“What’s your view on New World Development (00017.HK)?” “How about China Life Insurance (02628.HK)?”
I was facing a roomful of people asking for stock tips during the Q&A session of a seminar recently.
It’s upsetting, actually. People can’t improve their investment skills just by asking this sort of questions. They obviously hadn’t picked up anything from my speech.
This was the core message of my lecture:
Performances of different sectors have become increasingly divergent in global stock markets for three reasons.
First, the wealth gap keeps widening following massive monetary easing by central banks.
Second, technology development is accelerating. And third, the millennials have a different behavior than their parents, leading to a situation where a handful of heavyweights tend to underpin the market for a long time.
In Hong Kong, we have the additional factor of mainland capital gaining increasing pricing power, as reflected in the recent short squeeze on China Evergrande Group (03333.HK) shares.
The southbound capital inflow will continue to benefit the Hong Kong market.
I was hoping the audience would pose questions on these topics and discuss possible strategies to profit from such trends.
However, they only care about quick stock tips.
Most investors have the misconception that picking the right stock is the key to winning. They ignore the fact that there are more fundamental things, such as vision, patience, discipline, courage and a firm belief.
Holding on to a strong belief is critical; otherwise investors will just keep on swaying and end up with ugly losses in a difficult market.
This article appeared in the Hong Kong Economic Journal on June 6
Translation by Julie Zhu
[Chinese version 中文版]
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