There are more and more calls in the cryptocurrency circle to abandon the A

A-shares have been rising like crazy, with many projects doubling in just a few days, but I think this may just be the beginning - A-shares are a low point for global capital allocation, and A-shares have always accounted for the smallest proportion in the positions allocated by Wall Street institutions. But will this time be different?

Will the Chinese rush into the stock market and Wall Street rush into A-shares? This is actually happening, but how long can it last?

1. What happened to A-shares

Everyone understands the policy, but many people are not clear about its impact.
In fact, it is the government's unlimited QE release. The money is directly given to listed companies and can only be used to buy back stocks. There are also stabilization funds and the like. It looks complicated, but in plain words:

The government prints money indefinitely, and all the money goes into the stock market, encouraging high-quality companies to repurchase stocks for arbitrage.

This will result in people's confidence returning, and a large amount of money in banks will rush into the stock market.

When the stock market replaces the housing market as the new asset pool, the increase in book wealth will drive consumption and the economy may recover.

Therefore, those who jumped in early have doubled their money in a few days, while those who jumped in slowly are still opening accounts frantically.

And the reason why it is still early is that most people don’t trade stocks and don’t care about the economy. But everyone knows how bad the domestic economy has been in recent years and how difficult it is to make money. If there is a place with a wealth effect, I think the madness has just begun.

2. From the perspective of assets
Only valuation, no prediction. For example, Moutai, when it was 1200, the dividend interest was about 2.5%. If it really fell to 600, it would be more attractive than national bonds. This is a valuable enterprise in itself. Is 1700 now too high? From the perspective of large institutional asset allocation and global asset allocation, it is not bad.

But now it is no longer an asset allocation, but countless Chinese retail investors are waiting to enter the market. Their money is stupid money, and they have no awareness of risk, valuation and crisis at all - just look at the development of the housing market in recent years, the higher the price goes, the more people will take over.

So, I think the current stock market is just the beginning of the frenzy.

3. What are the risks?
The policy bull is afraid of a sudden turn and cooling, but at present this possibility is extremely low - building confidence is the most difficult thing in the world, and the possibility of punching oneself in the face is very low.

What if? Don’t be afraid. There is nothing to be afraid of if you hold high-quality stocks. Printing money like this, cash is the worst asset.

4. What are the high-quality assets?
When domestic funds rotate, securities companies always rise first, but this is a bear market with no money. On the contrary, if it is a long bull market, securities companies will not be bad, similar to BNB. If the company makes money, it will continue to rise.

So on the A-share side of high-quality assets, there are Moutai and Oriental Fortune, which have high profit margins. Note that those that bought in early, like Oriental Fortune, have almost doubled their shares. Don't ask me if you can still buy them, I don't know.

On the Hong Kong stock market side, there are Tencent, CITIC Securities, and Meituan - take Meituan, for example, just look at how many times it has increased this year, it's very impressive.

It is a strategy to buy high-quality assets at the bottom during a bear market, but you may not be able to endure the long wait of several years. It is also a good idea to enter the market when the bull market begins.

5. Impact on the cryptocurrency market
No matter how bad the A-shares are, the top quality companies will not be worse than the altcoins in the cryptocurrency circle. From the perspective of big funds, Bitcoin cannot be wrong as a special category of asset allocation, and ETH cannot be wrong as the only one with higher risk through ETFs.

Therefore, I think what will happen here is that A-shares will suck the blood of the cryptocurrency circle, and then the profits from A-shares will flow back to high-quality projects in the cryptocurrency circle.

6. Impact on US stocks
In the long bull market of the US stock market, there are fewer and fewer companies with low valuations. This is why Buffett directly reduced his holdings by 50%, including Apple.

Moreover, holders of U.S. stocks are still worried about various things such as the yen interest rate hike, so if there is an opportunity to find a value gap now, a lot of funds will definitely switch to Chinese concept stocks.

For example, Alibaba, Pinduoduo, etc. listed on the US stock market.

7. Unlimited QE
The last time was 20 years ago, during the epidemic crisis, the U.S. stock market was continuously circuit-breakered. It was a super crisis that we may only encounter once in our lifetime. As a result, the United States launched unlimited QE, which is very similar to what China is doing today - the translation means the same thing: don’t be afraid, have confidence, I have unlimited bullets!

As a result, after 312, the cryptocurrency world, like the United States, entered a crazy bull market that lasted for several years.

You can analyze the junk A-shares, and you can also notice that there are a lot of companies reducing their holdings. Many junk companies will take the opportunity to reduce their holdings, etc., but I think looking at the big trends and high-quality companies, this will be the second time in our lifetime that we will be fortunate enough to see unlimited QE by a major country.

What’s interesting is that several old A-share investors I know have been losing money for several years, and they all ran away when the market rose recently - in fact, there are not many people who truly understand investing.

I like this bull market of emotions and narratives. I like this atmosphere of people with lots of money. I know that this bull market is full of irrational ideas. You just need to rush fast enough and run early enough - then you can be a qualified speculator.

As for smart investors, I suggest that you double your investment before investing in value.

8. Ideal script
The current price of high-quality assets in A-shares has doubled, and cash is available to welcome a major correction in the US stock market and the cryptocurrency market. Get on board and achieve a 5-10 times increase in total assets in three years.

This script is too idealistic, please just treat it as a fantasy.