The market has experienced some volatility recently, influenced by fluctuations in US, Japanese, and South Korean stock markets, yet A-shares have demonstrated relative resilience with stable indices overall.
The Shanghai Composite Index falling below the 4000-point mark may impact market sentiment to a degree, while previously popular sectors like semiconductors have seen significant recent swings, potentially highlighting investment risks.
The current technology-driven bull market has persisted for over a year. Since early last year, I have maintained that this tech theme would be central to the ongoing slow-bull market, representing a key area for investor focus, and proposed six major investment tracks: semiconductors, computing power and algorithm infrastructure, humanoid robots, commercial aerospace, solid-state batteries, and biopharmaceuticals.
Over the past year, these six sectors have experienced successive waves of growth, transitioning from earlier high-flyers like semiconductors and computing infrastructure to the humanoid robot sector, which gained momentum in May, validating this perspective.
These six tracks represent different beneficiaries of the AI era: semiconductors are the "pickaxe sellers" of AI, the first and most prominent beneficiaries; computing infrastructure is the "utilities" of AI; humanoid robots represent the best application scenario for "AI + consumer"; commercial aerospace signifies AI's application in space; solid-state batteries represent a breakthrough in energy storage technology, potentially replacing lithium batteries as the mainstream form upon mass production; and biopharmaceuticals represent AI's application in healthcare and drug development.
These six sectors constitute the primary investment narrative of the technology bull market.
Recent significant adjustments in the US stock market, particularly high volatility in the Nasdaq, have occurred. While it's premature to declare the tech bubble burst, such large swings indicate growing investor divergence.
Bullish investors remain extremely optimistic, while bears are cautious; such significant divergence inevitably leads to heightened volatility.
In contrast, the humanoid robot sector has recently received positive catalysts: Unitree Robotics has passed its listing review and is poised to become A-shares' first humanoid robot stock, while Tesla's new robot, Optimus V3, slated for release in July-August, fuels market imagination.
With mass production of humanoid robots on the horizon, this remains a sector worthy of attention.
Given recent pullbacks in tech stocks and rebounds in traditional blue-chips, opportunities may arise in undervalued and high-dividend stocks.
However, it's not yet confirmed that a market style rotation has occurred; the sustainability of this rebound requires further observation.
Market trading concentration is high, with the top 5% of stocks by trading volume approaching 50% of daily turnover.
Historically, the A-share market has seen this concentration exceed 45% five times, leading to style rotation twice and bull-bear transitions three times.
The current situation may differ due to significant divergence in economic fundamentals: traditional industries face operational challenges, while emerging industries attract capital and perform strongly.
Given this fundamental divergence, it is reasonable for capital to concentrate in a few technological innovation sectors.
Therefore, this cycle may set a new record for trading concentration, though the risk of a style shift or bubble burst remains unconfirmed.
For investment allocation, a relatively balanced approach is advisable. Previously, I suggested a strategy of "technology in one hand, HALO assets in the other," offering both offensive and defensive capabilities.
Portfolio allocation should be controlled appropriately—neither fully invested nor completely in cash—to maintain a better mindset during market fluctuations and manage short-term volatility.
From a medium-to-long-term perspective, the technology theme remains the dominant market expression.
Significant disagreement exists regarding high valuations of tech stocks. Cautious investors, like Berkshire Hathaway's Warren Buffett, avoid bubbles. At this year's shareholder meeting, he likened the current US market to a casino next to a church, where the casino is more attractive, drawing most people in, reflecting his consistent caution.
He significantly reduced equity exposure as US stocks climbed, holding only about 40% in stocks and approximately $400 billion in cash.
Buffett offered a vivid analogy for bubbles: their formation is like a dance party where everyone drinks champagne and dances, unwilling to leave, knowing everything turns to mice and pumpkins after midnight, yet everyone wants to leave at 11:59 PM.
It is this greed that prevents many from truly exiting at the peak. He humorously noted the lack of a clock in the room telling the time.
Later, after attending the Berkshire meeting and visiting Wall Street institutions, executives humorously stated they advise clients to "dance near the exit." This illustrates the conflicted psychology of many investors: hoping to embrace the bubble for returns while fearing the risks of its burst.
Therefore, while participating, one must watch for signs of a potential bubble burst to prevent significant losses.
Persistently high international oil prices, exacerbated by potential disruptions in the Strait of Hormuz, adversely impact global inflation, particularly influencing Federal Reserve monetary policy.
The new Fed Chair has opted for a "balance sheet reduction + delayed rate cuts" approach, with some investors even anticipating potential rate hikes by year-end, negatively affecting global capital markets.
However, delayed rate cuts appear more likely currently; rate hikes would significantly impact US stocks and economic recovery, making them less probable, though investor concern persists.
Regarding impact on A-shares, monitoring US tech stock movements is key. As long as US markets maintain relative stability overnight, even with some adjustment, the impact on A-shares is likely limited.
However, a sudden sharp decline in US stocks, particularly a single-day Nasdaq drop exceeding 10%, would warrant caution as a potential bubble burst signal—a current risk to monitor.
From a medium-to-long-term view, this slow-bull market is supported by favorable policies and the significant shift of household savings into capital markets, suggesting it will not end abruptly and may continue for two to three years or longer.
During market fluctuations, investors are advised to maintain confidence and patience, seizing opportunities by investing in quality tech leaders and fundamentally sound blue-chip companies.
Federal Reserve policy must balance inflation, economic growth, and US stock market performance. With the US mid-term elections approaching in November, a significant market decline beforehand is undesirable.
Recent market dips have prompted supportive comments from former President Trump, while figures like Elon Musk and Jensen Huang have expressed optimistic views on AI technology to bolster investor confidence and prevent a tech bubble burst.
These are noteworthy signals. Before year-end, the likelihood of a US AI tech bubble bursting appears relatively low, as various parties actively work to maintain market prosperity, and these AI companies possess substantial orders or earnings to support the market outlook.
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