"Predictions for the A-Share Bull Market, U.S. Stocks, and Cryptocurrency Trends"

The A-shares have skyrocketed, with many projects doubling in just a few days, but I think this might just be the beginning—A-shares are a low point for global capital allocation. Historically, A-shares have accounted for the smallest proportion of positions held by Wall Street institutions, but will this time be different?

Will we see a rush of Chinese investors into the stock market, with Wall Street aggressively investing in A-shares? This is actually already happening, but how long can it last?

1. What Happened in A-Shares

Everyone understands the policies, but many are unclear about their impact.

Essentially, the government is engaging in unlimited QE, injecting money directly into listed companies, which can only be used for stock buybacks, along with things like stabilization funds. It may seem complex, but in simple terms:

The government is printing unlimited money, all of which goes into the stock market, encouraging quality companies to buy back stocks for profit.

This will lead to a restoration of confidence, and a large amount of money sitting in banks will flood into the stock market.

The stock market is replacing the real estate market as the new asset pool; as paper wealth increases, consumption will be stimulated, and the economy may recover.

Thus, those who jumped in early have already doubled their investments in just a few days, while those who are slower are still frantically opening accounts.

Moreover, it’s still early because most people do not trade stocks and are not concerned about the economy. However, everyone knows how poor the domestic economy has been in recent years and how difficult it is to make money. If there is a place with a wealth effect, I believe the frenzy has just begun.

2. From an Asset Perspective

Only valuing, not predicting. For example, Moutai, when it was at 1200, had a dividend yield of about 2.5%. If it were to drop to 600, it would be more attractive than government bonds. This is a value enterprise in itself. Is 1700 too high? From the perspective of large institutional asset allocation and global asset allocation, it’s still reasonable.

However, this is no longer about asset allocation; it’s about countless Chinese retail investors waiting to enter the market. Their money is "dumb money," lacking any risk, valuation, or crisis awareness—just look at the development of the real estate market in recent years; the more it rises, the more people are willing to buy in.

Therefore, I believe the current stock market is just the beginning of a frenzy.

3. What Are the Risks

A policy bull market is most afraid of a sudden shift or cooling down, but currently, this possibility is very low—building confidence is the hardest thing in the world, and the likelihood of self-sabotage is very low.

What if? Then there’s nothing to fear; holding quality stocks is nothing to worry about. With this kind of money printing, cash is the worst asset.

4. What Are Quality Assets

When domestic funds rotate, brokerages always rise first, but this is a bear market with no money. Conversely, if it’s a long bull market, brokerages will not perform poorly. Similar to BNB, when companies make money, their stocks will keep rising.

So, quality assets in A-shares include Moutai and Dongfang Caifu, which have high profit margins—note that those who jumped in early, like Dongfang Caifu, have almost doubled. Don’t ask me if you can still buy; I don’t know.

In the Hong Kong market, there are Tencent, CITIC Securities, and Meituan—just look at how many times Meituan has risen this year; it’s impressive.

Buying quality assets during a bear market is a strategy, but it may not be possible to endure a long wait of several years. Entering the market when a bull market begins is also a good option.

5. Impact on the Cryptocurrency Market

No matter how bad A-shares are, top-quality companies will not be worse than the altcoins in the cryptocurrency market. From the perspective of large funds, Bitcoin as a special category of asset allocation is a safe bet, and ETH, as a higher-risk option, is also a good choice through ETFs.

Therefore, I believe A-shares will siphon off from the cryptocurrency market, and the profits made in A-shares will flow back into quality projects in the cryptocurrency space.

6. Impact on U.S. Stocks

In the long bull market of U.S. stocks, there are fewer and fewer low-valuation companies. This is also why Buffett directly reduced his holdings by 50%, including selling off shares in companies like Apple.

Moreover, current holders of U.S. stocks are worried about various issues, such as yen interest rate hikes, so if there’s an opportunity to find a value low point, a lot of capital will definitely switch to Chinese concept stocks.

For example, Alibaba and Pinduoduo in the U.S. stock market.

7. Unlimited QE

The last time was in 2020 during the pandemic crisis, when U.S. stocks experienced consecutive circuit breakers. We may only encounter a super crisis like this once in our lifetime, and what happened? The U.S. initiated unlimited QE, which is very similar to what is happening in China today—translated, it means: don’t be afraid, have confidence, I have unlimited bullets!

As a result, after the cryptocurrency market crash on March 12, a long bull market began, just like in the U.S.

You can analyze the garbage in A-shares, and you can also notice that many companies are reducing their holdings, and many junk companies will take the opportunity to offload. However, I believe in looking at the big trend and focusing on quality companies; this will be the second time in our lives that we are fortunate enough to witness a major country’s unlimited QE.

Interestingly, several seasoned A-share investors I know have been stuck for years, continuously losing money, but recently, as the market rose, they all sold out—actually, there are not many who truly understand investing.

I enjoy this emotional and narrative-driven bull market; I like the atmosphere of naive investors with plenty of money. I know that there is irrationality everywhere in this bull market; you just need to rush in fast and exit early—that makes you a qualified speculator.

As for the smart investor thing, I suggest doubling your capital first, and then we can talk about value investing.

8. The Ideal Scenario

Quality assets in A-shares double in price, cashing in to welcome a major correction in U.S. stocks and the cryptocurrency market, achieving a total asset increase of 5-10 times over three years.

This scenario is overly idealistic; please consider it merely a fantasy for naive investors.

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