interest rate era in the long run.
5. It is almost impossible to find tenfold shares prospectively. Therefore, instead of pursuing tenfold shares, it is better to find one or two times more shares.
6. On the basis of in-depth research, reverse investment goes against market sentiment and conforms to the general trend of industrial development.
7. Study the times and industrial trends from top to bottom, stand on the correct historical trend and fish in places with many fish, that is, the slope length; From bottom to top, choose enterprises with good business model, that is, Xuehou.
8. Entrepreneurs are essentially allocating capital, and investors actually allocate capital by allocating entrepreneurs.
9. The development of new energy vehicles will not be achieved overnight. The penetration process of new energy vehicles as durable goods will be slower. We need to be careful about the twists and turns in the process of improving penetration.
10. There are two types of investment opportunities in Hong Kong stocks. One is the repair opportunity of undervalued companies, and the other is the slow bull market of companies with good growth potential.
to view value, we must first have the awareness of owner
question: Chongyang investment has always adhered to the concept of value investment. How should we treat value?
Wu Weirong : Buffett said that investment needs two abilities, and only two abilities, that is, how to understand the value and how to understand the market. How to look at value is how you look at the stock as a chip, a code, or part of the owner. In the long run, the income of investment comes from the value created by the company itself. Therefore, when looking at the value, we must first have the awareness of the owner, regard the invested company as our own, care about all aspects of it, think about the environment it faces, understand its business model and predict the future development. Secondly, looking at the company from the perspective of the owner, the ultimate purpose is to predict the value of the company. In general, the company's intrinsic value is defined as the discount of future cash flow. This is a very good concept. It considers value from the perspective of cash flow rather than profit, and considers the time value of money.
value and growth are unified
ask: how to understand the relationship between value and growth?
Wu Weirong : with regard to value and growth, the academic community regards low PE as value stocks and high PE as growth stocks out of the needs of research. This is a simplification of research, but it has brought many misunderstandings. In terms of investment essence, the two are unified. Good growth stocks should be supported by value, and good value stocks must grow, because growth is the best value. The difference between the two is only that the short-term value of "value stocks" accounts for a higher proportion, while the long-term contribution of "growth stocks" is higher. Due to this difference, the difficulty of research and the characteristics of the market will be different. If the valuation of value stocks can be repaired quickly, it can bring huge returns in the short term. On the contrary, we should carefully distinguish the "value trap". The advantage of investing in growth stocks is to be a friend of time, but if the overvalued overdraft too much in the future, the short-term fluctuation risk will also be great. Therefore, investment should eventually return to the definition of internal value itself, see which can bring better and more certain long-term returns, and see where your ability circle is.
Qian Xinhua : since the 2008 U.S. subprime debt crisis, the interest rates of major economies around the world have shown a downward trend or remained at a very low level. Even if the Federal Reserve enters the interest rate increase cycle in the next three years, we are still in a low interest rate era in the long run. China's economy has entered a high-quality growth stage, and the risk-free interest rate will probably decline. In this environment, high-quality equity assets will continue to be sought after by the market. If you want to buy good assets at a particularly cheap price, there are few opportunities. Investors need to layout companies with long-term growth potential more prospectively. There is no value without growth.
Wang Qing : value investment has two key attributes: one is to study and judge its internal value based on the company's ability to create future cash flow, and the other is to buy the company's stock when the current stock price is significantly lower than this internal value (i.e. there is a sufficient margin of safety). The income earned by value investors mainly comes from two aspects: one is the growth of the internal value of the invested enterprise, and the other is the valuation repair process in which the stock price more accurately reflects its internal value.
Game based on value
question : some people like to select high-quality stocks and hold them for a long time, while others will do periodic operations according to the guidance of mean regression. What do you think of this problem? How to operate in practice?
Wang Qing : everyone's penetration into the future is limited. The capital market often talks about "ten times stock", but in investment practice, it is almost impossible to find ten times stock prospectively. Therefore, instead of striving for tenfold stocks, it is better to find more one fold stocks and two fold stocks. If we can find three one fold stocks and configure them with the "relay" method, the final effect is the same as finding an eight fold stock. Moreover, at the practical level, due to the guarantee of investment and research methods and investment and research processes, it is easier to find three doubled shares than one eightfold share.
Wu Weirong : the two methods are not exclusive. If you meet the ideal company, you can always hold it. But there are two conditions for long-term holding: one is to have a really excellent company; Second, we should really understand and not follow the trend; Third, investors should be able to tolerate violent fluctuations and consider the long-term future of the company from the perspective of the owner. From the practical level, don't over believe in your ability to predict the long-term future, and don't give the company too high requirements.
Tan Wei : no matter how excellent an enterprise is, it will also experience huge fluctuations if it is blindly held for a long time.
The purpose of our asset management is to obtain income when the fluctuation is controllable. If we put aside the fluctuation and only talk about income, we may fall into the dilemma of "making money for the fund but not for the people". The "relay method" of value investment is suitable for the characteristics of asset management and A-share market, that is, after the investment target reaches the expected income, it should not be simply and mechanically held for a long time, but replaced by another investment target with greater safety margin through "relay".
counter market sentiment based on in-depth research
comply with the general trend of industrial development
question: Chongyang investment is known as reverse investment in the market. What is reverse investment? Why does it work?
Tan Wei : the definition of reverse investment is simply to sell high and absorb low, but it is easier to know than to do. We should overcome people's emotional weaknesses. The effectiveness of reverse investment refers to obtaining medium and high returns in the long term and reducing volatility in the short term. Reverse investment is especially suitable for a shares, because individual investors account for a high proportion in the trading of a shares. Individual stocks and industries often show strong volatility, thus forming the so-called "style". If we can make use of the style, we can get twice the result with half the effort and realize the benefits that should have been obtained in the long term in the short term. Therefore, layout in advance when the style does not come, and consider quitting in time when the style comes.
Qian Xinhua : reverse investment is based on in-depth research, goes against market sentiment and conforms to the general trend of industrial development. The development of industry and the operation of enterprises are tortuous. The capital market is good at linear extrapolation. Enterprises are highly valued when their short-term growth rate is high. Buying at a high level is easy to cause permanent losses of principal. Realizing long-term absolute returns needs to rely on reverse investment based on in-depth research.
Wang Qing : "the fund makes money, but the foundation does not make money" is a major pain point in the asset management industry. To solve this pain point, on the one hand, we hope that fund investors can adhere to the long-term investment concept. On the other hand, as a professional fund manager, we should also put forward higher requirements for ourselves. The market can fluctuate greatly, and the net value of the fund products we manage should minimize the fluctuation. On the one hand, it is necessary to obtain investment returns satisfactory to investors in the medium and long term; On the other hand, in the medium and short term, it is necessary to control the volatility and pullback and improve the holding experience of investors, so as to achieve long-term investment. In this sense, value investment and reverse investment are both means.
Mr. Qiu guogen, the founder and chief investment officer of Chongyang, once said: "investors can\'t easily say success until their natural life ends and they completely withdraw from the industry. They face uncertainty all the time in investment, so they need to be vigilant all the time." If the investment is a marathon without an end, professional athletes can stick to it all the time. For long-term success, they must adhere to training all the year round, continue to optimize, and find the right method that is most suitable for them. In nearly 26 years of investment practice, an important concept of Chongyang investment is to create considerable absolute returns for our investors. The specific methods are value investment and reverse investment.
layout of small and medium market value stocks is only the result
question: last year, small and medium market capitalization stocks in the portfolio made a good contribution to the income of the portfolio. Can we say that we prefer small and medium market capitalization stocks?
Wu Weirong : the layout of small and medium market capitalization stocks is a result. When evaluating the company, scale is not a factor I consider, nor does it involve the essence of investment. As for why there are more small and medium market capitalization stocks in my portfolio in the past two years, I think there are two reasons: first, the market generally prefers core assets in the past few years, the valuation of core assets has been significantly improved after 2017, and small market value stocks have been ignored. Since last year, the market has begun to prefer the style of small and medium market capitalization. On the contrary, many core assets have been abandoned. Now I am also paying attention to the investment opportunities of many core assets; Second, I personally have high requirements for the rate of return. Although some large companies also have good growth, on the whole, small market value companies have greater potential. To be more precise, I prefer companies that are growing rather than mature or declining.
Tan Wei : personally, I have no preference for style, market value and industry. My principle is reverse investment. No matter the size of the company, I will configure it as long as it meets the requirements of reverse investment. The reason why I configured more small and medium market capitalization stocks in 2021 is that I found that after the extreme group market in 2020, a large number of small and medium market capitalization stocks are in a state of no interest, so I can find a lot of investment opportunities. If the valuation of small and medium-sized stocks is too high in the future, I may return to large market capitalization stocks, so this is a dynamic adjustment process.
Wang Qing : we do not agree with the stock selection logic of labeling based on market value. With the full implementation of the registration system, the supply of small and medium-sized market value companies has further increased, which is both an opportunity and a challenge for stock selection.
Hong Kong stocks will usher in a high-quality slow bull market
question: how do you view the investment opportunities of Hong Kong stocks?
Qian Xinhua : there are two types of investment opportunities in Hong Kong stocks, one is the repair opportunity of undervalued companies, and the other is the slow bull market of companies with good growth potential. We judge that there are no systematic opportunities at the level of Hong Kong stock index, but there may be repair opportunities.
Specifically, some Internet platform companies faced triple pressure on policy, fundamentals and valuation last year, with a large range of stock price adjustment, and may usher in repair opportunities in the future. At present, the valuation of the financial sector is also in a relatively low position, the probability of sharp decline in bank profits is low, and the high dividend rate is attractive to some large pension funds or insurance funds. In addition, there are structural opportunities for Hong Kong stocks in the future. With the Federal Reserve entering the interest rate cycle, some real growth stocks are valuated to foam, and subsequent performance will be gradually fulfilled, and a profit driven high quality bull market will be ushered in.
Wang Shijie : it is worth noting that the allocation proportion of foreign capital in Hong Kong shares is lower than that in 2008. For investors, if only out of concern about policy uncertainty, downward pressure on the economy and tightening of external liquidity, Hong Kong stocks are now undoubtedly a "golden pit", and the tail risk of investing in Hong Kong stocks can be basically eliminated.
the new energy sector will not be configured at this time point
question: how do you view the investment opportunities of new energy?
Wu Weirong : new energy generally refers to photovoltaic, wind power and other fields from the energy end, and new energy vehicles from the user end. I'm optimistic about this field, but I won't invest at this time.
Take new energy vehicles as an example. Automobile is a 100 billion level industry, which is undergoing great changes in electrification and intelligence. This trend is difficult to reverse. There will be great changes in the whole vehicle, parts and materials industry. This is a process of reshaping the industrial chain and brewing great opportunities. We will continue to be optimistic about this direction. However, we should be vigilant that the development of new energy vehicles will not be achieved overnight. The penetration process of new energy vehicles as durable goods will be slower. We need to be careful about the twists and turns of the industry in the process of increasing penetration. At the same time, as we all see the huge opportunities contained in new energy vehicles, not only the enterprises in the industry are rolling in, but also the players with large business are entering the industry. At present, it is very challenging to judge the final winner.
Back to the investment level, the market's enthusiasm for new energy is very high. If we can find future winners, we believe we can still have good returns. However, if everyone feels that they find future winners and give high valuations, it is undoubtedly impossible. Therefore, I will not configure the new energy sector at this time point.
For reverse investors, the existence of quantification is a good thing.
question: how do you view the impact of the rise of quantitative investment on active managers such as Chongyang?
Tan Wei : momentum factor has been a great success in the past two years. Market differentiation is beneficial to quantitative strategy, but the increase of the scale of quantitative strategy in turn affects the further differentiation of the market. When the market differentiation and market style change, quantitative private placement will usher in a real test, so quantitative investment still needs more periodic tests. For active managers, the existence of quantification is a good thing, because if we layout the stocks we like in advance, we can realize the income in a short time. However, at the same time, we should also be vigilant against the huge pullback caused by the reversal of quantification. In general, the existence of quantification is a good thing for our reverse investors.
