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Core conclusions:

Since the core assets peaked in 2021, many pessimistic macro narratives have gradually unfolded. The logic of consumption upgrading has changed to consumption downgrading, the continuous upward cycle of real estate has turned into concerns about balance sheet recession, interest rates have continued to decline during the same period, and the stock market style has changed from growth stock track investment to dividend investment that pays more attention to valuation. The interpretation of these narratives has now lasted for about 3 years. In the history of A-shares, narratives that generally last for 3 years often change.

(1) In the history of A-shares, most bull markets did not last more than three years, including 1990-1993, 1995-1997, 2005-2007, 20092010, 2013-2015, and 2019-2021. The duration of each bull market did not exceed three years, regardless of the reasons behind the bull market.

(2) The Nikkei index was weak from 1990 to 2012, but there was actually a lot of volatility during that period, and the continuous downward bear market generally did not exceed 3 years each time.

(3) Judging from the high P/E index/low P/E index, since 2007, the general growth or value style has lasted for 2-3.5 years.

(4) The interest rates of the United States and Japan have been declining for decades from 1990 to 2020, but there will be a rapid upward trend every once in a while. After the bull market of US and Japanese bonds lasts for up to 3.5 years, there will often be a rapid and short bear market. So these evidences show that even if this time is different from history, some assets or logic will have a long trend, but once it lasts for 3 years, there will often be some changes.

Since the core assets peaked in 2021, many pessimistic macro narratives have gradually unfolded. The logic of consumption upgrading has changed to consumption downgrading, the continuous upward cycle of real estate has turned into concerns about balance sheet recession, interest rates have continued to decline during the same period, and the stock market style has changed from growth stock track investment to dividend investment that pays more attention to valuation. The interpretation of these narratives has now lasted for about 3 years. In the history of A-shares, narratives that generally last for 3 years often change.