Guangzhou, Chongqing, and Beijing have successively lifted the lockdown this week, no longer requiring mandatory nucleic acid testing, but instead making it non-mandatory unless necessary. However, due to the lack of supporting measures, whether taking public transportation or subway, nucleic acid testing is still required wherever you go. As a result, the grand and spectacular scenes of nucleic acid testing queues are frequently seen on social media. My friend said these people are not smart enough, but I think it's because of the system. Everyone is responsible to their superiors and they don't consider the people below and the actual effects. Therefore, they will always be the hands and feet of those above, and only a few people in the entire system are using their brains. It's really pathetic. The pandemic has caused division: the common people vs. the government; the rich vs. the poor.
Over the weekend, the stock market started PMP (price manipulation) again, boasting about adding bricks to the socialist valuation system of state-owned enterprises. Today, when discussing with several economists, we talked about the Western economic system and how it is now being denied by the higher-ups in favor of their own socialist new era. However, they cannot escape the framework of the Western economic system, starting from the most basic data such as GDP and CPI. No one has the ability to create a new set of data. It's just the same framework and data input and evaluation system, it just depends on how you interpret and respond to it. I think the so-called socialist valuation system is the same. (I really admire how they came up with it). Profit, cash flow, asset-liability... it's still a bunch of systems that represent the bottom-level value logic. It's just old wine in a new bottle. Is it necessary? It just ends up harvesting a bunch of retail investors again. Just say it, state-owned enterprises used to not focus on returns, but now they need to emphasize returns. Undervalued value needs to increase dividends, and growth industries need to increase the securitization rate to disguise themselves as growth stocks. In the end, there are only two types of companies: monopolistic industries rely on dividends, while fully competitive industries rely on selling stocks to exit.
This place will become darker and worse. I don't think any particular person is particularly stupid. How could a stupid person be in that position? It's just that the system's brain is not enough. There are only a few brains thinking about it. Even if they are smart, they are still human, not gods or encyclopedias. A few years ago, I said that technocrats were dead, and now experts are dead. Even economists dare not speak out. If they say something slightly wrong, they will be banned and blocked. If this continues, we will truly become like that arrogant person in Russia. Fortunately, the people are not dead. This is always the reason why I have persisted in this market. Look at the grassroots around us. Our hope comes from the bottom, from the most basic needs and spirits of the people. In this regard, China and the United States are indeed very similar.
Since the stock market crash in 2015, foreign hostile forces have become a traditional scapegoat in China, which is a great excuse to deal with questioning from above. However, the real reasons cannot be found. All measures are just treating the symptoms and not the root cause, and gradually it becomes ineffective. I have never thought that overseas epidemic prevention is "lying flat", but we are. We let the common people "lie flat".
Shanghai has relaxed the requirement for nucleic acid testing when taking public transportation on weekends, which makes more sense. Shanghai is indeed more capable of managing compared to other places. It seems that the positive news for Chinese concept stocks will be exhausted next week, so it's time to take a break. But there are still opportunities, especially for Pinduoduo (growth) and Alibaba (undervalued). The core business is only valued at 10 times PE.
For a period of time before, the A-share market only traded based on one factor - epidemic control policies. With the relaxation of nucleic acid testing and control measures in various places, it can be seen that opening up is the direction. In the future, this type of trading will come to an end, and the influence of the epidemic will only be limited to herd immunity and the process of capital flight. Everyone should take care of themselves. In terms of the economy, the market only sees the real estate industry being put into the ICU. This industry will become state-owned and state-controlled in the future, so don't expect any good companies to emerge. The Central Economic Work Conference may start trading in December. Why is it always about trading!
Fang Fang has discovered two targets in state-owned enterprises: Fuling Electric Power under State Grid, and State Grid Communications. I am optimistic about power equipment and lithium batteries. There will be new stimulus policies after the Central Economic Work Conference.