Chapter 930 Recovery and Collapse
Barron nodded and said:
"The US stock market is currently recovering, but it will take time for investors to regain their enthusiasm. It is appropriate to choose to go public next year."
After hearing Barron say this to him personally, Boss Ma became more and more certain in his heart.
After all, in addition to his status as the Duke of England, his investment vision has been verified countless times.
It can be said that in the past ten years, Barron's investment has been successful.
In the field of investment, he has become an investment master comparable to Warren Buffett-and in comparison, the only thing Buffett is better than Barron is that he has a longer period of continuous profitability.
But this is limited by the age gap between the two, not a sin of war.
Of course, there may be many reasons for a company to choose to go public, such as gaining higher visibility and allowing early investors to exit with profits...
But the most important purpose is to obtain the funds needed for corporate development through IPO-the original purpose of the stock market is to provide financing channels for enterprises.
Therefore, Mr. Ma naturally hopes that Alibaba can choose the right time to go public through IPO, which can improve the company's valuation and get a good stock price, thereby attracting investors and gaining more exposure.
Baron's affirmation is equivalent to giving Mr. Ma a reassurance - after all, according to the agreement between the two parties, after Alibaba goes public, Baron needs to sell the Alibaba shares he holds through DS Holdings (Cavendish Trust).
Therefore, even for his own interests, he must hope to sell those Alibaba shares at a good price, and there is no need to falsify his position.
Just as Baron analyzed to Mr. Ma, after entering 2013, the US stock market has repeatedly hit new highs...
Since the beginning of the year, the S\u0026P 500 index has accumulated an increase of more than 16.5%, and the Dow Jones has accumulated an increase of 14.55%.
But the strange thing is that although the stock market seems to be rising well, American stockholders seem unwilling to follow suit easily, and financial tycoons have quietly withdrawn a large amount of funds from the bull market. Some famous American investors do not hide their concerns about the future market, believing that the current US stock market is overbought and the possibility of a collapse is increasing.
It is worth noting that the rise of the stock market index beyond certain values does not mean that there will be a real impact on the market direction. The valuation level, economic growth and corporate profit growth rate are the core decisive factors.
Behind the continued rise of the US stock market, is it a real economic recovery or a hidden fragile situation? Is there a possibility of a collapse? These are what the financial media and investors have been discussing.
Especially in May, the speech of Federal Reserve Chairman Bergen in a private occasion hinted that the scale of quantitative easing policy was intended to be reduced, which caused a certain impact on the market at the time...
But the relevant official speeches and policies have not appeared so far...
Recently, Federal Reserve Chairman Bergen changed his words again, hinting in the conversation that the Federal Reserve had no intention of reducing QE, which surprised investors who had expected to reduce the bond purchase plan. The US stock market rose sharply, the Dow Jones and the S\u0026P 500 index hit record highs again, and all the ten major industry sectors rose...
In fact, since June this year, doves and hawks have been arguing about QE3. The speech of Federal Reserve Chairman Ben Bernanke has comforted investors who have been troubled by the Fed's policy adjustment issues recently, and the US stock market as a whole has remained strong.
Of course, as Barron had said to Robert Kennedy Jr. before, although it seems that the S\u0026P and Dow Jones Industrial Average of US stocks have risen this year, not all stocks can "be equally benefited"...
The best performing ones are consumer, TMT (technology, media, communications) and financial sectors. In the past month, pharmaceutical and automotive sectors have also performed well - as the economy improves, their demand has begun to accelerate.
If we compare it with the Fed's policy timetable, it is not difficult to find that from 2009 to now, every wave of stock market highs coincides with the time when quantitative easing policies were introduced.
From November 2008 to March 2010, the Fed launched QE1 (the first round of quantitative easing), during which it purchased a total of US$1.725 trillion in assets, and the Dow Jones Industrial Average rose from 8479.47 points to 10856.63 points, an increase of 28.03%.
From August 2010 to June 2011, during the implementation of QE2, the Federal Reserve purchased $600 billion of long-term U.S. Treasury bonds, and the Dow Jones Industrial Index rose from 11,215.13 points to 12,414.34 points, a phase increase of 10.69%.
From September to December 2012, the Federal Reserve successively launched QE3 and QE4. In addition to continuing to purchase $40 billion in mortgage-backed securities each month, it will also purchase an additional approximately $45 billion in long-term Treasury bonds.
The Dow Jones Industrial Index rose from 13,539.86 points to a peak of 15,542.40 points on May 22, 2013, with a maximum range increase of 24.61%.
In this way, with the introduction of QE, the U.S. economy has achieved restorative growth.
According to data released by the U.S. Treasury Department in June this year, as of the first quarter of 2013, the U.S. economy has grown for 15 consecutive quarters, that is, since the second half of 2009, the U.S. economy has gradually emerged from the trough.
However, policies are not always introduced in one direction, and the arrival of the window for exiting quantitative easing makes the situation complicated.
"In order to stabilize the confidence of debt-holding countries, it is unlikely that the Fed will withdraw from QE this year. However, in order to reduce capital costs and alleviate the financial crisis, the Fed has to make gestures, but every time it is louder than rain, Bernanke There are no new tricks to come up with.”
This was stated in a related report published by the Wall Street Journal last week.
However, what is eye-catching is still the actions of those financial tycoons and Wall Street capital. After all, in the eyes of many people, they can obtain more information.
According to regulatory documents from the U.S. Securities and Exchange Commission, Soros began selling bank stocks as early as the first quarter of this year, including stocks of famous banks such as Morgan Stanley, JPMorgan Chase, and Goldman Sachs...
American hedge fund tycoon Paulson (who became famous for his short selling in the subprime mortgage crisis and whose fund size exceeds US$20 billion) is also quietly shorting the stock market in American industrial, commercial and financial stocks.
In addition, Dealogic statistics show that since the beginning of this year, the funds realized by private equity investment companies have reached US$57.8 billion, which is much higher than the US$35 billion in the same period in 2007 (the peak before the crisis) and the record level of US$43 billion set in 2011.
However, there are of course those who continue to increase their investment in U.S. stocks, including Goldman Sachs, JPMorgan Chase, and Barron's companies-Merrill Lynch, DS Group's funds, etc.
Although most people in the industry are now optimistic that U.S. stocks will fluctuate in the future due to the "tightening curse" effect of the Federal Reserve and external market risks. However, considering the continued recovery of the U.S. economy and the strengthening of corporate profitability, there is still room for U.S. stocks to rise before the end of the year.
However, the fanatical Wall Street still makes American investors who have been fooled and learned lessons over the years still have lingering fears. The two major crashes in American history on October 29, 1929 and October 19, 1987 sounded the alarm for the exciting bull market.
Before the outbreak of the two crises, the stock market was prosperous. This prosperity attracted a large amount of hot money. The profit-seeking hot money crazily raised the stock price, creating false bubbles one after another.
Of course, Barron will not publicly express his views on this, but his attitude towards Alibaba's listing choice has already shown that he is optimistic about next year's economic situation, especially the economic situation in the United States.
