Fundamental Research is the Root

Thoughts of the Week

On September 11, 2020, I bought Himax Technologies (HIMX) at a price of 3.46 yuan.

On November 17, 2020, I sold at a price of 4.470, with a yield of 29%.

However, on November 27, HIMX hit a new high of 6.91 yuan.

If I held the stock until now, the yield would reach 99%.

What’s worse, on November 17, I bought Lufax (LU) at a price of 18.67, and as of now, the floating loss is 19.5%.

After a series of showy operations, the actual income decreased by 90%.

In addition, on November 13, I bought Zhongjia Bochuang at 5.58 yuan, and sold it at 6.12 on November 25, with a yield of 9%. It looks good, but it is actually a rubbish transaction, because on November 23, due to the release of RCS benefits by the China Mobile Developers Conference, Zhongjia Bochuang had 2 consecutive boards, creating a new stage high of 6.62 yuan. If sold at 6.62, the yield could reach 18%.

Why does this happen?

Fundamental research is not solid. The research on Himax Technologies’ product business was limited to easily collected network information, and did not dig deep into its value in the industrial chain, and did not even read the financial report. When the stock price rose, there was no clear understanding of its rising logic (this rise is supported by performance and is a valuation restoration), so when it fell back in stages, I chose to clear the position. Zhongjia Bochuang’s daily limit was completely driven by news, and the upward momentum would not continue, but I did not sell decisively at the high point.
Insensitive to event drivers. Ant Group’s listing was suspended, and the reason behind it was changes in industry regulation. Although Lufax, which also belongs to fintech, successfully IPOed, it will also be affected by regulation, and the stock price decline has become inevitable.
Trading must be based on a full grasp of fundamentals. Trading without a full understanding of fundamentals, even if profitable, is not called trading, but a random event.
Weekly review has become a formality. Deep thinking is necessary to be worthy of the time and money cost paid.
Do not slack off in doing things, persevere, and cultivate investment, entrepreneurship, writing, and exercise into habits like three meals a day, improving daily.

Events of the Week

On November 27, the Shanghai Stock Exchange and China Securities Index Co., Ltd. announced that they decided to include Science and Technology Innovation Board securities that have been listed for more than 1 year into the sample space of constituent indices such as SSE 180 and CSI 300. The adjustment will officially take effect on December 14, 2020. At that time, Science and Technology Innovation Board securities are expected to appear in scale indices such as SSE 180 and CSI 300 for the first time, and the market representativeness of the index will be further enhanced.

Market of the Week

Period: 2020-11-23——2020-11-29

Under the hype of the pro-cycle concept, the pattern of strong Shanghai and weak Shenzhen continued. When the valuation of pro-cycle weighted stocks is repaired, if the entire market maintains an upward pattern, Shanghai and Shenzhen will rise together. If the market remains volatile, it is difficult to grasp who is strong and who is weak. We must carefully select industries and individual stocks, and not pay too much attention to the rotation of the two markets. This week, banks, insurance, machinery and other pro-cycle stocks led the gains, while liquor, white goods and other consumer stocks led the declines.

Market (%)	Index	This Week	1 Week Ago	2 Weeks Ago	3 Weeks Ago
Shanghai Composite	3408.31	0.91	2.04	-0.06	2.72
Shenzhen Component	12690.88	-1.17	0.71	-0.61	4.55
ChiNext Index	2618.99	-1.8	-1.47	-0.96	2.91
Hang Seng Index	26894.68	1.68	1.13	1.73	6.66
HSCEI	1024.4	2.49	-0.43	2.31	7.06
Hang Seng China-Affiliated	3882.81	0.69	-1.21	3.15	6.98
Dow Jones	29910.37	1.45	-0.73	4.08	6.87
Nasdaq	12205.85	2.53	0.22	-0.55	9.01
S&P 500	3638.35	1.58	-0.77	2.16	7.32

Market (CNY, Billions)	This Week	Last Week	2 Weeks Ago	3 Weeks Ago
Shanghai Connect	115.09	84.4	73.75	126.87
Shenzhen Connect	7.51	-29.29	18.38	87.29
Hong Kong Connect	126.21	95.98	133.05	202.80

Positions

Type	Code	Name	Current Dynamics
Stock	SZ000889	Zhongjia Bochuang	Clear
Stock	SZ300766	Daily Interactive	New
Stock	LU	Lufax	Flat
Fund	F260104	Invesco Great Wall Domestic Demand Growth Mixed	Flat
Fund	F000566	Huatai-PineBridge Innovation Upgrade	Flat
Fund	F320022	Lion Fund Research Selected Stock	Flat
Fund	F001692	Southern National Policy Power Stock	Flat
Fund	F163415	Xingquan Commercial Front-end Fee	Flat
Fund	F001668	E Fund Global Internet Mixed	Flat
Fund	F519688	BOCOM Selected Mixed	Flat
Fund	F163406	Xingquan Herun Classified	Flat