[Qiu Zhichang Column]Convinced: The bulls will rise suddenly! ! | Anue Juheng – Juheng New Vision

1. Preface
(Figure 1: Daily Chart of Taiwan Stocks Weighted Stock Price Index, Juheng.com)

On May 23, 2022, the weighted stock price index of Taiwan stocks began to build a bottom zone while US stocks were still in decline. Although the broader market was still in a “high and low” trend that day; electronic and non-electronic stocks rose by more than 100 points at the beginning of the market. However, from the opening at 9:30 in the morning to the closing at 13:30 in the afternoon, funds gradually gathered from electronic semiconductor stocks to shipping stocks; finally Wanhai Shipping, which created the near-ocean line, closed at the daily limit, while the ocean line’s Evergreen and Ocean Shipping Lines closed at the daily limit. Yang Ming Shipping also rose by more than 3%. After the close, the market was in an uproar: electronics stocks have become the second largest, and they have become a douchebag that cannot be supported in the short term. This pattern of taking the lead in rebounding at the bottom with non-electronics and shipping is very likely to be the characteristic of the Taiwan stock market in the future. This is what this article has been describing recently, the structure of the non-globalized stock market; Taiwan’s marine container transportation is in It was also famous in the world 30 years ago. At that time, Evergreen Shipping’s cargo freight quotations competed fiercely with South Korea’s Hanjin Shipping. Evergreen Shipping was once hailed as a Price Killer by the international shipping community. This is a completely different share price structure change from the electronic semiconductors that rose sharply in March 2020, under the stock market conditions stimulated by the QE of the US Fed.

Based on the theory of Rational Expectation, in fact, starting from the second half of 2020, this article predicts that the Fed’s unlimited QE will be ignited, and finally trigger inflation; The “zeroing” of the epidemic has been continuously and thoroughly implemented, cutting off the production and supply chain, and then the Russian-Ukrainian war will break out in 2022. The current stock market is like a “Radom Walk,” which seems to be falling into a bottomless pit of bears. At this moment, encouraging investment to buy stocks seems to be in the opposite direction in the storm. In order to fight inflation, the reverse QE tightening monetary policy, and the US sanctions on Russia, the closure of Shanghai, China, and the closure of the residents are crazy; this article is also afraid that when the stock market gradually sinks down; this article also It is understood that domestic financial experts frequently shout that the peak of the boom has passed and the recession is imminent; under these terrible atmospheres, can we still have fun and oppose the bears? Is the opinion of this article unwise? However, in the past two months, the two major stocks of financial and transportation, which were once brilliant in Taiwan’s stock market, have suddenly and occasionally had strong offensives and ignited long sparks; this obviously verifies that this article has been emphasizing for decades that in any bad systemic risk, it is more known After that, the stock market will still be dawning, stepping out of its own bright sky.

2. Shipping stocks are the representative work of Localization!
(Figure 2: The daily chart of Wanhai Shipping’s share price, Juheng.com)
(Figure 2: The daily chart of Wanhai Shipping’s share price, Juheng.com)

The stock price of Wanhai Shipping is strong, and the reason why it has formed counter pressure on the bears can be seen from its line chart and the trend of EPS in the first quarter. A long red on May 23 overshadowed all the selling pressure since the beginning of March, which means that from March 1, investors who bought Wanhai Shipping stock, as long as they stick to the democratic bulls camp, will The long anti-communist recovery is just around the corner. This is repeatedly emphasized in this article. From February 24th, when the Russian army entered Ukraine to maintain peace and settle the internal war in the empire; let the world’s largest fund management company, the chairman of BlackRock Investment Trust in the United Kingdom confirm that this is the beginning of “non-globalization”, and all the The first big comeback of the bulls after going all short. At the time of the Russian-Ukrainian war, foreign capital was sold in Taiwan stocks for several consecutive days, with a daily amount of more than 50 billion yuan, and the sales exceeded 5 trading days in a week. ; After more than 3 months, through the Fed’s tight monetary policy, even though the Russian-Ukrainian war has been close to the Sino-Japanese eight-year war of resistance, the constant cycle of ups and downs in the stock market will surely turn around.

Just remember that this article was written in January 2018, more than a month after the US-China trade war started, and we believed that the stock market would eventually adapt to the US-China trade and come out of its own bull market. In the future era of de-globalization, the stock market will naturally move out of the Localization feature uniquely defined in this article. In fact, this human instinct is deeply rooted in my mind, and the memory of this article is obvious and profound. Thirty years ago, this article just came to Taipei to set up a family and was busy with work with his wife. He also considered the joy of parents in the countryside of Changhua, the joy of first-time grandparents, and the cognition of the future inheritance of the eldest grandson of the family. Therefore, he brought the newly born eldest son back to his hometown. Of course, my grandparents loved him even more: my father was still the first-level director of the county government at that time, in charge of the county’s agricultural administration; after returning home from get off work every day, and during the holidays, he always hugged him for a long time and never let it go. One day when I returned home, my father took him to my cousin’s house and let him crawl on the clean floor to play. When he was halfway through playing on the ground, I saw him with my own eyes, and suddenly he started crawling, crawling, crawling, crawling, and finally, without warning, stood upright and started walking. This is his first step in life: I will never forget this situation in my life, the vitality of human beings is so strong. The shock and joy brought by the strong desire of mankind to seek progress are always buried in the heart, which encourages this article to be broad-minded and kind-hearted in any difficult environment. The same is true for the stock market. As long as it is not speculative, but sincere investment, there must be the ability and opportunity to suddenly stand up from the roar of the bears. At present, the seemingly endless black hole of bearishness will surely show the bright and tenacious vitality of bulls, just as everyone stood up suddenly in childhood.

3. Think about it: Are U.S. stocks facing those still-unknown bad things? ?
(Figure 3: The daily chart of the Dow Jones Industrial Average, Juheng.com)
(Figure 3: The daily chart of the Dow Jones Industrial Average, Juheng.com)

This piece of testimony is deeply imprinted in my mind. Therefore, whenever the Taiwan stock market is in distress and panic, there is a strong bullish ambition and patience in this article, waiting for the brewing of karma and time. Although this article also has periodic long and short expectations for the market, and a stubborn judgment of long and short positions that does not give an afterthought; but we are bearish (refer to the future long short article in this article in November 2021) After a few months, we are now confident in the flames of the bulls. rekindle. Until recently, this article has continued to study the future of the “non-globalization” Localization of the long stock market; this article judges that it must be the only non-electronics in the world. Since May 15th (the second FOMC meeting of the Fed), this article has gradually turned from short to long; because we have always expected and firmly believed that under Localization, the stock market has a long offensive in a Localization method, and there is still a difference from “globalization”. ” (Globalization) move. This has been strongly confirmed from the Taiwan stock market on May 23, just like a child suddenly crawling, standing up and walking on his own. Moreover, this wave of market is the characteristic industry with the best profit in Taiwan. After a wave of financial stocks, the transportation stocks are the most resilient; this should be the beginning of the Localization era. The transportation industry is an important industry in trade-oriented countries: Taiwan’s Evergreen and Wan Hai Shipping are two long-established companies in the global ocean and near-ocean transportation, with strict management style and good profitability.

The board of directors of Evergreen Shipping has announced a capital reduction. The current share capital before the capital reduction is 52.9 billion yuan, and the net value per share is 82.54 yuan/share. The company earned 101.359 billion yuan in the first quarter of 2022, and the net profit per share was 19.6 yuan/share. If it is estimated at 15 yuan per share per quarter in the future, the company’s earnings per share will reach nearly 60 yuan per share in 2022, but the current share price is less than several times the price-to-earnings ratio, which is unbelievably low; of course If you think about it in reverse and identify the stock market as a “Strong Form Efficient Market”, it will undoubtedly mean that this low price-earnings ratio strongly implies that the economy will decline sharply in the future? Even evolved into a second “Great Depression”? This is definitely a long-term topic worth discussing. If this article is not forgetful, after the US-China trade war on January 29, 2018 and the Covid-19 epidemic in 2020, economists from global investment institutions have remarked that the second Great Depression in the world is coming; But it is often not like this. Is it possible that no one is talking about it at this time, and it is now progressive? We believe that even so, the stock market will still be long and short, and at least there should be a medium-term rebound cycle!

(Figure 4: When will TSMC's share price boom again? Juheng.com)
(Figure 4: When will TSMC’s share price boom again? Juheng.com)

As far as the views of all international investment banks are concerned, JPMorgan Chase’s long-short view on the stock market in recent years is the most accurate and consistent with the “period”. JPMorgan Chase warned in the fourth quarter of 2021 that the share price of semiconductors is overvalued, and it is expected that semiconductor inventories will increase and profits will be affected from 2022; this view will continue until mid-May 2022. No change. But on May 23, 2022, Dimon, the company’s chief executive, turned his back on his bearish stance; publicly stated that the U.S. economy remains strong and that potential obstacles to economic growth have yet to take shape. But high inflation and tight monetary policy (QT) are creating an unprecedented combination, under which the economy could be headed for recession. But he re-emphasized that after a period of time, these factors of economic recession will gradually dissipate.

4. Conclusion: Will there be other systemic risks in the future?

The IMF’s latest economic forecast report shows that the global economic growth rate will drop from 4.4% to 3.3% in 2022; the IMF spokesperson also made a special statement to this forecast, which has already caused the Russian-Ukrainian war and other possibilities to follow. The coming economic sanctions, and the US and global inflation, Fed tightening policy, China’s economic recession, etc. have been taken into account. IMF First Deputy Managing Director Gopinath said countries will face more inflation than originally expected. This article observes the US dollar index and the US 10-year Treasury bond yield, which is obviously the same, and has indeed reflected the expected future tightening risk. But at present, the stock market is taking two steps further, and this extremely boring trend has really caused quite a headache for the bulls, and it is even hard to let go; when will the decline stop and return to spring? become the most anticipated issue. But we believe that after the darkness of the day, the dawn actually came slowly; without a bit of cold, how fragrant the plum blossoms are? After repeatedly bottoming and consolidating, the ability of the bulls to suddenly rise will be the same as that of a child learning to walk and suddenly stand up; this article is convinced!

(Disclaimer: This article is a research on the practical integration of financial theory and the market, not an investment proposal, and does not endorse any reference to this article for stock selection decisions and investment gains and losses.)


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