The Stock Market Continues To Follow The Rhythm Of "Bloody Battle".

The stock market is like a battleground. If this spring rebound time window finally continues in a dangerous way, then a corresponding classic war in history is the bloody battle of the long Jin lake.

In January 18th, the conference call, I introduced the nature of the market rebound in spring, and said, "the scene of war of annihilation in the ice and snow, endure the torment of the whole heart, and wait for the enemy to enter into the encirclement circle and resolutely attack and solve the battle quickly. This is my art portrayal of the spring rebound in 2016."

On the "bloody battle of the long Jin Lake": Mao Zedong evaluated the battle of Chang Jin Lake: "under very difficult conditions, we have accomplished a great strategic task". It was a bitter and fierce battle launched by the Chinese and American armies in November 1950. The Ninth Army of the Chinese people's Volunteers set up an ambush ring at the freezing temperature of more than 30 degrees below zero, surrounded by more than 10000 divisions in the US division of the land war. There were about four regiments.

In the battle of Chang Jin lake, China won the position of a military power, but this victory came from a huge cost. The post war announcement shows that the US Army has killed more than ten thousand people and reduced the number of personnel to 40%, and the proportion of the reduction in the number of volunteers has reached 1/3, which has reduced more than 48000 people and frostbite more than two thousand and eight thousand people.

We have always stressed that the rebound in spring is a deep rebound. It is a period of respite in the downward trend. The operation of the rebound is very difficult. Too aggressive in the warehouse may lead to huge casualties.

The potential systemic risk in the two or three quarter is still not fully released or fully falsified. When the risk premium increases further in the two quarter, the market may not be as good as this time window.

Follow up, participation and participation in spring

Continue to maintain the January 18th view - reaffirming our proposals for different types of institutional investors, depending on the nature of the investors' funds.

Growth style public fund managers, "their own children's own newspaper", lighter positions, can continue to retain the core stock around the band; if the position is heavier, you can take advantage of the rebound to reduce positions, adjust positions.

A public fund manager who has flexible investment style proposes to lock in the relative benefits he has gained, and constantly seek relative benefits in "less people".

If the position is lighter, and want to participate in the rebound, it is necessary to act according to their trading ability, such as being good at trading, can be relatively positive; if they are not good at trading, they would rather not do it, but they are afraid to not do it at the beginning. Finally, they can not afford to pay the bill. If we want to participate in the rebound, we should choose stocks with good liquidity and high risk return matching, and get in and out.

Third, in the medium term, we reiterate our cautious attitude towards 2016 and fight the war of annihilation.

From the dimensions of half a year or three quarters, we need to be on guard.

The trend of premium increases, so as to A shares market in the low position, to resolve the bubble, consolidate the foundation and more rational and understanding, rest is in order to better travel.

On the one hand, we need to be careful.

The main task of the "annihilation war" of structural reform is to resolve the "pains" of overcapacity and the elimination of zombie enterprises, which will lead to an increase in credit risk, bankruptcy risk and unemployment pressure, which can track the spread of credit.

On the other hand, external factors may further complicate, including, 1) the continued decline of oil prices and other commodities will lead to the bankruptcy risk of pillar enterprises in the resource dependent countries, and further enhance the probability of regional financial crisis.

2) the linked exchange rate system of Hong Kong dollar is being tested.

3) in 2016, the interest rate cycle will be affected in the medium term, and the US stocks may face the "Davies double kill" that the valuation center has shifted down and the performance growth has stagnated.

In 2016, we need to fully measure the ratio of risk to earnings, take the initiative to choose the time, and have flexible positions to get excess returns.

Considering the medium-term trend of rising risk premium, we will take into account the four characteristics of the A share market in 2016: the bubble market, the volatility market, the structural market and the expansion of the market. After experiencing the "big year" of investment returns over a number of years, the approximate probability of 2016 is a "small year". We must not blindly optimistic and blindly pursue the rise and fall.