Buying US stocks on Alipay is not humiliating.. Brothers, let me say something offensive first. Many people think that it is Xiaobai's ability to buy funds on Alipay. I think true investors should open accounts for Hong Kong and US stocks, monitor Level 2 market trends, and keep an eye on the market until late at night. To be frank, these people often (though not absolutely) suffer the most. Why? Because he regards ritual as ability and complexity as professionalism. People who truly make money don't care which platform they buy from. He only cares about whether what you bought is right or not. 01） For example, a fund that has been invested by Alipay is called CCB Emerging Markets Preferred Hybrid. I did a tough thing in the first quarter: aggressively increased my holdings in Korean chip stocks. Samsung Electronics has more than doubled from 180000 shares to 400000 shares. SK Hynix has nearly doubled from 60000 shares to 100000 shares. How much is the return this year? 44%. What's even more ruthless is that the top two heavy holdings of this fund are not Korean stocks, but Nvidia and TSMC, each holding 10%. Equivalent to a fund that simultaneously bet on the leader of AI chips, the leader of contract manufacturing, and the explosion of Korean storage. The only thing is that the current limit is 20 yuan per day... There are only so many QDII quotas, and those who want to buy are lined up. The fund company can only close the door wider and narrower. Ten thousand MMP in my heart. Why are US stocks always at new highs? Many brothers don't understand why the US stock market can reach new highs every year, while the A-share market has been at 3000 points for ten years. They are looking for various reasons: the US economy is good, technology companies are strong, and the Federal Reserve is releasing funds. These are all appearances. The real reason is that the US stock market has three engines, while the A-share market does not have any. The first engine: 401k, the "wage speculation" of Americans From the first day of employment, American workers automatically deduct a portion of their salary into their 401k. This money cannot be withdrawn to buy a house, invest in stocks, or consume. It can only be used to buy funds. And the vast majority of them flow towards the S&P 500. 70 million accounts in the United States, buying on time every month like receiving a salary. In the 2008 financial crisis, retail investors were cutting meat and 401k were buying. In 2020, the pandemic hit a circuit breaker, causing panic among retail investors and 401k buying. The sharp decline in interest rate hikes in 2022 is causing retail investors to curse, while 401k investors are still buying. I'm telling you, this is not an investment, it's an institutionalized 'human flesh investment'. No matter the bull or bear, no emotions, no news, money keeps flowing into the stock market. Do A-shares have this thing? What is our pension doing? Buying treasury bond, depositing in banks, and occasionally buying A-shares were also called "national team's stock smashing". Where does the incremental capital of A-shares come from? From the savings of individual investors, from the grocery money of middle-aged women. Today, I heard from my neighbor that new energy is on the rise, so I chased after them. Tomorrow, it will drop by five points and come out to curse the market maker. It's no wonder this funding structure can be stable. Second engine: repurchase and cancellation, the company gives itself "weight loss and muscle building" In 2023, US listed companies repurchased nearly $800 billion of their own stocks. The key is not to buy it, but to cancel it after buying it. What does it mean? The total share capital of the company is 10 billion shares, with 1 billion shares repurchased and cancelled, leaving a remaining 9 billion shares. Profit remained unchanged, but earnings per share increased by 11%. The price to earnings ratio has not changed, but the stock price has risen by 11%. This is not making a fuss, it is a legal way to 'lose weight and gain muscle' for oneself. Apple has repurchased over $600 billion in the past decade, reducing its share capital by nearly 40%. It's like you didn't do anything and your stock automatically appreciated by 40%. What about A-shares? There are also repurchases of A-shares, but most of them are not cancellations, but rather "equity incentives". Buy it back and send it to the executives at a low price. Executives take stocks and then reduce their holdings. You think the company is raising the stock price, but in fact, the executives are using your money to give themselves red envelopes. Even more outrageous is the reduction of holdings. The reduction of holdings by major shareholders in the US stock market requires announcement, explanation, and payment of heavy taxes. Is the major shareholder of A-shares reducing their holdings? Divorce can be reduced, children's education can be reduced, and 'personal financial needs' can be reduced. There are more reasons than ways to reduce holdings, and more tricks than listed companies. The third engine: the hegemony of the US dollar, the world pays a protection fee to the US stock market Saudi Arabia sells oil for US dollars. China exports mobile phones in US dollars. India does software outsourcing and charges in US dollars. Doing business all over the world ultimately saves up a pile of dollars. Where should I put these dollars if I can't spend them all? Buy US bonds, buy US stocks. Wall Street is like a huge reservoir, where global funds eventually flow in. The rise of the US stock market is not due to how good the US economy is, but because the whole world is paying it a "protection fee". Including China. A large portion of the dollars we earn from exports end up in US bonds and stocks. It is equivalent to Chinese people working hard, indirectly injecting blood into the US stock market. Is this treatment available for A-shares? The Chinese yuan is not a reserve currency, and there is no urgent need to allocate A-shares globally. Foreign investment came in, and the regulatory authorities said they would check the allocation of funds, but they ran away. Foreign investment came in, claiming to rectify the platform economy, but ran away. Foreign investment came in and said that education and training cannot be carried out anymore, so they ran away. What comes is hot money, and what leaves is a startled bird. Who supports this market? Relying on individual investors. Retail investors account for over 70% of trading volume, with emotions dominating everything. The bull market is here, the square dancing auntie has opened an account. The bear market is here, Auntie cuts her flesh and goes dancing in the square. Ten years in a cycle, standing still. 03) The vicious cycle of A-shares Without a 401k bottom line, funds rely on emotions. There is no repurchase or cancellation, the company is cutting leeks. Without global configuration, foreign investment can leave at will. This is not that A-shares are not competitive. This is an inherent deficiency at the institutional level. What's even more frightening is that this is a vicious cycle. A-shares do not rise → retail investors lose money → no one is willing to invest in the long term → the market relies more on short-term funds → greater volatility → less willing to hold for the long term → A-shares still do not rise. What about the US stock market? 401k continues to buy → sovereign funds continue to buy → stock prices steadily rise → retail investors are willing to hold for the long term → market becomes more stable → more funds come in → stock prices continue to rise. Two cycles, with completely opposite directions. Standing in the A-share market and wanting to make money is like swimming forward in a swimming pool against the wind. It's not that you can't swim, it's that it's difficult. ---- To be frank, brothers, I am not singing short on A-shares. There are also good companies and people who make money in A-shares. But the question is, as an ordinary investor, what is your winning rate in a market where retail investors account for 70%, there is no pension support, companies do not repurchase but only reduce their holdings, and foreign investors come and go? 10%？ 5%？ In the past decade, some people have lost half of their A-shares, while the S&P has doubled during the same period. It's not that he doesn't work hard. He stood in the wrong pond. Let me tell you, choosing the right pond is a hundred times more important than fishing when it comes to investing. You are in a pond where almost all the fish are caught, no matter how good your skills are, it's useless. As long as the three engines of the US stock market -401k, repurchase and write off, and US dollar hegemony - continue to turn, the US stock market will reach new highs. When can these three engines be installed on A-shares? I don't know But before that, it was no shame to buy QDII funds on Alipay. It's embarrassing that despite having a better pond, you insist on paddling desperately on a leaking boat.