Interview with Huang Guoying | One trick to deal with the volatile market, continue to bet on "rising in the west and falling in the east", two types of stocks run out

This year, Hong Kong stocks and U.S. stocks are just as difficult to play, and even experienced fund managers will inevitably lose their hands.

Famous Hong Kong fund manager Huang Guoying recently established "Huang Guoying Asset Management". He also took the opportunity to explain his latest investment allocation suggestions and share his operation methods.

Huang Guoying once again "expressed his intentions" in the interview, and has no intention to invest a lot of scheming and funds in Hong Kong stocks. He always believes that the size of the Hong Kong stock market is small, the scope of stock selection is narrow, and the transaction volume is too high. It is difficult for the fund to deploy safely.

The U.S. economy has recorded negative growth for two consecutive quarters this year. Coupled with adverse economic development factors such as rising interest rates, higher-than-expected inflation, and a high debt burden, it is often described as entering a recession.

Faced with a recession crisis, it sounds like investors are panicking, but fund manager Huang Guoying said frankly that investment does not need to delve into whether it is experiencing an economic recession. A recession only represents an increase in factors to be considered.

Investors should focus on the company's financial status and profitability, so as to make appropriate allocations to adapt to market changes.

The stock god Buffett also likes traditional energy stocks, and recently increased his holdings of Occidental Petroleum (OXY).

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According to market conditions, the two types of stocks in the rotating sector can be held as core

This year's market volatility is "difficult to play", and even fund managers have been stumped. I believe that many readers are interested in Huang Guoying's allocation strategy.

Huang Guoying also generously shared that the most important thing is to understand "Sectors Rotation" and choose stocks that benefit from market conditions, which can be divided into two categories.

The first category, agriculture and energy stocks that benefit from inflation.

Huang Guoying suggested that investors should focus on one agricultural stock, such as John Deere (DE; John Deere), and the rest of the agricultural stocks should be "specialized."

Occidental Petroleum (OXY) is loved by the world, and it is a company that Warren Buffett has recently increased his holdings. Its stock price rose to a two-year high in May, exceeding Wall Street's expectations for four consecutive quarters. It can be used as a core holding.

The second category is essential consumer and technology stocks.

Huang Guoying divided the manufacturing of consumer goods into three simple categories, including necessities, middle-class luxury goods, and high-priced luxury goods.

During periods of high inflation, demand for non-essential consumer goods falls as the middle class is most affected.

For example, middle-class luxury goods such as Li Ning (2331) and Anta (2020) have high demand elasticity. When the public reduces consumption, such brands will naturally bear the brunt.

Huang Guoying believes that there are fewer substitutes for functional clothing, and the prospect of disguised Lululemon is better than Nike.

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Subdivided consumer stocks, middle-class luxury goods demand elasticity

Taking clothing, shoes and socks as an example, Huang Guoying believes that functional clothing has less substitution and lower elasticity of market demand compared with leisure types.

Therefore, investors tend to buy Lululemon (LULU) and not Nike (NKE). Functional clothing is always more prominent, with limited market choices and it is not easy to be eliminated. On the contrary, Nike, which takes the leisure route, has many other choices of the same type, and the competition is greater , or cut costs to stay competitive.

In addition, there are also some alternative "must-haves" that have attracted much attention from Huang Guoying.

Among them, Thomson Reuters (TRI), which provides professional information, not only provides business and professional intelligence information, but also provides legal information services. Huang Guoying believes that this type of business is not affected by inflation or recession, and the demand for "consumer goods" is stable. .

Huang Guoying, director of Huang Guoying Asset Management Co., Ltd., believes that investors should be more flexible in a volatile market and trade core sectors alternately in response to market conditions.

(Photo by Li Zetong)

Fluctuating market conditions should flexibly alternate trading and short-term trading

On the opening day of the office at the beginning of the month, Huang Guoying had already mentioned the need to pay attention to the "Cool Tech" sector. In addition to the recent global heat wave, he believes that under the general trend of energy saving, the upgrading of air-conditioning equipment in commercial buildings in the future is a major investment opportunity.

However, in the Chinese and Hong Kong stock markets, he admitted that there are not many choices. From the perspective of financial statements, Gree (Shenzhen: 000651) and Midea (Shenzhen: 000333) performed relatively “cut”.

Sir Ying revealed that in terms of China and Hong Kong, investing in the refrigeration business is the best strategy, and he himself has allocated domestic A shares engaged in refrigeration.

Different from the big bull market one or two years ago, the current "Buy & Hold" may not be able to adapt to the volatile market, listing and falling.

Huang Guoying also doesn't mind the public operation method, "take less and change less", increase or decrease the proportion of holdings in the two major categories, the actual operation is more flexible, and constantly alternate trading in response to market conditions.

Perhaps readers mainly trade Hong Kong stocks, while Huang Guoying prefers US stocks.

He believes that Hong Kong stocks "play almost the same way", and they are all looking for opportunities in must-have and large technology stocks.

However, the market in Hong Kong is smaller and the range of choices is narrow. For example, he pointed out that everyone in Hong Kong has flocked to Nongfu Spring (9633), which has caused the valuation to reach a high level, and the current price is no longer attractive.

One of the reasons for Huang Guoying's reduction in allocation to Hong Kong stocks is that the trading of Hong Kong stocks has shrunk sharply. When the fund needs to withdraw urgently, it is difficult to find funds to undertake.

(Photo by Li Zetong)

Insufficient depth of Hong Kong stock market makes it difficult to allocate funds

Not only that, Huang Guoying is most taboo about the sharp contraction of the Hong Kong market. For some funds, buying goods is not a problem, but "scattering water" is the problem. When the fund is about to retreat quickly, it is difficult to have funds to undertake selling orders.

When it comes to Chinese-funded stocks, Huang Guoying admitted that the proportion of Chinese-funded stocks currently held by funds is "extremely small." He described Chinese-funded stocks as just a side dish for the portfolio, but the current situation is "no side dish."

Returning to the Hong Kong stock market forecast that everyone cares about, Huang Guoying reiterated that Hong Kong stocks are currently facing three major stock market disasters, including the 2000 Internet bubble, the 2003 SARS, and the 2008 US real estate explosion.

However, he believes that the Hong Kong stock market is more rigid than before. "Because there was a Crisis (crisis) in the past, I don't even know if there is a five-point (point)!" Huang Guoying predicts that the Hang Seng Index may not have much downside, but It is expected that there will be a "dry decline", and the overall pattern will continue to deviate.