Special interview
Written by: Kwong Yueting and Huang Jie
2020-11-30 07:02
Last update date: 2020-11-30 07:02
Facing the global economic recession, central banks of various countries have successively launched large-scale economic stimulus programs, but they seem to have little effect. The real economy has not improved much, and the stock market has soared.
Ma Shiheng, the former director of the Bureau of Commerce and Economic Development, worked as an investment bank in his early years. He was once the leading bank stock analyst in the Canadian securities industry. His views on current market conditions are naturally worthy of reference.
He bluntly stated that the central banks of various regions adopted quantitative easing measures because of the "unresolved method", which can avoid the Great Recession, but the negative impact is that the flow of funds to the real estate and stock markets has increased the chances of bubble bursting and the degree of danger is rising.
"The market is getting more and more disconnected. The real economy is so bad, but the stock market is rising day by day. In fact, because of quantitative easing, hot money has nowhere to go, only the stock market and the property market have poured into it."
Ma Shiheng continued that in the future, many countries around the world are likely to experience a "Japanese-style recession," that is, low growth, low inflation, and low national consumption.
Because Japan, Europe and the United States are already mature economies, the annual economic growth rate will not be too high. Even in China, the economic growth rate has dropped from the past double-digit to 6 to 7% before the epidemic, although it is already very strong.
Ma Shiheng emphasized that you should always invest within your capacity, do your homework, and don't care about stocks.
(Photo by Li Zetong)
Buy up to 30% of stocks and borrow funds to invest in the new economy fever
Faced with the market conditions in Sri Lanka, Ma Shiheng once again emphasized that always invest within one's ability and do enough homework. "According to one's ability means that I do not encourage investors to buy stocks with their entire net worth and do asset allocation. Wealth distribution is good." He said with a smile, young people may be able to "bo", but at his age, most of his money is used to buy bonds, only a lot of money to buy stocks.
"More than ten years ago, it was five to five (ratio). Now, the maximum for buying stocks is 30%, and the proportion is getting smaller and smaller. You will put a little more in bonds. This is related to your age."
On the other side, although the new economy stocks are hot, he bluntly said that he doesn't like the new economy stocks because the price is too high and the valuation is so expensive, "I would like to buy stocks that are worth buying, so I will go for treasures."
Having said that, he pointed out that even if new economic stocks are speculating, a sudden wave can cause investment losses of 20%. This is a common phenomenon in new economic stocks, while old economic stocks rarely fall so fast. Even if they fall, they have real value. "New economy stocks talk about beliefs and visions. Someone said long ago that buying new economy stocks is not the so-called price-to-earnings ratio (PE), but Price to Dream, and some are Price to Concept." Although some stocks such as Amazon and Alibaba (9988) eventually won, but Ma Shiheng still reminded investors that it depends on their financial resources, age, etc., "I have invested in the new economy, but I don't know much, so I only buy funds."
Ma Shiheng Hong Kong Stock Market
