As we look back from June 2026, the market has charted a more complex course than many anticipated, including prominent investor Li Bei, who made several definitive predictions for 2025.
On June 21st, a letter from Li Bei, founder of Banxia Investment, to her investors circulated within financial circles. In it, she addressed a single-week net value drawdown of 15% for one of her products. She candidly attributed the significant fund correction to substantial declines in equity holdings across four sectors: energy, real estate, consumer goods, and building materials.
Data from private fund research firm Simuwang shows that as of June 18th, the net value of Li Bei's flagship product, "Banxia Wenjian Hunhe Hongguan Duichong," had fallen 24.5% year-to-date. Over the same period, the CSI 300 Index gained 6.73%, while the ChiNext 50 Index surged by 34.96%.
Gold: A Nuanced Outcome
Li Bei's bearish stance on gold intensified from the fourth quarter of 2025. Her reasoning was clear: first, gold's valuation premium had reached historical extremes; second, the Russian central bank, the world's fifth-largest holder of gold reserves, began selling in 2025, suggesting a shift from the two-decade-long bull market driven by central bank accumulation.
In an interview, Li Bei stated she had completely exited her gold positions by the end of 2025, when the spot price of London gold was around $4,000 to $4,500 per ounce.
The subsequent three months did not validate her call. On January 29, 2026, London gold hit a historic high of $5,598.75 per ounce, representing a gain of roughly 20% to 30% from her exit price. "Li Bei sold too early" became one of the most discussed critiques during that period.
However, the story did not end there. Since the January peak, gold entered a sustained correction, falling back to around $4,100 by June, a drawdown of nearly 30% from the high. Goldman Sachs, in June, revised its year-end 2026 gold price target down from $5,400 to $4,900, adopting a stance of "tactical caution."
Real Estate: The Major Rally Awaits
Real estate is a sector Li Bei has been publicly bullish on and held significant positions in. At an analyst conference in November 2025, she posited a "once-in-a-decade opportunity" in property. Her logic chain was: the supply side had undergone a four-year consolidation, with over 95% of developers losing the ability to acquire new land; leading developers were achieving net profit margins exceeding 10% on newly acquired plots; and an inflection point could arrive within six months.
The market offered a preliminary test in January-February 2026. Transaction volumes in many cities showed a temporary rebound, leading to a "small spring" for the property sector. The net value of Banxia's product reached a historic high of 8.618 yuan at the end of January. In early February, Li Bei published a series of articles titled "Confirmation of the Major Turning Point in Chinese Real Estate," declaring the inflection point had substantively arrived.
Yet, data from the following months suggests a larger-scale recovery is still pending. According to the National Bureau of Statistics' data on price changes for new and existing commercial residential buildings in 70 major cities from March to May, prices in first-tier cities showed month-on-month growth, while second- and third-tier cities continued to experience month-on-month declines.
China Post Securities noted in a research report that, based on NBS data, the real estate sector overall continued a pattern of "weak recovery" from January to May 2026. Core indicators remained in negative year-on-year growth territory, though signals of marginal improvement were gradually emerging. The data trend indicated a clear characteristic of "sales recovery leading, investment lagging."
The year-on-year declines in sales area and value narrowed from -13.5% and -20.2% in Jan-Feb to -10.8% and -13.5% in Jan-May, suggesting a slow recovery in demand under ongoing policy optimization. However, the year-on-year decline in completed real estate development investment widened from -11.1% to -16.2%, reflecting persistently weak investment willingness among developers and indicating that a full recovery in sector confidence will take time.
According to Li Bei's latest assessment, three scenarios are possible for real estate going forward. The first is that housing prices continue their differentiated decline of the past two years without systemic improvement. However, two other outcomes are more likely: either mortgage defaults force the introduction of powerful policies, akin to a "September 24th moment" for the property sector; or, in the absence of forceful policies and with only moderate measures, prices oscillate and diverge near the bottom before beginning a slow upward trajectory at some point in the coming two years.
AI: The Key Performance Variable
Addressing market skepticism, Li Bei remarked, "A high-volatility product has drawn down just over 10% from its peak, and a low-volatility product has drawn down by a single-digit percentage. I don't see what there is to mock."
While net value volatility is commonplace for private fund products, the extreme profitability seen in the technology sector this year has cast a shadow over the relative performance of many non-tech strategies, even those with controlled drawdowns.
Technology, particularly AI, became a critical differentiator for performance in the first half. It wasn't just Li Bei; Lin Yuan, another investor known for his caution towards AI, also underperformed this year. As of June 18th, the Lin Yuan Investment No. 21 fund he manages was down 29.53% year-to-date. In contrast, Dan Bin's firm, Orient Harbor, employing an "All in AI computing power" strategy, saw most of its products gain over 20% for the year, with dozens hitting new net value highs.
Li Bei expressed no regret over her stance on AI and advised investors to approach it with caution. In her letter to investors, she wrote, "If any investor intends to use the funds [from redeeming Banxia products] to chase AI, even if you criticize me for saying so, I must advise: please be extremely cautious."
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