When you are pessimistic, you need to find the bottom line of value, and when you are optimistic, you need to think about performance elasticity.

For a long time, stock market investment has two natural enemies-greed and fear. Greedy allows investors to buy at the highest point, stocks become shareholders; fear allows many people to sell shares worth far greater than the price, sell cabbage price floor price. How to overcome greed and fear sets up the lessons that fund managers need to think continuously.

 

In the fourth quarter of, the stock market plunged along with the huge psychological panic that affected the world by the overseas financial crisis and the continued deterioration of the fundamentals of the domestic real economy, many of the previously popular stocks have become the hot potato, and the index has fallen all the way to 1664 points in a piece of panic and fear. Now let's look back at the 1600-plus market, where gold is everywhere. Reflecting on this "bloody" slump, we should not only ask how to maintain rationality in the excessive fear of the market, the answer seems to be the margin of Enterprise Security and the bottom line of value.

 

Any enterprise that continuously makes profits and operates has a bottom line of value and a margin of safety. Reflecting on this, we feel that Pb in the asset industry constitutes the bottom line of value. The reevaluate value of resources in the resource industry is the bottom line of the stock price, the bottom line to overcome fear is the low enough PE of continuously growing consumer companies.

 

For example, asset-type banking stocks are a bottom line of value when they are 1.5 times Pb: in the past 20 years, the Pb hubs of banking stocks in the United States have doubled; the weighted average price of strategic investors for restructuring and introducing state-owned banks is also basically higher than 1.5 times Pb. For example, China Construction Bank introduced 1.51 times Pb of Asian financial companies, and China Construction Bank introduced 1.68 times Pb of new bridges for deep development, the Bank introduced HSBC 1.76 times Pb. Return to the stock market to verify our judgment. The lowest share price of China Construction Bank at the end of 08 is 3.59 yuan, which is exactly 1.5 times of the net assets of 2 yuan. the rebound of other banking stocks that have fallen below 1.5 times Pb is even greater, the stock price also returned to the value center two to three times Pb early. The 3-4 or 1.2 Pb of Resource-class real estate stock RNAV has almost fallen. The RNAV, which has always been expected by the Chinese merchants real estate market, is 27 yuan, the lowest share price of China Merchants property is basically 10.47 off of RNAV. With the assumption that the new business grows by 1-2%, the new business multiples are 10-15 times more secure.

 

In the same way, it is necessary for a resource-type enterprise to look at the value of minerals and reevaluate resources.

 

PE, which is 15 times more secure for consumer goods companies and Growth Enterprises with stable growth, is also safe. From a macro perspective, the next 10 years will be the 10 years of upgrading consumption and improving quality of life in China, the nominal growth rate of total retail sales of social consumer goods can be maintained at more than 15%, fully supporting the PE of leading high-quality enterprises by 15 times. From overseas experience, the average PE center of global consumer goods companies in 20 years is 20-25 times, and 15 times PE of high-quality companies is also the bottom line. In the past 25 years, Walmart and jard.com have almost never fallen below 15 times PE, even when profits have barely increased in the next year.

 

If we can clearly understand the bottom line of enterprise value when the market is panic and insist on buying on the left side, then we may be able to enjoy victory over pessimism and fear on the right side.

 

Starting from the first quarter of this year, the-share market has rebounded and launched a fund-driven market. In a twinkling of an eye, the index has increased by more than 100%, follow the mainstream Analysis Framework "credit-year-on-year growth of investment-industry climate-stock price" to produce asset stocks (such as finance and real estate) resource stocks (such as coal and colored goods) that result from the continued devaluation of the dollar, as well as new energy and terminal sales of over-expected durable consumer goods (such as automobiles and household appliances) became the most brilliant investment main line in. In an optimistic and upward market atmosphere, elastic analysis seems to be a powerful weapon to grasp market hotspots.

 

We often use the beta coefficient to describe the stock price feature of an industry, that is, elasticity, BETA coefficient can also be understood as the sensitivity of an industry to the overall fluctuations in the stock market or to a key variable. In general, it is industry elasticity and performance elasticity.

 

Taking coal as an example, we will consider how to grasp the impact of industry elasticity on the stock price in this round of increase, coal was not the first beneficiary of the Economic Recovery (it should be a strong product that entered the overheated stage), but this year's situation is somewhat different. One of the main reasons is that frequent mining difficulties make the rectification of the coal industry much stronger than that of the steel industry. The shutdown of Small Coal Kiln and the control of new coal production capacity have greatly changed the Supply and Demand structure in the industry. Since 0.3 billion, more than coal mines have been shut down in various regions, and tons of outdated production capacity have been eliminated. This has greatly reduced the price elasticity of coal. Originally, the price of tons of coal is expected to drop by 20%-30% this year, but the current situation is indeed not falling or rising. The beta coefficient of the main coal stocks has increased significantly since the second half of last year. The coal industry has become one of the most beneficial industries in this round of economic recovery.

 

Key assumption of performance elasticity is nothing more than quantitative price-product prices and production capacity, especially product price elasticity, which has a greater impact on the stock price, such as Raw Material Medicine, chemical fiber, and nonferrous metals, performance is highly sensitive to product prices. Changes in prices directly affect future performance and valuation.

 

However, if the stock price has fully reflected the most optimistic profit prediction and valuation in the market, then the stock price has fully reflected its value and the expected value after improvement.

 

In the current market position, our elastic analysis will focus more on the demand and price sides. Our logic is that if the supply increment is not large next year, as long as demand increases significantly next year, the supply curve will not be smooth, and the industry's prosperity and price will increase significantly. Whenever demand increases, revenue growth will be higher than cost growth, the profitability of the industry is improved faster.

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