I got sick today and felt a bit unwell. In fact, I fell ill yesterday, but I didn’t notice it while working. After work, I wanted to play some games, but I found my head was heavy. When I measured with a thermometer, it showed 38.8 degrees, which shocked me. I immediately turned off the computer and drank a cup of Melatonin before sleeping. I woke up sweating in the middle of the night, and when I got up in the morning, my fever had subsided. However, after dinner, the temperature rose again, and now I’m having a bit of trouble concentrating in front of the computer.
I used to think that people like me who don't work and don't go out are less likely to get sick, but recently, my sons have caught the virus while at school and then spread it at home, so I definitely can't escape it either. It's hard to tell if this is a variant of COVID-19, and the term 'positive' has already become a thing of the past.
Also, a reader asked me about the Yingfu Fund last night. This is a fund that tracks the Hang Seng Index, with an annual management fee of about 0.08%, which is very cheap. It distributes dividends twice a year, once in May and once in November, with a historical dividend yield of about 3-4%. This year, it is at 3.77%. Additionally, I confirmed that it is currently a Hong Kong Stock Connect target, and if you have access, you can buy it using your A-share account.
As for the questions from readers about its holdings information, you need to check the Hong Kong website for that. I’ve done the legwork for you, and the top ten holdings are as follows:
At the bottom of the image, it's hard to see until you zoom in. I was quite surprised that the top blue-chip stock is actually Meituan at 8.63%, followed by Alibaba, which is quite weak at 8.2%, and Tencent, which repurchases 100 billion every year, only at 7.4%.
Among the top ten blue-chip stocks, seven are purely mainland companies, with the exceptions being HSBC, AIA, and the Hong Kong Stock Exchange. The international flavor of Hong Kong stocks has been fading; it's been many years since a well-known foreign company listed in Hong Kong. Now, the correlation between the Hang Seng Index and the A-shares Index is becoming stronger, as the composition of Hong Kong stocks has completely localized, including Hong Kong businesses led by Li Ka-shing that have also exited the top ten weights.
……
Today's market is quite decent, with trading volume recovering to 1.8 trillion. The median increase is 1.7%, and the trend is still led by small-cap stocks. Small-cap stocks have already set a new high in this round, and the CSI 2000 Index is just one step away from breaking its previous high.
Some readers feel uneasy about the continuous underperformance of blue-chip stocks compared to small-cap stocks. I see it quite openly; if you really have confidence in long-term investments in small caps, then just shift your positions. From a long-term historical data perspective, the comprehensive return of small-cap stocks is even lower than that of the CSI 300. Didn't we calculate that from 2010 onwards, the annualized return of the CSI 300 is only 1% (+2% dividends)? The return of the CSI 1000 is even less than half of that, but it bears much larger price fluctuations, making the risk-reward ratio a complete mess.
So my investment boundary for A-shares is the CSI 500. No matter how it performs in the short term, I won't be tempted beyond that. I've set my investment boundaries and will focus on the money I should earn. For example, many readers have recently asked me if I participated in the good performance of meme coins. I haven't; aside from Bitcoin, I haven't bought a single meme coin, even though I often see news about those 10x or 100x gains. It has nothing to do with me.
After today's rise, some major indices have crossed the critical threshold and returned to the strong side of the trend. However, if we add the filtering value for platform fluctuations, there's still a bit of a gap, and we need to rise a bit more.
The current market for A-shares is hesitant and full of entanglements, but if it can hold on, it won't be a bad thing, because hesitant markets tend to last longer. I hope that by the first half of next year, it can reach 3800-4000, and the CSI 500 can go to 7000+. At that time, I can reduce my holdings and realize profits at a reasonable price.
……
1. The statistical caliber of M1 money supply will be revised; it will change in January, and the revised data will be published in February. The main content of this revision is to include personal demand deposits in M1, with the official explanation being that payment methods are now developed, and demand deposits can also be used for daily payments and transactions, making it reasonable to count them in M1. Thus, the data released in February should show a significant improvement in year-on-year growth.
2. The offshore RMB exchange rate has dropped to 7.28, once again approaching the support level of 7.3. Currently, there are many predictions in the market that the RMB will further decline in 2025, but the extent of the bearish outlook is not large, estimating it to be around 7.5-7.6. If that's the case, this wave should hold off; it can't just hit 7.5 before 2025 arrives. China's central bank has a strong ability to control the exchange rate, proven throughout history, so there is no need to doubt it.
On the other hand, the yield of the 10-year government bond has fallen below 2%, reported at 1.9995%. This is also an important signal indicating that market expectations for stimulating the economy and real estate suggest further monetary easing will follow. The decline in government bond yields has created room for interest rate cuts, with an expected reduction of 0.3-0.4% next year.
3. Wentai Technology experienced a flash crash today, with rumors circulating that the US is planning to take action against it. Wentai's significant business revenue now comes from dealings with Apple, and if the US government truly has targeted measures, OFILM is a cautionary tale.