Chapter 690 [U.S. stock market outlook is bullish or bearish? 】
At this moment at the annual shareholders' meeting, the question-and-answer session is still going on, and Lu Ming has already answered questions from 11 people.
So far, 14 questions have been generated, and the others have been answered by Gao Hua, Ge Feng and others.
After a while, the staff presiding over the meeting selected the next questioner, who was an investor from China. After taking the microphone, he first said a few words of thanks.
Then, the investor began to ask a formal question: "...Mr. Lu, we found that the US stock market, taking the Dow Jones Index, has reached more than 26,000 points again. It has reached a position about to reach a new high and it is time to choose a direction.
Do you think the U.S. stock market will successfully break through and go bullish this time? Or will it go bearish? And will our A-shares be affected? Thank you!"
Lu Ming took a bottle of water brought to him by a staff member, opened it and took a few sips before saying: "Since we are talking about the issue of US stocks, we need to correct it first. You should still follow our big A's rules."
If we want to discuss whether the market is bullish or bearish, how do we define a bear market or a bull market? If you don’t give me a definition, then what is the concept of bullish and bearish? If it goes up, it’s bullish; if it goes down, it’s bearish?”
"Such a description is incorrect, especially when describing U.S. stocks, there is almost no so-called bull-bear concept. A more professional description should be that the market volatility will increase? Or is the market in a relatively stable return rate stage?"
?”
"If you extend the U.S. stock market cycle for a hundred years, its average return rate is positive. In other words, it has been in a bull market for a hundred years. If a market responds effectively, it will always be a bull market in theory, and it will always be a bull market.
will provide a rate of return.”
"When we discuss the market, we are more concerned about whether its return rate in recent years is at a high or low level. So what is the average return on U.S. stocks? That is, the economic potential provided by the world has given U.S. stocks a boost.
The return rate is about 14%."
"Then for our Big A..."
Having said this, Lu Ming paused, thought for a while and said with a smile: "The problem with our Big A is the index. Our Shanghai Stock Exchange Index does not reflect our rate of return."
When these words were spoken, some investors in the audience burst into laughter. They misunderstood, thinking that Lu Ming's words were making fun of Big A for not providing a rate of return.
Lu Ming continued methodically: "...If you say that the Shanghai Stock Index has not risen in ten years, then you say that the domestic capital market has not performed. This is actually another mistake. The U.S. stock market is about the survival of the fittest. Simply put, the good ones come in and the bad ones come in.
It is removed, so its index weight has been adjusted and can fully reflect the market."
Among the 20,000 attendees, Lao Yang was also present. He also prepared a question. However, it was hard to say whether he would be selected for this year's shareholders' meeting. Anyway, he prepared the question first.
When Lao Yang heard Lu Ming's words, he immediately thought of the Tiansheng Shang 50 Index and Tiansheng Shenzhen 100 Index compiled by Tiansheng Capital's own company. Perhaps these two indexes truly fully reflect the large A-share market.
Because the two major indexes compiled by Tiansheng Capital are equivalent to adjustments in the overall Big A market, they are also the survival of the fittest just like the U.S. stock market. The good ones are added in, the bad ones are eliminated, and the weights are constantly being adjusted.
The results are also extremely obvious. The Tiansheng Shanghai 50 Index is often benchmarked against the Shanghai Composite 50 Index, but the constituent stocks of the two are quite different. For example, the Tiansheng Shanghai 50 Index does not have so many bank stocks or securities stocks. The returns of the two
Rate, from the first trading day of this year to the close of the last trading day, the Shanghai Composite 50 Index has increased by +28%, while the Tiansheng Shang 50 Index has increased by +47%, significantly outperforming the benchmark index.
The same goes for the Tiansheng Shenzhen 100 Index and the Shenzhen Stock Exchange 100 Index. In recent years, as of the close of the previous trading day, the Tiansheng Shenzhen 100 Index had a cumulative increase of +67%, while the Shenzhen Stock Exchange 100 Index had a cumulative increase of +38% over the same period. The same
Significantly outperformed the benchmark index.
At the same time, Lu Ming continued to answer the question asked by the questioner: "For the U.S. stock market, after the financial crisis in 2008, what kind of state did you find its average performance? What will be the rate of return in the next two to three years?
It is very high, about +40%. You will find that the more crisis there is and the worse, the better the return rate will be in the next two to three years. And regardless of the stock market, the return rate on all assets is good. Why is this?
"
Lu Ming asked and answered: "The answer is a monetary phenomenon. That is to say, the bigger the crisis comes, the more money you print and the looser it is. The lower your cost of capital is, and the higher the return on assets will be. Why? Because assets
The rate of return will enjoy two things. The first is growth, and the growth of corporate profits is the so-called value part; the second is valuation. The greater the easing, the greater the proportion of your valuation, and the rate of return will of course be
The higher it is, this is easy to understand. When there is more money in the market, people are grabbing assets."
"If after two or three years, the Fed has to tighten, and if the economy can hold on, the rate of return will fall back to the average of about 14%. This is a relatively normal market. If this is the case, it will
The volatility will be very low, so there is nothing to see in U.S. stocks, just hold it and eat and drink when you need to.”
"Then we looked at the Fed's tightening in 2013 and 2014, but you found that the return rate of the U.S. stock market at that time was basically stable at 14%. What was the reason? That's because the implicit growth of the North American economy gave the stock market a return rate.
That is, the rate of return on the asset side is greater than the cost push on your liability side.”
At this point, Lu Ming suddenly changed his subject: "But if your economy cannot sustain it and you have to tighten it, then the market volatility will be magnified and the rate of return will be reduced. The past 2018 was a typical example.
You just mentioned the Dow Jones Index, let’s take the Dow Jones Index as an example..."
Lu Ming paused his speech and worked on the laptop placed on the table in front of him for a moment. He opened the market software and switched to the US stock market Dow Jones Index, the trend from January 2018 to the present, and then projected the screen to the giant screen behind him.
All the attendees at the scene turned their attention to the giant screen, and Lu Ming's voice echoed throughout the audience again: "If you only look at the K-line of the Dow from January last year to now, it rose sharply to 26,000 in January last year.
It then plummeted, then rose again, reaching more than 26,000 points in October last year, then plummeted again, and rose sharply since the spring of this year, and is now at more than 26,000 points."
"So, if you just look at the K-line chart, you will see big rises and plummets! Alas, it seems to have pulled back to a small new high, but then suddenly crashed and plummeted, and then pulled back again... you will find that since 2018
It has been almost a year and a half now, and the average return on U.S. stocks during this period has been almost zero."
Lu Ming typed a few times on the keyboard of his laptop, turned off the screen projection, then looked at the questioner and then looked around everyone and said: "Why did the U.S. stock market go like this? The answer is that there has been friction between the United States and us since 2018, but this is not
The essence of the slump is that North America will fight you only if the economic growth fails, which means that North American economic growth is no longer enough to generate an annual return rate of about 14% for the U.S. stock market."
Speaking of this, Lu Ming smiled faintly and said: "It seems now that North America has been fighting the trade war with us for more than a year, and it is of no use. We have withstood it and have not collapsed. At this time, if you are North America
What should the authorities do? So no surprise, the Federal Reserve will definitely cut interest rates this year. This is our prediction. The specific time is hard to say, but it must be lowered. Only by lowering the monetary policy can the liability side offset the shortage of assets.
, thus forming a basic equilibrium state in the market."
Lu Ming is not afraid that these words will be heard by the policy makers of the beautiful country on the other side, because the general trend does not depend on personal will, not to mention that a super black swan will come next year, and if it is not relaxed, it will explode on the spot.
Lu Ming paused for a moment and added: "Then if there is a sudden public crisis such as a war that affects the world, or a major black swan event that affects the world, and the cost of funds is reduced to an extremely low level, it may suddenly
All asset valuations and bubbles will rise quickly. At this time, your rate of return will not only be normal, but also super high, just like after the 2008 crisis, because what you earn at this time is not value growth.
The money is the money given by the banks of various countries for valuation, so this is not a simple matter of saying that the U.S. stock market will go bullish or bearish this year.”
After speaking, Lu Ming nodded and said no more. The question was answered, and the questioner was also very satisfied, because Lu Ming's answer was detailed and professional enough.
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