Ding Feng Assets Li Linjun Statement of the Sixth Golden Bull Award
This year is also my tenth year of private equity. The age is not the biggest, but it is already a long career. In addition, today is the tenth Taurus Award we received from our company and individuals. This year we are also doing stocks above the scale of 10 billion yuan. This is the first one and it is very significant. I think after many years of experience, I think the Chinese stock market is also booming. Especially in the past year or two. Well, I think I stand by the point of view of investing in kind to share with you a few questions that we often encounter.
For example, yesterday said that the leader did not say anything, but later came out and read it. Many people said that Monday may have fallen, such as how to explain the days? I am like you guys. What do you do tomorrow? We are all thinking about this issue. However, I said to everyone, what I will do tomorrow, for your reference. If it is a big fall tomorrow, I may continue to buy some products along my portfolio. If I don't fall tomorrow, I won't buy it. If I go up tomorrow, I won't move anything. Basically, I'll do it. Why do you do this? Because I think that the whole market is called short-term disturbance factors, the driving factor of this bull market's core comes from two, one is called money and the other is called expectation. Its correlation with fundamentals is not particularly high. For example, the problem of money, this money is not more, because in the past we all went to buy a house, now do not buy a house, and now moved to another market, such as moving to the stock market.
Speak with people about practical things. Every company, every individual, and every family has a balance sheet. In the past, we were willing to dispose more assets on the house. For example, when we look at our eyes, our house still occupies a large part in family assets. In the future, I think it is still necessary to reduce this configuration. For example, in the past, if you had the money to buy a house and buy a house, you would really make money. For so many years, the only one who did not fool us was the sales lady. I think that whether we are individuals, families or businesses, we have actually reduced the allocation of such a real estate to some extent. In addition, in fact, we all know that bank financial management, from a few trillion to a dozen trillion, should now have a level of 20 trillion. Everyone knows that as the interest rate goes down, the yield of financial management is getting lower and lower, and its attraction is becoming less and less, so people are reluctant to give more money to banks. Therefore, everyone also reduced this configuration.
For example, in the past, I had a small company earning two million yuan a year. The money I made would continue to be expanded and re-invested. Now I really want to be reluctant to do so, I feel that doing industrial is too hard, and the productivity too big. Therefore, this money slowly flows into the equity market, mainly the stock market and the new three boards. For example, over the years at the weekend, everyone is still going in this direction. There is no new money coming in. This matter is a bit problematic and the issue of how long this matter can take. However, we now observe that most of our money comes from the money handed over to us by workers and peasants. For example, we saw the Agricultural Bank of China and the Construction Bank of China because their risk control was strict. Their money also came into the stock market. Didn't there come any more money coming in? It seems that there will be no more, and everyone will pay great attention to this market risk. However, this did not see that all the most active commercial banks are giving us money, so the driving factors for funds are still there.
Second, anticipation, why valuations are high and low, including a lot of people do not understand. In fact, I think that it is normal for people to ignore the stock market. I really want you to understand it before. In fact, this matter is very simple to understand. Everyone thinks so. You have your expectations. I have my expectations. For example, we often say a word called the market, who is the market? What is the market? However, Mr. Buffett said that it is better to call "Mr. Market". Is it not the market? The market is you and the market is me. For example, I was not happy tonight and quarreled with a few brothers. The stocks fell, which is also a market issue. However, when the market formed some expectations, the response was still very strong. What is the consensus of the Chinese people? Our consensus at this stage is: transformation, upgrading, innovation, services, and the Internet.
I think that the next five to ten years will probably follow this direction. Because China has experienced market development after experiencing so many years of development, you must adopt a market-oriented approach to solve the problems through the capital market. Problems with corporate financing, local debt problems, and state-owned enterprise debt problems, I think that only marketization can solve this problem. I think this may also be a national strategy. However, I think this direction is certain. If the funds on the market are sufficiently large and expected to be very consistent or clear, we should not be too concerned about what little policy we had yesterday. However, I think this is an indicator we can observe. For example, when did the policy turn? Is there more money coming in? For example, those present here should look at the technical aspects. I heard that there is also a "technical double cake," as if it hasn't appeared yet. We have a lot of indicators that we can observe. For example, the little girl who gave you a foot bath also recommends stocks for you. This hasn't happened yet. None of them are the most radical or the most pessimistic investors. If many of us here are no longer worried, we will suffer. Because the highest price must be bought by the most optimistic person in the market, the lowest price must be sold by the most pessimistic person. Therefore, we should enjoy it. For so many years, we can finally make a lot of money.
Can focus on five major areas of investment opportunities
What is our future? doing what? This is more important. However, if the average person stands at a slightly more macroscopic point of view, I have found that people with Mars are investing in such aspects as VCs and PEs. Health care, energy conservation and environmental protection, service consumption, TMT, including modern agriculture. Everyone is investing in these directions. I said that I also vote in these directions without characteristics. I would like to tell you from a different perspective why there is no doubt that the expectations are the same in the big direction. In this, we want to subdivide the industry with the fine-grained industry. This is critical.
For example, in the medical and health industry, the business model for opening a hospital and selling drugs is not the same, but it is all in the medical industry. I think there are so many directions for stocks in the future that you can use for reference. First, I call it reform. It is nothing more than two major reforms. One is mixed reform. We are changing Beijing, and Shanghai and Guangzhou are all mixed. This is definitely a general direction. But how do you do it? For example, you are familiar with Beijing's state-owned assets, so you have a few mixed Beijing companies. How do you understand Shanghai? If you understand Shanghai, you don't necessarily understand Guangzhou. Therefore, in the allocation of the stock market, I think this is a direction. We can participate in it. There is nothing more than a general good, and the certainty is the subject of reform.
The second direction of reform, I think, is called factor market reform. There is still a great opportunity. For example, when reforms were made, secondary schools have already started to set up football teams. This market is still quite big. For example, why do we put football in when we study sports? Football accounts for about 50% of the time, so football is very important, so the fact that the middle school soccer team is still big. Of course there are also teaching reforms, so I think the first major direction is the direction of reform.
Second, I think it is called a change in the financing structure. In fact, we are unaware that our private equity has also become an industry. We all know that wealth management institutions have expanded at a faster rate and that there are many families with more than 100 billion yuan. In fact, I think that in these major directions, when there is a change in the financing structure or investment structure, there are actually the greatest opportunities here. Such as stock market opportunities, Internet finance opportunities, I think this is the second direction.
Third, I think M&A is the direction. We all know that mergers and acquisitions are merely representations. Mergers and acquisitions are called eating too much, eating weak, and growing old. However, mergers and acquisitions is a phenomenon. Behind acquisitions is the logic of an industry called transformation, upgrading, innovation, and service. Internetization, mergers and acquisitions is only a representation.
In fact, nearly 5,000 mergers and acquisitions occurred in the entire M&A market in the past year, and the entire scale is about one trillion yuan. In fact, at this moment, on average, there were more than 200 companies that were on a suspension. About 6,000 companies announced every day that I would take a merger. I want to restructure my assets. This, I think, is expected to be honored. I think this is inside. There is actually a huge opportunity and it will continue. I think this year will continue. So, I think this is also a direction.
In another category, I think there can be some alternative opportunities in the portfolio. For example, the first opportunity called arbitrage, mergers and acquisitions can be arbitraged. We all know that the Oriental Pearl and BesTV will be merged. CSR will not be understood by CNR. I can't read it. However, CNR I think I can buy it, but I bought it. What is the reason? This is because it will soon be absorbed and merged. Of course, it is a little late. In June, absorbing mergers is an important arbitrage opportunity. You analyze all the absorption and mergers in history, and the difference you make is the merger of Shen Wanhong Yuan and there are also 32% chance. I think there are many opportunities for arbitrage in mergers and acquisitions.
There are still many opportunities for arbitrage. Yesterday, one of my colleagues talked about grading B. Few people graded A. Last year I think grading A is a very good opportunity. Nothing dare to do. The benefit from 14% to 18% is so good. Cash management. I think this is a direction.
Of course, there are opportunities for new shares and sub-stocks. If a market takes 4,000 acquisition cases a year, the market is too late to study. Since there is no time to study, is there a chance? In fact, I think there is also a great opportunity in this direction.
In addition, there are opportunities for new shares, including offline placement and online distribution, and about 100 new shares will be issued in 2014. This year, at this rate, it should be at the level of 300. If it is normal, in March of next year, the registration system will come up. I think there are about 300-500 new shares issued each year. I think there is a huge risk-free return on new shares. Everyone bought the bank's financial products in the past and felt that the rate of return has been getting lower and lower. You can play new shares. I figured out that this year's fool-style play is about 20% chance.
In fact, we are now more and more abundant in the stock market. This has placed high demands on our managers. However, I think it also provides a steady stream of strategies. This is the second big point I want to make.
Brokerage stocks can also hold without selling
Speaking of a more concrete example, everyone here should be tangled like me. For example, small stocks are expensive, big stocks are expensive, and some are also available, such as banks are not too expensive. For example, you are also thinking, for example, if you still have CITIC Securities, brokerage stocks have not been opened for a long time, diamond stocks have risen quite a lot, you now have, do you want to hold, why are some stocks, when you do not rise, you When I sold it, I went up. The problem I encountered with everyone was exactly the same.
However, as a fund manager, I think we should analyze the logic and nature behind it and think about it. For example, talking casually with everyone is not necessarily correct. For example, do you have a securities company? Do you still want to buy? My conclusion is very simple. I think if there is a securities company, I think I can hold it and I don't have to sell it. Why do you say that? Because the logic is this, because in April, the securities company's quarterly report is about to come out. This, I think, is seriously unexpected. There is no doubt that it is seriously worse than expected. The CSI 500 came out. Every new product is a huge opportunity to make money.
For example, last year's economic business contributed a net profit of more than 20 billion yuan to securities companies. However, the margin contributed by a margin financing and securities company has already exceeded 30 billion yuan, including the CSI 500. In fact, I think that for brokers, the current brokerage firms are not the former brokerage firms. In fact, I think its performance will seriously exceed expectations.
Why don't you sell it? Both have risen 2, 3 times. In fact, it is a very simple logic to analyze if you look for a bull market, you analyze the history, including 1996, 2006, such as a three-year cycle of such a bull market, the brokerage's increase will be less than 10 Times. Third, why can you still hold? According to the current market value of the securities company, the market value of 3,4 trillion, see its profit rate. If you trade at a daily average of one trillion transactions per day, brokerage firms are also twenty-one times, and valuations are not outrageous. However, why don't you recommend buying it? It is true that the short-term gains are too large now, and some people will run.
In fact, in the case of funds and expectations, the volatility will increase. Are we earning a trend or fluctuating money? Therefore, we must make this issue clear. In addition, for example, if you buy a large securities company, or buy a small securities company, you are willing to hold CITIC, Haitong, investment, or are willing to hold the East China Sea. My proposal can in fact hold large brokers because the competitiveness of large brokers is far stronger than that of small brokers. However, if it is short-term, the short-term increase may be slightly larger, but if it is put in one year, it is basically the same.
- Above is the speech of Li Dingjun of Ding Feng Assets at the 6th Golden Bull Awards Forum