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Author Cao Guangliang of Huatai Securities

What is a good investment framework

Simple enough

Different from the current market situation, We believe that investment is neither a labor-intensive industry nor an intelligence-intensive industry, but more of a confrontation and struggle with the weaknesses of human nature. For example, just a few people overseas can manage large-scale funds, and fund managers are often on vacation. This fully demonstrates that mature professional investment should not be an individual job. On the other hand, Buffett , Peter Lynch and other investment masters have expressed the view that high IQ and rich business school education background are not important. Otherwise, the richest man should not be Buffett, but should be Newton, or other big guys who were intoxicated with mathematics and physics. Newton's painful lessons in stock trading also show that investment should not become a game for people with high IQs.

To survive in an industry that is neither too smart nor too tiring, a qualified investment framework should be simple enough. Otherwise, the framework you build is too complex, and the market cannot understand it but you can understand it yourself. It will definitely be an ineffective framework, because the meaning behind applying such a framework is: you are standing on the opposite side of the entire market, and the end can be imagined. There is no flaw in the logic of

. It is best to express it in mathematical language. The importance of

logic has been extremely recognized in A-shares. Even if it has nothing to do with the reality of the company, as long as it makes sense logically, the stock will rise. The psychological motivation behind this is that people who have received higher education in an atheistic environment can only rely on logic to convince themselves and then reach the state of believing in themselves. An investment framework that you don’t believe in is meaningless, and you simply don’t dare to follow it. Of course, due to the natural flaws of natural language, it may seem majestic when expressing logic, but it does not completely guarantee that the logic is perfect. Therefore, in the field of social sciences, it often happens that one set of theories subverts another set of theories, such as the subversion of Confucianism by revolutionary theory during the Cultural Revolution. It cannot be passed down and evolved flawlessly from generation to generation like mathematics. Therefore, a model that can be expressed in mathematical language is more logically reliable, and it is easier to convince yourself and stick to it.

can explain the conditions of various countries and cycles.

The probability of miracles is very low. We believe that the most dangerous thought in investment is "this time is different from before", and then act boldly according to one's own logic and eventually lead to disaster. I believe that the Wall Street investment banks that collapsed in 2008 were all studying the special features of that major cycle, while ignoring the warning signals that the bond market had been sending out since 2006.

There are many exceptions in an investment framework. On the one hand, it means that the investment framework itself is logically wrong. On the other hand, even if it is right, it is difficult to stick to it, because you will always doubt whether this time is an exception, thus Make very irrational moves.

Real estate The background of the investment clock

Our construction of the real estate research framework has continued intermittently for 7 or 8 years. For example, in 2008, our report "The Power of Expectations - Ideal Stability Does Not Exist" discussed the differences between the real estate industry and other industries. Since 2005, the financial attributes of China's real estate have gradually exceeded its industrial attributes, resulting in this It is no longer possible for the industry to reach a stable state, and the small turning point theory mentioned by Mr. Wang Shi is impossible to appear. Since that report constructed a mathematical equation and expressed it in mathematical language, we have persisted to this day and found that this is indeed the case. The prototype of the real estate investment clock appeared in the market debate at the end of 13. The market unanimously concluded at that time that the big turning point in the real estate industry had arrived. Although the reasons given by the various bosses are various, some say that the depreciation of the RMB will detonate the real estate industry, some say that the withdrawal of US QE will kill the real estate industry, and some say that the sale rate is calculated, research on regulatory policies, etc. are just a few. We have carefully studied the opinions of all parties. We can understand the reasons and the conclusions are clear, but what we don't understand is the connection between the causes and the results.

In the midst of this commotion, we patiently followed various logics in the market to verify the evolution of overseas real estate bubbles, and found that all the opinions in the market were wrong. The only thing that can lead the real estate cycle stably and consistently is the change in bond interest rates (for details, see: "2014 Annual Strategy: Real Estate Will Accompany You Until the Last Dance No Matter What"). The rest of the factors either have a large number of exceptions or are simply lagging indicators. The fluctuations in the bond market have achieved a one-to-one response to the real estate industry's leadership, without exception, and a stable lead. Logically speaking, only leading and synchronous indicators can be the cause of an event. This has prompted us to launch a comprehensive study on the relationship between bonds and the real estate industry. For details, see "Real Estate: Be Wary of Interference from the Bond Market." In

's communication and learning with customers, as well as discussions and guidance from colleagues, we finally developed a model of the real estate investment clock, and completed mathematical deduction and induction verification of various countries and economic cycles.

Logical derivation of real estate investment clock

Derivation of the existence of perfect interest rate

Pandora's Box, discussion of parameter set A

In the discussion of perfect interest rate, we intentionally ignored parameter set A, which can affect the trend of the real estate industry in addition to interest rates. a collection of factors. We prefer to call parameter set A a Pandora’s box in the field of real estate research, because once it is opened, real estate research will be unstructured and no one can convince anyone. Many talented economists and real estate researchers have put all their Careers are spent in this meaningless research. At one time, in order to cope with market noise, we also spent a lot of energy on research on other factors, falsifying a large number of factors, such as exchange rate fluctuations, international capital flows, GDP growth rate, per capita living area, macroeconomic adjustment policies, etc., through regression Fallacies and counterexamples prove that these factors cannot dominate the real estate industry cycle. Factors that may be related to the real estate industry were also discovered, such as the degree of democratization of the country, the fiscal and taxation system, etc. However, due to the extreme complexity and sensitivity of these factors, the final study came to nothing.

In the field of empirical economics, we might as well adopt a more sophisticated approach, that is, simply assume that A is a constant, that is, it has an impact on real estate, but its impact will not change with time. With this simple assumption, we will expand on the economic cycles of various countries. If the final research results can meet the standards of a good investment framework proposed at the beginning of the article, then thank God, as a research on financial markets, we can achieve purpose.

is very lucky that under the assumption that A does not change over time, the framework we built can perfectly explain the situation in each country and each cycle, and can meet the basic requirements of a good framework proposed at the beginning of the article. We can finally gently close this Pandora’s box of real estate research, and we advise colleagues not to waste their limited lives by immersing themselves in this box.

JamesR who will never be found, the realistic meaning of perfect interest rates

The structure of the real estate investment clock

The practical correction of the real estate investment clock

At this point, we seem to have constructed a very beautiful, but at the same time useless theory. It’s easy to judge the current real estate boom, but the data disclosed by various countries is uneven. Even the central bank can’t find a perfect interest rate, so how do we know whether it’s high or low? In fact, this is also in line with another belief of mine. Perfect things in the world are useless. For example, mathematicians in ivory towers have built perfect theories one after another. Even now, economists only use their linear function theory. , although the description of the real world by linear functions is so pale. Next, we have to build a flawed but somewhat useful model.

From the perspective of real estate prosperity, since we cannot find the real estate prosperity index or rental levels of all countries, there is no way to eliminate the data interference caused by currency value fluctuations in housing prices measured in paper currency units.Therefore, to be opportunistic, we simply assume that when the real estate boom is high, the macroeconomic boom will be high, and when the real estate boom is poor, the macroeconomics will be poor. Therefore, the actual growth rate of GDP is used as a yardstick for the prosperity of the real estate industry.

From the comparison of actual interest rates and perfect interest rates, we need to be bolder and change the vertical axis to the absolute level of interest rates. But we know that the lower the real estate boom level corresponds to the lower the perfect interest rate, the difference between interest rate and GDP growth rate can be dispersed into various quadrants to obtain more refined judgments. And set judgment criteria for each quadrant.

In this way, we can get an investment clock that is rough but has practical value.

So far, I have proved the existence of perfect interest rates and deduced the changes in the real estate boom after the actual interest rates deviate from the perfect interest rates. Finally, through the available data, we can guess whether the current interest rate level is above or below the perfect interest rate, and we get a simple and guiding investment clock model. From the first to the fourth quadrant, according to the highest quality investment targets in this quadrant, we call them the cash holding area, bond investment area, equity investment area and real estate investment area in turn.

Where is China now? Still in the debt investment zone

According to this logic, we need to analyze the relationship between interest rates and GDP growth to confirm where we are in the real estate investment clock. As shown in Figure 3, China's interest rate level is at an extremely high level relative to GDP growth. This level of overestimation of interest rates has only been experienced in the 2008 financial crisis, the 13-year money shortage, and the 1998 deflation cycle. Combined with the latest GDP growth rate of 7.3% and the inter-bank interest rate disassembly level of 3%+, it can be very It is clearly confirmed that China's economy is in the bond investment zone of the second quadrant of the investment clock. In this zone, real estate stocks will have a mid-level rebound, but it is difficult to form a trending bull market. Therefore, we believe that among the current real estate investment types, real estate bonds, especially non-standard claims related to real estate, can actively participate in the signing of real estate non-standard contracts such as real estate bonds and real estate bonds to obtain high returns.

In addition, we also believe that based on the existing monetary policy, it is difficult for real estate to enter the trend recovery channel immediately, and it is more likely that the fundamentals will temporarily stabilize. Of course, what makes us optimistic is that the real estate supply side will deteriorate much faster than the demand side, which means the central bank should take action before real estate fundamentals deteriorate substantially. What we have to do now is to wait patiently for clarity on the central bank's monetary policy. When they lose their composure, the trending bull market for real estate stocks will come.

Luck rather than wisdom, a summary of the A-share real estate research model in the past ten years

Since a considerable part of the customers we face are institutional investors who can only invest in stocks, the real estate clock can also be simplified to the stock investment clock as shown in Figure 4. Each region corresponds to different real estate stock investment strategies. When

was studying the reports of predecessors predicting the trend of real estate stocks, he found that most excellent real estate analysts predict the trend of real estate stocks through changes in real estate fundamentals. This method has been effective for most of the past 10 years. This is because for some unknown reason in the past decade or so, the central bank has been pursuing an ultra-low interest rate strategy (relative to the real estate boom, see Figure 3). Yes, we are in the real estate investment zone of the real estate investment clock most of the time, and it is only in this zone that the trend of real estate stocks is consistent with the fundamentals. This research method will face increasingly severe challenges after the new government's new normal economy and interest rates return to high levels, forcing real estate to return to the debt investment zone.

Therefore, real estate researchers need to reconstruct their research framework in the future to improve the accuracy of their stock trend predictions.

Verification of the real estate investment clock in various countries and economic cycles

The experience of various countries in the debt investment zone

The reason for high interest rates and low growth is generally a temporary phenomenon caused by monetary policy lagging behind the decline of the real estate economy.This phenomenon will not exist for a long time. It is purely a short-term disorder caused by the limited means of economic forecasting or the inability to predict the policies caused by the central bank's political games. The central bank cannot directly stabilize interest rates at a perfect level and quickly support the decline in real estate prosperity. The only way to bring the economy into a stable range is through repeated interest rate cuts and constant attempts. This short-term disorder often leads to a liquidity crisis in the real economy, and precisely because of this, this short time window provides an excellent opportunity for institutional investors with large amounts of long-term funds to take advantage of the situation. At this time, the main problem facing stock investment is that although the easing of monetary policy will trigger a mid-level rebound in real estate stocks, it is difficult to sustain a sustained recovery in industry prosperity because it is impossible to confirm whether the central bank has lowered interest rates below the perfect interest rate. , stock investment may still face a larger level of correction.

(1) United States

Since the United States does not have a real estate bond index and a commercial real estate price index, we can only use the Treasury yield level to indicate the performance of bond products in this time window. As can be clearly seen in the chart below, every time the difference between the benchmark interest rate and the GDP growth rate becomes too large, there will be a sharp decline in the yield on government bonds.

Specifically, let’s select several representative time windows to look at:

In the early 1980s, the United States had a high fiscal deficit and the economy was in recession. After Reagan came to power in February 1981, he reduced government intervention in the economy and proposed the "Economic Recovery Plan", which included four parts: tax cuts, reduction of restrictive government regulations, reduction of government expenditures, and strict control of money supply; subsequently, the central bank adopted Due to the monetary tightening policy and the inflation expectations caused by the huge deficit at that time, the preferential interest rate of commercial banks increased by about 20% in 1981, which plunged most sectors back into crisis; in 1981Q3~Q4 and 1982Q1~Q4, GDP increased by 4.93% and 1.29% year-on-year respectively. , -2.42%, -1.17%, -2.64%, -1.40%; from 1981Q3 to 1982Q4, the federal benchmark interest rate fell by 829BP; however, the quarterly difference (average) between the federal benchmark and GDP during the same period was still at a high level of 11% to 15%; during the same period, national debt Yield fell by 418BP.

In the mid-1980s, interest rates began to rise in 1984 (they began to decrease in 1985, but at a relatively slow rate), and the quarterly GDP rate fell from 5.7% to 8.5% in 1984 to 3.5% to 4.1% in 1985 and 1986. The annual level was 3.1~3.6%; the quarterly difference (average) between the federal benchmark and GDP rose from 1.1%~2.5% in early 1984 to 3.5~4.1% in 1985 and 3.1~3.6% in 1986; from 1984Q2 to 1987Q1, the government bond yield ( Quarterly average) continued to decline by 601BP.

htmlIn the early 1990s, the U.S. economy experienced a brief recession. Against the background of the Gulf War and rising oil prices, war and recession occurred at the same time, and the total planned domestic expenditure and output of the United States declined; in 1987, after Greenspan took office, the United States gradually bid farewell to In the era of low interest rates, the interest rate hike cycle entered, causing banks to gradually tighten credit in the early 1990s; the quarterly difference (average) between the federal benchmark and GDP rose from 2.4% to 3.8% in 1988Q1~Q3 to 5.1%~6.0% in 1989 %, the 5.3%~7.1% level in 1990, and the 5.7%~7.3% level in 1991Q1~Q3; from the beginning of 1989 to the end of 1991, the government bond yield fell by 186BP.

The economic recession in 2001 began in 2000Q2. Multiple factors such as the Federal Reserve's continuous increases in interest rates, rising oil prices, and falling stock markets had a suppressive effect on total demand in the United States. The demand for consumption and fixed asset investment changed from the strong growth trend in the late 1990s, and in 2000Q4 The growth rate supported by U.S. residents' consumption dropped 610 BP compared with the Q1 growth rate, and business investment in Q4 2000 plummeted to -1.4% compared with the Q1 growth rate of 21%, resulting in a significant slowdown in economic growth in 2001, with monetary policy lagging behind the decline of the real economy. The quarterly difference (average) between the federal benchmark and GDP increased from -0.06% to 0.61% in 1999 and 1.0% to 2.4% in Q1 to Q3 of 2000 to 3.0% to 3.6%. From the beginning of 2000 to the end of 2001, the Treasury yield Down 171BP.

During the lingering period of the U.S. economy after 2006, the bond investment range once again appeared; the quarterly difference (average) between the federal benchmark and GDP was at a stage high between 2006Q3 and 2007 Q2, reaching 2.9%~4.0%; again during the period of 2008Q4~2009Q3 Returned to the periodic high of 3.3%~4.2%; during 2009Q3~2009Q3, the government bond yield fell by 138BP.

(2) South Korea

From the perspective of South Korea's bond investment range:

The economic downturn in 2003, after the economic growth in 2001 and 2002 was less than 5%, the South Korean economy in 2003 was unfavorable, growing only 2.9%, becoming the 62nd In the third low-growth year after the outbreak (in addition to 1980 and 1998), South Korean residents' consumption was sluggish and capital outflows. At the same time, domestic labor disputes also led to weak economic recovery, and the advancement of monetary policy lagged behind. Specifically, GDP quarterly growth dropped from 7.0%, 7.4%, 7.8%, and 7.5% in Q1 to Q4 in 2002 to 4.0%, 2.2%, 1.8%, and 3.8 in Q1 to Q4 in 2003. %; the difference between the benchmark interest rate and GDP growth (quarterly average) increased from -3.6%~-3.0% in 2002 to 0.25%~1.95% in Q1~Q3 of 2003; from the beginning of 2002 to the end of 2003, the yield on government bonds The rate dropped by 174BP.

The 2008 financial crisis hit the real economy. According to medium and micro data, South Korea's largest shipbuilding company Hyundai announced that its order volume dropped by 50% from January to October 2008, and South Korea's automobile exports to the United States plummeted. In terms of foreign trade, by November 2008, the export growth rate dropped sharply from 28.2% in September to 10%, and the export volume in November decreased by 18% compared with the same period in 2007. As of the end of September 2008, South Korea was burdened with a net debt of approximately US$25.1 billion; the quarterly GDP growth rate in Q1~Q4 in 2007 was 4.7%, 5.6%, 5.1%, and 6.3%, which dropped to the year-on-year growth rate in Q1~Q4 in 2008. The difference between the benchmark interest rate and GDP growth rate (quarterly average) increased from -1.3% to -0.2% in 2007 to 0.9% to 4.6% in 2008. At the end of 2007 By Q1 2009, the yield on government bonds had dropped by 85BP.

(3) Hong Kong, China

We use the 10-year government bond yield to show the performance of bond products in the time window. It can be seen that after the Asian financial crisis in 1998 and the Hong Kong economic downturn in 2001, the currency lagged behind the real economic recession. , a bond investment area emerged.

1997~1998, the impact of the Asian financial crisis. In July 1997, under the pressure of the impact of foreign capital markets on the foreign exchange market, the Thai baht, which switched to a floating exchange rate, depreciated sharply. This was the beginning of the Southeast Asian financial crisis, and the storm quickly spread to Malaysia. , Indonesia , Philippines , Japan and South Korea, etc. Amid the financial turmoil, the competitive depreciation of the Japanese yen and currencies of Southeast Asian countries and the decline of stock markets became the triggers. Hong Kong's asset prices experienced substantial adjustments. Property prices fell by 30% from the peak in 1997 to the first half of 1998. The destructiveness of the financial crisis It also continued to deepen the real economy. From 1998Q1 to 1999Q1, GDP quarterly grew by -2.7%, -6.0%, -8.3%, -6.3%, and -3.0% year-on-year respectively, showing continued negative growth. The difference between the benchmark interest rate and GDP growth rate ( Quarterly average) climbed to a historic high of 9.7% to 15.2% in 1998. As for bond market realization, Hong Kong's 10-year government bond yields dropped significantly by 212BP from 1998Q2 to 1998Q4.

Hong Kong's economy fell back in 2001. After the Asian financial crisis, Hong Kong entered a slow recovery stage. As a "small open economy", affected by the economic recession throughout the year, export figures from January to October 2001 (except February) Combined with the structural unemployment and other problems caused by its own real estate bubble and the "hollowing out" of the economic structure, the economic growth rate declined in 2001. Compared with the quarterly GDP growth rate in Q1~Q4 of 2000, the year-on-year growth rate was 10.7% and 7.4%. , 7.2%, 5.7%, dropped to the year-on-year growth rate of 2.0%, 1.1%, 0.1%, -0.8% in Q1~Q4 of 2001; the difference between the benchmark interest rate and GDP growth rate (quarterly average) dropped from -3.2%~ in 2000 The 2.3% level rose to the 4.1%~4.5% level in 2001, and it was still at a periodic high of 2.8%~3.9% from 2002Q1~Q2; from 2000Q1 to 2001Q4, the 10-year government bond yield fell by 182BP.

(4) China Taiwan

uses the 10-year government bond yield to show the performance of Taiwan's bond products and observe the bond investment areas that have appeared in its history - in 2008, Taiwan's economy was "cold both internally and externally", and inflation climbed in the first half of the year. In the second half of the year, the economy experienced a sharp decline. Looking at the island's exports, exports in the first eight months of 2008 still had a year-on-year growth rate of 16.8%. However, they continued to decrease in subsequent months. The year-on-year growth rate in November before statistics was only 4.8%. ; In the service industry, wholesale and retail sales also continued to decline after October 2008; in terms of prices, consumer prices remained in the rising zone in the first half of the year, but prices turned downward after demand was significantly insufficient in the second half of the year; GDP from 2007Q3 to 2008Q2 Year-on-year growth rates were 7.1%, 6.5%, 7.6%, and 5.7% respectively, while the GDP quarterly year-on-year growth rates from 2008Q3 to 2009Q2 were -1.23%, -7.53%, -8.12, and -6.58% respectively; the difference between the benchmark interest rate and GDP growth rate (quarterly average) rose sharply from -3.83% to -2.04% in 2007Q3~2008Q2 to 4.73%~9.53% in 2008Q3~2009Q2; from 2007Q3 to 2009Q2, Taiwan's 10-year government bond yield fell by 118BP.

(5) Germany

From the perspective of Germany’s bond investment range:

The recession in the first half of 2009 and the sudden drop in global demand caused by the economic crisis caused a serious decline in German exports. Overall, in addition to private consumption and public expenditure, exports and enterprises Investments are in free fall. The most important prosperity indicator, Germany's Ifo Business Index, hit record lows of 82.6 and 82.2 in February and March of 2009. In the first quarter of 2009, Germany's GDP fell by 3.5% month-on-month and 6.7% year-on-year, marking the worst recession in the past 80 years. The year-on-year GDP growth rates from Q1 to Q4 in 2008 were 2.04%, 3.04%, 1.05%, and -1.86% respectively. In 2009, the year-on-year GDP growth rates from Q1 to Q4 have dropped significantly to -6.56%, -7.85%, -5.63%, and - 2.43%; the difference between the benchmark interest rate and GDP growth (quarterly average) increased from 1.1% to 6.1% in 2008 to 8.4% to 11.2% in 2009; from 2008Q2 to 2010Q1, the German government bond yield fell by 142BP.

(6) Japan

Japan has its particularity in the applicability of the investment clock. After the economic tragedy of the bursting of the real estate bubble in Japan in the early 1990s, Japan was not resolute and decisive in the follow-up treatment of non-performing assets, and a series of rescue measures were not implemented. The failure to inform the public and activate transactions in the financial and real estate industries, and the currency's failure to rescue the recession, made Japan an exception, and it has always been in the bond investment zone.

The experiences of various countries in the equity investment zone

When interest rates hit the bottom and real estate fundamentals are bleak, but the deterioration slows down, we can confirm that the current interest rate level is already below the perfect interest rate level, and the spring of equity will come. Of course, as a cyclical industry, this change trend is measured in years. In fact, we do not recommend that long-term investors make economic forecasts. It is better to wait patiently until the results of GDP and interest rate data come out, and then intervene in the equity investment industry after confirmation of recovery.

(1) The equity investment area in the United States

often comes from the monetary relaxation after the recession, which can be seen from the equity investment area in the United States: the stimulus after the 2001 recession. At the beginning of the 20th century, the U.S. economic growth obviously slowed down, showing three major characteristics: rapid cooling, declining investment becoming the number one factor, cooling for the first time since entering the new economic era, and in order to get out of recession, the Federal Reserve began to cut interest rates multiple times starting in 2001 (from 2001 to 2003). 13 consecutive interest rate cuts in 2016), resulting in effective improvement in liquidity. Judging from the performance of representative window period data, the period from 2001Q1 to 2003Q3 continued to be in the interest rate cutting cycle, during which the federal benchmark interest rate fell by 434BP; the economy was in a stage of gradual recovery. From 2001Q2 to 2003Q3, the GDP quarterly year-on-year ratio was 0.94% respectively. , 0.49%, 0.21%, 1.42%, 1.44%, 2.25%, 2.04%, 1.63%, 2.01%, 3.22%; the S&P 500 real estate stock index has continued to rise from the 82 level in 2003Q1 to 107 in 2004Q1.

In response to the impact of the financial crisis, the United States launched four major economic stimulus and financial stabilization plans in early 2009, including the US$700 billion Troubled Asset Relief Program (TARP) launched by former President Bush, Obama's 7870 The US$800 billion economic stimulus plan, the US$800 billion rescue package launched by the Federal Reserve, and the US Treasury Department’s financial stability plan totaling up to US$2 trillion.The federal benchmark interest rate has dropped to a low level since the end of 2008, from 4.5% to 5.1% at the end of 2007, to a level close to zero interest rates; the quarterly GDP value has begun to rebound since 2009Q2, and the S&P 500 real estate stock index has risen rapidly since 2009Q1. , looking at the period from Q1 of 2009 to Q1 of 2001, the SP500 real estate index rose from 48 to 102.

(2) South Korea

Observe the emergence of equity investment areas in South Korea in 2009:

Post-crisis assistance in 2009, in order to cope with the impact of the financial crisis on the real economy, the Korean government and the central bank adopted large-scale assistance. The Bank of Korea lowered interest rates three times in a row. The base interest rate was lowered from 5.25% to 4%; the scale of low-interest loans to small and medium-sized enterprises was increased from the current 6.5 trillion won to 9 trillion won; state agencies purchased unsold houses or land by builders. Directly provide 9 trillion won of liquidity to the construction industry; sign a US$30 billion currency exchange agreement with the Federal Reserve to stabilize the exchange rate and financial markets; South Korea's benchmark interest rate dropped sharply from 5.25% in 2008Q3 to 2% in 2009Q1 (a decrease of 325BP ), and continued to have low interest rates in the subsequent period; economic growth has picked up since the second half of 2009, and from 2008Q4 to 2009Q4, GDP quarterly year-on-year rates were -1.6%, -1.9%, -1.1%, 0.9%, and 4.8% respectively; From 2009Q1 to 2009Q4, the Korean real estate stock index rose from 30.83 to 75.73, an increase of 59.29%.

(3) Hong Kong, China

For the historical equity investment area of ​​Hong Kong, China:

1998~1999, the stimulus after the Asian financial crisis. In order to combat the crisis, the Hong Kong SAR government took a series of measures, using more than HK$110 billion of the Exchange Fund to stabilize the exchange rate system and the securities market; in October, it began to implement a comprehensive economic revitalization plan (including expanding infrastructure, developing innovative technology, stabilizing the financial system and housing policy etc.), the good implementation of the "Financial Defense War" and the advancement of assistance measures have resulted in the emergence of a bottom in interest rates and the economy. Hong Kong's GDP began to stabilize and rebound on a quarterly basis in 1999. According to the data, the year-on-year GDP from Q1 to Q4 in 1999 was -3.0%, 0.4%, 4.0%, and 8.4% respectively, while the year-on-year GDP from Q1 to Q4 in 1998 was -2.7 respectively. %, -6.0%, -8.3%, -6.3%; Hong Kong’s benchmark interest rate dropped from 7% in the first half of 1998 to 6.25% in 1999Q2, a decrease of 75BP; in Q3 of 1998, the Hong Kong Hang Seng Real Estate Index began to fall sharply compared with the previous period. Rebounding, from Q3 of 1998 to Q4 of 1999, Hong Kong's Hang Seng Real Estate Index rose from 7077 to 17498, an increase of 59.56%.

The economic improvement from 2002 to 2004 was affected by the second recession of Hong Kong's economy and the impact of the SARS epidemic. Hong Kong's economy showed a situation of "low growth, high unemployment, and deflation". The SAR government timely launched "relief measures" of HK$11.8 billion, and signed a closer economic and trade relationship with the mainland. It signed CEPA - zero tariffs will be implemented in stages when Hong Kong products enter the mainland market, and the open areas of service trade will be expanded to lower entry barriers, trade and investment. The three major aspects of facilitation have helped Hong Kong develop, resulting in a double improvement in economic and liquidity conditions. The GDP growth rates from 2003Q3 to 2004Q4 were 4.0%, 4.7%, 7.9%, 12.1%, 6.9%, and 8.2% respectively year-on-year, while the quarterly GDP growth rates from 2001Q3 to 2003Q2 were 0.10%, -0.80%, -0.60%, 0.50%, respectively. 2.40%, 4.10%, 3.90%, -0.6%; from Q2 in 2003 to Q1 in 2005, the Hang Seng Real Estate Index rose from 10447 to 18059, an increase of 42.15%.

Rescue after the 2009 financial crisis. During the crisis stage, the Hong Kong SAR government quickly launched measures to "stabilize finance, support enterprises, and protect employment", investing approximately 4% of GDP; during the recovery from 2011 to 2013, driven by the economic recovery of mainland China, Hong Kong's response to China The mainland's import and export growth momentum is strong, and its currency liquidity is extremely loose. Since the first half of 2010, the Hang Seng Real Estate Index has shown a long-term upward trend.

(4) Taiwan, China

Stimulated by Taiwan’s response to the crisis in 2009, an equity investment area emerged.Taiwan lowered discount loan interest rates seven times from September 2008 to February 2009, guiding market interest rates lower. From Q3 of 2008 to Q1 of 2009, Taiwan's benchmark interest rate dropped from 3.63% to 1.25%, a decrease of 238BP; during the Spring Festival in 2009 Afterwards, stimulated by the mainland's plan to expand domestic demand and the "urgent order effect" of purchases from Taiwan, coupled with the general rebound of the international stock market, the relevant indexes showed a significant upward trend; from Q4 of 2008 to Q2 of 2009, the quarterly GDP growth was -7.53%, -8.12%, -6.58%, while Q3~Q4 of 2009 has reached -1.41% and 8.82% respectively; during Q1~Q4 of 2009, the Taiwan Stock Construction Industry Index rose from 106 to 277, an increase of 61.73%.

(5) Germany

From the perspective of Germany’s equity investment area:

Recovery in the second half of 2009: In 2008, Germany suffered the largest economic recession since World War II; the German government proposed twice in November 2008 and January 2009 The "Economic Stimulus Plan" totals more than 80 billion euros; among them, the second plan focuses on infrastructure investment and tax cuts. It also includes some policies to expand domestic demand, such as lowering the minimum income tax rate and medical insurance premiums, for those who have Provide additional assistance to families with children and encourage car sales; the planned export tax rebate policy also has a positive impact on consumers' expected income, thereby enhancing purchasing power and willingness to buy; stimulated by expansionary fiscal policy and low interest rates, in 2009 The German economy recovered rapidly in the second half of 2008; from Q4 of 2008 to Q4 of 2009, the German benchmark interest rate continued to fall by 208BP; the quarterly GDP gradually recovered from mid-2009; the SP German real estate index increased from 52.82 to 52.82 from Q3 of 2009 to Q4 of 2009. It rose to 70.26, an increase of 24.82%.

The experience of various countries in real estate investment zones

When interest rates are lower than the perfect interest rate, real estate fundamentals will enter the recovery channel in the future. After real estate has begun to recover, if interest rates do not rise to the perfect interest rate level in time, then according to the formula deduced earlier, housing prices will easily enter a rapid upward trend, or even create a real estate bubble. It is best for investors to get involved in the residential market at this stage. Due to the leverage factor, the return from investing in real estate will be greater than that of stocks, and there is not much risk of fluctuations.

(1) The United States

During the real estate boom from the 1990s to the financial crisis in 2008, in order to stimulate economic growth, the stimulus policies adopted by Clinton and George W. Bush included plans to promote "home ownership" for American families. The population Driven by the adjustment of distribution, the shift of industrial focus, the influx of immigrants and the expansion of the labor market, a relatively loose monetary policy has created the foundation for the boom of US real estate; in addition, related financial derivatives and loose home purchase loans have also Further arousing the enthusiasm for home buying in the United States; in this real estate investment area, it can be seen that A. The difference between the benchmark interest rate and GDP growth rate (quarterly average) has obviously entered a relatively low level compared with the high level from the late 1970s to the early 1980s; B. , during the period of real estate investment area, the difference is in a narrowing trend. From Q2 of 1989 to Q4 of 2006, the U.S. housing price index increased by approximately 57%.

’s resurgence in 2012. In order to get out of the recession after the crisis in 2008, with the continuous stimulation of quantitative easing policy, the federal benchmark interest rate continued to be lower than 0.20%. The relatively good economic recovery during the same period also provided conditions; after 2010, GDP returned quarterly year-on-year. Positive growth; with both economic and monetary improvements, the difference between the federal benchmark interest rate and GDP growth continued to be at an absolute low below zero, and the U.S. real estate industry began to gradually recover. From the end of 2011 to the end of 2013, the U.S. housing price index increased by approximately 15%.

(2) South Korea

Real estate investment area after the financial crisis. Combined with the characteristics of real estate price fluctuations and low prices, this investment area lasts for a long time. We divide it into two stages for analysis:

A. Post-crisis stimulus: 1997 After the Asian financial crisis, in the hope of activating the real estate industry to drive domestic economic recovery, the South Korean government introduced a series of policies to encourage citizens to purchase houses and relaxed the previous policies that suppressed demand; for example: reducing real estate taxes (reducing or exempting registration taxes for newly purchased housing, reducing or exempting housing transfer income taxes) ), relax restrictions on residential transfers, completely cancel price limit policies, and grant national treatment to foreign home buyers; and the Bank of Korea also implements low interest rate policies in a timely manner to provide support.

B, making rapid progress: After 2002, with the recovery of South Korea's economy, and after the crisis, citizens lost confidence in holding Korean won, and more expected to gain a "security" in wealth through home purchases. Combined with the continued inflow of foreign speculative funds, and the high level of age-appropriate home purchases The demand after the accumulation of wealth among the people has been continuously released, and South Korea's housing prices have ushered in a period of rapid growth (it was not until after 2007 that subsequent control policies gradually took effect, and the increase in housing prices gradually narrowed).

As can be seen from the figure below, in the real estate investment area, the difference between the benchmark interest rate and GDP growth rate (quarterly average) is basically below the level of -2%. During the period from Q4 of 1999 to Q4 of 2007, South Korea's national real estate index rose by 59.27%. As the core area of ​​South Korea, Seoul’s Gangnam District is the result of multiple factors such as economic transformation, North-South relations, and the Miracle of the Han River in South Korea’s modern history. Its growth rate has led the entire South Korea. According to a survey by the Korean National Tax Service, the six-month increase in sales from 2000 to 2006 During the year, the average selling price of apartments in the Gangnam area has increased more than three times, with the average price per square meter climbing to about 60,000 yuan. In the most prosperous areas in Gangnam, such as Cheongdam-dong and Apgujeong-dong, the average price per square meter is about hundreds of thousands of yuan. The number of luxury houses doubled every year, forming the concept of "Jiangnan Myth" at that time.

(3) Hong Kong, China

Hong Kong emerged as a real estate investment area in the eight years from 2004 to 2012 (2008 after deducting the background of the crisis). Since September 2003, Hong Kong's housing prices have entered a new round of rising cycle. After adjustments due to the impact of the financial crisis in 2008, under the background of global quantitative easing, combined with Hong Kong's high capital inflows, interest rates have remained low, and housing prices have increased since 2009. It started to accelerate. It can also be seen within the time window that there is a continued shortage of housing supply. From 2004 to 2012, the supply of private housing was only 50% of that from 1990 to 2003.

As can be seen from the figure below, during the window period of the real estate investment area, the difference between the benchmark interest rate and GDP growth rate (quarterly average) has been below zero for a long period of time (including: from 2009 Q2 to 2010 Q1, the benchmark interest rate and The difference in GDP growth is in a stage of rapid decline), and interest rates are very cheap compared to the amount required by entities. Overall, from 2004 to 2012, Hong Kong’s house price index increased by 63.40%.

(4) Taiwan, China

Taiwan in 2009. In 2009, the Taiwanese government proposed a "new plan to revitalize the economy," which covers issuing consumer vouchers, expanding public construction, promoting urban renewal, encouraging private investment, and reengineering industries. Among them, the "new plan to revitalize the economy" decided to allocate an additional 200 billion yuan in incentives. For housing purchase project loans, the loan limit is increased to a maximum of NT$3.5 million per household in Taipei City and NT$3 million in other areas. Young people aged 20 to 39 can buy a house with a loan of up to 2 million yuan, with a loan period of up to 20 years, zero interest rate for the first two years, and a grace period of up to 5 years for interest payments and non-repayment of the principal; for those who cannot afford it, For those who want to live in a house, the "Ministry of the Interior" also provides rent subsidies, with a maximum of 3,600 yuan per household per month, and a subsidy period of 2 years; the difference (quarterly) between Taiwan's benchmark interest rate and GDP growth rate dropped sharply in Q3 of 2009, and from 2009Q3 to 2010Q3 , the difference dropped from 2.66% to -10.20% (a range of 1286 BP), and until the end of Q3 2011, the difference between the benchmark interest rate and GDP growth rate was below zero; from Q3 2009 to Q3 2011, Taipei, Taiwan The regional housing price index increased by 21.22%.

(5) Germany

In 2011-2012, under the background of the European Central Bank's continued quantitative easing, bank interest rates were at extremely low levels for many years; however, due to Germany's firm attitude towards regulating the real estate market, the protection of residence rights is relatively complete (such as Strict price controls are implemented to combat the power of market speculators; most housing mortgage loans are subject to fixed interest rates; the down payment must reach 40%, remortgages are prohibited, and the leverage of home purchases is strictly controlled; the housing savings system further reduces residents’ leverage, etc.), in addition, The characteristics of the concept of renting also promote the good implementation of preferential policies for renting; from a historical perspective, the overall housing prices in Germany have remained at a relatively stable level.

The experience of cash holding area

At this time, the fundamentals of real estate are prosperous, but in the process of the central bank being forced to raise interest rates, interest rates have quietly risen above the perfect interest rate level, and the real estate view is about to emerge. At this time, fundamental research on real estate cannot reveal anything at all, but it often breeds huge crises. The difference between interest rates and GDP growth is still an effective predictor, but after our data screening, the related indicator---the slope of the Treasury yield curve is more effective and sensitive.

After quantitative calculations, we found that the earliest burst signal was the term structure of the bond market. From a time perspective, the term structure changed 6 to 18 months earlier than the real estate bubble burst.

(End)

The stock market is risky, so investment needs to be cautious. This article is for reference only and does not represent any investment advice. Any investment decisions made with reference to this article are made independently by the audience, and the resulting economic, financial or other risks are borne by the audience.