China Has Its Own Zenith Sun; All Nations Dance the Nine Shao
2007/3/19 8:52:42
Western seas and Eastern seas, tides rise and fall; in commerce forests and stock roads, cold winds and hot gales blow.
The divine land has its midday sun of its own; ten thousand nations in robes and crowns dance to the Nine Shao.
The globalized economy driven by the US, Europe, and Japan encountered an historic developmental bottleneck after the dot-com bubble burst in 2000. The rise of China's economy is the inevitable demand of both the history and reality of global capital flows, the inevitable choice of a new global economic engine distinct from the US, Europe, and Japan, the inevitable responsibility of a new economy possessing the largest population and greatest potential market, and an inevitable trend that no one's will can alter. When China's economy becomes a new engine for globalization, China's stock market should also become the new leader of global stock markets — a super-market facing the world. China's exchanges will inevitably become world-class exchanges, and companies worldwide will take pride in being able to list in China. All of this will become the true wellspring of power for China's next super-scale bull market. Any short-sightedness toward this will mean missing this historic opportunity.
From September 26, 1986 when Yanzhong Industrial began over-the-counter trading, to June 14, 2001 at 2,245.42 points, the first great bull market of nearly 15 years, full of twists and turns, was followed by a comprehensive adjustment lasting four years with a decline exceeding 50%, and also left behind a market with severe institutional defects along with countless debates. All these debates ultimately reached one most basic consensus: stocks, as a type of trading certificate, must have their most fundamental system guarantee that all stocks share the same liquidity attributes. On June 6, 2005 — six-six good fortune — the institutional reform marked by full circulation opened the curtain on a new round of the great bull market. And China's stock market institutional reform is, at its root, an inevitable choice in response to China's historic economic rise against the backdrop of economic globalization.
This round of super-scale bull market is at least on the same magnitude as the first great bull market. The latter, even counting from the 95 points in 1990, ultimately gained more than 22 times. And world stock market history shows that the second great bull market without exception far exceeds the first in both duration and magnitude. Even using the most conservative ratio of 1.5, from this we can project that the new super-scale bull market that has continued for two years from 998 points, rising 2,000 points, will still extend at least another 20 years and rise another 30,000 points. Standing on the historical backdrop of China becoming a new engine of the global economy, it can be predicted that this historically magnificent super-scale bull market will unfold in three major phases:
The first phase, accompanied by the institutional and structural improvement of China's stock market itself, after which China's stock market will truly possess the qualifications to participate in the global feast. Full circulation, integrated listings, functional reorganization of the two exchanges, gradual free convertibility of the RMB, and so forth, are all merely inevitable steps in this institutional and structural improvement. In this phase, the market movement is most prominently reflected in index constituent stocks led by heavyweights. It's laughable to talk about stock market bubbles before total market capitalization surpasses GDP — the first phase will not end before China's stock market capitalization exceeds its GDP.
The second phase, accompanied by the deepening of China's participation in globalization: more and more Chinese companies will gradually grow into global companies, the Chinese market will gradually grow into a global market, China's stock market will grow into a global stock market matching China's international status, and a thorough structural reorganization of the Greater China Circle's stock markets will become reality. In this phase, market movement is most prominently reflected in stocks possessing global growth potential, marked by global growth. The second phase will not end before China's stock market becomes Asia's largest and most important stock market.
The third phase, accompanied by historic changes in the global pattern of globalization: China's economy will transform from a new engine to the most important engine; China's market will also become the world's most important market. Just as China's GDP will inevitably surpass US GDP, China's stock market will become the world's most important stock market — the most important venue for integrating and restructuring the world's economic resources. In this phase, market movement is most prominently reflected in stocks possessing global integration and restructuring capabilities, marked by global integration and restructuring. The third phase will not end before China's stock market becomes the world's largest and most important stock market.
China needs the world, and the world under globalized economics needs China even more — this is both a realistic requirement and a historical inevitability. Against such an historic backdrop, even so-called bubbles can only be phase-specific bubbles. Making China's economy the new engine of the world economy, making China's financial markets the new leader of global financial markets — this is the historic responsibility that China should shoulder as a responsible great power. And this round of historic great bull market is merely an inevitable historic manifestation of this historic responsibility. This historic stage will bestow upon all participants historic opportunities, inspiring their greatest potential and creativity.
As the poem goes: Western seas and Eastern seas, tides rise and fall; in commerce forests and stock roads, cold winds and hot gales blow. The divine land has its midday sun of its own; ten thousand nations in robes and crowns dance to the Nine Shao.
Relative Excess Liquidity and Economic Transformation and Financial Restructuring
For everyone's convenience, the appendix is placed here:
Today's market movement was entirely within the plan. The launch of Bank of China was hinted at on Friday. But the war against the traitors won't end because of this — even more arduous struggles lie ahead. 3,000 points won't be firmly established just because of one day's upward push. A critical question is: if old thinking or traitor thinking continues to dominate market mentality, then will you or won't you or won't you want to listen to the recent screechings of the likes of Jim Rogers?
Whether this launch of big index-constituent stocks can succeed actually depends on every market participant. The fire has been lit, but whether it becomes a prairie fire — that's not something this ID can decide. The market belongs to everyone, not to this ID alone. This ID has already done everything that needed to be done. Of course, this ID will only adopt different tactics according to the current situation and will never blindly buy and stubbornly hold. As long as the fire truly becomes a prairie fire, all traitors' efforts will be in vain.
Nothing to say about individual stocks. The big picture of China's economy lies in a new economic structure — the so-called transformation of economic growth mode. Therefore, from a medium-to-long-term perspective, the sectors previously and repeatedly emphasized — environmental protection (especially including new energy), agriculture, military, technology, and so forth — are all worth medium-to-long-term attention. This is the new direction of China's economic development.
Of course, the short-term decisive battle is in financial stocks — banks, insurance, etc. are all battlegrounds. Obviously, the traitors' current strength is still quite formidable. This ID has already prepared for a prolonged war — the more oscillation, the lower the cost; it's no big deal. However, once there's an opportunity for a breakout, this opportunity will not be missed. For the specific market trend, you can analyze it yourself based on hubs. This ID needs to head out first — there are more meetings to attend.
Goodbye.
Replies
缠中说禅 2007/3/19 15:18:14
Today's market movement was entirely within the plan. The launch of Bank of China was hinted at on Friday. But the war against the traitors won't end because of this — even more arduous struggles lie ahead. 3,000 points won't be firmly established just because of one day's upward push. A critical question is: if old thinking or traitor thinking continues to dominate market mentality, then will you or won't you or won't you want to listen to the recent screechings of the likes of Jim Rogers?
Whether this launch of big index-constituent stocks can succeed actually depends on every market participant. The fire has been lit, but whether it becomes a prairie fire — that's not something this ID can decide. The market belongs to everyone, not to this ID alone. This ID has already done everything that needed to be done. Of course, this ID will only adopt different tactics according to the current situation and will never blindly buy and stubbornly hold. As long as the fire truly becomes a prairie fire, all traitors' efforts will be in vain.
Nothing to say about individual stocks. The big picture of China's economy lies in a new economic structure — the so-called transformation of economic growth mode. Therefore, from a medium-to-long-term perspective, the sectors previously and repeatedly emphasized — environmental protection (especially including new energy), agriculture, military, technology, and so forth — are all worth medium-to-long-term attention. This is the new direction of China's economic development.
Of course, the short-term decisive battle is in financial stocks — banks, insurance, etc. are all battlegrounds. Obviously, the traitors' current strength is still quite formidable. This ID has already prepared for a prolonged war — the more oscillation, the lower the cost; it's no big deal. However, once there's an opportunity for a breakout, this opportunity will not be missed. For the specific market trend, you can analyze it yourself based on hubs. This ID needs to head out first — there are more meetings to attend.
Goodbye.
缠中说禅 2007/3/19 8:55:15
Will come back if time permits after market close. Heading out first. Goodbye.