Efficiency is Life

Weekly Reflections

In 1979, Shekou, Shenzhen put forward the slogan: “Time is money, efficiency is life” (In 2018, when I went to Shenzhen, I made a special detour to Time Square to see this sign). Since then, money has become the goal that Chinese people openly pursue. Cherishing time and working efficiently have become the standards for the government, enterprises, and individuals. Enterprises in the Pearl River Delta work 5+2, day and night, while cadres in the Yangtze River Delta work from Monday to Saturday without rest, and weekends are not guaranteed. Even the foreign company Tesla followed local customs, completing the construction and production of its Shanghai factory in just 10 months, while the Tesla German factory announced at the same time is still in the stage of cutting trees and acquiring land 2 years later.

I only truly felt that “Time is money” after visiting Shenzhen, but I didn’t understand “Efficiency is life” at all until this epidemic, when I had a visceral feeling about this phrase. As the top leadership summarized, China used a little over a month to preliminarily curb the spread of the epidemic, about two months to control the daily new local cases within single digits, and about 3 months to achieve control of the epidemic in Hubei and Wuhan, the hardest-hit areas. Efficiency is the greatest respect for life. As written in “People and events that are heroic in emergencies are indeed exciting, but what we need is a mechanism to avoid emergencies”, compared with SARS in 2003, our epidemic prevention and control capabilities have indeed improved significantly this time. Medical teams from all over the country rushed to aid Wuhan, Huoshenshan and Leishenshan hospitals were built quickly, all parties searched globally for masks and protective clothing, communities and villages quickly implemented closed management, and medical workers sacrificed their small families for everyone, going to the front line while ill…

US President Trump said on the 6th that for the United States, the consequences of the COVID-19 pandemic are worse than Pearl Harbor. A Washington Post reporter quipped: “One can imagine, if it were Trump who received Einstein’s letter, what things would have turned out like: Two months later, he would congratulate himself on his ‘extraordinary work’, disband his atomic bomb task force, and leave the entire nuclear issue to the US states. Texas would compete with Florida for uranium, while New Jersey and Ohio drove up the price of plutonium. New York State, which makes the atomic bomb, would not contact Washington, and Washington would modify B-29s without specifications.” “The atomic bomb would not work properly in tests, bombers would take off without enough fuel, and Trump would blame the governor of Michigan - and we would all be speaking Japanese.”

No comparison, no harm. Indeed, differences in epidemic prevention results are due to differences in systems and people’s awareness, but the most important factor is the difference in government efficiency.

Although Peter Thiel argues in “Zero to One” that only companies in an absolute monopoly position can develop for a long time, the vast majority of companies find it difficult to become oligopolies, and to survive, a very important point is to be efficient.

Weekly Market

Period: 2020504-20200509

Market (%)	Index	This Week	1 Week Ago	2 Weeks Ago	3 Weeks Ago
Shanghai Composite	2895.34	3.04	0.76	-1.06	1.5
Shenzhen Component	11001.58	4.77	1.49	-0.99	2.23
ChiNext Index	2125.24	4.65	1.97	-0.84	3.64
Hang Seng Index	24230.17	-1.68	3.14	-2.25	1.71
HSCEI	960.15	-2.02	3.65	-1.38	0.17
Red Chip Index	3823.64	-1.04	4.28	-1.66	1.13
Dow Jones	24331.32	2.56	-0.22	-1.93	2.21
Nasdaq	9121.32	6	-0.34	-0.18	6.09
S&P 500	2929.80	3.5	-0.21	1.32	3.04

Shanghai-Shenzhen-Hong Kong Stock Connect

Market (CNY, Billion)	This Week	Last Week	2 Weeks Ago	3 Weeks Ago
Shanghai Connect	-23.14	18.83	18.63	124.99
Shenzhen Connect	51.71	30.92	5.53	175.22
Hong Kong Connect	16.89	7.62	75.83	62.1

This week, the three major indices in Shanghai and Shenzhen all rose by more than 3%, the three major indices in Hong Kong all fell by more than 1%, and the three major US indices also rebounded significantly, especially the Nasdaq index, which has rebounded 11% in the past month and has entered a technical bull market.

Overseas markets fluctuated sharply during the May Day holiday, but in the 3 trading days after the holiday, the Shanghai and Shenzhen markets withstood the test. The main reason is that investors are confident in China’s epidemic control and optimistic about the positive development of the Sino-US trade war.

Continue to maintain last week’s judgment that A-shares are already on the right side of the bottom and will fluctuate upward in the future.

The cancellation of QFII/RQFII investment quotas will accelerate the inflow of foreign capital into the mainland market, and it is expected that the net inflow of foreign capital for the whole year will exceed 350 billion RMB.

Hot Industry Concepts

From the perspective of Wind Level 4 industries, oil and gas drilling, semiconductors, and computer hardware led the gains, while supermarkets, shipping, and pharmaceuticals indices led the declines. This week, photoresist, TWS earphones, and semiconductor concepts led the gains, while ST/cap removal, venture capital, and vaccines led the declines. Compared with last week, technology concepts continued their gains, and epidemic-related sectors continued their declines.

Weekly Events

On May 3, Charlie Munger was absent from the Berkshire Hathaway shareholders meeting, and Greg Abel, Vice Chairman and head of non-insurance operations, attended. The first-quarter financial report released by Berkshire showed a net loss of US$49.746 billion, a record high. The investment portfolio suffered a “paper loss” of over US$54.5 billion, while cash on hand reached a record US$137.3 billion. It cleared its holdings of the four major US airlines, including: Delta Air Lines, American Airlines, United Airlines, and Southwest Airlines.

On the 7th, the “Regulations on the Management of Domestic Securities and Futures Investment Funds by Foreign Institutional Investors” was released, implementing the requirements for canceling the domestic securities investment quota management for Qualified Foreign Institutional Investors (QFII) and RMB Qualified Foreign Institutional Investors (RQFII), further facilitating foreign investors’ participation in the mainland financial market.

Portfolio

Increased positions in GF Domestic Demand Growth and GF CSI All Share Construction, remaining positions unchanged.

Type	Code	Name	Current Dynamic
Stock	SZ002241	Goertek	Hold
Stock	VAL	Huashibo	Hold
Fund	F210008	Golden Eagle Strategy Allocation Mixed	Hold
Fund	F005311	Wanjia New Economy Momentum Mixed A	Hold
Fund	F000363	Guotai Juxin Value C	Hold
Fund	F005911	GF Dual Engine Upgrade Mixed	Hold
Fund	F161725	CMSC Baijiu Graded	Hold
Fund	F163415	Xingquan Commercial	Hold
Fund	F270022	GF Domestic Demand Growth Mixed	Increase
Fund	F004856	GF CSI All Share Construction	Increase
Fund	F001592	Tianhong ChiNext ETF	Enter