Domestic Grand Circulation

Weekly Thoughts

On June 21, Zhang Lei, founder and CEO of Hillhouse Capital, and Qiu Guolu, Chairman and CEO of Gaoyi Asset, held a wonderful dialogue. The theme of their dialogue was “On the Self-Cultivation of an Investor”.

Zhang Lei shared a lot of dry goods (valuable insights):

1. What is the most important cultivation for an investor? The first and most important point is intellectual honesty. Can you face yourself honestly, and measure yourself honestly and sincerely? When you are always afraid of missing this bus, or missing this person, you are actually making a discount on honesty.

2. Investment first depends on whether you can face yourself and your failures sincerely and honestly.

3. Whether it is an entrepreneur or an investor, the essence is the same and connected. It is the pursuit of excellence, the recognition of creating value, and a very strong belief in building a great organization in the long term. This is very rare.

4. Hillhouse’s business model is agricultural civilization. Do your own things well, truly create value, and attract good entrepreneurs. In this way, a certain screening can be carried out automatically. Hillhouse’s ability to grab deals is not strong enough, but agricultural civilization has an advantage: it can calm down and cultivate deeply. After intensive cultivation, you can truly sow in spring and harvest in autumn. You can sow hope after sowing seeds. Slowly, when the harvest season comes, many people will come over, and many entrepreneurs who focus on the long term are willing to take the initiative to come over.

5. We are entrepreneurs who happen to be investors. We are investors, but first of all, we are entrepreneurs. We put ourselves in the shoes of entrepreneurs to think about problems. This is a very important starting point. In this way, you have empathy and can truly understand the enterprise.

6. How to step out of your own boundaries, called comfort zone in English, is not easy. My conclusion is that this is a gradual evolution process. So how can you step out of your comfort zone? This is the reason why many excellent people are willing to join Hillhouse, and many excellent people are willing to join Gaoyi, because a lifelong learning environment has been created here. This lifelong learning environment ultimately means that who you walk with is more important than the distant place you want to go.

7. We did a core thing, which is to gather such people together and create such a value and environmental culture for them, so that everyone can constantly expand their boundaries. Everyone can learn from each other, hold hands, walk forward, and expand each other’s boundaries.

8. Is it creating value? What I always ask is, the first positioning of the big picture view is whether you can constantly create value for society. What I say is constantly and crazily creating long-term value. Can you do this?

9. The most important thing is to carefully choose your colleagues, partners, and investors, and make the choice well. Don’t sell yourself too cheap. If someone gives you some money or some benefits, you do it, constantly compromising everywhere, violating your own principles, just to simply compare with others, my capital scale, or compare superficial things with others. I think being able to maintain, at least in the first three to five years, and always maintain peace of mind.

10. The big picture view is not only looking at the long term of things, but also looking at the essence of things, the essence of people, and the understanding of the organization. Behind this reflects your pattern as a person.

Qiu Guolu shared the following main content:

1. Investment itself is a very lonely thing. It requires a person with intellectual honesty to discuss with, argue, debate, and discuss from different angles to help everyone improve. The core lies in not being stubborn.

2. I think the mistake that smart investors easily make is overconfidence and overestimating their own cleverness. The second is that sometimes they underestimate the “stupidity” of the market.

3. We always reflect first, is there something we saw wrong? We must distinguish which are facts and which are just opinions. Distinguish facts and opinions. All opinions need facts and data to support them. If there are no facts and data to support the opinions, we feel that they are untenable and still need to return to an objective argumentation process.

4. We want to be able to set up a quiet desk in a noisy market, so that everyone can truly calm down and focus on the first principles, and be able to know what the laws of this industry are.

5. In fact, applying common sense well also requires very deep skill.

Weekly Events

On June 18, the Lujiazui Financial Forum opened, attended by authoritative figures in the financial sector.

Weekly Market

Period: 2020615-20200621

US stocks, which have been constantly hitting new highs recently, encountered “Black Thursday”, with all three major US stock indices closing with a sharp plunge. Affected by US stocks, Hong Kong stocks also saw a slight decline. Everyone increasingly agrees with Comrade Chuan Jianguo’s (Trump’s nickname) contribution to the two centenary goals, and the Shanghai and Shenzhen indices rose slightly to show respect.

Hot Industry Concepts

From the perspective of Wind Level 4 industries, software, gas, and personal products led the gains, while the energy industry chain was at the bottom. This week, equity participation in finance, Chengdu-Chongqing Special Zone, and smart grid led the gains, while low-priced stocks, limit-up stocks, and masks led the losses.

Market (%)	Index	This Week	1 Week Ago	2 Weeks Ago	3 Weeks Ago
Shanghai Composite	2967.63	1.64	-0.38	2.75	1.37
Shenzhen Component	11668.13	3.7	0.64	4.04	1.33
ChiNext Index	2319.45	5.11	1.86	3.82	1.96
Hang Seng Index	24643.89	1.41	-1.89	4.37	0.14
HSCEI	967.77	1.27	-2.22	2.86	1.38
Red Chip Index	3866.25	1.9	-2.37	2.6	1.5
Dow Jones	25871.46	1.04	-5.55	6.81	3.71
Nasdaq	9946.12	3.73	-2.3	3.42	2.21
S&P 500	3097.74	1.86	-4.78	4.91	3.25

Shanghai-Shenzhen-Hong Kong Stock Connect

Market (CNY, Billion)	This Week	Last Week	2 Weeks Ago	3 Weeks Ago
Shanghai Connect	91.30	1.78	29.84	77.86
Shenzhen Connect	112.38	47.38	121.94	74.58
Hong Kong Connect	102.38	40.30	32.10	65.30

Positions

Cleared VAL, bought small molecule targeted drug company ONTX, and increased positions in the five funds in the table which have acceptable gains currently.

Type	Code	Name	Current Period Action
Stock	SZ300766	Merit Interactive (GeTui)	Buy
Stock	SZ002987	Kingteller	Clear
Stock	ONTX	ONTX	Enter
Fund	F210008	Jinying Strategy Allocation Hybrid	Increase
Fund	F005311	Wanjia Economic New Momentum Hybrid A	Increase
Fund	F161725	China Merchants Liquor Graded	Increase
Fund	F163415	Xingquan Commercial	Increase
Fund	F270022	Guangfa Domestic Demand Growth Hybrid	Increase