This morning, I went for surgery, which involved removing two lipomas from my forearm that I mentioned earlier. When I lay down on the operating table, I was extremely nervous; when the doctor injected the anesthetic, my whole body was shaking. The anesthetic hurt, but soon my arm lost sensation. I vaguely felt the doctor was sharpening a knife on a wooden board while cutting. I have a strong curiosity but was more afraid to see my skin being cut open, so I dared not look throughout the process.
After a while, the doctor finished stitching and wrapped me layer by layer. The nurse pointed to a bowl of minced flesh and told me this is what was removed. I took a silent glance and, inexplicably... felt a bit secretly pleased? Many people online like to take photos to commemorate, but I forgot to bring my phone when changing clothes.
After returning home, the anesthetic began to wear off after 3-4 hours, and my arm has a slight ache, but it's not serious; I can tolerate it. I tried that as long as I don't exert strength, like eating or typing on the keyboard, it's fine. However, my favorite daily activity of digging into ice cream has been paused out of necessity. I tried scooping with my left hand while supporting the bucket with my right, which was very uncomfortable, so forget it.
I have to go to the hospital on Friday to have my stitches removed and change the dressing. I can't get it wet for 14 days, but it should be almost healed in half a month.
……
Let me update the content from last night. I mentioned wanting to test the style rotation model, specifically the large-cap and small-cap indices, by analyzing their performance over the past 20 trading days. Whichever performs stronger will switch to its ETF and see if it can adapt to the current market performance.
In fact, a similar 80/20 rotation strategy was quite popular seven or eight years ago and isn't anything new, so I quickly tested the results.
I won't post each chart one by one, as it might confuse you all. I'll directly state the understandable conclusions.
1. The overall return performance is below my expectations, and the backtested returns are not great; some even lost to the index itself. However, the performance of the combinations of SSE 50 and ChiNext Index, as well as SSE 50 and CSI 1000, is quite good.
Some new stock investors might say, let's just make these combinations. In fact, one cannot simply view the issue this way. The biggest pitfall in historical backtesting is over-optimization. The past results being particularly good could just be a random coincidence, and the future may not guarantee the same. Of course, if I had to choose a combination for the next five years with my eyes closed, I would still select the combination of SSE 50 + ChiNext Index, SSE 50 + CSI 1000, and then pray for good luck.
2. I've noticed a phenomenon where the historical performance of style rotation has been unstable, but it has generally been good since March 2021. I recalled that March 2021 was exactly when the last round of blue-chip stocks in A-shares peaked, and the market's style switched to small-cap stocks. So, one possibility is that this style-switching model was not useful before, but has been quite effective in the last three years.
3. If we add another condition to this model—when both the large-cap index and the small-cap index have declined in the past 20 days—then we would hold neither, choosing to stay in cash. Adding this condition will significantly improve returns. I discovered this rule ten years ago, which is why I created a fishbowl model for everyone to reference.
Trading A-shares, the 20-day moving average is very useful. Selling offline and buying online is a straightforward and brutal rule that can bring you dramatic changes in returns. However, this model has a low win rate of only 20-30%. It relies on making big profits and small losses to outperform the market, so the experience isn't great. Many new stock investors can't stick with it after losing five or six times in a year and a half, and they doubted and complained about me at the time, which is why I later stopped publishing it.
Interestingly, the 20-day moving average only works well in A-shares and is of no use in U.S. stocks. Trading U.S. stocks with the same rules will get beaten by the index itself. The best strategy for U.S. stocks is to hold, mindlessly and steadfastly hold.
……
Today, the trading volume in A-shares reached 1.3 trillion. I haven't checked if this volume is the lowest since September 24th, but even if it's not the lowest, it must be among the bottom. Today, the median fell by 0.94%, and the market is facing an awkward situation of a comprehensive retreat.
Didn’t I mention that the 20-day moving average is very important? Currently, all indices except for the micro-cap stock index are below the 20-day moving average. Today, there are signs of style switching in the market, with the SSE 50, which had been at the bottom every day, being the only index in the red. However, the increase is too low, and it’s a shrinking rebound, which doesn’t indicate any real issues.
Previous hot topics have basically all cooled off. These past couple of days, only millet concept stocks have gathered some funds for speculation. The so-called millet refers to the transliteration of 'goods', which are various anime IP peripheral products, like badges, targeting young consumers. If middle-aged readers don’t understand, an analogy would be the hero cards from 'Water Margin' in childhood, which you would definitely get.
I have a friend who is doing this business. Since last year, the business has been very good, with one store selling over a million a month and high profit margins. The core competitive advantage of this business lies with the IP party, while the specific production and sales points can easily be wiped out in China's overall environment. I haven't looked closely at the current concept stocks related to millet in A-shares, but I guess most of them don't have IP.
Today, the industry with the best performance is the food consumption sector, mainly benefiting from the new round of consumption voucher distribution activities across the country. I looked at the gainers list and felt that the market still lacks confidence because in the past, when speculating on food and consumption, investors would rush to buy liquor stocks, but this time they are buying retail food stocks, which generally have smaller market caps.
Many people have been lamenting that the bull market is over these days. If the trend at the end of September counts as a bull market, then there have been very few days like that in A-shares' history. If they are worried about returning to the market conditions before September, I don't think it will happen now. I actually have no confidence in the market either; I just simply believe that a market won't complete a cycle in just one month after its trading volume has increased fivefold.
……
Trump stated that he wants to impose a 25% tariff on both Canada and Mexico. Over the past few years, many Chinese companies have built factories in Mexico to avoid tariffs, and now, before the factories even warm up, new tariffs are being imposed. Trump's goal is to force the production stages of manufacturing back to the U.S. Anyone who doesn't come will have tariffs imposed on them, using tariffs to offset the high labor costs in the U.S. Some have complained about why it's always the U.S. imposing tariffs on others, but the U.S. is the largest consumer in the world, with the best consumer market. Countries exporting goods want to make money from Americans, and the vast majority of countries will definitely suffer from mutual tariffs with them.
That's all for now. Today I saw a DEX project coin on Binance, which is a mine I primarily harvested in 2022-2023. I've probably sold around a million of them, but the price I sold at was cheap, averaging only two or three dimes. I just saw it soar 400% to 1.2 U.S. dollars; I missed out on 100,000 dollars.
