The A-share market of 2023 has already come to a close.

The ups and downs of this year naturally need no elaboration, as every shareholder has a clear understanding in their hearts.

Setting aside the Shanghai Composite Index, the entire market has been high in the beginning and low at the end. It can be said that since the end of January, it has been falling for a whole year without any improvement.

The SSE 50, CSI 300, have even experienced a three-year consecutive decline on the annual line, which is unprecedented in the history of A-shares.

But as the saying goes, after a period of decline, there must be a period of prosperity. Many funds have started to have new expectations for the market in 2024.

After all, the probability of the market experiencing a continuous four-year decline is extremely low.

However, there are also some voices that are skeptical about the future of the A-share market, because many problems of A-shares have not been clearly resolved.

That's right, the existence of many problems in A-shares themselves is a main reason for the continuous blood loss and the sustained bear market.

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This is also the direct cause that led to a large number of policies being introduced in the second half of 2023, but they were unable to reverse the situation of A-shares.

The market has made a summary of these reasons.Firstly, the implementation of the IPO registration system, the over-raising of new shares, and the market's bloodletting.

The implementation of the registration system was originally a good thing.

However, it was launched in a very hasty manner, and many issues are worth discussing and resolving.

When the registration system became a bridge between listed companies and securities firms, various problems followed one after another.

They are in the same boat.

To make more money, securities firms have assessed the stock prices very high, and the issue price-to-earnings ratio is also very high.

This behavior directly led to the inflated prices of many IPOs, resulting in over-raising, and to a large extent, drained the market's liquid funds.

In the end, the listed companies are full of benefits, while investors are taking over at high levels and have to accept losses.

In addition, the number of IPOs is increasing, and the wealth creation plan is not uncommon, making the entire IPO seem a bit murky, and the problem is not small.

The raised funds are used for financial management, debt repayment, and large dividends before going public, and such things are not uncommon.The market's call for a temporary halt to IPOs naturally follows.

Secondly, major shareholders engage in various tricks to cash out their stakes, exploiting loopholes in the rules to make money.

To reduce their holdings, major shareholders have racked their brains.

Mature markets permit the reduction of holdings, but it is crucial that such reductions are reasonable, compliant, and legal.

Utilizing market value management for the reduction of holdings inherently poses certain problems and risks.

Under the new rules for reduction, the market's rules for shareholding reduction have undergone significant changes, but they still cannot resolve some practices of deceit and evasion.

For instance, divorces and property divisions between spouses can lead to the need for a large amount of capital to take over, thereby further causing the stock price to fall.

There are also major shareholders who make money by short selling, directly crashing the market, and they are constantly coming up with new tricks to cash out indirectly.

Major shareholders have many tricks, all focused on the issue of cashing out. Only by resolving these issues can there be a way out.

If the market only focuses on drawing blood and does not value giving back, then such a market will sooner or later drain the water, ending up with no liquidity at all.Thirdly, the increase in quantitative funds and the frenzied "mowing of leeks" (a term used to describe inexperienced retail investors being taken advantage of) in trading behavior.

Quantitative funds have also been a significant issue in the past two years.

In fact, quantification itself is reasonable, legal, and compliant, and has its meaning and value, and is one of the main themes of the future.

However, the rapid expansion of quantitative funds, along with the quick and short-term trading model, is a poison for retail investors.

The efficiency of quantitative funds in mowing leeks is too high, which is also the main reason for the market often being stagnant.

Controlling the scale of quantitative funds and the frequency of quantitative trading is of great value to the system.

Otherwise, at the current pace of development of quantification, if not restrained, it will soon become a market where only quantification can survive.

The stock market cannot be full of arbitrage funds; there must be more long-term plans and actively bullish funds entering the market.

Fourth, malicious speculation and insider trading, short-selling behaviors are not uncommon.

Insider trading is an eternal topic in the stock market, and there is no way to completely curb it.The investment market, by nature, is based on profiting from information asymmetry.

However, malicious hype and rampant short-selling activities can be intervened and stopped.

These behaviors can easily lead to the collapse of the market mechanism because ordinary retail investors can only go long, which is very disadvantageous.

An unequal market with increasingly unfair participation will eventually lead to no one's participation.

Under controllable conditions, cracking down on insider trading and preventing malicious hype and short-selling is what regulation should actively do.

These stumbling blocks still appear on the way forward, which makes it difficult for A-shares to move forward.

The above issues are all reasonable, but in fact, they do not touch on the essence.

What A-shares really need to change is the punishment system, which is the essence, the key, and the core.

Those who go public with fraud need to be severely punished.Those who violate the rules and reduce their holdings need to be severely punished.

Insider trading requires strict and heavy penalties.

Malicious short-selling requires severe legal penalties.

Strict handling is the key to the problem. Incidents where those who profit from illegal activities in the hundreds of millions are only fined a few million should not happen again.

Additionally, should the mutual cover-ups within the chain of interests also be severely cracked down on?

The A-share market may not have been born to make money for retail investors, but rather for financing.

However, if it only knows how to cut leeks (a metaphor for exploiting inexperienced investors), then in this era of transparent information, there will be no room for survival.

There are ultimately only two paths for the market.

The first path is the depersonalization of retail investors, with institutional funds playing on their own.

If the market collectively only cuts leeks from retail investors, there will eventually come a day when there are no more leeks to cut.It is evident that the number of retail investors entering the market in the past five years has actually decreased significantly compared to the previous period.

Instead, a portion of the public has flocked into the stock market through the channel of funds.

However, in the more than two years, these funds have also left the market bruised and battered, it can be said that the overall number of retail investors in the market is gradually decreasing.

So the ultimate outcome is that the main force cannot harvest the "leeks" (a term used to describe inexperienced investors), because there are no more "leeks", they can only play by themselves.

At that time, the market will naturally correct itself, and a bull market where institutions gather together again may also come.

The second point is to give returns to retail investors, allowing the "leeks" to survive in the market.

What the retail investors want is not for the stock to rise every day, but they cannot always be harvested, making them lose money.

If it is understandable that junk companies are retreating step by step.

But those core assets, regardless of the performance, continue to fall, which the retail investors cannot bear.

When value investment is far away from the entire A-share market, then the bull market cannot set sail.A market without value investment cannot sustain a bull market, as it lacks even the most fundamental foundation.

No bull market can be entirely built on bubbles.

Therefore, fundamentally and at its core, if the systemic issues can be resolved, then the A-shares market can set sail in 2024.

When the penalty system can be thoroughly improved, perhaps the A-shares market will usher in the third round of a super bull market.