Bull or Bear, Ensure Alpha Returns

Weekly Thoughts

Many people believe that over-the-counter (OTC) financing was the main culprit of the 2015 bull market crash. Therefore, on July 8, when the enthusiasm for the bull market was high, the China Securities Regulatory Commission (CSRC) collectively exposed a list of 258 illegal OTC financing platforms, fully demonstrating its intention to protect the hard-won bull market. In the important announcement on the 10th, the Social Security Fund intends to reduce its holdings in PICC, and the Big Fund intends to reduce its holdings in Goodix Technology, Beidou Navigation, and Taiji Industry. Coupled with the small outflow of northbound funds that day, it caused a slight correction in the Shanghai and Shenzhen indices on Friday, and the trend for next week became confusing for a while.

Compared with a bear market, stocks generally rise in a bull market, and volatility increases. If you want to obtain alpha (α) returns, the difficulty may be greater than in a bear market. Especially for investors who stick to value investing, the overall return may be lower than aggressive investors. The bull market is like a continuous ocean current. Any investor in the market is as small as a drop in the ocean. Individuals cannot influence the trend of the group. As long as you follow the trend, you can get beta (β) returns. If you are brave and resourceful, and dare to stand at the forefront of the tide, you can also get alpha returns. Therefore, for ordinary investors, buying broad-based indices is the best solution to share the bull market dividends.

In fact, for investors, worrying about whether it is a bull market or not makes little sense. Whether it is a bull or bear market, as long as the market is open for a day, you have to trade for a day and strive for profit. It doesn’t matter how the market is, as long as you get alpha returns, it is a victory.

Weekly Events

Weekly Market

Period: 2020629-20200705

Social Security Fund reduction

Global stock markets rose generally. China, which was the first to walk out of the shadow of the epidemic and did not have a large-scale secondary rebound, became a favored target for global capital. Northbound funds flowed in on a large scale this week. The Shanghai and Shenzhen indices hit new highs, and the bull market is about to emerge.

Hot Industry Concept Board

From the perspective of Wind Level 4 industries, hotels, resorts and luxury cruises, investment banking and brokerage, and system software were among the top gainers, while photography, household appliances, and apparel retail were among the top losers. This week, duty-free shops, connected stocks, and stock trading software were among the top gainers, while low-priced stocks, propylene index, and Toutiao were among the top losers.

Market (%)	Index	This Week	1 Week Ago	2 Weeks Ago	3 Weeks Ago
Shanghai Composite	3383.32	7.31	5.82	1.49	1.64
Shenzhen Component	13671.24	9.96	5.25	3.44	3.7
ChiNext Index	2778.46	12.83	3.36	5.23	5.11
Hang Seng Index	25727.41	1.4	2.39	0.35	1.41
HSCEI	1027.13	3.22	3.48	-1.14	1.27
Red Chip Index	4242.78	4.37	5	-0.45	1.9
Dow Jones	26075.30	0.96	0.32	-3.31	1.04
Nasdaq	10617.44	4.01	1.9	-1.9	3.73
S&P 500	3185.04	1.76	1.5	-2.86	1.86

Shanghai-Shenzhen-Hong Kong Stock Connect

Market (CNY, Billion)	This Week	Previous Week	2 Weeks Ago	3 Weeks Ago
Shanghai Connect	137.32	177.38	47.21	91.30
Shenzhen Connect	144.76	111.24	0.69	112.38
Hong Kong Connect	292.06	130.36	7.1	102.38

Positions

Clear Daily Interactive, buy CSC Financial, clear positions.

Type	Code	Name	This Period Dynamic
Stock	SH601066	CSC Financial	Clear
Stock	SZ000889	Zhongjia Bochuang	Buy
Stock	ONTX	ONTX	Hold
Fund	F210008	Golden Eagle Strategy Allocation Mixed	Hold
Fund	F001351	Nuoan CSI 500 Index Enhanced	Buy
Fund	F161725	China Merchants Liquor Graded	Clear
Fund	F001553	Tianhong CSI Securities Insurance C	Buy
Fund	F163415	Xingquan Commercial	Clear
Fund	F270010	Guangfa CSI 300 Index	Buy
Fund	F270022	Guangfa Domestic Demand Growth Mixed	Clear