Embrace big consumption

  The recent market has been described as very chaotic, scattered, chaotic, dangerous and difficult to do. Although a bit overstated, but also to some extent reflects the current dilemma of investment operations. Analysis of the fundamentals, macro, meso, micro, it seems not generally complex, but very complex and variable, the third quarter economic growth indicators is the signal. Look at the technical K-line, the deep into the index, CSI 300 index trend, always feel in the level of sinking, the positive line negative line also seems to be in the disorderly evolution. Want to follow the hot spot, this year’s hot track stocks, cyclical stocks are weak, oversold rebound stocks seem to lead the way again for a few days, mostly short term operation, daily stop stocks dozens of hundreds, is more difficult to make money. Ask the experts, various institutions and investment banks are also quite slippery, the release of the strategy report is simply a foggy, incomprehensible. When the market is chaotic, everyone’s heart can not be chaotic, more to see less to do, if really idle, personal advice, you can start to consider focusing on the big consumer sector.
  From a short term perspective, the large consumer sector has a valuation repair rebound requirements. As we all know, there is no stock that does not go up, and there is no stock that does not go up. Since this year, the new energy sector as a representative of the track stocks and coal non-ferrous as a representative of the cyclical stocks can be described as bullish, the early bold participants have gained much. In contrast, pharmaceuticals, consumer and other kinds of thatch stocks as a representative of the big consumer sector but fell, holders of losses. Haitian taste industry, Shuanghui development, Yili shares, Changchun high-tech, Hengrui medicine, Hualan biological, gold dragon fish, thousand harvest taste industry, Fuling squash, GREE electric appliances, small bear appliances and many other star stocks in the highest price to the lowest price of the year fell mostly in more than fifty percent. Whether from the down time or down space, at least to a break, take a breather stage, oversold rebound gradually began to present in these stocks gradually, such as Dong Ah Gum, Haitian flavor industry, Yili shares, Changchun high-tech this time the highest rebound range of more than 30%. In this sense, those who have fallen for a long time, fell hard on the big consumer sector stocks, as long as there is a counter-trend red, the bottom release, are worth the rebound.
  From the medium-term point of view, the big consumer sector has the conditions to absorb. Some people may say that the rebound is not the bottom, is the bottom not rebound, the right choice should be waiting for the trend reversal to confirm before intervening, should not pick up the knife on the way down. This is what we should analyze, in case the short term to grab the bounce failed, the risk of the back is not big? Personally, I think, excluding the short term as, from a medium-term perspective to see, many large consumer sector stocks, but also to the low gradually absorb the layout of the stage. On the one hand, from the position of the stock price, many stocks this year almost erased the front of the rise, back to the low range, down space has not much. Such as the recent New Hope, Shepherd Plains shares, Wenzhou shares, Zhengbang Technology as the representative of the pork sector stocks began to be active, some are coming out of the bottom, combined with the price of pork back down to historical lows hovering, reflecting the current pig cycle bottoming may be more clear, the market does not rule out an early reversal, such stocks are fully accessible to the low layout vision, similar chicken concept stocks have the same restlessness. On the other hand, for the new historical lows and new lows in recent years of stocks, as long as it is not a fundamental problem, short-term risk has also been initially released, after the adjustment pressure is also gradually reduced. Such as Hengrui medicine, because the growth of bottlenecks, the share price fell to the level of 2016, but look at the record-high investment in research and development, “medicine that” the value should have its gold. As for the new stocks and sub-new stocks with particularly deep adjustments, as long as the fundamentals have not changed, once the market reverses or the wind comes, the low absorption should have a good harvest.
  In the long run, the large consumer sector began to reflect the margin of safety. Stock investment is the process of value discovery, the nature of capital is to find good growth and stable development of low-valued varieties, but the common role of capital often triggers valuation deviations, in the hot windfall on the overvaluation, abandoned by the funds may fall too far. There are several reasons why the consumer sector can be concerned about the long term: first of all, the previous share price correction, risk release more, the valuation basically back to a reasonable range, the margin of safety level is rising. In the past year, consumer index funds, food and beverage index funds, livestock and meat index funds, home appliance index funds, pharmaceutical index funds, if you look from the highest to the lowest, down more than 20%, more than 30%, because of the index weighting differences, most of the actual decline in individual stocks are greater than this level. Many companies in the retracement process, but also the existence of the company itself to digest the negative factors. Secondly, from the distribution of the best bull stocks industry in the last 20 years, the large consumer sector of pharmaceutical and biological, food and beverage, automotive, household appliances, etc. are firmly in the forefront. It is the 2007 Shanghai 6124 point high to buy the core assets of the large consumer plate stocks, later not only most unsettled and made money, this position to buy the risk is not very big. Once again, the large consumer sector has a large and stable market support. Consumption is always the immediate needs of 1.4 billion people, clothing, food, housing, transportation, medical and retirement, unlimited space, the pursuit of a better life business opportunities are unlimited. It is not like the technology industry is affected by technological upgrading is huge, can not lead or can not keep up will be eliminated, risky. Also unlike the cyclical industry by the external environment policy constraints, performance ups and downs. Finally, the large consumer sector has policy support. Double-loop new development pattern in the role of consumption weight, common wealth to promote consumption is the benefit of the sector, the development of health and pension industry is an important way to deal with aging. It is foreseeable that the future of the large consumer sector will still be bull stocks, investment prospects are optimistic.
  From the recent section of the market performance, large consumer plate is breeding new trends. As the saying goes, the spring river is warm, in the capital market, funds, institutions and foreign investors are more sensitive to the market than our small and medium-sized investors. Here to remind you can embrace the big consumption, in addition to fall deep, fall long, more is there are some traces show that this sector has begun to appear new trends. Fundamentals, including Haitian flavor industry, including a number of food companies recently announced a general product price increase. Fund, in October ushered in the issue of a small climax, although the consumer is one of the worst performing sectors this year, the front related theme funds issued few or difficult, but this month there are 12 consumer theme funds in intensive issuance, and the entire three quarters of this theme funds issued only 18, a significant increase. Another from the information already disclosed in the third quarter, some top-flow funds began to reverse investment, adding positions in consumer stocks such as Tao Li bread, Myriad Medical. Institutions, Dong Ah Gum in recent days, the transaction of the Dragon Tiger list shows that they are becoming the main force to buy, Aimek, Tongze Medical, Shepherd, Wen’s shares, etc. back to the institutional research hot list. Foreign investors, northward investors in the third quarter overweight industry in addition to new energy is consumer, including food and beverage overweight 4.83%, home appliances overweight 4.67%, medicine overweight 2.35%, consumer services overweight 1.2%. As of October 18, the five largest sectors in the market value of the north capital positions are food and beverage, new energy, pharmaceuticals, banks, home appliances, the big consumer five have three of them. Considering that liquor has been at a high level, the northward capital to bag reduction pressure, the net outflow may continue for some time.
  Now start to focus on big consumption, embrace big consumption, but also to pay attention to the method skills. Must choose good companies, value investment. Resolutely take the performance as the first element of the selection of stocks, carefully analyze the performance of the three quarterly reports related to the company’s performance status, development trend, must not fall more, low prices as the criteria for stock selection. Must choose the leading companies, investment core assets. Consumer sector industry complex, many companies, to focus on grabbing those companies with industry influence, market appeal, brand attractiveness at home and abroad for investment. Must focus on new industries and new consumption. We must focus on those industries and companies that can lead consumption upgrade and may become the new trend of consumption in the future, such as medical beauty, health care and consumer services, which were more active some time ago, and especially pay attention to the consumer companies in the newly listed new stocks and sub-prime stocks since this year. It is necessary to gradually build positions and prevent risks. You can start to try a small-scale layout, and then in the case of the general market uncertainty not to chase high, take the more down the more buy mode to achieve position building.

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