At the beginning of the year, it was expected that the US stock market would undergo a moderate adjustment (around -15%, not so precise), with core reasons such as the pinned tweet https:// ((x.com))/qinbafrank/status/1883689330235134429? S=46&t=k6rimWSEbo2D2TXolYcM-A discusses the need to adjust and digest high valuations, as well as the economic downturn caused by the successive impacts of policy uncertainty (and even the current weak economic data is due to conservative and cautious investment and consumption by businesses and residents under uncertainty). 1. Why didn't you look at bigger level adjustments before? Because in history, when the US stock market exceeded -25%, it was accompanied by huge macro shocks: either an unprecedented financial tsunami; Either it's a once-in-a-century pandemic impact; Either it's a 40 year high in inflation and the fastest pace of interest rate hikes. In my opinion, the biggest macro risk this year is the market panic caused by the uncertainty of policies after Trump took office. https://((x.com))/qinbafrank/status/1874686960691995069? As discussed earlier this year, the pain of policy is the risk of the market. As for the various risks that various parties are calling for now, they largely come from this: policy uncertainty and the negative effects of policies. So I said early that Trump is an independent variable, and the economy and the Federal Reserve are dependent variables, However, it should also be noted that Trump's policy is primarily "the United States first". It has been talked for a long time that they do not think that the Trump Club will achieve its policy objectives 100% (the effect will be discounted), but it is still a big probability to achieve about 70%. Now it is equivalent to the policy playing period and the opponent's response period, and the effect still needs time to manifest. And as policies continue to be introduced, uncertainty is decreasing rather than increasing. When the market anticipates all the worst and most pessimistic outcomes, it gradually desensitizes to policies. 2. From the perspective of market indicators The CNN Panic Greed Index has previously reached an extreme state of panic, but the Financial Stress Index is still at a low level. In the past two years, the US stock market has undergone two moderate level adjustments and one minor level adjustment. As the market enters an extreme state of panic, it corresponds to a surge in the Financial Stress Index, which means that there are various risks in the overall financial market at that time. At least this time, it has not been seen yet, and it is more likely due to excessive pessimism in emotions. Extreme pessimism is excessive, but even a slight reversal may not necessarily occur. Extreme pessimism can also persist for a period of time, so buying on the left side at a low price is not a problem. If you patiently wait for the risk to clear, marginal improvement is also not a problem. 3. Check if the adjustment of the US stock market is in place I didn't think it was a big foam, but it was really expensive. Expensiveness is the problem, mean regression needs to kill valuation. Taking Nvidia as an example, currently Nvidia's PE TTM has been digested to a level similar to that at the end of 2022, and its P/S has also been digested to the lower edge of the P/S center in the past five years. If we continue to move forward, if the rolling P/E ratio reaches just over 30, it will basically return to the level at the end of 2022, and some funds may feel that the cost-effectiveness has come out again. Many people say that Deepseek falsifies Nvidia, but in fact, all Deepseek optimizations are based on Nvidia's architecture. The Jevons Paradox of the Industrial Revolution era will still play a role. 4. What marginal improvements can we expect in the future? The tax reduction policy in the budget bill has been passed to reduce the burden on enterprises; Regulating and stimulating innovation vitality; The pace and intensity of policies are becoming increasingly clear, and the market is becoming desensitized; The weakening of the economy (the weakening of the service industry does not necessarily lead to weaker future inflation) has forced the Federal Reserve to cut interest rates again; Possible cessation of balance sheet tightening in the coming months (as mentioned in the Federal Reserve's semi annual monetary policy); 5. What if we further break through? If Trump's repeated efforts and the subsequent weakening of economic data lead to a further sharp decline in the market, then the funds from the previous sharp reduction in positions can be bought more vigorously. The principle of "opportunities fall out" should always be effective.