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the sudden surge in a-shares and hong kong stocks this time has brought huge surprises to many investors. however, there are also concerns over whether this is just a blip, so divisions in the market remain. despite this, the current level of excitement in the market is still very high.

although domestic a-share investors are currently in the midst of the national day holiday, many have not devoted themselves to leisure activities during the holiday, but continue to pay attention to the trading situation of hong kong stocks. hong kong stocks continued to trade on wednesday, thursday and friday during the holidays, and the market was volatile. the market experienced a sharp rise on wednesday, followed by a sharp decline on october 3, which caused many people to worry about whether the rise was complete. since hong kong stocks have no upper or lower limit restrictions, many stocks rose an astonishing ten times or more that day, especially brokerage stocks, with many stocks rising more than double.

markets pulled back again on thursday but nearly recovered losses in late trading, with many stocks recouping the day's losses late in the session. the market continued to rise and hit new highs on friday. in particular, the hang seng index hit a new high for this market on friday, reaching more than 22,700 points, indicating that the sustainability of this market has exceeded many people's expectations.

it is foreseeable that a-shares are more likely to have a good start after the holidays, because hong kong stocks have risen sharply in advance during the holidays. in addition, during the holidays, stocks and funds have become hot topics of discussion. many people are looking for funds everywhere and want to cover or increase their positions to seize this round of market conditions. from an emotional perspective, the market has been thoroughly activated.

in fact, just a dozen days ago, many investors were still in pessimism and despair. in the previous live broadcast, the comment area was also full of pessimism, because many people had no confidence in the market outlook. at that time, it was recommended that everyone keep hope when the market is most desperate. teacher yu minhong was often quoted as saying: "see hope in despair, and life will be brilliant." when you are desperate, you should not be more desperate, otherwise you will lose high-quality chips at the bottom. as long as you hold the chips, you can wait patiently for the market to arrive. we do not predict when the market will arrive, but as long as we hold high-quality stocks and high-quality funds at the bottom, the market will arrive sooner or later.

as mr. lin yuan said before in his speech at the national development institute of peking university, all we have to do is wait patiently for the market to arrive. it was also to cheer everyone up, but many people still didn't believe it. it wasn't until the market suddenly rose sharply that many people woke up and realized that we couldn't tell when the market would arrive, nor did we know how high the market would rise. but as long as we hold high-quality assets and buy them at a lower level, it is only a matter of time before we make money, and we just need to wait patiently.

i have repeatedly called on relevant departments to take advantage of the federal reserve's start of a new round of interest rate cut cycles on september 18 to increase efforts to stimulate the economy. give full play to the role of monetary policy and fiscal policy, stimulate investment and continued consumption through the issuance of ultra-long-term government bonds, and release more liquidity through interest rate cuts, reserve requirement ratio cuts, and existing mortgage interest rates. many experts, myself included, are actively advocating for these policies, and the intensity and timeliness of the policies introduced this time exceeded many people’s expectations.

first of all, at the press conference of the state council, the heads of the three major departments of the central bank, the state administration of financial supervision, and the china securities regulatory commission launched a series of major favorable policies, including interest rate cuts, reserve requirement ratio cuts, existing mortgage interest rates by 50 basis points, and strong support for capital market development. the central bank has also specially set up two tools: one is to provide swaps for funds, insurance, securities firms and other institutions, with the first batch of quota reaching 500 billion, so that these institutions can obtain central bank bills, treasury bonds and other liquid assets from the central bank through swaps , these assets can be sold in the secondary market and used to buy stocks, and they are stipulated that they can only be used to buy stocks. central bank governor pan gongsheng said that if the first batch of 500 billion is used up, there can be a second 500 billion, or even a third 500 billion. the second tool is to provide repurchase financial support to listed companies and major shareholders. the first batch will reach 300 billion, and more can be provided if necessary.

chairman wu qing emphasized at the meeting that it is necessary to introduce medium and long-term investors, introduce patient capital, support the vigorous development of the capital market, improve various systems of the capital market, and crack down on illegal activities. this series of statements fully demonstrates that my country's major financial authorities fully support the capital market and economic recovery.

the meeting of the political bureau of the central committee once again deployed the future prospects of the economy from the highest level perspective, especially emphasizing the coordinated efforts of monetary policy and fiscal policy. it is expected that 2 to 3 trillion yuan of ultra-long-term government bonds may be launched in the future to boost investment and stimulate consumption. in the past, government bonds were mainly issued to support infrastructure investment, but now infrastructure investment has been relatively complete, and the main problem is insufficient consumption. therefore, this issuance of government bonds may boost consumption.

this series of policies far exceeded the expectations of domestic and foreign investors. some wall street tycoons, such as dalio, have emphasized that the chinese government’s current policies are far beyond expectations, just like the series of major policies introduced by europe in response to the european debt crisis, which completely reversed the trend of slowing economic growth. it changed everyone’s expectations. he used an interesting metaphor, saying that the reaction of the capital market was extremely enthusiastic, and these policies inspired investors’ animal spirits, that is, human nature. as long as you see the opportunity to make money from good assets and see the capital market improving, a lot of money will come to you uninvited. i have often mentioned this logic in previous live broadcasts and articles. investors will not buy when they see it falling or becoming cheap, but they will buy when they see it can rise and make money. in other words, there must be a money-making effect first, and then the funds will come uninvited.

the sales departments of many securities companies are working overtime during the holidays, and the queues for online account opening are already out of line. this shows that investors will come after seeing the money-making effect. therefore, the logic of this round of stock market rise is actually that the policy bottom and the market bottom resonate. it was after the market fell to more than 2,600 points and the market bottom was reached that policies collectively exerted force and formed a resonance, making the market more certain.

when deploying these policies, the political bureau meeting emphasized that a package of policies will be released in the future. the number of policies issued so far is not large, and the intensity has not been fully released. they will be gradually implemented later. for example, on september 29, guangzhou took the lead in canceling all purchase restrictions, allowing both guangzhou residents and outsiders to buy houses in guangzhou. however, although shenzhen and shanghai have also relaxed purchase restrictions, they have not completely abolished them, which means that there is still a lot of policy space in the future.

in terms of fiscal policy, there is currently no clear scale, but foreign media have reported that a fiscal policy of about 10 trillion yuan may be adopted to stimulate the economy. if this policy can be implemented, the economic recovery will be strong and the foundation for market growth will be stronger.

i believe that this policy will be implemented to the letter, because the central government is very determined to completely reverse the trend of slowing economic growth and push the economy into a new growth cycle.

the a-share market is expected to continue to rise after the holiday. on the last trading day before the holiday, market trading volume reached 2.59 trillion, exceeding the level in 2015, indicating that market enthusiasm has not yet been fully unleashed. many stocks have already reached their daily limit, and coupled with the rising sentiment of hong kong stocks during the holidays, it is expected that heavy volume growth will continue on the first trading day after the holiday. however, this sharp rise may quickly release emotions, causing the market to rise too quickly, and when this part of the funds is consumed, a correction may occur.

however, if the policy can be followed up continuously, once the money-making effect of the market is formed, it will continue to attract funds from the fixed-income market such as bank deposits, wealth management products, and large deposits to flow into the capital market. recently, the seesaw effect of stocks and bonds has begun to appear. the bond market has begun to weaken, while the capital market has begun to strengthen.

it is worth noting that there is huge potential for large-scale transfer of residents’ savings. in the past four years, resident deposits have increased by 60 trillion yuan, and currently resident deposits are as high as more than 140 trillion yuan. even if only 10% is transferred, it is still more than 10 trillion yuan of funds, which will have a very significant stimulating effect on the a-share market.

this round of market is a high-level rising market. the current trend is to rise rapidly rather than slowly. after rising rapidly to a certain extent, the market will enter a volatile upward stage, accompanied by upward adjustments, but the overall trend is still upward. the market has confirmed the reversal trend, which is very important. because the bull market has no peak, the market may continue to rise for a long time. it will not end in just one month or half a month, but may last for one or two years.

even according to the valuation of us stocks, the a-share market should rise to more than 4,000 points. currently, the a-share market is still in the first stage of the bull market. if we look at the buffett indicator, which is the ratio of a country's stock market value to gdp, the united states clearly has a larger valuation bubble, with the buffett indicator exceeding 200%. the market value ratio of the a-share market divided by china's gdp is about 0.6. if hong kong stocks and chinese concept stocks are included, the ratio of chinese stocks to gdp is about 0.8 to 0.9, which is less than 1. this shows that our market value is seriously undervalued.

there are certain differences in comparisons between different countries, and simple analogies cannot be made. the buffett indicator reflects the capital premium. the higher the premium, the higher the expectations for the future. the top seven holdings in the u.s. stock market are mainly technology stocks, especially technology stocks represented by nvidia. the pursuit of capital is more intense, so the valuations are higher. our stocks with large market capitalization are mainly big white horse stocks in traditional industries such as finance, liquor, petroleum and petrochemicals, etc., and their valuation levels are relatively low.

at least we should return to the buffett indicator of 1x. currently, a shares are only 0.6 to 0.7x. if we can return to 1x, there will be at least 50% room for growth, or even more. therefore, this is a relatively comfortable period for investors who have held on to good assets during market downturns.

the market is experiencing a strong rally, and investors holding high-quality assets are witnessing a continued recovery in market value. however, for those investors who bought at high levels before, they have not yet unwound, so they still need to be patient and wait for the market to rise further, hoping that this round of market conditions will bring surprises.

for investors who had short positions before, they may feel anxious now, because shorting the market is more uncomfortable than being trapped, and they will naturally feel emotionally uneasy. i have mentioned before when the market is down, it is not suitable to go short when the market is low, and it is not suitable to go long when the market is high, so it is dangerous to maintain a short position when the market is low. once the market situation arrives, short positions will mean missing opportunities, which will be very embarrassing. if you wait until the market has already risen before entering the market, you may miss the first wave of gains.

therefore, for investors with short positions, the current situation is very unfavorable. they should decisively increase their positions when the market fluctuates or pulls back, increasing their positions to at least 50%, so that they can both attack and defend.

for investors with a half position, since the position is not too heavy, they can respond to market fluctuations more calmly and will not panic like investors with a short position. they can look for opportunities to further add to their positions after the holidays.

at the same time, while we are paying attention to the rising market, we also need to remind ourselves to pay attention to risks. this round of rise is mainly the result of policy expectations, capital promotion and market sentiment. since the market has been in decline for more than three years and many stocks are seriously oversold, this rise is the result of a combination of factors. however, complete changes in economic fundamentals will take time and require the gradual implementation of policies. the stock market always reflects economic changes in advance, so if the market experiences excessive rises or bubbles in the future, we need to pay attention to controlling risks.

first of all, do not use leverage, because it is not recommended to use leverage in certain market conditions, because once the market trend changes, it will be difficult for investors who use leverage to get out. we already have lessons from 2015 and the past three years. we should avoid using leverage, invest with spare money, and maintain a good mentality.

second, you should buy high-quality assets even if the market goes crazy. always remember that value investing is the basis of investment, and do not touch junk stocks or theme stocks. in this way, even if the market fluctuates, you will not feel panic and can firmly hold it or even become a shareholder.

finally, investing requires maintaining a good mentality, although few people can do so without being overly excited when the market rises or frustrated when the market falls. but we should try to restrain our emotions and look at the market more rationally. realize property income by becoming a shareholder of a good company or indirectly holding a good company by purchasing funds.