[Red envelope] Do you choose two seconds of pleasure or a stable life?

Faced with an aging streetwalker of average looks, why would he get impulsive over those two seconds of pleasure? [Tao Gu Ba]

We were all puzzled, but the fact is that my former colleague lost his job over it.

Is it worth losing a job for a few seconds?

I don’t understand, but when I think about the financial market, it all seems reasonable.

There is a rational man hypothesis in finance, assuming all investors are rational!

Unfortunately, the facts may be exactly the opposite!

Do pharmaceuticals have high expectations? Does the old stock have high expectations?

But the market has been pulling the old stock in recent days, and some funds have even been rolling out of the tech sector.

Where is the reason?

Because Meta announced a few nights ago that it would rent out its computing power?

Because the market saw Meta renting out computing power, it assumed that computing power is oversupplied and that capital expenditure might even be cut—that's how a ghost story begins.

But in reality, Meta is renting out computing power from its older cards, and it has already placed orders for new computing power combinations at a higher cost!

For example, a company has an old factory, but its equipment and space are outdated and insufficient. So it decides to rent out this old factory and open a new one elsewhere.

In this case, can we say the company has no orders and is going under?

Interestingly, this is only a rental, not a sale, because they are worried that one day computing power will be so tight that they are beyond redemption. Then, based on the lease contract timeline, they can reclaim these older computing cards as a flexible measure.

It is worth noting that this week, due to the influence of this ghost story and the end-of-June fund sell-offs, the market has been disappointing, even exceeding the expectations of big capital!

However, the logic of big capital is not wrong.

Drop first, then recover. As long as there is no high-level black swan in the market, this kind of situation will be made up!

If it’s a capital problem, the market will naturally punish it. But if it’s a market problem, the market will naturally compensate!

If your thinking is correct, just wait for the rest.

How can the market let big capital lose money?

So, how should we view the upcoming market?

I am a bit uncertain about the indices here, because the old stocks are being pulled in a messy way.

During the session, banks, baijiu, and other old stocks turned green at one point.

By the close, they flowed back, and innovative drugs also picked up.

But do these have a future?

The simplest transmission chain of capital is from investment to company, from company to revenue, and from revenue to consumption.

We are still in stages one and two, and consumption power is obviously lagging behind.

So-called value investing uses historical dividend data to argue that the current share prices of old stocks can be recouped through dividends in ten years.

But this ignores two things:

First, if consumption does not pick up, can these companies still pay out so much in dividends as they did in previous years?

Second, there are more consumption options now. Emotional robots have recently been launched on a large scale. In the new era of consumption, will consumers choose an emotional robot for companionship, or continue to drown their sorrows in alcohol?

The old stock narrative, under the operation of some capital, might continue for a while, but it can only be viewed as a short-term play; it has no practical significance as a mid-term position!

Here, use Xinlitai as an anchor point. When Xinlitai ends, this round of old stock rally will basically be over.

Correspondingly,

There will be another round of rally in the AI sector—this is the consensus among big capital.

Accordingly, there might be a period of adjustment here, but it’s unclear how many days.

The main reason for this adjustment is that the original market logic was to pull up at the end of the month, then sell to the funds that have style drift and need to rebalance at the beginning of the month!

But the actual trend in recent days is that no one wants to take the bait, so competition disappears.

If one fund actively takes the position, other funds will have to follow—even if they all lose money together, it’s better than the risk of that one fund profiting and surpassing others in rankings.

However, if no fund takes the position, they are all happy to lie low and avoid competing.

But without fund support, the market might need to adjust for a while.

So, for the next period, the thinking is: consider pulling out of high-level tech stocks (except those that are not afraid of mid-term adjustments), but actively switch to low-level positions and ambush targets that quant funds might push up!

In other words, the driving force of the market has shifted from funds to quant institutions!

This point deserves special attention!

Besides that, we need to unite. If we want to lure quant funds, we certainly need to take some action, right?

How can this level of cohesion be enough?

On the weekend, it’s all about clicking likes, pushing oils, getting tipsy, and trusting big capital! Shengyi Technology and Honghe Technology have both been pulled up; big capital’s thinking always leads the market!

In hindsight, we are all puzzled.