Yang Delong: Distinguish between real risks and fake risks in investment

On Wednesday, January 12, the Shanghai and Shenzhen markets showed a general upward trend, ending the adjustment of the previous six consecutive trading days, and it should be said that this year started unfavorably. Most of the sectors that rose more last year fell sharply, while the undervalued sectors showed a certain recovery. The style of the market switched at the beginning of the year, but the switch was switched in the process of falling, so it was relatively a painful switch. At the end of last year, I told you that the main investment line of the market in 2022 will be performance is king, and 2022 is a big year for value investment, and we must grasp the two important indicators of performance and valuation to invest. In 2021, the style of the market is biased towards growth stocks, theme stocks, and concept stocks, and many value investment targets have fallen sharply in 2021, but whether it is extremely tailai, some high-quality stocks have ushered in the layout opportunity after being wrongly killed. The new fund I issued in July last year, Qianhai Open Source High-quality Leading Fund, encountered a sharp decline in these high-quality leading stocks during the position building period, which just provided a relatively good opportunity to open a position.

Yesterday I told you about the need to distinguish between real risks and fake risks when making investments, and Buffett said: "I can bear the false risk of stock price fluctuations, but I am not willing to bear the real risk of deterioration of business operations." Investing in us is a lifelong undertaking, not an overnight thing. So we can't focus too much on short-term stock price volatility and ignore the long-term fundamentals. According to the theory of real risk and false risk, we look at this recent market correction, the larger pullback in this pullback is new energy, because new energy is the largest increase in last year's sector, the main reason for the pullback is that there is such a bearish decline in new energy vehicle subsidies of 30% on the policy side, but the fundamental reason is that last year rose more, and the valuation was too high to lead to some profit taking. New energy instead of traditional energy is the general direction, and China's carbon neutrality time is until 2060, that is to say, the development of the industry is still in the early stage, at most in the early stages, so the long-term development trend of the industry has not changed. The correction of the stock price is mainly affected by valuation fluctuations, so it is a false risk. It is worth noting that the leading enterprises of new energy are in a dominant position in the industry competition, so they are often the ultimate winners. My Qianhai Open Source Clean Energy Fund is allocated to the leading stocks in the subdivision industry, including the lithium battery industry chain of new energy vehicles, photovoltaics, wind power, hydrogen energy and other four major track leading stocks. Some non-leading enterprises, especially some enterprises that are only stained with the concept of new energy, may have a relatively large operating risk this year, which may be a real risk.

In terms of consumption, in the past two years, affected by the epidemic and strict control, the growth rate of consumption has declined significantly, coupled with the excessive increase in consumer white horse stocks in the past five years, the Mao index fell sharply last year. The decline in these consumer white horse stocks I think is a false risk of stock price fluctuations, rather than a real risk of a change in investment logic. Although the short-term consumption growth rate has declined, it has not changed the investment value of many consumer white horse stocks, so their stock price has fallen down as an opportunity for layout. China's per capita GDP exceeded 10,000 US dollars in 2020, according to the experience of European and American countries, when the per capita GDP exceeds 10,000 US dollars, it will usher in consumption upgrades and total consumption outbreaks, and the epidemic in these two years is equivalent to suppressing the outbreak of consumption in the short term. Once the epidemic is over, if the epidemic control can be more precise and relaxed, the growth rate of consumption is expected to pick up. Once the consumption growth rate rebounds, the entire consumer white horse stock is expected to regain its upward trend and even reach a new high. In summary, this year for consumer white horse stocks, I think to maintain confidence.

From the perspective of macro policy, this year's steady growth is the mainstay, and monetary policy will maintain a wide currency and wide credit model and maintain a low interest rate environment, which is conducive to the valuation repair of some high-quality leading stocks that have been wrongly killed. I think the main investment opportunity this year is the opportunity for valuation repair or recovery. It is a better strategy to lay out some high-quality stocks or high-quality funds through each market crash and patiently wait for the valuation to rise, that is, the better the fund falls, the more it makes up. If the market sentiment is too excited, when the explosive funds appear frequently, it is time to reduce the position, but now it is far from there. This year was expected to be the opening period for the issuance of new funds, but most of the new funds were not in a satisfactory state, including some funds issued by some star fund managers. The start was unfavorable, which shows that the current market is far from the time of excitement, but in a downturn. Peter Lynch once famously said, "When you feel hopeless, don't sell stocks, because the price of selling must be very low." This sentence is very simple, but it means a lot, because when you feel hopeless, it is also when others feel hopeless, and the price of selling at this time is definitely very low. Munger also humorously said that making an investment is actually very simple, that is, buying stocks from desperate people and selling them to some excited people. If you want to do a good job in value investment, you must not only learn the concepts and methods of value investment, but also exercise a good attitude, overcome the weaknesses of human nature, and overcome greed and fear. Some investors follow the trend, chase the rise and fall, if these human weaknesses can be successfully overcome, investment is not far from success.