The battle for confidence is everywhere: win or lose, not win or lose
This week, since the end of last year, “falling” new energy plate finally exhale, leading a wave of small rebound in the market, early by new energy “brought into the ditch” rare earth industry also followed the continuation of last week’s rally.We can also take a breath and share with you some of the lessons learned from the market volatility of this period.In rare earth before together with the new energy during callback, we once said that the core of the capital market rule is long-term investment on fundamentals, short-term timing is depends on the market all the “vector and” investor psychology, also is a point of view is correct is not important, important is whether their views to agree with the consensus of the whole market,And do it before consensus is formed.For example, the market correction in the past two months will be attributed by many to rising inflation data and increasingly strong expectations of monetary tightening in developed economies, while the market style switch will be attributed by many to the increasing downward pressure on China’s economic growth and the clear tone of steady growth set by the Central Economic Work Conference.So, will monetary tightening in advanced economies necessarily lead to liquidity contraction in our country?Does the priority of steady growth necessarily mean that the development of new energy industry stagnates?I’m afraid not.But that doesn’t matter, as long as most people think so, there will be an overall net outflow of short-term money.More interestingly, the so-called “smart money” in a presentiment that most of the money is going to sell on the market, will not from their own perspective to keep hold of it will “anticipation your anticipation”, before the others beat retreat, leading to decline is expected to further strengthen, confidence is collapse, caused panic in the market adjustment.Let’s take a simple example.When we read history, we see that there are many cases in ancient times where the lesser wins the greater, but how are these cases formed?Generally speaking, the advantages of having a large number of men in war are mainly reflected in two aspects: first, the continuous fighting ability is strong, which can withstand more losses in the long-term confrontation, and even can take turns between the various departments to maintain more abundant physical strength and morale;Second, there are more tactical options. When fighting in the open plains, they can attack from the flanks or flank around the rear while confronting directly.However, when a war occurs in a narrow and complex terrain with dense valleys or water networks, due to the limited contact area between the two sides, there is not much difference in the number of people fighting on the front line, and the rear army with a large number of people often does not see the situation of the front army fighting, which creates conditions for the victory of the few.Once impact is the former top can’t start intensive retreat, instead to shake after the army’s fighting will, at this time if plus ShuaiQi cut down by the other party, or the other party should be in the army to spread rumors manager died, etc, it is easy to turn into a confidence after the collapse of chaotic stampede and rout, in the case of loss of organization, number are also more fish on the chopping block.At this time, when the situation is not good, “intelligent people” who understand human nature will choose to flee first, so as not to be the last to be slaughtered, but also accelerate the defeat of the army as a whole.Back to the capital markets, even if many times business fundamentals (troops) and no obvious change, but in the majority of people think bad fermentation (back) and funds scrambled after a false start, it may turn into severe drop (scattered rout), if unable to restore confidence in the short term (behind the reinforcements arrive in time, the city shelter),Then it may also lead to a sharp decline in risk appetite, unsustainable liquidity risk of financing, heavy damage to the business fundamentals of enterprises, and complete the self-realization of the crisis (the army is eliminated by the establishment of the system).That’s why we say confidence is more valuable than gold in a crisis, because sometimes the line between success and failure is thin.Therefore, in the process of continuous adjustment, whether the government level or the level of listed companies can take some measures to rebuild confidence, such as introducing policies, propaganda, statement, letter, refuting rumors, etc., to prevent the self-realization of the crisis, it is very important.For example, the confidence in rare earth comes from the first quota of mining, smelting and separation in 2022, which was released in advance two weeks ago. The market has seen the government’s careful care for the steady rise in rare earth prices.The confidence in new energy, to a large extent, comes from a leading battery enterprise over the weekend to clarify some rumors and to the rumor makers resort to law.Only after sentiment is calmed can fundamentals regain their dominant role in share price performance.And the rules are universal.We can extend the perspective even further to look at the Internet and pharmaceuticals, which have fallen sharply over the past year.As we all know, the direct cause of the two plate back, respectively, is the anti-monopoly and centralized mining, so the anti-monopoly and centralized mining will really damage the fundamentals of listed companies?In the short term, of course, it will. After all, the original business model of competing for flow (channel), volume and quick money has gone out of business, and some capital seeking short-term returns has also begun to wait and see or withdraw, which will naturally affect the fundamentals and valuation of enterprises, as well as the confidence of investors.But what about the long term?Many large successful enterprises eventually failed, often in the face of the new stage of development and technological progress, slow response, adhere to the rules, remaining weak, “the ship turned around”, and eventually were eliminated by The Times, such as nuoxx and MOXX, which were eliminated by the era of smart phones ten years ago.At present, in the era of intelligent vehicles, the traditional auto manufacturers are facing the same challenge as the new forces of automobile manufacturing.Subjectively speaking, this is because the management is easy to indulge in the past successful experience and fall into “path dependence”. If they do not update or change their ideas in time, they will unconsciously become conservatives who are afraid of and hinder innovation.Objectively speaking, the original business is “the food and clothing of millions of workers”. Even if the management wants to reform and transform, they will face huge resistance from the internal, and even endanger their own “rice bowl”, so they would rather “lie down”.Some enterprises in Our country also began to appear such problems.The characteristic advantage of China’s super-large market lies in that, with the tilt, support and protection of national industrial policy, it can create a good development environment like greenhouse for Chinese enterprises, so that some enterprises in China can achieve the volume close to many global industry leaders only by relying on the domestic market.However, it has to be admitted that some of the “big ships” built on inland rivers are not only unwilling to turn around, but also lack core competitiveness. When they reach the vast ocean, they cannot withstand fierce storms and can only stay in a corner.What is more serious is that, after the melting of capital, they are keen to chase short-term high returns and rush into the fields that can make quick money. However, it is difficult and expensive for enterprises to invest in innovation to improve technological capabilities, which ultimately leads to “bad money driving out good money”.How to solve this dilemma?Given China’s current solutions, one is the cliche “prevent capital sprawl”, the second is from the internal and external pressure, on the one hand, moderate open still wider to the outside world in all walks of life, put some “the storm” come in, let our enterprise “inundated the rain, a bug”, on the other hand is the upstream channel blocking, delimit “protect the livelihood of the people, protect the employment” this line,Push companies downstream, forcing them to compete, to go offshore, to overcome internal resistance and inertia.And anti – monopoly and collective purchase are two of the most important measures.Indeed, if the drift, some companies may to tell the story of a few years, under the high valuation of capital inflows are likely to keep a few years, but industry ecological distortion and deteriorate further, also can let the distance with the international leading to close to them to widen, open markets in the future after the competition may be annihilated.By snookering under double pressures of policy and market, and solve the problems exposed in advance, can be achieved on the basis of quality and cost control leading evolution, ecological purification industry, after wind and rain will all walks of life to survive, realize sustainable, healthy, orderly and high-quality development of the venture into the individual tiejun, in the vast market abroad to share,You want performance, you want valuation, you want capital.This means that when the short-term pressure reaches a certain level and the ecology of the industry is cleaned up, we will usher in a process of rebuilding confidence.It also means that, we, from the perspective of the securities investment must also adapt to this change, market competition and pattern under refactoring, stock investment demand for information analysis ability and risk tolerance will be more and more high, and the index of portfolio investment and investment, or will become us to maintain confidence in the short-term shocks, and ultimately achieve long-term stick to wait for the bloom of good choice.- huatai BaiRui fund managers Tan Hongxiang written in 2022.02.17 risk tip: this material is a point of sharing, not marketing campaign funds material does not constitute any legal documents, and views contained in this material does not represent any investment advice or a commitment, investment funds need to pay attention to investment risks, please read carefully the fund contract and fund prospectus, know details of the fund.