Reading is not only a quest for dialogue with the outside world, learning from the outside to understand the development of the company, industry and society, but also a practice of self-growth again and again, constantly improving the mind and iterative cognition inward. Adhering to the principle of enlightenment through reading and enlightenment with good books, Penghua Fundamental Investment Reading Club is committed to linking fund managers and investors and conveying the way of fundamental investment.
Enlighten with reading and enlighten with good books
Think about the way to invest fundamentally
Penghua Fundamental Investment • Reading Club
See you again
The guest we share in this issue is:
Fixed Income Research Department of Penghua Fund
Bond researcher Jing Zhao
The golden sentences in the book are shared
1. From the perspective of savings and investment, the fundamental factors that affect interest rates, savings is the supply of funds, and investment is the demand for funds, and the two jointly determine the equilibrium interest rate.
2. The financial cycle is a typical phenomenon of credit distribution. Because property and land are the most common collateral, the sectors and industries related to real estate have an advantage when it comes to financing. Therefore, the spontaneous credit allocation in the market is usually closely related to the financial cycle, with housing and land prices rising in the first half of the financial cycle, and real estate developers and sectors with more land resources taking the lead, while the second half is the opposite.
3. Particular attention needs to be paid to the impact of information technology and the sharing economy spawned by the Internet. The sharing economy improves the efficiency of the use of existing resources and capital stock through the service platform, and reduces the demand for investment. The size of the sharing economy is still relatively small, but as it expands rapidly, the macro impact will increase.
4. Macroprudential supervision in the time dimension has two goals: one is to promote financial institutions to build enough space in times of economic prosperity so that they can absorb losses in times of recession, and avoid crises in the financial system or financial health problems to tighten credit sharply, which is a countercyclical operation. The second is to limit the size of asset bubbles, so as to reduce the impact on the economic and financial system after the bubble bursts.
5. China is going through its first financial cycle, and it is unsustainable for excessive real estate and credit expansion to hurt the potential growth rate of the economy, distort the economic structure, and exacerbate the gap between the rich and the poor, and environmental pollution. The second half of the adjustment will eventually come, which means the de-bubble of real estate, the deleveraging of the non-financial sector and the financial sector, and economic growth will face downward pressure for a period of time, but the economic structure will be improved.
Quotes to share
"The Approaching Financial Cycle" is a series of books by Mr. Peng Wensheng, chief economist of CICC, which was published in 17 years, and "The Dividends of Drifting" was published 13 years ago, and both books have reached more than 9 points on Douban.
Based on the basic theories of economics, the author deeply analyzes many issues such as whether money is neutral and interest rate determination, from the perspective of neoclassical economics and Keynesian aggregates to the structural perspective of the Austrian school. The book is structured and logically coherent, analyzing the factors and mechanisms driving the financial cycle from the dimensions of real estate prices, credit, interest rates, etc., and analyzing the role of finance, money and regulation in it, thus building a framework for analyzing the financial cycle.
Among them, I think the most realistic point is that we are in the downward adjustment stage of the financial cycle that the author systematically analyzes. This stage is manifested by the lack of endogenous economic growth momentum, real estate problems, local debt problems, overcapacity, deflationary pressures, etc., which are essentially the superficial characteristics of this stage, and these have already been systematically described in this book published in 17 years. Even the author also discussed the issues that are more concerned at the moment, such as the functional fiscal currency, real estate destocking, and negative interest rates, which are very instructive for our investment and research.
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