Latest fund price: $1.8472 (-0.0493, 2.6%)
Total Market Value: $1,666,469.43
Total units: 902,177.0315 units
Dear Investors,
This month nothing much happen in my fund, I only had two trades (one buy and one sell), however the market is turning up side down, both China and Hong Kong have been slumped roughly 40% and 20%, meaning all the sky rocking in May have been canceled out. My fund merely dropped 2.6% because a lot of my stocks are defensive in nature (most of them are real estates), while few aggressive stocks, I only hold a little bit.
So this month I would like to talk about the topic most people care (but I don’t really care), the China & Hong Kong market. A-shares in China have been stay low for 7 years, when the financial world start to lost hope, it started to surge 100% within 6 months in the beginning of 2015, it is difficult for a single stock to rise 100% in 6 months, let alone a 9.7 trillion market! Even with the recent 40% drop, China market still has rose 64% since 2015.
The prime minister of China Xi Jinping called this is the “new normal” *LOLS*, to me new normal is still abnormal (something abnormal will not become normal only because it has a new name), there are rules in a free market (obviously China is a closed market), when the government want to control the financial world, rather let the “invisible hand” take control, they can achieve certain goals in short term, but harm the economy of the whole country in long run. I think Russia and many communist countries have proven why Karl Marx’s communism does not work in real world, yet China say: “Hey, let’s give it another try, with 1.4 billion people this time!”
“Socialism vs capitalism” is a big topic, however fundamentally it is “planned economy vs free market”. Planned economy meaning government control the supply and demand (stock market is only a tip of the iceberg), if the government decide this year we need to manufacture 2 billion jeans, even the people do not feel like wearing jeans, 2 billion jeans will be made, if it turns out no one want to buy any jeans, then the government launch a campaign to promote all citizen to wear jeans, they will tell you how wearing jeans is good for your health, or why you should wear jeans if you are a true patriot, it may sounds ridiculous, but this is exactly what is happening in China.
The government set a goal (with details planning), and they ask the local government to achieve the goals no matter what, eventually they will have to fake the numbers, they claim their economic growth must remain 7% annually, let’s face it, who can guarantee an economic growth? No one, but what if the government insist? Then we have to make stuffs up. The China market is overvalued, even after the huge drop, so don’t be delusional, eventually the market must return to her “true normal”.
這個月我的基金沒有甚麼大改變，我只做了兩筆交易（一買一賣），但市場已經反轉了，中國和香港股市已經分別下跌了約40％和20％，這意味著5月的大升已經被取消了。我的基金僅僅下跌了2.6％，因為我的很多股票都是防禦性質的（其中大部分是房地產），而一些高風險的股票，我只買了一點點。
所以，這個月我想談最多人關心（而我不關心）的話題，就是中國及香港市場。 A股在中國一直保持在低位連續7年，當金融世界開始對她失去希望時，它開始於2015年年初6個月內激增100％，在6個月內上升100％, 在單股已經是很困難的，更不用說一個9.7萬億的市場！即使在近期下跌40％，中國市場自2015年仍然上漲64％。
中國習近平首相稱這是「新常態」 * 大笑*，對我來說新常態仍是非常態(不正常的東西不會因為改了新名稱就變成正常)，自由市場有其規則（顯然中國是封閉市場），當政府想控制財政，而不讓“無形之手”掌握控制權，他們可以在短期內實現某些目標，但在長遠損害了整個國家的經濟。我認為俄羅斯和許多共產主義國家已經證明，為甚麼馬克思的共產主義在現實世界行不通，但中國仍說：「嘿，讓我們再試試看，這一次十四億人一起試!」
「社會主義VS資本主義」是一個很大的話題，但是從根本上是「計劃經濟 vs 自由市場」。計劃經濟意味著政府控制供應和需求（股市是只是冰山一角），如果政府說今年我們需要加工製作廿億條的牛仔褲，就是人民不怎樣喜歡穿牛仔褲，都會有廿億條牛仔褲會做出來，如果事實證明沒有人想要買任何牛仔褲，那麼政府將推動全民著牛仔褲的運動, 他們會告訴你牛仔褲對你的健康有多好，或如果你是一個真正的愛國者, 為甚麼你一定要穿牛仔褲, 聽起來是如此荒謬, 但這樣的事正在中國發生。
政府設定目標（詳細規劃），他們要求當地政府不管如何都要實現目標，結果他們最終將不得不製作假數，他們聲稱經濟增長必須每年保持7％，但誰可以保證經濟增長？沒有人，但如果政府堅持一定要發生？然後我們就必須要做數了。中國市場在巨大的下跌後仍然被高估，所以不要被她騙到, 最終市場都必須回歸到她的「真常態」.
regards,
Calvin
