Listen to the recent sounds of the market.

The SSE 50 has risen.

The A50 has risen.

Stocks with "China" in their names have risen.

Banks, insurance companies, and securities firms have risen.

Micro-cap stocks have plummeted.

Value investing is about to make a comeback!

After 21 years, the market no longer truly speaks of value investing.

The source of this recent sound comes from the outline of the "Nine National Principles," as well as the market's reaction on the trading floor.

The market once again abandons junk stocks and huddles around core assets.By the end of January, the historical peak of micro-plate stocks was repeatedly mentioned, but it seems to have been forgotten in February and March, and reality once again hit these people's faces hard.

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Is value investing about to make a comeback?

Should we once again tightly hold various big white horses?

From 2019 to 2021, the Shanghai and Shenzhen 300, the Shanghai 50, all had a doubling of the market.

Various big white horses have risen 5 times or 10 times, and is the opportunity coming again?

Value investing is on the way back, but this comeback is not so urgent.

In simple terms, there is still a long way to go before true value investing.

Value investing is a concept, and the rise of stocks is also a concept, and the two are not exactly the same.

Funds buying blue-chip stocks is a direction, but this direction is not equivalent to value investing, which is also two different things.Value investing refers to the practice of buying into a publicly traded company when it is undervalued and then selling once it returns to a fair valuation. Of course, if there is no bubble in value and the company is in a virtuous cycle of growth, it is possible to hold the investment for the long term.

The core of the profit-making effect of value investing lies in three aspects.

First, the stock price is cheap.

The essence of value investing is to buy at a low price, not necessarily to choose the right high-quality listed company. For example, Tencent and Moutai are undoubtedly high-quality listed companies. However, if you buy at the peak of the stock price, you will still be trapped, and it may take several years to break even. Although the index is currently around 3,000 points, which is relatively low, some listed companies are still setting new highs in high stock prices.

Therefore, when engaging in value investing, it is still necessary to consider whether the price is expensive or cheap. Even if the performance is still growing, the risk is very high when the price is expensive.Secondly, high industry prosperity.

Listed companies that can rise in the long term must be in the industry track with high prosperity.

Some industries are on the verge of disappearing, and listed companies are definitely struggling.

But now, there are fewer and fewer industry tracks with high prosperity.

When the Internet has also reached the mature stage, and the manufacturing industry is facing the stage of insufficient domestic demand, there seems to be little prosperity in the tracks other than the general direction of science and technology.

Manufacturing and technology upgrades are the core of the high prosperity track, but high prosperity and performance growth are not necessarily completely linked.

Some tracks are good, but listed companies can't make money, which should be paid special attention to.

It is okay to chase the wind and hot spots, but also to see whether these high prosperity can bring real performance behind.

Third, the market is loose in funds.

Finally, the market needs money for speculation, and the same is true for value investment.In a market of stockpiling game, there is no such thing as true value investing.

Because compared to earning this kind of slow money, most of the funds are more inclined to make quick money.

As a result, the stocks of value investing have also been declining all the way, and there is no significant difference from the stocks with poor performance, except that the decline is not as great.

Only a loose monetary market can drive the rise of value investing.

The market still needs a large amount of capital to enter to reflect the growth value of these listed companies.

The so-called blue-chip stocks, even if the valuation is low and meets the first point, it is difficult to meet the second and third points.

And why the current market still needs to go through a winter of value investing is also due to the second and third points.

The reasons that hinder the rapid realization of value investing are actually three.

1. The economic recovery cycle is slow.

Value investing requires the underlying economic recovery, because value investing needs to deliver performance.Almost everyone has reached a consensus that we are on the path to economic recovery.

This road will not be taken quickly.

It's like a person who has suffered a great loss of vitality and will not immediately be lively and energetic.

Economic recovery must be step by step, with a long way to go.

Reflected in the performance of listed companies, it is also the case, and it will not immediately turn from a decrease in expectations to an increase in expectations.

Especially in some traditional industries, such as large consumer goods, the road to recovery is particularly long, requiring time, and the winter will not be too short.

2. The cycle of capital entering the market is long.

The underlying reason for the rise in stock prices is not performance, but chips.

The national nine articles are very clear about the introduction of capital, but the cycle and rhythm of capital entering the market are slow.

Capital cannot be achieved overnight, and it is not possible to increase holdings in large amounts near 3000 points, and there are not enough chips.Capital is definitely spent over half a year or a year, or even longer, to select good investment targets in the market and slowly buy in.

Value investing leads to stocks that often have a bottom oscillation of 1-2 years before officially starting.

This is the process of capital taking a large amount of chips in the divergence, and the entire plate is also cleaned up.

3. High prosperity track needs to be verified.

The targets of value investment are mostly concentrated in high prosperity tracks.

The liquor that was previously fried is also because of the upgrade of large consumption, which benefits the leading Mao Wu Lu, and also belongs to a high prosperity track.

The subsequent scenery and lithium storage are also high prosperity tracks brought by the times.

In the past two years, the high prosperity track has been mainly concentrated in technology and computing power, these directions.

But these directions have not yet been well verified.

In addition to some hardware companies, which have indeed had performance answers, many software companies only have concepts and no performance.The high-growth track is a process of continuous growth and verification, and it is also the end point of value investing.

In the market plagued by internal and external troubles, these tracks will experience a fluctuating climb, not like the bull market where it soars all the way.

If we also consider the technological overtaking, there is still uncertainty in these tracks.

True value investing has nothing to do with blue chips.

Even an ordinary listed company that takes off with the wind is also a form of value investing.

Under the torrent of history, any listed company's stock that can create value and bring about a significant increase in performance can be defined as value investing.

As an investor, there is no need to limit oneself with rigid rules.

There is no need to dismiss some listed companies outright because of the so-called value.

Spend more time doing trend analysis of industries, as the great opportunities are actually in the torrent of the times.As for blue-chip stocks, they are a good investment direction, provided that one has patience and modest expectations.

The era of significant speculation on blue-chip stocks has passed, and there is a risk of adjustment for those that have risen too much.

The spring of value investing will come with a comprehensive recovery, rather than short-term speculation; the journey is still long.