80,000 points! Indian stock market may end the year on 100,000 points.
Abstract: The main stock indices abroad are composed entirely of leading stocks, not comprehensive indices of the entire market. Therefore, the practice of trading in leading stocks in international markets has its origins here. It is anticipated that A-shares will also follow an international trend in the future.
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There is no need to envy or be jealous of India; understanding the patterns can also reveal opportunities.
Today, the Indian stock index surged past 80,000 points, which is an index composed of 30 leading Indian stocks. Since 2008, the Indian index has increased by a full 10 times. Coupled with the GDP growth spurred by urbanization, India's economy remains in a strong growth phase. At the current pace, it will surpass Germany and Japan to become the world's third-largest economy in three years. In 5 or 10 years, it is expected to reach the level of our country. This is because their concentration is more focused than ours. They only need to build infrastructure equivalent to 30% of ours to achieve a scale similar to that of our country. This is their advantage; they have a concentrated land advantage, unlike our country, which has varying elevations, including areas as high as 8,000 meters, resulting in construction cycles and areas much larger than India's. The pressure is also greater than in India, so their current development achievements are already incredibly impressive.
Learning is for the future; currently, the main international indices are leading indices with a limited number of constituent stocks, typically around 30-50. Don't question why the SSE 50 Index doesn't rise; it's because there are many homogeneous companies within it. Even within the same industry, having too many similar companies is redundant in terms of index composition, making it very laborious to support the market. It also makes it easy for junk stocks to take advantage, harming the overall market and the expansion of the market.
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Currently, A-shares are trending towards marketization. Under such circumstances, if done well, it can be similar to international standards. As the world's future largest economy, it is possible for the index to rise. While 100,000 points may be unthinkable, 10,000 points are still conceivable, of course, that would require creating one's own index to achieve it more quickly. My A25 index surpassed 10,000 points three years ago.
In a stock market, it is impossible for all individual stocks to rise. That was something that could only be achieved 20 years ago. What has passed is passed; facing the future and planning for it is more realistic.
It is the same all over the world; once the stock market grows larger, it is unlikely to be the rise of the entire market index, but rather the rise of leading indices. In the future, institutional funds will typically enter leading stocks for layout and endurance, rather than excessive trading. Even with quantitative trading, they only dare to layout in leading stocks, and the impact of quantification will be limited.Today's news, Musk stated on social media X on Tuesday that once Tesla has fully solved the autonomous driving issue and mass-produces the Optimus robot, anyone still holding short positions will be eliminated, not even sparing Gates.
This is the courage of a leader. Even with short selling in the US stock market, it remains as strong as a bull. This is value investing, the power of a true leader in a market-driven environment. It's not afraid of short selling, and even in times of crisis, the index rises. Look at the three years of the pandemic, the US stock market and Indian stock index have doubled. Japan is the same. But they all rise in indices composed of leading stocks.
If our A-shares are composed into an index with leading stocks, they are also bullish now. My casually compiled Leading A-shares 25 index has already exceeded 8,000 points, and it could actually be better. It's just that I'm not an index fund manager at the moment, so I can only play around with these.
The resources of leading stocks in our country are somewhat dispersed.
No matter what field, even Bajie is the same, the market only recognizes Huawei. It's not good for companies to always play like this, and it puts too much pressure on A-shares. A lot of unnecessary actions in A-shares, unable to rise above 3,000 points, are related to this. Companies are too fond of splitting up for listing and financing. It's not that they don't understand, but rather that splitting up is more profitable.
Another splitting play appeared last night. On the evening of July 2, 2024, Seres announced that its controlling subsidiary, Seres Auto Co., Ltd., plans to acquire 919 registered or applied-for Wenjie and other series of text and graphic trademarks held by Huawei Technologies Co., Ltd. and its related parties, as well as 44 related design patents, with a total purchase price of 2.5 billion yuan.
Huawei responded by saying that Huawei will transfer the Wenjie and other series of trademarks to Seres, and Huawei will continue to support Seres in making and selling Wenjie well.
In May of this year, Huawei Technologies Co., Ltd. transferred its registered "Xiangjie" trademark in the category of transportation tools to Beijing New Energy Automobile Co., Ltd. This trademark was applied for by Huawei in May last year and completed registration in November last year.
This transaction appears very reasonable on the surface. In fact, it has been forced to become a "Jiu Ba Lao" (a derogatory term for a middleman). Everyone doesn't want to be a "Jiu Ba Lao," but the market always tempts everyone to be one.
Huawei sells trademarks, selling to its own son. What kind of business is this? No matter what field, without Huawei, it's not worth anything. Everyone knows this, but this kind of transaction has appeared. A-share companies can't get tough because they are forced to be "Jiu Ba Lao" too much. You split, I split, we all split, and 3,000 points appear like this. The index doesn't rise, and that's how it comes.If the A-share market can resolve the issue of spin-offs, marketization can be successful, and the index can rise strongly. However, there are many positive signals now, with leading stocks presenting rare opportunities, but there are not many leading stocks, so be careful to distinguish. The so-called leading stock is one that cannot be replaced by anyone in the industry. This is the real leading stock. Don't be fooled by companies that are leading in the A-share market but turn out to be mere agents on the international stage; such companies are the most frightening.
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