An Address to All Retail Investors, Major Shareholders, Market Makers, Funds, and Regulators

2007/7/4 23:34:45

China's capital market will inevitably become a world-class market, and therefore will inevitably attract global capital to participate. But all capital participating in China's capital market must play by rules set by the Chinese people. Anyone attempting to achieve hidden agendas through bribery, trickery, or sabotage deserves due punishment.

What is the regulators' most important task? Ensuring the absolute security of the financial market — this is a matter of equal importance to national defense. And what is the most fundamental indicator of absolute security in China's financial market? That China's financial market is in the hands of the Chinese people, impregnable to any foreign power. No concessions allowed, not 0.00001% of colonial taint, not a single hilltop in the financial market flying any non-Chinese flag — whether it be the Rising Sun or the Stars and Stripes.

But as everyone knows, various flags were flying at the 1,000-point level in mid-2005 — traitors and their masters waving assorted banners, forever historically showing off at the Shanghai index's 1,000 points in 2005. Before the Spring Festival of 2007, below 3,000 points, they made their move, attempting to permanently seize the roulette wheel of China's capital market. But that time, after a war of blood and fire, they failed. After 1997, the arrogance of the traitors and their masters was struck down once again — but they never give up. This time, the quota allocated to them increased dramatically in one stroke. But anyone with even a shred of understanding of this market knows that this doesn't even scratch the tip of the iceberg — the capital hiding behind it is far, far greater. But the increase in quota gave them a new excuse, and they have new targets.

Although the Chinese are hospitable — at 1,000 points we let the guests eat first, and maybe this time we can arrange another 2,000 points for the guests to eat first too — but certain guests absolutely do not just want to be guests. They don't just want to pick up a few bottoms and sell a few tops. What they covet is the entire Chinese capital market. Everything they're doing now is merely a rehearsal, merely cultivating a habit, an emotion — a gradually accumulating habit that permeates unnoticed. Ultimately, when they launch their fatal strike, these habits and emotions will play a decisive role. By the time you wake up to it, it'll be too late.

We must, just like the time below 3,000 points, disrupt their rhythm and foil their plans. We cannot let them succeed — because once they succeed even once, we'll be forever trapped in their snare and rhythm. A simplest question: is it acceptable that every time they raise their quota, the market must correct 60% to wait for them to buy in — is this the Chinese way of hospitality? The hospitality already shown at 1,000 in 2005 was more than enough. Anyone suggesting more of this is either an idiot or has ulterior motives.

Every capital market has its big fish. If you kill off all the domestic big fish, you're merely clearing the way for foreign big fish to run rampant. China's financial market also needs its own powerful army, navy, and air force — in modern society, this is an even more important form of national defense. Only someone whose brain is filled with sewage would think that only price increases involve manipulation — can't price drops be manipulated too? Yet the reality is that people go to prison for pumping stocks up, but nobody goes to prison for driving them down. Again the simplest question: after 2001, against the backdrop of China's rapidly developing economy, shouldn't whoever suppressed the market for four years by nearly 60% to let foreigners load up bear legal responsibility? Shouldn't certain foreign funds be investigated for violating Chinese law? Shouldn't funds engaged in criminal activities be fully confiscated and permanently banned? Can't the regulators' surveillance systems be a bit more environmentally friendly — stop only watching the red, the gainers — and monitor accounts that deliberately suppress key index-weighted stocks? Can't you tell the difference between deliberate suppression and normal selling? Shouldn't necessary measures be taken against those who broadcast fabricated rumors across every major channel? Should people be allowed to freely spread panic during a disaster? Don't today's technical capabilities suffice for effective countermeasures?

To the major shareholders in the post-full-circulation era: manage your enterprises well. As long as your enterprise can make Chinese people proud on the world stage, your stock price and wealth will naturally reflect that pride. China's capital market will provide the most powerful energy for every capable, ambitious Chinese enterprise — this is your strongest backing, enabling you to conquer the world. Any Chinese enterprise that lacks the ambition to conquer the world is unworthy of being a listed company on China's capital market.

To all the market makers out there: you've worked hard. Every industry has its black sheep, but market makers must be vindicated — a few bad apples shouldn't taint the entire profession. No capital market exists without market makers, but the form must evolve with the times. The old model will offer an ever-narrower path. New models for market makers must emerge, but regardless of the model, one thing must be understood: guard your own turf and don't let the foreigners sneak in behind you. There are only around 1,000 stocks right now — can China really not produce even 1,000 qualified market makers? The most basic standard for any Chinese market maker is: don't let foreigners outflank you. Better to be a mountain king than a traitor chief licking the foreigners' boots.

As for funds: given the traitorous background of some funds, I won't bother with them. All funds that don't want to become traitor-ized must make it their mission to establish investment philosophies with Chinese characteristics. Any fund that has been completely brainwashed by foreigners is unfit to manage the Chinese people's money.

To retail investors: you must only use surplus money to participate in the capital market. Money that carries pressure must not and should not enter this battlefield. For individuals, the capital market is merely one part of life — there's no need to sacrifice your entire life for it. If the money you have in the market doesn't meet the above requirements, then wait for a good opportunity, set aside the money that should be kept, and absolutely never let stocks affect your normal life. As for pressure-free money, you still can't go be cannon fodder — activities with excessive risk must absolutely be avoided. Moreover, in large-scale battles, you really can't help much. You must wait for buy points — especially large-level buy points — before entering. The market is the result of combined forces. Wait until the large-scale battle has produced a result, until the combined forces have determined a direction, then enter. Otherwise, amid flashing blades and flying missiles, getting hurt wouldn't be good. Someone like this ID, even if defeated, still eats well, sleeps well, and lives without worry for life. But retail investors are different, so remember these points:

Three Disciplines for Retail Investors

I. Only use surplus money to participate in the market

II. You must wait for large-scale battles to produce results before entering — wait for large-level buy points. Even if this ID loses and the traitors and foreigners win, they will ultimately push the market up anyway. In that scenario, the seeds of revenge can still be preserved. "Though only three clans of Chu remain, Chu can still destroy Qin" — where there are seeds, there is hope.

III. Absolutely refuse to carry the sedan chair for traitors and foreigners at high prices. Hone your skills, start from the bottom, and gradually drain every last drop of their blood.

When the market is controlled by traitors and foreigners, there can be no financial security. This requires the joint effort of China's retail investors, major shareholders, market makers, funds, and regulators. To disrupt the rhythm of the traitors and foreigners, this ID can be sacrificed — but I hope it can be exchanged for the joint effort of China's retail investors, major shareholders, market makers, funds, and regulators, united against the outside. China's capital market can only be ruled by the Chinese people.

Finally, composing a "Man Jiang Hong" (The River All Red) at the screen, to address the nation.

Man Jiang Hong

Chán Zhōng Shuō Chán Eternal sky, today as yesterday — a single dawn of wind and moon.
Where does one dwell? Spring blossoms, summer rain, autumn geese, winter snow.
A hundred generations of splendor all turn to dust — a thousand rivers drained, nothing left to say.
Ask the world: how many dreams ground away, how much heroic blood?

Stars spin their orbits, heaven mends its rifts; mountains crumble their pillars, rivers flood their banks.
Storm the divine palaces and ghost halls, the phoenix nests and dragon lairs.
A furious sword pierces the clouds, startling the vast cosmos; wild waves swallow the sun, a lone raft rides crosswise.
Through life and death, let karmic fire cleanse heaven and earth — all rejoice together.