Published on the morning of January 1, 2024, regarding the outlook for A-share investment in 2024.

Speculations represent only personal opinions, bold assumptions, and careful verification.

The market is dynamically changing, with some things dynamically correcting, respecting objective reality.

1. Index trend, high first and then low.

Many people must be very concerned about the trend and direction of the index.

A bold guess, the first quarter of next year will have a good market, and the second, third, and fourth quarters will be a bumpy bottoming process.

The main reason for such a guess is the current market environment.

All the major broad-based indices in the entire market were three consecutive bearish in the second, third, and fourth quarters of 2023, which is very rare.

Apart from 2008, there are very few cases of continuous decline without any rebound.

This also indicates several issues, one of which is the lack of incremental funds in the market, lack of confidence, and insufficient response to policy stimulus.In other words, the capital is actually very pessimistic, and the incremental capital is unwilling to enter the market. Under such circumstances, it is highly likely that there will be new lows.

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However, the reason why there is a high probability of a market trend in the first quarter is that after a continuous decline, the market sentiment needs to be released.

As for after the sentiment is released, it is only possible that it will return to the process of further bottoming out. In terms of the long cycle of time, it may still need to be polished, including the strength of policies and the extreme values of valuations, which all pose challenges and require further confirmation.

2. Technology themes continue to soar.

There are always industries, sectors, and concepts that survive in the market.

In recent years, from the proposal of information creation, to the popularity of AI, and then to the high-profile of Huawei, the market has been making a big fuss around technology themes.

After all, technology has the imagination and imagination space, and most other sectors do not have this kind of space.

That is to say, if the capital wants to speculate on a meal market, it is highly likely that it will still revolve around technology themes.

Under such circumstances, the sectors that can soar must also be within the category of technology.

Now it seems that the attitude of the capital is to speculate on the new rather than the old, so it is highly likely to avoid the previously speculated sectors and look for new hot spots.For instance, the MR sector that was hyped at the end of 2023 is likely to be one of the key main themes at the beginning of 2024.

The opportunities in the technology sector brought about by technological advancements overseas will continue to be the main theme.

The elasticity of technology stocks also provides speculative capital with ample reasons and space to operate, and the opportunities to make money are also in these sectors.

There are opportunities in other sectors, but the elasticity won't be very good, the stories won't be easy to tell, and the space will be relatively limited.

3. Value investing is at a low point.

Perhaps many people believe that the bottom of value investing has arrived because the valuation is already at a low point.

But I still have reservations about this.

The core of value investing is whether the future performance expectations can show a good increase, rather than the current valuation level.

When the performance expectations start to decline, the underlying logic of value investing changes.

The reason why value investors have been losing money in the past two years is, on the one hand, the valuation was too high in 2021, and on the other hand, it is the impact of the economic environment on this part of value investing, which has affected the underlying logic.It's as if, 10 years ago, the lowest price-to-earnings (P/E) ratio of the Shanghai and Shenzhen 300 was 8.5 times, but will the lowest P/E ratio of the Shanghai and Shenzhen 300 be 8.5 times 10 years later?

The GDP growth rate at that time and the current GDP growth rate are no longer comparable.

Therefore, many things may need to be logically changed. If the market really wants to kill valuations, there is still room to go down.

Since the market wants to correct the so-called value investment logic, it is entirely possible to kill a new low in value.

After all, only when a new low in value appears can there be a great investment opportunity, and the logic of value investment can be reshaped.

4. Cyclical industries, turning around in adversity.

There are many cyclical industries, and it can be said that everything can be a cycle.

The cyclical industries referred to here mainly have two directions.

The first direction is the consumption cycle.

The consumption data for 2023 is actually far from expectations, and the CPI data even has the suspicion of deflation, which can be described as a continuous defeat, so much so that many people are talking about the issue of consumption downgrading.Stocks related to consumption have also seen a decline in performance.

Consumption is starting to decline, but this situation will not last long. After all, the Gross Domestic Product (GDP) is on the rise, and the total amount of currency is also increasing. Market confidence will not be insufficient for long, and consumption will eventually recover.

The large consumption cycle in the stock market has already peaked in 2021, which is ahead of schedule. So, in 2024, after four years of adjustment, the probability of bottoming out is actually very high, and it will hit bottom ahead of the entire economic cycle.

The second direction is the commodity cycle.

In recent years, many bulk commodities have also entered a counter-cyclical phase, especially scarce metals, which have been continuously declining under the new energy cycle.

When the price of lithium carbonate falls from 50 to 10, the counter-cyclical phase is basically coming to an end, but bottoming out requires a certain amount of time.

2024 is a very good time to complete the bottoming out of such bulk commodities.

There must be the most difficult times in the entire cycle, but after the reversal of the predicament, it will inevitably be a smooth road.

5. The IPO system is about to change.

The last point is about the IPO system.

(Note: The original text ends abruptly, so the translation also ends there.)If we delve into the details, it's about the Science and Technology Innovation Board (STAR Market) and the Beijing Stock Exchange (BSE).

In the first year of the registration-based IPO system, it can't be said to be a failure, but it's definitely not a success.

Especially for those companies on the STAR Market that went public with losses, the vast majority have one problem or another.

The market has made an "experiment", and some listed companies are indeed here just to raise funds.

Everyone has lost confidence in the IPO, without fresh high-quality enterprises, the market trend will become problematic.

The market has already realized the problem with the IPO, and there have been changes in how to reform the IPO system.

Firstly, the BSE will no longer follow the routine of transferring from the New Third Board, but some innovative enterprises will join the ranks of the IPO.

That is, there will be a significant change in the IPO of the BSE, but there are no specific standards yet, that is, the admission threshold.

Secondly, the review system of the STAR Market will be significantly stricter. After all, there are so many companies in line for listing, and survival of the fittest is crucial.

That is, the quality of the companies listed on the STAR Market will also undergo significant changes. At least in terms of performance, the proportion of underperforming companies will be less.The IPO system is the root of the market and also the key to changing the market structure. After all, the source of the financing market is the IPO.

(Note: The original text has some redundancy and lacks a complete sentence structure, so the translation provided is a paraphrased and more fluent version in English.)