Holding Cash is the Only Way to Protect the Interests of Shareholders and Investors

Weekly Thoughts

There were two major conferences this week.

Buffett moved the shareholder meeting to Los Angeles for Munger. Here are the highlights of the meeting.

On Apple: Selling some Apple stock last year was probably a mistake. Sometimes I might have to do some operations secretly under Munger’s nose, but in his opinion, they are all wrong.
Airline Stocks: The airline stocks sold accounted for only a small part of the investment. The performance of airline stocks improved later because we cleared our positions. Airlines fell into crisis not because of their operations; I believe people will still fly.
Bank Stocks: Although I love bank stocks, bank stocks will not exceed 10% of Berkshire’s portfolio.
Stock Buybacks: If buying back stock is just to push the price up, it is immoral.
SPAC: SPAC speculation is a by-product of new investors flooding the market, and no one tells you when this frenzy will end.
Bitcoin: Buffett refused to answer questions about Bitcoin. Munger said: I hate the success of Bitcoin. I don’t like this virtual currency kidnapping our existing currency system. Bitcoin is like a financial product created out of thin air. I am not satisfied with this point. I think this is contrary to the development of our civilization.
Best Investment: Invest 90% of funds in the S&P 500 index fund.
Commission-free Trading Platforms: It’s like a casino owner joining the stock market. In the past 12-18 months, Robinhood has become an important part of the casino nature presented by the market. For a civilized society, such a business is not what I like.
Skyrocketing Raw Material Prices: Some people have money in their pockets and don’t care about higher prices, so prices are speculated higher and higher, and the supply chain is completely distorted.
Holding Cash: Holding cash is the only way to protect the interests of shareholders and investors.

On April 30, the Politburo studied the current economic situation.

Dialectically view the economic data of the first quarter. The current economic recovery is unbalanced and the foundation is not solid. It is also a K-shaped recovery. The focus of work is still supply-side reform and dual circulation.
Actively develop the industrial Internet, accelerate industrial digitization, orderly promote carbon peaking and carbon neutrality, and actively develop new energy.
Formulate an action plan to promote common prosperity.
Adhere to the positioning that houses are for living in, not for speculation, increase the supply of subsidized rental housing and shared ownership housing, and prevent speculation in housing prices in the name of school district housing, etc.
Implement shared responsibility for the party and government, strictly investigate and punish all kinds of illegal occupation of cultivated land or changing the use of cultivated land, curb the “non-agriculturalization” of cultivated land, and strictly control “non-grainization”.

Weekly Events

During the 5-day May Day holiday in 2021, the tourism market and the film market were booming, and consumption drive was obvious.

In a dialogue between Ren Zeping and Qin Shuo in 2018, it was mentioned: China is entering a consumption-led stage of economic development, which contains huge opportunities.

Qin Shuo: In 2017, the total order volume of Double 11 in China in 24 hours was almost 300 billion, Alibaba platform was more than 160 billion, and JD.com had 127.1 billion. This number is very, very large. This kind of online shopping is more of the consumption of the Internet generation. I noticed that your recent article said that China’s future consumption is a big driving force, and it compared China with the United States, saying that in the process of high consumption growth in the United States back then, finance actually played a big role, such as installment payments, consumer finance, etc. Do you think that from the perspective of consumption in China today, what might our future situation be like?

…

Ren Zeping: First of all, in economics, consumption upgrading is generally divided into four stages. The first stage is to solve the problem of food and clothing. The second stage is durable goods, such as electronics, home appliances, washing machines, refrigerators, etc. The third stage is to solve the problem of housing and transportation, that is, the explosive growth of automobiles and real estate after 2000. When everyone has a car, a house, and durable goods at home, what do they pursue? Buy health, buy happiness, pursue quality, a better life, and also include wealth management.

Weekly Market

Period: 2021-04-25——2021-05-01

4-week review: The three major indices rose together on the last trading day of this week. It can be basically confirmed that it is a rebound rather than a periodic pullback. Wind industry top three gainers were semiconductors, alcohol, and water affairs; top three losers were forestry, environmental protection, and cultural media. Wind concept semiconductor packaging, semiconductor, and national big fund indices; top three losers were Beautiful China, PM2.5, and elevator indices.

3-week review: The three major indices fell together this week. Wind industry top three gainers were shipping, steel, and leisure products; top three losers were catering and tourism, aviation, and power generation equipment. Wind concept hydrogen energy, semiconductor, and Hainan Free Trade Zone; top three losers were trust heavy holdings, servers, and sewage treatment.

2-week review: The three major indices fell together this week. Wind industry top three gainers were office, leisure products, and automobiles; top three losers were papermaking, furniture, and education. Wind concept liquor, digital currency, and COVID-19 detection; top three losers were tungsten ore, rare earth, and MLCC.

1-week review: The three major indices rose slightly this week. Wind industry top three gainers were daily chemicals, healthcare, and biotechnology; top three losers were leisure products, oil and gas, and forestry indices. Wind concept vaccines, lithium batteries, and yellow rice wine; top three losers were HNA series, aquatic products, and Hainan Free Trade Zone.

This week’s review: The three major indices rose slightly this week. Wind industry top three gainers were shipping, biotechnology, and healthcare; top three losers were airports, forestry, and motorcycle indices. Wind concept top three gainers were vaccines, medical aesthetics, and biological products; top three losers were small base stations, 4G, and Stock Connect.

Market (%)	Index	This Week	1 Week Ago	2 Weeks Ago	3 Weeks Ago
Shanghai Composite Index	3446.86	-0.79	1.39	-0.7	-0.45
Shenzhen Component Index	14438.37	0.6	4.6	-0.67	-1.19
ChiNext Index	3091.4	3.24	7.58	0	-1.14
Hang Seng Index	28357.54	-2.06	0.38	0.94	0.42
HSCEI	1084.21	-1.6	0.42	1.21	-1.04
Hang Seng HK Chinese Enterprises	28357.54	-2.06	-0.36	1.89	-2.33
Dow Jones Index	3387.85	-0.49	-0.46	1.18	1.95
Nasdaq	13962.68	-0.39	-0.25	1.09	3.12
S&P 500 Index	4181.17	0.02	-0.13	1.37	2.71