Lee thunder: from the view of investment Logic -- lose one's temper

Lee Thunder (Hai Tong Securities vice president and chief economist)

Today's investors are increasingly concerned about the macroeconomic data, whenever the data were made public, it will lead to explosive interpretation of, or happy or sad. In this regard reflects the rationality of the investors in improving the investment philosophy of the mature markets in close proximity, but on the other hand, it also brings a number of questions: data reflect past investment to buy the future. Such as the April 13 announced first quarter GDP data, and investors should be thinking about the second quarter and full year or future economic trends. This is like the relationship between lightning and thunder, the propagation velocity of light is faster than sound, so we are always first see lightning, and only hear the thunder, the occurrence of the data such as lightning, and the publication of the data is considered a thunder. There are a lot of people hear the thunder scared to death, fear of being Ray hack, but in fact, when you can hear thunder, in fact, have proven that you are safe. Threat to human life, has been hit by lightning, thunder is already past.

Believe that the knowledge of the lightning, we know everything but understand normalized understand, Scared or not, perhaps because the sound and light compared to the former is more shocking people. Dual function for both physiological responses and rational thinking, it is still difficult to overcome a lot of irrational panic. Similarly, the investment behavior of seemingly rational, but the emotional impact is very obvious, for example, the valuation is low, the growth of good varieties should be ready to buy, but the timing of investors purchased often depends on two factors, prices rise, the second is when someone recommended. In addition, the herd mentality led to a typical performance of investment in non-rational, the so-called herd behavior led many investors often chase sell, countless losses. Therefore, the investment behavior is actually between the rational and emotional tangle, greed and fear go hand in hand. Such as able to overcome the emotional distress should be able to improve investment performance.

But no matter lightning or thunder, which did not constitute the best basis for investment decisions, because the investment focus on the future, while the thunder on behalf of the past, lightning but that now. To this end, the main basis for research and anticipation to the future in order to become investment decisions. This requires a test of investors' analysis tools, data acquisition channels and analytical skills, is Buffett so successful, and most investors are running to lose market reasons. Some would say that to predict the future, also need access to the data of the past. Remark, which we need to further deepen the study of the causes of past data, authenticity and context.

Macro data, for example, the central bank announced the monetary data relative to other data accuracy is higher, and economic aggregate data reported by the subordinate layers relative error will be larger, such as per capita disposable income, total investment in fixed assets larger errors. Therefore, investors respond to the data are generated on the basis of reliability and up the chain need to understand the relationship, etc., that is, not only to filter the noise (thunder) interference on investment, but also to analyze the causes of and influence of the event (lightning), and the future direction.

In the main factors influencing the market trends, not only changes in the economic data, as well as countermeasures to cope with fluctuations in the economy, that is policy. From the historical trend of China's stock market and economic trends are not large, but the larger policy changes related, such as the end of 2008 to mid-09 GDP growth all the way down, but the Shanghai Composite Index rose nearly doubled, rising main driving force is the Government has proposed a two-year 4 trillion investment plan, so the economic downturn means that the policy will be good, and vice versa. Two and a half in the second half of 2009 to 11 years, the economic growth rate of its advance, the stock market has become one of the worst of global stock market performance. Visible, based on economic data to grasp the investment opportunities in China is basically a failure of the majority.

A higher level of China's economic growth this year is a foregone conclusion, even in the second quarter will bottom out, it is difficult to have high growth opportunities, economic growth next year or lower than this year. So, even if you are able to predict the quasi-economic data, the logic of the stock market a sharp rise in economic growth does not seem to set up; again and investment-led stimulus is unlikely, so the policy logic seems not valid. This is known as history will not repeat. However, if the transition from the economic reform and innovation, sustainable growth perspective, the risk of high economic growth led to the bubble seems to be resolved in the past, market performance is not and should not lag behind the United States and other developed countries. Therefore, the market opportunities tend to come from beyond the consensus expectations of part from the logic in the unusual addition to the analysis routines.