ratroulette| Yang Delong: U.S. inflation expectations weaken, the Federal Reserve is expected to cut interest rates for the first time in the second half of the year

May fourthRatrouletteI went to Omaha for the sixth time to attend Buffett's shareholders' meeting.RatrouletteOh, I feel a lot. The number of participants in this shareholders' meeting reached a record high of about 40,000. People from different countries, different nationalities and different investment ideas around the world have gathered in Buffett's hometown of Omaha to listen to the insights of the old man of the century, reflecting the charm of value investment.

Berkshire Hathaway's net worth has risen by 4% in nearly 60 years of investment.Ratroulette.38 million times, outperforming the S & P 500 by more than 300 times. Buffett, the god of stocks, has made unprecedented and unprecedented investment performance.

The reason why Buffett can achieve such a large return on investment is mainly related to his stubborn adherence to the concept of value investment. Although many people are familiar with his famous saying that I am afraid when others are greedy and I am greedy when others are afraid, there is only a handful of things that can be done. Buffett has been practicing his investment philosophy, first of all, holding some great companies for a long time, growing with great companies, that is, long-term bulls, but when there is a big bubble in the market, he will also rise while reducing positions to avoid the risk of bubble bursting.

Berkshire Hathaway has lost about $20 billion in stock in each of the past few quarters, according to Berkshire Hathaway's first-quarter results. And Buffett said that cash reserves are likely to increase from $182 billion to $200 billion by the end of the second quarter, meaning he has begun to reduce positions ahead of time as U. S. stocks continue to hit record highs. Of course, after reducing the position, there is still about 60% of the position, indicating that he has been long for a long time, but when there is a bubble in the market, he will appropriately reduce his position to avoid risk, that is, when others are greedy, Buffett begins to fear. On the other hand, if there is a big fall in the market, when there is a panic, such as a stock market crash, Buffett will increase his position at a bargain. So as Buffett once said, the stock market crash is a gift from God to value investors. Many people cannot overcome greed and fear, so it is difficult to do so.

Of course, Buffett won the victory of long-term investment, the most important thing is his investment philosophy-to buy stocks is to buy enterprises. He chose the leading companies in both consumer and financial directions, because statistics show that the consumer and financial industries can generate a steady stream of profits for shareholders in the long run, while many other industries often find it difficult to generate sustainable profits.

So Buffett captured the nature of investment, he is not a stock investor, more accurately, he is an investor, allocating his money to different companies. He chose great companies and went with great entrepreneurs, which is why he made Berkshire Hathaway's achievements. No matter how the economy and markets fluctuate, Buffett insists on being a good shareholder, which is the secret of his success.

Buffett has been far away from Wall Street, away from the hustle and bustle, lived all his life in his hometown, the small town of Omaha in the central United States, in order to avoid being disturbed by the noise of the market, to be able to think independently, to overcome the herd effect and herd effect, which is worth learning. Not affected by the complex market information, settle down to study the industry, study the fundamentals of the enterprise, and grasp the essence of investment.

This shareholders' meeting is the first shareholders' meeting held since Munger's death. Without Munger's participation, Buffett was slightly sad, but did not affect Buffett's consistent investment philosophy. Before the start of the conference, a short film documenting Munger's life was shown in the venue, which moved nearly 40,000 people. After the short film was played, Buffett asked the lights to be turned on, and everyone stood up to salute Munger.

As a wise old man, Munger plays a key role in the formation of Buffett's value investment concept. So when Munger died last November, Buffett made it clear that without Munger, Berkshire Hathaway could not have achieved what it is today. Since I met Munger, I have rapidly evolved from an ape to a human. Munger has always advised Buffett to buy great companies, not just depending on the price. He said that he would rather buy a great company at an ordinary price than an ordinary company at a great price, revealing the light of wisdom. Because many companies will achieve the return on investment through the growth of performance, and be friends of time, which shows the true meaning of value investment. Although Munger died, Buffett continued his usual style, sticking to the circle of ability in investment and unmoved by investments outside the circle of ability. For example, the current fire of artificial intelligence, Buffett said that I know nothing about AI, so I will not invest. The emergence of artificial intelligence has indeed profoundly changed human work and life, but its emergence, like the emergence of the atomic bomb, is still difficult to tell whether it is a blessing or a curse for mankind, so Buffett will not invest easily.

In fact, the same was true of Buffett's investment in technology stocks and Internet stocks in the past, so in 2000, when the entire US stock market was crazy about the Internet, Buffett did not invest a single share, so he successfully avoided the risk of the bursting of the US technology Internet bubble in 2001. but it also made him miss the market of some successful Internet companies that followed. Buffett didn't invest until Apple launched iPhone and achieved great success, transforming from a technology company to a consumer company. It can be seen that Buffett's investment is more focused on stable profits and understandable business models, rather than blindly chasing hot spots, which is worth thinking about.

Take a look at the inflation data in the United States. The CPI of the United States in April just released was 3.Ratroulette.4%, in line with market expectations, a slight decrease from 3.5% in the previous month, and a certain decline year-on-year and month-on-month, which made many investors breathe a sigh of relief. Inflation in the United States has been going on for more than three years, reaching a peak of more than 9%. After the Federal Reserve violently raised interest rates 11 consecutive times, inflation in the United States has fallen. Although there is still a certain distance from the U.S. long-term inflation target of 2%, a trend of a large decline in inflation has gradually taken shape, which has also made the Federal Reserve's monetary policy turn closer and closer. According to current market consensus expectations, the Federal Reserve may announce its first interest rate cut in September. Although the rate cut may be small, the shift in monetary policy is certain. Moreover, in his recent speech, Federal Reserve Chairman Powell also mentioned that the United States will not raise interest rates again, which dispelled many people's concerns. Because the Federal Reserve is now in a dilemma, cutting interest rates too quickly may lead to a resurgence of inflation expectations. However, if interest rates are not cut, it will also put great pressure on the debts of U.S. residents and companies, which will not be conducive to U.S. economic growth. Therefore, the Federal Reserve is still relatively cautious when it comes to cutting interest rates.

U.S. stocks are still on a strong upward trend, and the three major U.S. stock indexes have recently hit new highs, indicating that investors are still relatively optimistic about U.S. stocks. Of course, the rise of the market has also increased investment risks. For example, Buffett has already withdrawn while rising, appropriately reducing his holdings in U.S. stocks. Globally, A-shares and Hong Kong stocks are in a valuation depression in the global capital market, and some funds that are afraid of heights have also taken profits from U.S. stocks in search of new opportunities. During this period, some international capital flows began to turn and entered A-shares and Hong Kong stocks for layout, reflecting such changes. Of course, the market's rise has inertia, so U.S. stocks are still on a strong upward trend and have not yet seen a trend decline. Therefore, this strong trend has not changed in the short term, but the higher the investment risk, the greater the risk, which is something everyone should pay attention to.

Now A-shares and Hong Kong stocks have begun to rise on the trend, but the upward trend of the market will have certain twists and turns, because it will take time for investors to regain their confidence. However, in the medium and long term, some high-quality stocks and high-quality funds are currently at the bottom of history, which is a good opportunity to layout. To adhere to value investment, we must dare to reverse layout, especially when the market undergoes short-term adjustments, and we must respond with a normal mind. Seize the opportunity of medium-and long-term market structural conditions and lay out some high-quality assets that have been mistakenly killed is a better response strategy.

(The author is chief economist and fund manager of Qianhai Open Source Fund)