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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 give up and even listed, "you issued a signal of a long bear market in 2001, a signal of a market turning point in 2005, a signal of ushering in a new era for the securities market in 2006, a signal of market overheating in 2007, and a signal of mad cow failure in 2015." continuous signals are correct every time, why are you pretending not to understand? now the stock market drama has become staggering, 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 anything wrong. it's just because i didn't understand and didn't dare to say more. don't make me force myself to do anything.

no, today a man called me and said that the new chairman of the china securities regulatory commission took 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 the china securities journal. published; now new expectations are really here. if you don’t express your position, everyone will lose money in the future. you are just too irresponsible.

i am the same person. at this age, it seems that i still can’t 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 broken away 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, affected by the environment outside the stock market, the market still reached a new low until mid-september. as soon as the bank and 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, efforts and support from all aspects are needed.

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 focusing on economic construction, especially since the top management has not paid 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 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 considered that the market will rise another 10% to 20% from today's point, with effective support from policy, capital and corporate valuations which are still relatively low. to reach and stand on that platform, most investors and public equity funds will only with the basic citizens can we basically turn losses into profits. therefore, once this battle is launched, it cannot be defeated. of course, emotional outbursts and speculation among market participants may push the market to much higher points.

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 launched by this policy and the 2015 stock market mad bull that many people compared.

in this way, when the expected dividend rates and mid- to 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 the underperforming 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 market rise supported by fundamentals requires an overall improvement in economic conditions and a significant increase in corporate profits.

what needs to be pointed out is that history has repeatedly proved that the mad bull market will eventually lead to a market crash, and the most serious losses at that time have always been retail investors. 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 being discussed are not enough to reverse the trend of economic fundamentals, especially those that propose further large-scale reforms. invest more heavily 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), focusing on the short-term improving economic efficiency 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, at present, in addition to immediate and effective first-aid medicine for the stock market, for complex economic policy decisions, it is more critical to find the breakthrough point for comprehensive macro-policy and structural transformation that is stronger, more focused, more sustainable, and affects the whole body. highly cherish the precious reserve bullets of the central government's finances, make decisions before taking action, and adopt unique skills that are precise, powerful, and hit the mark.

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 wish that the stock market in the year of the dragon can continue to reach a higher and more stable new starting point. (text/watson)