Learn to Live Frugally

Cycle

20200210-20200216

Market

Index	Points	This Week (%)	1 Week Ago	2 Weeks Ago	3 Weeks Ago
SSE Composite	2917.01	1.43
SZSE Component	10916.31	2.87
ChiNext Index	2069.22	2.65
Hang Seng Index	27815.60	1.5
HSCEI	1089.49	0.98
Red Chip Index	4357.78	0.73
Dow Jones	29398.08	1.02
Nasdaq	9731.18	2.21
S&P 500	3380.16	1.58

Review

Major indices rose to varying degrees this week. The momentum in Shanghai, Shenzhen, and Hong Kong still comes from valuation repair after the deep squat on February 3, 2020. The momentum in US stocks still comes from economic recovery.

In last week’s investment review “Before the epidemic is completely lifted, the most important thing is to preserve principal, and do not blindly add positions”, it was proposed:

Short-term deep squats do not change the medium-to-long-term slow bull trend. Stocks and funds already held should not be blindly sold off. For those with light positions, positions can be appropriately added in biomedicine and wrongly sold technology stocks.

From this week’s trend, technology stocks basically confirmed last week’s judgment, but the correction in biomedicine came faster than expected. Everyone is quite optimistic about the epidemic 😄.

Events

Three things are worth paying attention to this week:

1. The latest epidemic statistics show that the number of new confirmed cases daily across the country excluding Hubei has shown a downward trend for 12 consecutive days. The motivation for local governments and enterprises to resume work has become stronger. In some places where the epidemic is not serious, more than half of the enterprises have resumed work. In Hangzhou, Zhejiang, nearly 50,000 enterprises above designated size have resumed work in two batches. Hangzhou City also chartered special trains to bring migrant workers from Guizhou, Chengdu, and other places back to Hangzhou to assist enterprises in resuming work. With the easing of the epidemic and the realization of resumption expectations, biomedicine, online education, and remote working, which were previously greatly affected by the epidemic, may see a brief correction.

2. There are three pieces of news about Bitcoin this week. First, Justin Sun announced that he had shared dinner with Buffett. Buffett affirmed that blockchain has huge prospects, but believes that Bitcoin needs to go a long way to prove its value. Second, at 11:14 am Beijing time on February 9, the price of Bitcoin broke through the $10,000 mark, and many people began to believe in Bitcoin again. Third, Charlie Munger stated at the Daily Journal 2020 Annual Meeting: He hates things like Bitcoin, and he hates things that are essentially anti-social. Driven by multiple factors, Canaan Technology, a leading mining machine company, rose by a maximum of 82.86%.

3. Since mid-December last year, Tesla, the benchmark for new energy vehicles, has risen by nearly 3 times, driving the entire new energy vehicle industry chain to rise sharply. Tesla entered a high-level consolidation period this week. CATL also entered a consolidation period, and the upstream leader Ganfeng Lithium also began to adjust slightly in the last two trading days of this week.

Position Adjustment and Reasons

I. Clearance of Ganfeng Lithium and Cathay Smart Car

In January, car sales from car companies to dealers fell by 20% to 1.61 million units, the largest monthly decline since January 2012. A report released by Topology Research Institute under market research agency TrendForce on Tuesday stated that because the COVID-19 epidemic severely hit supply and demand in the auto industry, it is expected that China’s new car sales in the first quarter of 2020 will fall by more than 25% year-on-year. The epidemic has exacerbated the plight of manufacturers and dealers in China, the world’s largest auto market, which is already suffering from slowing economic growth and trade tensions.

Hubei Province is a major center of China’s auto industry, with annual output accounting for about 10% of China’s total. Among them, Wuhan, Shiyan, and Xiangyang are the main locations of car factories. In addition to the damage to the production capacity of complete vehicle factories due to the city closure, the crisis of auto supply chain breakage and labor shortage has spread to all of China and overseas. According to the number of auto manufacturing enterprises announced by Hubei Province, there are more than 1,000. Auto parts suppliers such as Valeo, Bosch, and car sunroof manufacturer Webasto have production bases in Wuhan. Although car factories and related component factories have planned to resume work one after another, there is a difference between resumption of work and recovery of production capacity and normal operation. Compared with determining the time of resumption of work, grasping the production capacity of resumption is more difficult.

Ganfeng Lithium is a rare good company in the new energy industry chain, but the new energy vehicle industry is a complete chain. From upstream lithium ore imports to end-user purchasing power, everything is closely related to the macro economy. This epidemic outbreak has made the already weak auto industry even worse.

In addition, Zhang Lei’s Hillhouse Capital cleared its positions in Tesla and NIO in the fourth quarter. There may be two logics: one is that there are better investment targets than Tesla and NIO, and the other is that the risk of new energy vehicles is already high.

Therefore, temporarily clear Ganfeng Lithium (A-share return +41.2%; H-share return +12.23%), and closely observe Cathay Smart Car.

II. Buying Grandshores Technology

Recently, Grandshores Technology hit a low of HK$0.31, setting a new low in nearly two years, and then began to show a slow rebound trend. Under the influence of the Bitcoin market last week, it even saw a daily increase of 20%, which is worth paying attention to. Yao Yongjie, the actual controller of Grandshores Technology, has a unique vision and is good at networking. He invested in Canaan Technology in 2014. After several years of layout, Grandshores Technology’s blockchain technology has begun to make profits. In addition, Grandshores Technology has also cooperated with Hanma Group and others to get involved in industrial hemp, forming a “blockchain + industrial hemp” dual-drive business development model. Both aspects are also expected to enter the performance realization period in 2020.

Near HK$0.375, bought Grandshores Technology.

III. Continue to Add Positions in Technology Stocks

I am continuously optimistic about the electronic information industry. First, under the influence of the epidemic, online education and cloud office have become rigid needs, and related company stocks have also risen repeatedly. This is the same logic as shared bicycles and taxi-hailing apps spending money to cultivate users. This accelerates the cultivation of user habits, and the development of content service providers will drive the development of upstream equipment operators and equipment manufacturers. In addition, the second phase of the 200 billion scale National Integrated Circuit Industry Investment Fund (hereinafter referred to as the “Big Fund”) established last year will strengthen investment in semiconductor materials and equipment. Therefore, bought Changxin Electronics Quantization Hybrid (519929) with a net value of 1.081.

IV. Selling East Money Convertible Bond

East Money Convertible Bond was listed, sold (return +28.9%).

Positions

Type	Code	Name	Current Dynamic
Stock	SZ002460	Ganfeng Lithium	Cleared
Stock	HK01772	Ganfeng Lithium	Cleared
Stock	HK01647	Grandshores Technology	New Entry
Fund	F001790	Cathay Smart Car	Hold
Fund	F000404	E Fund Emerging Growth	Hold
Fund	F005911	Guangfa Double Engine Upgrade	Hold
Fund	F519778	BOCOM Data Economy New Power	Hold
Fund	F110026	E Fund ChiNext ETF Feeder A	Hold
Fund	F519929	Changxin Electronics Quantization Hybrid	New Entry
Convertible Bond	SZ123041	East Money Convertible Bond	Cleared

Thoughts

Life is only once, be cautious in everything, stay at home if there is nothing, and wear a mask when going out. Don’t spend money lavishly in normal times, save more funds, and think more about ways to make money. When disaster strikes, you won’t be reduced to complaining online about mortgage defaults, company bankruptcies, and being unable to survive.

Published at: Feb 20, 2020 · Modified at: Jan 14, 2026