Hexun Investment Advisor Zhang Ping: A-shares are consolidating with decreased volume, what should I do with the stocks I hold?

A-share market contraction and sideways adjustment: big finance props up the index. Behind the 4,400 stocks that are waiting to rise, what should you do with the stocks you’re holding? According to Zhang Ping of Hexun Investment Advisory, first, today’s A-share market did indeed hold the so-called 3,900-point level, but it’s more the banks’ doing.

During the session, it basically meant a broad-based pullback. By the close, there were still 4,378 stocks waiting to rise today. Only 32 stocks hit the daily limit up, and there were 20 stocks with daily limit downs. So what’s behind it? It’s affected by the U.S.-Iran geopolitical situation. A lot of investors, in the morning today, also heard Eagle’s analysis of the market ahead—especially his understanding of the Middle East region. I’m very clear in telling everyone: this isn’t over yet. It’s not that after he finished his remarks, then that’s when you start talking about it. After he spoke, first, the logic of the yen suddenly surged—its interest rate. Some people said this affected global investors’ confidence as a whole.

That is, the demand for the yen 10-year government bond auction was poor. Plus, on the Middle East side, so-called military action may continue to occur, which triggers broad volatility across assets—from crypto to stocks to bonds. But among this, the volatility isn’t necessarily particularly large. Some people say this “currency” side may not be the biggest, right? Right.

Take a look at this—up to now, the crude oil turning oil and Brent oil. Some people say it keeps pulling back. Brent oil is rising, gold keeps falling, and a plunge of 171. Why? Because of the impact on future rate hikes, right? Why? Because you see the crude oil—including the rise in some commodity prices—will that tighten liquidity? Is there such a possibility? So that’s the overall change today.

But Eagle said something behind the scenes: today the A-share market didn’t drop. It’s more due to the banks’ effort. It’s not that the market’s risk has already fallen to a stop. The market’s drop is still relatively severe. In history, we’ve told everyone that in a major upswing, it’s often easier to make new highs and in market corrections, the major downswings are especially common.

So at this point, we keep giving you these four words—do you know which four words? Yes, repeatedly emphasized: control drawdowns. Here I repeatedly emphasize the reason—A-shares are: sector rotation rises overall while broad declines move slowly; the market climbs steadily and sells off sharply. It’s very simple: the stocks that can rise in the future may not be what you currently hold. Even if you have “the right medicine,” it doesn’t mean it’s the same medicine you held back then, or that you bought at a high point. This surge may not be the same original stock either. It may have risen for a long time and only now just broke even—that’s the first point.

Second, each time a rising stock or sector moves up, it will come with new logic at the same time. In a weak environment, Eagle mentioned three jewels. First is newly listed stocks, because historically there’s no trapped-float to weigh them down, so they’re easier to trade. Second is the dividends/belief sector. Look at today’s banks, right? And including expressways. Some say there’s a third—thirdly it’s about “recognizability.” So you see, within limit-up strings, there were even medical- and pharmaceutical-related limit-ups.

Every cycle is different. Don’t think that simply holding shares can always make you money. The ones getting delisted are delisted the same way too. There are about 20 to 30 companies delisted each year, so you still need to be careful.

On this basis, you continue to control drawdowns—that’s still those same four words. How do you control it? If your overall funds pull back another 10%~20%, you need to pay attention to whether you should continue holding stocks. This has nothing to do with whether you hold 50% or 30%—it’s about the necessity to pick the right instruments. That’s the big premise.

To make money, you need to control the magnitude of every drawdown, and expand the space for every profit. So without a bigger upward move, this position should be to hold cash, not to hold stocks recklessly. If you insist on holding for short-term trading, try not to hold long-term—right? Do it only after you’re sure.

In investing, remember what Eagle says: doing profit-and-loss balance rather than chasing high means the downside is limited, and the upside is unlimited. At this time, what do you need? It’s beta volatility. We select stocks for alpha, and then look at volatility—beta—only when the alpha instrument is correct. So first we pick the stocks, then we pick the position with the potential upside space. That requires borrowing force—borrowing the broader market’s upward momentum to push your held stocks back to the main board.

What you’re seeing, including yesterday, is that the intraday wicks are filling back—this is the weakest type of pullback-and-fill. So today’s adjustment should be within expectations.

I had expected today to be a doji, but instead it closed as a bearish candle. Going forward, it will continue to maintain mostly choppy consolidation, because the situation in the Middle East not only hasn’t improved but has worsened—it doesn’t seem like things are getting easier. It should be getting more difficult. So today, domestic oil and gas also started to rebound, even crude oil drilling began to rebound.

Eagle reminds everyone: the closer you get to this stage, the more it’s a time when volatility in the market increases. Don’t just blindly hold stocks. Control your emotions appropriately. Don’t always think about long-term holding value investing. Sometimes what you hold may not truly have value.

Find it—when the right windfall and direction exist, find the direction of incremental demand in the market. Next, our first theme is crude oil—crude oil alternatives, right? New energy and clean energy. But it’s not just solar power—unless the new concept comes, such as space solar or new ideas, right? Also look to see whether there are domestic power equipment exporting themes and so on, but at the moment the timing isn’t good. Remember this: no matter how good the valuation potential is, the process of realizing that value also needs an environment and supporting conditions.

You see, before gold rose before the January surge, it didn’t rise much either, right? In the earlier phase, gold itself was rising very strongly, but gold stocks didn’t move. Why? When the environment was bad, gold stocks didn’t rise. After the environment improved, you see this gold rose—then the gold stocks rose too. It actually implied the logic of the broader market and the logic of the environment. Remember: realizing the price of value—value also needs cooperation from the environment and sentiment.

（责任编辑：王刚 HF004）

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