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recently, too many people come to ask about the stock market. i said that 99% of the time i really don’t understand stock trading, let alone give advice. some people did not stop and cited that in 2001, you issued a signal of a long bear market, in 2005, you issued a signal of market turning point, in 2006, you issued a signal to welcome a new era of the securities market, in 2007, you issued a signal that the market was overheated, and in 2015, you issued a signal that the mad cow was unsustainable. the signal is correct every time. why are you pretending not to understand? the dramatic changes in the stock market are now staggering, and you must give another signal. i can only explain repeatedly that i was just studying the stock market system and mechanism, and happened to do some auxiliary judgment on the stock market trend. fortunately, i didn't say the wrong thing. it's just because i didn't understand and didn't dare to say more. don't make me force myself to do anything.

i didn’t expect a brother to knock on my door today and tell me that the new chairman of the china securities regulatory commission has taken office at the beginning of the year of the dragon. you wrote a very influential post on “new expectations for the stock market in the year of the dragon”, which was later published on the front page of china securities journal. . now new expectations are really here. if you don't express your position, you will be very irresponsible if everyone loses money in the future. i am the same person. at this age, i still can’t seem to be provoked by others, so i can’t help but say a few more words.

the reason why i say we have new expectations at the beginning of the year of the dragon is because the development of china's stock market has not yet separated from the policy market at this stage, and the change of leadership in the stock market at a critical juncture reflects the central government's high concern for the stock market. at the first symposium of the new chairman, i also said that the chairmanship of the china securities regulatory commission is a high-risk position. one of the main reasons is that although the china securities regulatory commission is the department directly responsible for the stock market, the trend of the stock market is more subject to economic fundamentals and constraints from all parties. objectively speaking, although this year the china securities regulatory commission has been forced to adopt a lot of compulsory administrative intervention that has mixed reputations, overall, it has done a lot of remarkable and important things in improving the quality and investment value of listed companies. groundwork. but despite this, the market still reached new lows until mid-september due to the impact of the environment outside the stock market. as soon as the bank financial support measures were announced last week, especially after the decision of the political bureau meeting of the central committee was announced, the market immediately experienced an unprecedented violent rebound. it can be seen that for the securities market to truly develop and strengthen, it requires efforts and support from all aspects.

the main reason for the v-shaped reversal in the securities market is of course that the central government's decision changed market expectations and greatly increased people's confidence and expectations. it shows the government's firm belief in economic development as the centerpiece, especially since the top management no longer cares about and pays much attention to the financial and securities markets, as some people have speculated. at the same time, this unconventional and ultra-limited credit support commitment to the stock market is an accurate and accurate measure to promote market recovery and to recruit real goods. with the stock market experiencing an unprecedented surge within five trading days, where the stock market will develop next in the year of the dragon has naturally become the focus of attention.

it can be believed that if the market rises another 10% to 20% from today's point, there will be effective support from policy, capital and economic fundamentals, and only the majority of shareholders and the basic citizens of public equity funds will be able to reach and stand on that platform. basically turning losses into profits. therefore, this battle cannot be defeated once it is launched. of course, emotional outbursts and hype from market participants could push the market to much higher levels.

however, we must also be soberly aware that even unlimited capital supply will be inherently constrained by market forces and cannot push up stock prices indefinitely. the smart and innovative design of this government debt and credit support is that the objects of its precise support are the stocks of blue-chip listed companies that can be used to arbitrage interest rates, rather than encouraging the flooding of mountains and plains, let alone laissez-faire. highly leveraged capital allocation leads to disorderly expansion of skyrocketing prices and plummeting prices. this is a major difference between the stock market initiated by this policy and the 2015 stock market mad bull that many people compared. in this way, when the expected dividend rates and medium- and long-term returns of these blue-chip companies approach the 2.25% government bond or credit cost as their stock prices rise rapidly, the demand for loans will naturally shrink rapidly. as for low-performing stocks that follow the trend of speculation and lack growth prospects, they will inevitably see nothing when the tide ebbs.

from another perspective, when the chinese stock market returns to the market highs and the usual levels of emerging markets in 2021 under favorable internal and external environments, and when my country's large technology companies are also rapidly catching up with the valuations of the top seven technology companies in the u.s. market, it is prudent to capital will stop in its tracks. a higher fundamentals-backed market rally requires an overall improvement in economic conditions and a significant rise in corporate earnings.

what needs to be pointed out more is that history has repeatedly proven that the mad bull market will eventually lead to a market crash, and retail investors will always suffer the most serious losses at that time. it should be said that the vast majority of the stocks with a market value of 7 to 8 trillion sold in the skyrocketing market transactions in the five days before the holiday were sold by retail investors. therefore, both the market and regulators must be wary of the stock market surging out of control. as economic fundamentals gradually improve, slow growth in waves rather than big ups and downs will obviously be the goal pursued by the government and regulators.

it should be recognized that whether the market can continue to develop healthily and achieve a sustainable trend reversal after the first wave of stimulus rebound depends on the options and intensity of fiscal and other related policies. now that the central government's overall policies have been clarified, the key depends on the issuance and implementation of specific policies by various departments. unlike the stock market, which can achieve immediate results and a single click, the economy requires greater intensity and more scientific and accurate leverage points.

in my opinion, since we are currently facing a negative feedback spiral of the three overlapping economic cycles, structural adjustments and institutional changes, the measures and methods currently discussed are not enough to reverse the trend of economic fundamentals, especially those that propose further large-scale reforms. focus on investing in investments and projects that may have enumerable social benefits but no visible economic returns (this is the crux and root cause of the current heavy debt burden, especially local government debt problems), and focus on short-term results. the pull will only further increase our debt burden and reduce the space for policy adjustments in the next step.

i have always believed that effective measures to solve any problem do not lie in the number of measures. a few measures that are truly put in place can be effective and effective. therefore, in addition to immediate and effective first-aid medicine for the stock market, what is more critical for complex economic policy decisions is to find the breakthrough point for comprehensive macroeconomic policies and structural transformation that are stronger, more focused, more sustained, and have an impact on the whole body, and highly cherish it. the precious reserve bullets of the central government's finances, make decisions before taking action, and use unique and hard moves that are precise and powerful, and hit the target with one shot.

the stock market in the year of the dragon has had a promising start. after the difficult bottom-out and twists and turns in the mid-term, i sincerely hope that the stock market in the year of the dragon can continue to reach a higher and more stable new starting point.