Daewoo: Forecast of the bull market of A-shares, US stocks and crypto

The A-shares have gone crazy, with many projects doubling in just a few days, but I feel that this is just the beginning - the A-shares are a low point for global capital allocation, and the proportion of A-shares in the positions of Wall Street institutions has always been the least, but will this be different this time. Will we see Chinese people rushing into the stock market and Wall Street rushing into the A-shares - in fact, this is already happening, but how long can it last? 1. What has happened to the A-shares? Everyone knows the policies, but many people are not clear about their impact. In fact, it is the government's unlimited QE flooding, with money being directly given to listed companies, which can only be used to repurchase shares, and there are also things like the stabilization fund, which may seem complicated, but in plain language it means: The government is printing unlimited money, all of which is going into the stock market, encouraging high-quality companies to repurchase shares for profit. This will lead to a return of confidence, and the huge amount of money existing in banks will rush into the stock market. And the stock market will replace the housing market as the new asset pool, with the increase in paper wealth driving consumption and economic recovery. So, those who rushed in early have already doubled their money in a few days, while those who rushed in late are still frantically opening accounts. And the reason why I say it's still early is that most people don't trade stocks and don't care about the economy, but everyone knows how bad the domestic economy has been in recent years and how difficult it has been to make money. If there is a place with a wealth effect, I think the craziness has just begun. 2. From the perspective of assets Only valuation, no forecasting. For example, Moutai, when it was 1200, the dividend yield was about 2.5%, and if it really fell to 600, it would be better than government bonds. This is a value company, and is 1700 really that high? From the perspective of institutional asset allocation and global asset allocation, it's still okay. But now it's not about asset allocation, it's about countless Chinese retail investors waiting to enter the market, and their money is dumb money, with no risk, valuation or crisis awareness - just look at the development of the housing market in recent years, the more it goes up, the more people are willing to buy in. So I think the current stock market is just the beginning of the frenzy. 3. What are the risks? The policy bull market is afraid of sudden reversals and cooling, but at the moment the possibility of this is extremely low - the rise in confidence is the most difficult thing in the world, and the possibility of self-sabotage is very low. What if? There's nothing to be afraid of, just hold on to high-quality stocks, as cash is the worst asset in this kind of money printing. 4. What are the high-quality assets? When domestic funds are rotating, brokerages are usually the first to rise, but this is a bear market without money, and conversely, if it's a long bull market, brokerages won't be bad, like BNB, if the company makes money, it will keep rising. So the high-quality assets on the A-share side are companies like Moutai, and companies with high profit margins like East Money - note that those who rushed in early like East Money have almost doubled, don't ask me if you can still buy, I don't know. On the Hong Kong stock market side, it's Tencent, CITIC Securities, Meituan - you can see how much Meituan has risen this year, it's very strong. Buying the dips of high-quality assets is a strategy during bear markets, but you may not be able to hold out for the long wait of a few years, and it's not bad to enter the market when the bull market starts. 5. Impact on the crypto sector Even if the A-shares are bad, the top-quality companies won't be worse than the Altcoins. From the perspective of large capital, Bitcoin as a special category of asset allocation is not wrong, and ETH as a higher risk one, the only one that has passed the ETF, is not wrong either. So I think what will happen here is that the A-shares will suck blood from the crypto sector, and then the money that made money in the A-shares will flow back to the high-quality projects in the crypto sector. 6. Impact on the US stock market The long bull market in the US stock market actually has fewer and fewer undervalued companies. This is also why Buffett directly reduced his position by 50%, including reducing companies like Apple. And the current holders of US stocks are still worried about things like yen rate hikes, so if there is an opportunity to find a value low point, capital will definitely switch to Chinese concept stocks. Such as Alibaba and Pinduoduo in the US stock market. 7. Unlimited QE The last time was 20 years ago, the COVID-19 crisis, the US stock market had consecutive circuit breakers, the super-crisis that we may only encounter once in a lifetime, and the result? The US launched unlimited QE, and it's very similar to what China is doing today - translated, it means the same thing: don't be afraid, have confidence, I have unlimited ammunition! The result? After the crypto 312 incident, just like the US, it has ushered in a crazy bull market that has lasted for several years. You can analyze the junk in the A-shares, and you can also notice that there are a lot of companies reducing their holdings, and many junk companies will take the opportunity to reduce their positions, but I think looking at the big trend, looking at high-quality companies, this will be the second time in our lifetime that a major country has unlimited QE. Interestingly, a few A-share old-timers I know, who have been trapped for a few years and have been losing money, have all run away after the recent surge - in fact, there are not many people who really understand investment. I like this kind of emotional and narrative bull market, I like this kind of atmosphere where people are dumb and have money, I know that there is irrationality everywhere in this bull market, you just need to rush in fast enough, run out early enough - that's a qualified speculator. As for the smart investors, I suggest you double your money and get your principal back first, and then come back to value investing. 8. The ideal script The high-quality assets in the A-shares double in price, cash to welcome a big correction in the US stock market and crypto, get on board, and achieve a 5-10 times increase in total assets in three years. This script is too ideal, please only consider it as a fantasy of the retail investors.