Only because I am in this mountain, in May 2025, it is now a bull market.
Both the bottom and top are regions; bull and bear markets are also ranges. I think it is already a bull market now. Policies are in place, and it just lacks the U.S. injecting liquidity. If the U.S. injects liquidity, China will follow. If China injects liquidity first, the money will flow to the U.S. to take over the overvalued U.S. stocks and the crumbling U.S. bonds.
This part is not understood by many; let me explain in detail the reasons why both countries will lower interest rates.
American capital has always relied on the tidal waves of the dollar to harvest global assets. When the U.S. lowers interest rates and injects liquidity, the supply of dollars increases and flows worldwide to purchase assets. When the U.S. raises interest rates and tightens monetary policy, the liquidity in the market shrinks and the economy hits the brakes. Moreover, compared to other options, there are risk-free U.S. Treasury bonds to choose from, which will flow back to the U.S.
If a country does not comply, offer higher interest rates.
1. If a country is export-oriented, raising interest rates will directly lead to the appreciation of its currency, impacting the entire country's dynamics. Refer to Japan.
2. If a country does not rely heavily on exports, the U.S. can engage in color revolutions or policy repression against them. This would cause turbulence in the local capital market, and capital would have to flee. Refer to Europe.
Large American capital will enter when the economies of various countries are in turmoil and assets are oversold. Samsung played this game and lost. Many companies with American capital as major shareholders operate on this principle.
I believe the U.S. will definitely lower interest rates because American capital needs the dollar cycle to continue, and U.S. Treasury bonds also need lower interest rates and liquidity injections to catch a breath. Trump's policies temporarily boosted inflation, which was the most irrational decision within the entire system, and all parties are waiting for him to ease up.
Now, let's talk about China.
China currently has issues with real estate debt, a high savings rate, and sluggish consumption, along with deflation. Rationally speaking, interest rates should be lowered.
The Chinese people are not lacking money; they lack confidence in the economy. You might say the money is in the hands of the wealthy, but when the wealthy spend, money circulates. If a wealthy person spends twenty thousand on a bag, that money flows into the industry chain. This part of the money would have run away early; it won't keep increasing after 2021.
Debt issues and deflation can also be alleviated by injecting liquidity; I don't need to elaborate on this.
After liquidity is injected, there needs to be a reservoir to absorb the excess currency to avoid uncontrolled inflation; skyrocketing housing prices are better than skyrocketing pork prices. Previously, we chose the real estate market, but the consequences are evident to everyone. I believe the next round will be the stock market. The stock market has a low entry threshold, and China's previous strategy of industrializing the country meant that the previous reservoir couldn't be the stock market; housing still requires saving for a down payment, so one needs to work hard before saving for a down payment. The housing market can drive the engineering industry, but the stock market is different.
China's manufacturing industry has become crucial globally; it is reasonable to switch anchors at this moment.
From the perspective of the stock market's absorption capacity, the stock market is indeed at a low point compared to mainstream countries. Based on price-to-earnings and price-to-book ratios, there is significant room for growth (this only refers to large-cap stocks and high-performing stocks). Previously, Chinese money was focused on real estate, but now it's kept in pockets. Foreign capital took advantage of the U.S. injecting liquidity and ran to the U.S. stocks, creating a V-shaped reversal from 2022 to 2023 (isn't this also a policy-driven market?). In 2024, their first stop entering China will be Hong Kong stocks, and the procedures for A-shares are complicated, so it will take longer.
This round has completely shifted the reservoir from the real estate market to the stock market. The determination above has become very clear; holding meetings to teach state-owned enterprises about net value management, it’s just short of making it explicit.
This is a personal tree hole for sharing insights.
If I had to pinpoint a widely recognized starting point for a bull market, I think it would be around June or July, after the Federal Reserve lowers interest rates. But if I enter the market then, it might be too late, and I could end up settling at 10.8 for 924.
Right now, if I position myself, I might only lose a few dozen or twenty, but the potential returns upwards are very high.
Regarding stock selection, focus on core and quality assets within the CSI 300, choosing those with monopolistic positions or industry leaders. This year's theme is technology and consumption. Chemicals, bulk commodities, lithium batteries, and photovoltaics are independent capacity cycles; without experience in various industries, there are only trading opportunities. Oil, pharmaceuticals, and banks have stable demand and performance but lack imaginative potential, so they will be the last to rise. Real estate... is expected to remain lukewarm, with no room for decline or growth. Education is a policy-driven market; the next round may focus on vocational education and AI-related topics, which might take longer but also has slight expectations. I don't want to get involved.
I'm just joking; I'm a newbie who just entered the market. Everyone just have a laugh.
The stock market is risky; proceed with caution. The above is my personal understanding. Avoid chasing after rising prices and selling during dips; never borrow money to invest in stocks. The principle remains unchanged, allowing one to navigate bull and bear markets.