Yesterday, I shared the crisis of the crypto ecosystem. After finishing the article, I suddenly thought of how various opinions have been discussing the crisis in the A-shares market these days—numerous "grand" articles discussing the roots of the crisis in A-shares primarily look for reasons in macroeconomic aspects:

Some find clues from margin trading data;

Some look for reasons from GDP trends;

Some search for signs in central documents;

And others look for the "root cause" in various internal essays;

……

In short, it’s snowing heavily, making people feel dazzled.

I originally tried to avoid writing about A-shares, but upon seeing this situation, I felt the timing was just too coincidental, and this material is indeed a good basis for analysis.

So, I felt the urge to write about A-shares again.

Today, I would like to share my views on A-shares, with the core being:

Do investors really need to pay attention to the crisis in A-shares?

Again, I will use the three viewpoints I mentioned in my previous article, plus that point I emphasized repeatedly, along with the quote from "Duan Yongping" at the end of yesterday's article:

• The three standards for judging the investment value of a company: corporate culture, business model, and appropriate price;

• When we examine and analyze the investment value of a company/investment target, if we cannot understand or comprehend any of the three points of corporate culture, business model, or appropriate price, then absolutely do not buy, do not invest;

• (The gist is) it’s better to keep money in the bank earning interest than to invest haphazardly and not keep pace with inflation;

Let’s take a look at the technology innovation board, which has seen the most severe drop this time.

I remember a few months ago, I compared some star stocks on the technology innovation board with Nvidia’s financial report data.

The comparison results were simple and straightforward: the financial reports of the "stars" on the technology innovation board almost all indicated that, based on the annualized revenue at that time (note that it is revenue, not the more stringent free cash flow), to maintain that stock price/market value, it would take a hundred years or even several hundred years.

So as an investor, consider it from the simplest business model perspective:

Can their profit model sustain itself?

Is their debt ratio too high?

Can their free cash flow support that for so long?

Then ask a simpler question:

Is it reasonable for a company that can only accumulate a hundred years or even several hundred years of revenue (not free cash flow) to reach today's market value at their current (then) price?

I believe anyone with a bit of common sense can answer this question, but the vast majority of people are what I previously referred to as "self-deceiving," unwilling to admit the answer—either unwilling to acknowledge that they cannot understand the future free cash flow summation of these "tech stars," completely relying on hearsay, buying whatever those "star stocks" are recommended; or unwilling to admit that they are not investing but are gambling, prettily naming it "capturing trends" or "following the wind."

If you cannot understand these "tech stars" stocks, operating on them is also straightforward; returning to the second point, just don’t invest, don’t buy.

If it's not investing but gambling, then that's not a topic that can be discussed in this article.

In fact, as long as one honestly admits the answer, these stocks should have been sold when the so-called "crisis" had not yet happened, or should simply not have been bought.

What does this have to do with the occurrence of a crisis?

If there’s no crisis, do these stocks continue to be bought and held?

If this isn't "self-deceiving," then what is it?

Do we still need to diligently check margin trading data?

Endlessly analyze GDP?

Carefully dissect central documents?

Exhaustively search for various essays?

It’s the same logic; when these stars on the technology innovation board are warmly embraced, there is still no "crisis" then, but it is extremely evident in A-shares, easily recognizable by anyone with a little knowledge, that stocks with rich free cash flow and wide economic moats are being ridiculed by those fund managers heavily invested in technology as "old businesses," yet they are ignored.

I am not saying that those "old businesses" are necessarily worth investing in, but regarding the most critical aspect of the future free cash flow summation, "old businesses" are significantly stronger than "tech stars."

Some also say they do not dare to touch "tech stars," or that they cannot understand or do not believe in the future of "old businesses."

This is also straightforward; return to the third point: wouldn’t it be great to just put the money in the bank for a fixed deposit earning interest?

This has nothing to do with the "crisis."

It’s not that we only think of this now that a "crisis" has occurred, but rather that even without a "crisis," it should be this way.

The above three points are the principles that should be upheld in investing, and whether or not a crisis occurs does not affect them at all. If the principles are upheld, even if a crisis occurs, it will not impact true investors.

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