As of today, both the primary and secondary industries in China have far surpassed those in the United States, as analyzed in previous responses. The only area where we lag behind is the tertiary industry, particularly in the financial capital market, where the gap is the largest. This will also be the final and most brutal battlefield between China and the U.S. The current situation shows that our investors and investment mechanisms still have significant differences from theirs. From seed and angel investments to VC, PE, and then to IPOs and secondary markets, we are comprehensively lagging behind. During the last decade's internet boom, most of our founding team's funding came from U.S. dollar funds. Many times, we were too lazy to even talk to RMB funds. Why? It's not discrimination; it's just that although they are both called funds, RMB fund investors are fundamentally different from dollar fund investors. They don't even understand what venture capital is, always hesitating and pointing fingers. The little money they invest can't outweigh the costs arising from various internal conflicts. What use is that money? Once you choose the path of dollar funds in the first half, you naturally have to exit in the U.S. stock market in the second half. If you don't go public in the U.S., you can't do anything. The past review system of the domestic stock market means that these unicorns can't meet the rigid requirements to go public. I've previously mentioned my collaboration with CICC when I was at one of the Big Four consulting firms; in fact, most of the resources for going public in the U.S. come from foreign investment banks, and you can't enter their core circles. Even if Chinese people enter the American circle, at most, they can only help build the U.S. capital market, which holds no significance for the Chinese market. One could say that for so many years, the Chinese capital market has essentially been a follower of the U.S. Of course, this doesn't mean that such practices are completely without merit; one must do what is appropriate for each stage. If you don't eat the first three buns, you won't get the fourth; it's all an inevitable stage of development. Even if we were to go back in time and do it all over again, we would likely still have to follow this path. Hindsight has no real significance. Although we haven't done anything wrong, the problems that exist will still exist; our capital market is still in a rough state.

Look at these fund managers; how many can outperform the SSE 50 ETF?

Do you really think there are no good companies in the Chinese stock market?

Not to mention anything else, China's industrial electricity consumption is already six times that of the U.S., and industrial products account for over 30%, nearly 40%, of the world.

In any given sub-industry, you might find a leading company in the A-share market.

You say these companies, which monopolize more than 50% of the supply in some industries, are not good companies?

Why can't the valuation go up?

Because they also don't care about market capitalization management.

In fact, many companies go public not for financing but simply because they were misled by investment banks or to fulfill local political tasks.

Once you're in, the task is done. You can do whatever you want after that. There's no need for additional issuance, nor any intention to exit. What's the point of market capitalization management?

The only ones still doing market capitalization management are those small-cap stocks.

It's usually a small private fund boss with a model assistant going to the big shareholder's office to discuss cooperation in market making.

As a result, small-cap speculative stocks run rampant, and there are even ironic scenes of timed market constraints.

This is why I have always advised everyone not to touch small-cap stocks; they are really just a game for fools.

Since small-cap stocks are off-limits, how about buying large-cap stocks?

These companies in the SSE 50, not every one of them is excellent, but at least as long as China exists, they won't delist; I believe no one disagrees with this, right?

Not only will they not delist, but they will also pay dividends every year.

In the past 30 years, the market has increased 30-fold; in the next 30 years, the SSE 50's performance will not fall short of the market, making it virtually unbeatable.

But large-cap stocks have problems too.

In a market like China's, where the navy is rapidly expanding, shouldn't military stocks have skyrocketed by now?

If it were the U.S., when Dongfeng Express tests a missile, the further it can hit, the more the arms company's market value will rise.

But look at the A-share market, what's the state of the defense and military industry ETF?

Is it because the institutions are too dumb to understand the market?

Of course not, but it's because the military industry has no profits.

Where are the profits?

It's all turned over to the big brother.

As the largest shareholder in the A-share market, the big brother hasn't even utilized the capital market for financing; so what is there to say about market capitalization management? (Of course, it seems there's really no need right now.)

If the big brothers and institutions are like this, what can we expect from those small retail investors?

Among tens of millions of retail investors, being able to understand financial statements is already a rare occurrence.

The vast majority of people are actually gamblers, and the most basic kind, only betting on high or low.

This means I am about to start market capitalization management.

The big brother says he wants to give brokerage firms swap convenience, meaning he wants to move debt to equity, so don't buy government bonds.

The big brother says he wants to lower the reserve requirement and interest rates, meaning he wants to push M2 into circulation, so don't save money.

After the big brother finished speaking, the stock market rose, and we won a round.

But the enemy is not to be underestimated; we can't always win, and you can't always listen to the big brother while wanting to share the spoils. What to do?

Still, as I said, holding the SSE 50 ETF for 30 years will surely outperform inflation; a 30-fold increase is not difficult.

But if you can't hold for 30 years, or even 3 years, it's better not to get involved.

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