Source: China Fund News
Author: China Fund News reporter Yang Bo
Over the past 20 years, a number of outstanding fund managers have emerged in China’s fund industry. China Fund News reporter Yang Bo interviewed Gao Yi Asset, a well-known representative of the value investment school in the industry. Chairman Qiu Guolu. In more than three hours of interviews, he talked about his early experience and investment process, including wonderful investment cases, vivid stories and characters, as well as his investment experience and investment wisdom from his 20 years of investment experience. .
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Why did you consider building a platform like Gaoyi?
Qiu Guolu: It is very difficult for an excellent fund manager to start a business. There are seven things to do to open a business, and none of them can be missing. As mentioned earlier, I had a hard time starting a business in the United States. Later, I found a platform and gave it a portion of the proceeds. My quality of life, probability of success, depth of research, and investment acumen were greatly improved.
Therefore, when I started my business, I wanted to create such a platform. I am a fund manager myself and have worked on other platforms. As a fund manager, whatever platform I want, I will build Gaoyi into a platform. Whatever services I need at that time, I will provide them to the partnership funds. manager. The three companies I have worked for in the United States are all partnerships. I know how the relationship between partners should be handled and how the interests should be distributed.
Why can Gao Yi thrive?
Qiu Guolu: The most important thing is for partners to get along well with each other and get along harmoniously. I am very lucky to have met several other partners of ours who have good character and strong investment ability. If Gao Yi has achieved something in the past three or four years, it is mainly due to them. I just happened to be with the right people and did the right thing.
We have six very senior fund managers, and there are one or two people who know a lot about almost any industry. We all learn from each other’s strengths, which is very beneficial for us to understand the world and the market.
Our characteristic is that we study together and have a lot of arguments and debates. In the process, we can figure out a lot of things. We rarely debate market trends or the rise and fall of individual stocks. What we debate is the fundamentals of the industry and the company, how the industry will change in the future, which company is more competitive, which company’s strategy is right, and which company Management quality is better.
As you said, every partner of Gao Yi is excellent. Is it possible for them to leave the company and start their own business in the future?
Qiu Guolu: This problem exists for every asset management company. The advantage of Gao Yi is that, first, the mechanism is relatively in place. The company's equity incentive mechanism, performance sharing mechanism, and bonus deferred mechanism all take into account the continuity of the company; second, the core lies in the company's culture, and our culture is With the fund manager as the core, the fund manager has full autonomy, full decision-making power, and his own independent sub-brand; finally, there is character. It just so happens that the partners we met have good character and get along well with each other. It's also very good and feels more comfortable. The characteristic of this industry is that all excellent investors have financial freedom. No one will compromise for financial reasons. Everyone must be satisfied. It is impossible to be completely satisfied, but you can still find a more reasonable greatest common denominator.
Gao Yi has performed well since its establishment and has been recognized by channels and customers. The company's assets under management have also grown rapidly. Do you feel any pressure?
Qiu Guolu: Gao Yi is positioned as a platform company with fund managers as the core. The fund managers themselves decide when the products will be opened and closed, and the company will fully respect the fund managers’ wishes. In the past year or so, Gao Yi has had different fund managers close subscriptions for the products they manage. Now most fund managers have closed subscriptions for most of their products. Gao Yi's scale has been relatively stable in the past six months.
I only sent one company-wide email throughout 2017, which talked about how to deal with three types of conflicts: first, when the company’s interests conflict with the interests of customers, the interests of customers take precedence; second, when business development conflicts with When compliance conflicts, compliance takes precedence; thirdly, when scale conflicts with performance, performance takes precedence. These are three problems that asset management companies will encounter.
Gao Yi's company management is very flat and simple. There were only two company-wide meetings last year, one for compliance training and the other for year-end summary. Last year, when we had a double bumper harvest in terms of performance and scale, in the year-end summary, we only summarized the results for three minutes and discussed the issues for three hours. In history, we have seen many asset management companies that became popular in a short period of time, and we also know that it is easy to achieve temporary success in the market, but it is difficult to achieve lasting success.
To be successful in the asset management industry, the first thing is to have a good mechanism to attract excellent talents so as to create excellent performance. The last thing is the ideal scale. This is a reasonable sequence. If we directly pursue scale through various marketing methods, there will be some short-term effects, but it will not be sustainable in the long term.
Technically speaking, several of Gao Yi's partners have relatively rich experience in the industry and have the experience and ability to manage large funds. Their investment style is also on the left side, with early entry and early exit, and relatively large capacity. We often buy too early or sell too early. After I buy, it continues to fall, and after I sell, it continues to rise. Especially with reverse investment , you buy things that others don’t want. Basically, you can buy as much as you want. For some companies, you have no problem buying one billion a day now, because everyone is selling them. In January 2016, when you bought liquor stocks, you would get as much as you wanted. Even if the fund size was larger, the impact on investment would be Not big either. Why did
participate in the founding of Gaoli Value Investment Research Institute?
Qiu Guolu: The core competitiveness of the asset management industry is talents. How to recruit, train, motivate and retain talents is the top priority of the company. In terms of recruiting talents, Gao Yi still has some appeal. Our fund managers are all excellent and relatively attractive to talents. In terms of incentives, we have been very clear and mature when we were founded, and retention and incentives are basically in place. The next step is training. How to train talents?
The Gaoli Value Investment Institute was founded by Hillhouse Capital. David Swenson, chief investment officer of Yale University, serves as the honorary chairman. Zhang Lei, founder of Hillhouse Capital, serves as the chairman. I serve as the dean. It recruits more than 20 students a year, and nearly 1,000 people signed up last year. The students are all front-line investment researchers in the primary and secondary markets, including fund managers and researchers from public and private funds, as well as equity investors. Their average Anyone with 5 to 8 years of investment experience, or even 20 to 30 years of investment experience in some cases, can definitely become a teacher. The specific courses of
are mainly taught by Hillhouse on the primary market and Gao Yi on the secondary market. Partners talk about what they are good at. For example, Zhang Lei talks about the retail industry, Hillhouse TMT partners talk about TMT, Deng Xiaofeng talks about the communications industry, and Feng Liu talks about the consumer goods industry. We will also invite some senior experts from outside to give lectures. A topic will be assigned every month, divided into four groups, studying different samples, doing 2-4 case studies, and studying some issues that we are generally concerned about, such as new energy, electric vehicles, new retail, etc.
The Gao Li Value Investment Institute is positioned as a post-MBA, because most of the students have a master's degree and have practical experience, so what they teach is relatively close to practice. The academic system lasts for two years. The first year is for study and ten classes. The second year is for practice. If you encounter problems during practice, you will discuss them together with a view to applying what you have learned.
Some students at the Gao Li Value Investment Institute have resumes and experiences that are no less than mine, and can be my teachers in many aspects. Therefore, we are both teachers and friends, and we are each other’s mentors. In the past year, I have learned a lot from these students. It is rare to have the opportunity to listen to teachers’ systematic lectures. I will listen to almost every class. Gao Yi's researchers can attend and study together, which is also helpful for Gao Yi to form an atmosphere for systematically cultivating talents.
is not pessimistic about the prospects of the stock market.
At present, everyone is relatively pessimistic about the stock market. What do you think?
Qiu Guolu: There will always be great uncertainties in the future. Some uncertainties are known to you, and some uncertainties are unknown to you. There are three main sources of large systemic risks in a market:
The first is valuation bubbles. For example, in 2007 or the first half of 2015, the valuation was too high and the decline would be sharp. At other times, it is basically volatile. Currently, it is Later in the volatility phase, valuations are already relatively low.
The second is that the fundamentals have greatly deteriorated. The company used to make money, but now it no longer makes money, or the economy has undergone major adjustments and there has been an economic recession or collapse. But even if trade friction is taken into account, China's economy will not collapse, because from 2011 to 2015, China's economy went through five long and sufficient adjustments, and for fifty months in the middle, PPI was negative growth, and PPI is industrial finished products. Ex-factory price index and PPI are negative, indicating that enterprises are under tremendous pressure. Therefore, the reshuffle in the past five years has been relatively sufficient. The recovery since 2016 and 2017 has been relatively mild. Inventories are not high, there is not much excess production capacity, and fundamental bubbles are not big. It is unlikely that there will be a sudden cliff-like decline.
The third is that the central bank has sharply tightened liquidity and the cost of funds has increased rapidly. This is also unlikely. The deposit reserve ratio has been targeted three times this year. Recently, the State Council executive meeting stated that active fiscal policy should be more active, and the central bank’s investment has also increased significantly. , policies are gradually relaxing.
This is the main reason why we are not pessimistic about the stock market outlook.
Please tell us your views on Sino-US trade friction.
Qiu Guolu: I am not an expert. It is difficult to say specifically how the Sino-US trade friction will evolve, but we need to know where the bottom line is. China has a very large local market and a relatively comprehensive industrial chain layout. China's foreign trade dependence is about 1/3, which is lower than the world average. In addition, we do not have very serious foreign debt and we are a country with a high savings rate. These conditions determine that the theory of China's economic collapse is untenable.
Japan and the United States fought a trade war for 20 years from the 1970s to the 1980s, but it did not cause huge harm to the Japanese economy. In the later period, Japan's per capita GDP has been close to and surpassed that of the United States. Their two economies are in direct competition, while China's per capita GDP is now four or five times lower than that of the United States, so the Chinese and American economies are still complementary. Don't forget that we have a huge trade surplus with the United States. A considerable part of it is re-export trade. If we export an iPhone to the United States for US$1,000, China's added value is not much, but it is reflected in a US$1,000 surplus. If trade friction really breaks out, the pressure will also be transmitted to countries upstream of China.
Now that the supply chain has become globalized, I don’t think the Sino-US trade friction will develop out of control. The two sides should be able to reach a certain degree of cooperation and compromise within a certain range. Of course, the Sino-US trade friction may take a long time and there will be many intermediate rounds.
Are you optimistic about China's economy?
Qiu Guolu: I have always been optimistic. After all, China's economy is growing. Although the stock market has gone up and down, some listed companies are still good. Buying good companies will yield good returns in the long run. The government has many cards in its hands. Once the economy shows signs of slowing down, policies will begin to relax. Many people only look at the debt ratio, but they should also look at the asset side. The Chinese government owns land and state-owned enterprises, and there are still many resources on the asset side.
Everyone is still a little worried about local debt, but I think it is controllable. If you want to save it, you can definitely save it. At present, I just want to break the rigid redemption, but it is within the controllable risk range. Deleveraging is a means, and preventing risks is the purpose. It is impossible to create greater risks in order to prevent risks. Although this is a possibility, the government is very cautious and should not underestimate the wisdom of those in power.
Many problems seem big, but there is room for solution. China's current GDP is 80 trillion, and its economy is still very resilient. Unlike some small economies, which have no ability to resist risks.
In the current market situation, what would you do? What industry are you optimistic about?
Qiu Guolu: There is no need to be too pessimistic about the stock market. The valuations of many listed companies, such as financial stocks, basically reflect particularly pessimistic expectations about the Chinese economy.
The valuations of many financial stocks in Hong Kong stocks are already very low. The price-to-book ratio of some financial stocks has been lower than 0.5, which is even lower than the valuation of U.S. financial stocks in 2008. This reflects an extremely pessimistic expectation. Why it is cheap is the last word, because it reflects a very pessimistic expectation, and the probability of exceeding expectations in the future is very high. Judging from the valuation of some financial stocks, it seems that China's economy is in a mess, and the bad debts of banks are more than 10%. In fact, we are concerned that the bad debts of banks have continued to improve in the past eight quarters, and there may be some minor deterioration in the future. But it's not as serious as the market fears.
In addition, the differentiation between banks is very serious. We recently conducted an in-depth systematic review of the accounting statements of 17 banks and found that there are great differences between different banks: First, the standards for recognizing bad debts are very different. Some banks will treat it as a bad debt as long as it is overdue for one day, and some banks will not treat it as a bad debt if it is overdue for 100 days. Overdue is objective, but the identification of bad debts is subjective. The second is the provision for bad debts. Different banks have different provisions. Some provisions are more than 100%, and some are more than 400%. Provisions vary greatly. This is the concept of stock. Let’s look at flow. In the past year, some banks’ new provisions have been more than two or three times the amount of newly formed bad debts, while some banks’ provisions are not enough to cover their new bad debts. of bad debts. Just whether banks are cautious or aggressive in dealing with bad debts can make a big difference.
The current valuation of banks is between 5 and 8 times. After adjusting for bad debt provisions, some banks are several times higher, and some should actually be dozens of times higher. Some banks have even lost money. , and some banks may derive 80 or 90% of their profits from insufficient provisions. According to more stringent standards, profits may be reduced by more than half. Therefore, banks cannot just look at the surface. Everyone has not noticed the differentiation of banks.
It is estimated that no one will study banks now. Not to mention now, no one did it in 2012 or 2013. In fact, the performance of banks has not been that bad in recent years, especially the leading bank stocks, which have performed very well in recent years. . Now, we only need to judge one thing, that is, China's economy will not collapse. This is a relatively high chance of winning.
Early experience: Top academics + the first batch of investors
Please tell us about your early experience. Your father, Qiu Huabing, is the dean of the Department of Finance and the Dean of the School of Economics at Xiamen University. It can be said that he has a family background.
Qiu Guolu: I didn’t study very hard since I was a child, but my academic performance was not bad. I participated in various competitions in high school. I won first place in Fujian Province in physics competitions and computer programming competitions, and also won prizes in mathematics competitions. My family has always felt that it was a pity that I did not do scientific research. I ranked second in Fujian Province in the unified examination for high school graduation, so I was qualified to be admitted to university.
I can’t talk about my family background, but I have read a lot of books since I was a child. I have read a lot of books on economics, finance, history, and society. My father is a teacher. There are not many other things in the family but a lot of books. I was born in , Xiamen University, and grew up on the campus of Xiamen University. The faculty dormitory where I lived when I was a child has now been converted into the Human History Museum of Xiamen University. I joked with my friends that when I was a child, I lived in the caveman’s house on the top of the mountain.
In terms of economics, finance, and investment, my first enlightenment teacher was my father. In addition to theoretical and practical guidance, his words and deeds, including his life and academic circle, had a great influence on me. Xiamen University has a strong major in finance, and my father had many students. He was probably the first group of people to come into contact with the capital market after China's reform and opening up. I may not have understood the topics they talked about at the time, but I guess I was influenced by them.
My father paid more attention to the combination of theory and practice and founded the first asset appraisal firm in Fujian Province. When I was a sophomore and junior in college, I interned in the firm.I participated in the asset appraisal of a cement factory in Fujian and a brewery in southern Fujian. Of course, I mainly did odd jobs, helping others with computers and accounting. This is the first time that I personally know how to value a company. What I look at is not the financial statements, but the machines, equipment, factories, and calculations of depreciation, life, etc. This is a very simple job, but it is very good. training, my understanding of cyclical stocks and consumer stocks began from that time.
The person who had the greatest influence on me in the early days was undoubtedly my father. Unfortunately, he died young. This year marks the 15th anniversary of his death. Together with my mother and brother, I donated to establish the Xiamen University Qiu Huabing Education Foundation as a way of remembering him.
When did you first get involved in the stock market?
Qiu Guolu: I started to be interested in the stock market very early. In 1992, Xiamen began to issue stocks of Laoshijia. You can buy a subscription certificate for 5 yuan. You can subscribe for stocks a few months later. One ID card can buy 5 yuan. I organized a group of classmates and colleagues from my mother’s company to buy a subscription certificate. I still remember that my classmates and I played cards until four in the morning and queued up. The call warrant is essentially an option, and the leverage is very high. If the option cannot be exercised, it will be a waste of a day and a loss of five yuan. If the option is exercised, you can earn 10,000 yuan. At that time, 10,000 yuan could buy a house. This was my first time participating in stock market and derivatives trading, and it was my first pot of gold.
In 1996, you went to the United States to study. Please tell us about the situation at that time.
Qiu Guolu: At that time, the Internet had just begun. I was one of the first Internet users in China. I used the Internet to apply for American schools, which was very magical. There were no browsers at that time, and all were text interfaces. You had to look at the American school website, enter your name, and then go take a shower and come back. The website might have just come out. But even so, it is still very fast, because in the past, it took more than a month to communicate by letter, but with the Internet, you can send a letter today and receive a reply from the school tomorrow. This gave me a first-hand understanding of the power of technology.
went to the United States for graduate school and gained a lot. I applied to study for a master's degree in economics at Tufts University, and later applied to study finance at the University of Rochester. I received full scholarships for both schools. Economics and finance seem to be very close in China, but in fact they are very different. Economics is more principle-based and macro-based, and is a basic discipline. Finance is more mathematical, quantitative, and practical, and it is an applied discipline.
My original plan was to pursue a Ph.D. in finance. In the United States, a Ph.D. requires two years of classes and three years of writing a thesis. I completed the course and passed the Ph.D. qualifying exam, but did not write the thesis, so I went to get my master's degree. Go to work and join the fund industry. My father has always been worried about me not finishing my Ph.D., and he always felt that I was inferior in everything except studying, and felt that I was not doing my job properly. Now that I think about it, I still feel a little regretful.
Joined a hedge fund and became a partner in five years: The first lesson in value investing will be unforgettable
How did you get into a hedge fund after graduating from graduate school?
Qiu Guolu: I graduated in 1999, at the peak of the NASDAQ bubble. The employment situation in the United States was very good, and the unemployment rate was the lowest in decades, a bit like now. In the United States, postgraduate students generally go to the sell-side first after graduation. Brokerage research institutes may recruit hundreds of people every year, while the buy-side rarely recruits graduates directly from schools. Medium-sized fund companies generally recruit one or two people a year, only if the year is particularly good. At that time, you could go directly to the buyer, so in a certain sense, I was a beneficiary of the technology stock bubble that year.
I went to many companies for interviews, and finally decided to go to Wedge Capital, which is a private equity institution and cannot be regarded as a hedge fund or a public equity fund. The company manages billions of dollars in assets and has less than 100 institutional clients. It does not do hedging in investment, but value investment and long-term investment. There are many private equity funds in the United States that specialize in managing money for institutions.
My first job was as a strategy analyst and quantitative analyst.Doing macro-strategy requires a big-picture view, looking at the problem as a whole, and quantitative analysis is very objective. Everything must be tested with data and programs. I basically know all the indicators of technical analysis in the past, including moving averages and Japanese candle charts. After testing with programs, the conclusion is that most of them are inaccurate and cannot be used by programs. In fact, a lot of the stock market is pseudo-experience. If you do the right thing ten times, you may be right six or seven times. If you do the wrong thing, you may be right three or four times out of ten times. But a person may only experience the three or four times when he is right among the mistakes. Sometimes, he may regard some wrong things as correct experiences. The advantage of quantification is that you can test it ten times or a hundred times. You can use data to test what is good and what is bad. This has developed a relatively objective attitude in me.
How is your job at Wedge Capital?
Qiu Guolu: I learned a lot at Wedge Capital and I enjoyed my time there. On the first day of registration, the company gave me a large office, which was my boss’s original office. Because the company had just expanded from half a floor to one floor, there were not many people in the company, and almost all the investment researchers had offices. The boss moved to another larger corner to work, so he gave me his office.
company was very good to me. When I first joined the company, they sent me to study in a short-term training course on behavioral finance at Harvard University. It was at the height of the Nasdaq bubble and the entire market was going crazy. Theory and reality were contrasting. Very inspiring to me. My English accent is very strong, so the company hired a university teacher to teach me one-on-one English speaking for half a year.
I did a pretty good job. I was promoted three times in five and a half years, from researcher to director to executive vice president, and finally to partner. That’s the good thing about investing, you can see your contribution.
At the end of 2004, I became a partner of the company and owned a portion of the company's shares. The company's size at that time was US$6 billion.
What was your first boss that had a big impact on you?
Qiu Guolu: The boss of Wedge Capital is very good. He served as the research director of the fourth largest bank in the United States at the age of 27. He is the founder and chief investment officer of the company. He is a die-hard value investor and has a great influence on my investment. . Very lucky to have met him.
I worked as an assistant to my boss when I first arrived at the company. He often gave me some questions and taught me a lot of things, from investment concepts to research on market history. I read a lot of books in those years and grew up very fast.
When I joined, the company's performance had lagged behind the market for five consecutive years, and the company's size had dropped from US$3 billion to US$2 billion. Our customers were institutional clients, and we mainly looked at the rolling performance of 5-7 years. Our performance had lagged behind for five consecutive years. , the company has begun to feel a lot of pressure. Faced with the craziness of the Nasdaq, the boss’s calmness and independent thinking, as well as his persistence, are something I will never forget. At that time, everyone was saying, "This time is different," but he firmly said, "This too shall pass."
Once, I told my boss that science and technology are indeed advancing very fast. He replied: "No matter how fast science and technology progress, it will not grow as fast as the greed of Wall Street ."
In May 1999, I joined the company and ten years later Months later, in March 2000, the Nasdaq bubble burst. This was the biggest bubble in history. The Nasdaq fell from more than 5,000 points to 1,000 points, a drop of 80%. The first batch of Chinese Internet stocks listed in the United States fell to a low of a few cents. In the six years after
, from 2000 to 2005, Wedge Capital's performance was almost among the best every year.
This is my first lesson in investing. This work experience inspired me and was crucial in forming my investment philosophy, research methods, and research system. You see, my ability to withstand stress is relatively strong now, because my boss’s calmness at the time left a particularly deep impression on me.
In the capital market, overall bubbles occur every once in a while, and local bubbles are possible almost every year. How should you treat it? I tend to choose to walk around, maybe not participate, and certainly not go short.
In early 2004, my boss decided to retire, not yet 50 years old, and then volunteer to manage assets for a charity.His residence is densely wooded, with countless leaves falling every autumn, but he insists on cleaning and packing it by himself. He is approachable and remembers the names of every cleaner in the building. When the boss of
left, he gave me two large volumes of clippings from old magazines and newspapers that he had accumulated in the past. They were classified by industry and were very well organized. As soon as I entered the company, he taught me to read old magazines and reports. This is a very good habit. Nowadays, everyone is worried that China's leverage is too high and the economy will collapse. You have to look at the historical "Business Week" and "Fortune". Americans have felt that the United States will not be a country since the 1970s. In the 1970s, Worried about inflation, worried about Japan catching up in the 1980s, and later worried about bad debts, there are many such articles, and there are always people who are worried about the future.
Why should we have a historical perspective? Because only by taking a long time can you see many things clearly, their size and importance, and then you will not just listen to the wind and rain, and always live in fear. On the other hand, when a big danger approaches, you will be more sensitive and know how to recognize it.
Another advantage of reading old reports is that it helps to judge the level of the seller’s researcher. Just take out his report from three years ago and you will know whether this person’s words are reliable. The stories and boasts he told three years ago Cow, how is it now? Is it useful? China's sellers have a group of very good researchers, and it is very clear just by looking at the historical reports.
quit his job to start a business on Wall Street for his ideals: he received double-digit positive returns in the 2008 bear market. Why did
leave Wedge Capital to start a business?
Qiu Guolu: Charlotte, where Wedge Capital is located, is known as the second largest banking center in the United States. Bank of America and Wachovia Bank are headquartered there. It is one of the most economically developed cities in the southern United States and is very comfortable. But it's too quiet for me, unless you're golfing. If you want comfort and stability, staying at Wedge Capital is definitely the best choice. But I was young and energetic at the time and thought being a hedge fund manager was a cool thing. I read many theoretical books at that time. The characters’ stories also inspire me to want to achieve something in my career. I felt that I could be as good as Buffett and Soros. I wanted to go out and have a career, so I ran to New York.
In 2005, I founded Altair Navigator Hedge Fund with two other partners. After leaving Wedge Capital, my shares as a partner of Wedge Capital were gone. Later, Wedge Capital grew to more than 10 billion U.S. dollars. A rough calculation showed that those shares were almost all of my net worth at the time. I was still young at the time, so I didn’t think much about the value of these shares and just left. After
started its business, our company's performance was pretty good, but the operation was very hard. Later, I began to cooperate with a financial group with a scale of US$80 billion. I operated on their Princes Capital platform. They provided me with seed capital and working capital, and helped me with marketing and operations. In this way, I can concentrate on investing, worry less about so many trivial matters, and my quality of life and investment acumen will be much stronger. Why I built a platform like Gaoyi Asset has something to do with this experience.
In 2008, the subprime mortgage crisis swept the world and the stock market plummeted. How was your investment situation that year?
Qiu Guolu: Seventy or eighty percent of hedge funds lost money in 2008 because most hedge funds did not adequately hedge. We were fully hedged, so even though global stock markets plummeted, by the time I returned home in October 2008, the company still had double-digit positive returns. At that time, we invested in four countries and regions: the United States, Canada, South Korea and Hong Kong. Our investment strategy was market neutral and country neutral, and we hedged within the same industry. Industry risks were also neutral. We bought low valuation fundamentals. Solid companies, short-selling companies in the same industry with high valuations and good fundamentals. For example, in the 2008 slump, a good liquor stock will definitely fall less than a junk liquor stock.
In 2008, the United States was in real panic.Almost all companies on Wall Street are unable to withstand it. Big banks and investment banks in the United States are at risk of bankruptcy. Everyone thinks that no securities firm or bank can be trusted. They don’t know where to put their money and they don’t dare to put it in custody. Morgan Stanley, Goldman Sachs , don’t dare to put them in Citigroup, Merrill Lynch , all the friends around me are losing their jobs.
People who have experienced the bursting of the Internet bubble in 2000 and the subprime mortgage crisis in 2008 will have a better mentality, be relatively calm, and have a certain ability to identify overreactions to the market, whether they are too optimistic or too pessimistic. Sometimes everyone panics at every turn, but it is an overreaction of the market. For example, in early 2016, the valuation of Hong Kong stocks reached as low as in 2008, and the valuation of the state-owned enterprise index fell to the lowest point in 50 years. However, the situation in 2016 was worse than that in 2008. Years are much better.
Joined Southern Fund at the end of 2008 : Read dozens of reports every week and learn quickly
In October 2008, you returned to China and joined Southern Fund. How big was your company in the United States at that time? Why are you considering returning to your country?
Qiu Guolu: The fund I was managing at that time was already large enough to be built. When the company was first founded, there were two other partners. Later, because it was too tiring to operate independently, I found a platform for cooperation and bought the shares of the other two partners.
I returned to China partly for family reasons. After my father passed away, I wanted to spend more time with my mother. In addition, I have been talking to Mr. Gao Liangyu for several months. Mr. Gao has ideals and is very practical. I highly approve of Mr. Gao and Southern Fund. At that time, the management scale of China's public fund industry was not large. I felt that the development space of China's fund industry was huge. Various causes and conditions converged, which made me determined to return to China.
You went to the United States after graduating from college and stayed there for almost 13 years. You have been working in the industry for nearly 10 years. Will you be acclimated when you return to China?
Qiu Guolu: When I first returned to China, I learned quickly to adapt to the new environment. I read a lot of books and read dozens of reports every week. Through extensive reading and studying, I quickly understood the Chinese market and conducted field research. many listed companies. Why do some outstanding fund managers from abroad not necessarily do well when they come to China? This is because the concept is one thing, but they also need to be grounded, understand China's national conditions, and understand the specific market conditions and industry conditions.
I can read most of the seller reports at the beginning, because I don’t know who is good and who is bad. After three months, I will select the reports based on the names of the researchers. I can read some people’s reports, but not some people’s reports. Went to read. I will also read old reports and reread what the researchers said and boasted about the bull market in 2006 and 2007. Therefore, I told researchers from the Southern Fund that in the financial industry, a person's name is a brand. It may take decades to build this brand, and it may only take a few minutes to destroy it. Your work will leave traces. Therefore, everything you do should be done to the highest standards.
When I came to Southern Asset Management, the Shanghai Composite Index had fallen by more than 70% from its highest point in 2007. At the historic low of 1,664 points, everyone had no confidence at all. I saw that policies had turned and valuations had been underestimated, so I made it clear that I wanted to increase my position. In January 2009, as a member of the investment decision-making committee, I made a specific resolution request asking fund managers to increase their positions in securities companies’ stocks to a certain proportion, because Brokerage stocks have the greatest upward elasticity when the market bottoms out. I have been with Southern Fund for 6 years, and this is the only specific resolution our voting committee has ever made.
One strategy for ten years: locking in three major areas to create a circle of competence
You started writing Weibo soon after returning to China. You emphasized the industry structure and paid attention to some industries where the growth rate has slowed down but the concentration has increased, and the profits of leading companies have increased significantly. In the past ten years, The market of 2019 has verified your original judgment.
Qiu Guolu: Investing in a company is essentially to share part of its future cash flow. In an industry with a clear industry structure and a clear winner, the certainty of profitability is high. Like white goods, the industry grew rapidly from 2000 to 2005, but profits were not good. In 2006, the growth rate of the industry began to slow down, but profits increased significantly, because after the industry was reshuffled, small factories withdrew, and the industry concentration increased greatly.
Many people liked to bet on horse racing in the early days. Some people did bet correctly, but the probability of being right was very small. When a new technology comes out, there is always a melee between the heroes, and it is difficult to tell who is the winner. I am willing to wait until the winner is determined, as Sun Tzu said in The Art of War: Win and then fight, rather than fight and then win. When the industry is concentrated to a certain extent, and the top three occupy more than half of the industry, it will be clear who is good and who is bad. Not only can you invest, but you can also dare to make big moves.
Everyone is always worried that it will be too late to invest when the outcome is decided, but looking back, companies that were leading ten years ago are still industry leaders ten years later. In the past ten years, their growth has been astonishing, and this is true for all walks of life.
I have been saying to count the moon, not the stars. Counting the stars is too tiring, and the long-term returns will not be good because it is too difficult. There will be a certain person who is clairvoyant and can count stars very well. Then he may be a good candidate for angel investment or venture capital, because he can see how old he is at the age of three. Just like judging whether a person is talented or not, would you rather judge it when you are three years old or wait until you are 30? Of course, some people will judge by counting the weeks when they are one year old. If they catch the abacus, they will say that they will be accountants when they grow up. But this is fortune telling. He has not yet entered kindergarten. How do you know what he will do in the future? Of course, you can say that this person is the second generation of rich people. Many second generation rich people later ruined their families. Therefore, the accuracy of judging old age at the age of three is too low.
We are secondary market investors, and we can wait until we are 30 years old. You can wait until this person grows up and know which school he graduated from, what industry he entered, what position he holds, and whether he was promoted quickly in the first 3-5 years of work? Using this to judge his condition in the next 30 years is much more certain than judging his age at three years old. The
pattern determines the outcome. When I first returned to China, everyone was talking about the ceiling of air conditioners. We conducted a comparative analysis of white electricity and black electricity, and the conclusion was that we were optimistic about white electricity and not optimistic about black electricity. Because the industry structure is different, although white appliances are still fighting, there are only four companies left, and there are only two air conditioners left. Moreover, the technological changes of air conditioners are continuous, and there will be no disruptive results in the process of technological changes. . As for black electricity, from CRT to plasma to LCD screen to LED to 3D TV, every change is revolutionary. It will be painful for companies to follow or not. If you don't follow, you may fall behind. If you follow, you will have to invest a lot of money, which is risky. It is also very big. New technology may come out in two or three years. If it is invested in 3D TV, it may be a false proposition, so black electricity is much more difficult.
In 2010, you began to manage Everbright 2, a special account product of Southern Asset Management, and resigned in 2014. Everbright 2 performed well during its four-year existence. Please tell us about the representative companies that contributed significantly to the net worth during this period. Investment Case.
Qiu Guolu: When I first entered the industry in the United States, I once asked a senior partner of the company how to become an excellent fund manager. He said, it's very simple, you just need to remember two things: first, cherish your customers' money as your own money; second, analyze stock investment in the secondary market as industrial investment in the primary market.
In the past ten years, I have mainly invested in some high-quality companies in industries where the winners and losers have been divided, such as some big white horse companies, which often appear in my portfolio. If you look at my combination, you will find it very boring and boring. Everyone will definitely think that you have found a lot of white horses in the past ten or eight years, which is not interesting, everyone can do it.
I rarely talk about investment now, because there is nothing new. If I talk about it, people will think that this person is really devoid of new ideas. His investment philosophy is just these few sentences, and these are the stocks he invests in.
Why have I only said these few words and these few industries in the past ten years? Because I invest from an industrial perspective, what I pursue is companies with unchanged core competitiveness. They were the industry leaders ten years ago, and they are still the industry leaders now. Of course, it is not easy to find a company that remains unchanged in a fickle market.
The market is changing every day. When we make investments, we study the laws behind the market that are independent of human will: economic laws, industry patterns, supply and demand relationships and business models. We guess that changes in market sentiment will sometimes bring us Gains, but those are not lasting.So investing is really "boring", it's the norm. Just like those who go to casinos, some go there to have fun and spend one night in a VIP room with millions of dollars, but those who really want to make money need to be very rational and rigorous, and it is not fun.
It is difficult to find these companies ten or eight years ago and still associate with them frequently. You just said that investing is a "boring" thing. This statement is very fresh and thought-provoking.
Qiu Guolu: I have been a strategic manager for ten years and it hasn’t changed much. Because I am not good at chasing changes, I am better at seeking unchanging laws in changing phenomena.
In the past ten years, when people asked me which industries I was optimistic about, I would always talk about three major industries: financial real estate, brand consumption, and advanced manufacturing. why? These industries meet my standards, the industry pattern is very clear, and the moon has come out. I have never been the first person to eat crabs. I will wait until the outcome is decided and things are clear before investing. Anyway, there is always a chance to buy. A-shares are highly volatile, and good buying opportunities often appear.
The financial and real estate landscape is relatively unclear, but it is cheap. Five years ago, when everyone was very bearish on real estate, I made a comprehensive comparison between movies and real estate. At that time, Chinese movies had a box office of 30 to 40 billion a year, the market value of the largest company was already 40 to 50 billion, and real estate sold for 80 billion a year. trillion, the largest leading company has a market value of only 60 to 70 billion. At that time, the market share of the largest leading companies was only one or two points, but it was obvious that large real estate developers would continue to seize the market share of small real estate developers. We expect that the concentration of the real estate industry will inevitably increase. It is very simple. Large companies can obtain land 5~10% cheaper than small companies; centralized procurement of raw materials can be 5~10% cheaper; financing costs are also 5~10% cheaper than small companies (for example, The interest rate on five-year corporate bonds issued by some leading real estate companies at the end of 2016 was less than 3%, and the lending rate for small companies may be more than 10%); finally, for houses in the same location, large companies are 5 to 10% more expensive than small companies. Because there is a brand. If these 5 to 10% are added together, how can small real estate developers compete with large real estate developers? This is what I call "the winner is decided." These principles are very simple and can be imagined by everyone.
Pricing power is also very important. Why I often talk about these three major industries is because these industries can increase prices. I have always said that industries with "overlord clauses" are not too bad. For example, the "overlord clause" in real estate is very powerful. You have to pay him all the money in advance, and he will use your money to build your house and give you the house after two years. In movies, you have to spend money first. Cash flow is poor. Liquor costs a handful of rice and a pound of water, and costs a few hundred yuan. The gross profit margin is 80 or 90 percent, which is quite high. Banks also had some "overlord clauses" in the past few years, but they no longer exist, which shows that competition in the banking industry has become more intense than before.
Is this the circle of competence that Buffett talks about? Through long-term unremitting efforts, we can gain a better understanding of certain companies and certain industries than almost everyone, so that we can make more accurate judgments about the company's future long-term performance.
Qiu Guolu: Every investor has his own boundaries and limitations of abilities. Ability without boundaries is not a real ability. Human cognition has limitations. I think it is easier to summarize the regular things in the past than to accurately predict future breakthroughs and evolutions. It is easier to find the constant in change than to find the constant. Anticipate changes. After realizing this limitation, I began to try my best to find some simple rules and simple tools that have been proven to be effective in history, and then stick to them for a long time.
I do not pursue research on particularly difficult things, but study relatively simple things very carefully and clearly. Based on different industry characteristics, I find out what are the key factors that determine the outcome of industry competition and what kind of company is good. company, what price is cheap. Once you understand many things, you can value the industry, know when it is cheap and when it is expensive, and then you can firmly buy and hold when the company is very undervalued.
When investing, the core is not the difficulty, but how confident you are.As Buffett and Munger said, all companies can be divided into three baskets, one is too difficult, one is investable, and one is uninvestable. The basket that is too difficult is the biggest because a lot of things will be thrown away. Go in.
A few months ago, Dalio from Bridgewater came to China. The media arranged a conversation between me and him. I asked him a question. He always said that people should constantly challenge themselves and their limits, but Buffett said Investors should stay within your circle of competence. How to explain these two contradictions?
Later I figured it out. One of them talked about research, and the other talked about investment. Research should go out of your comfort zone and constantly challenge your limits, but investing should stay within your circle of competence. The scope of research should be wider than the scope of investment. You may research ten things and finally understand three. Just invest in three things, but you can't just study in three things.
Buy 8 liquor stocks during the "circuit breaker": Contrarian investment is not a skill but a character
Do you particularly emphasize valuation?
Qiu Guolu: I am a deep value investor, not a growth value investor, and I have relatively high requirements for valuation.
I simplify stock selection into three elements: valuation, quality, and timing. Timing is difficult to grasp, so I will basically downplay it, or judge it through valuation. Buy more when it is cheap, buy less when it is expensive, and quality only matters. Good homework is not too difficult, but quality is sometimes difficult to judge, and valuation is relatively easy to grasp.
is cheap. The return of a stock does not depend on whether its future growth is faster or slower, but on whether future growth is faster or slower than the growth expectations reflected in the current stock price. I buy a lot of things, but everyone thinks they are traditional industries, sunset industries, already very mature, meaningless, and unchanged. But as long as the valuation you buy at is low enough, you can still make money.
The pricing of the U.S. stock market is relatively reasonable. Things with low valuations are often in sunset industries and are very rubbish. However, as long as you analyze carefully, rubbish is also valuable. As long as you buy it at half the price, you can double it. For example, U.S. Steel is the most declining industry and U.S. Steel is the oldest steel company in the United States. When the price-to-earnings ratio was 2 times in 2002, many people considered it to be a company waiting to die. But from 2003 to mid-2008, this stock continued to rise for 6 years, increasing 20 times. Of course, in 2008 it returned to its original form.
The advantage of the A-share market is that you can often buy excellent companies at very cheap prices. For example, we bought some liquor and leading consumer companies at a price-earnings ratio of about ten times. We also bought them at a price-earnings ratio of 15 times at the end of 2016. Joined a security company.
Sometimes, some stocks are just too cheap. At the end of 2015, a Hong Kong real estate company fell to a market value of only 15 billion. The company's characteristic is that its land is located in first- and second-tier cities. I was optimistic about the future of quasi-first-tier cities like Chengdu, Chongqing, Tianjin and Wuhan. At that time, I didn’t choose other larger real estate companies because the quality of their land was not as good as the former. We spent several months drawing all the projects of this Hong Kong-listed real estate company on a map, and then evaluated the location of each project and the surrounding housing prices, so as to evaluate the company's value at least 50 billion. In 2017, the company sold 300 billion houses. Based on a net profit margin of 8%, it should have made a profit of more than 20 billion. Only by looking back can we realize how cheap the valuation of 15 billion at the end of 2015 was.
This company is relatively radical, with high leverage and large off-balance sheet liabilities. People are worried that it cannot afford its debts and no one dares to buy it. Cheapness is the last word. The quality of this company is certainly not as good as some leading real estate companies, but it is cheap. I get a margin of safety from the low valuation.
In mid-2016, the chairman borrowed several billion to increase his holdings, but the stock price fell by another dollar. Later, it finally rose back to three yuan, and the company spent another 15 billion to buy a company in a popular field. I sold the stock the day after the announcement. Although it turned out that this real estate company's investment in a company in a certain popular field was a big failure, the real estate company still increased six times in the next half year. This is the power of the stock price being cheap enough. Even if the investment made a major mistake, it did not change its stock price rise. the trend of.
Recently, a group of excellent companies have begun to become very cheap, because everyone has begun to panic again. In fact, the consequences of trade friction are not as serious as the market fears. Japan has been fighting a trade war with the United States since the 1970s and has been fighting for two decades. China is much larger than Japan and its market is much larger. There is nothing to be afraid of. Of course, the market does not panic, and there is no opportunity to buy excellent companies at cheap prices.
The last panic was probably in early 2016. The stock market "circuited" twice. The market was extremely pessimistic. The Shanghai Composite Index once fell to 2638 points. What did you do at that time?
Qiu Guolu: At the end of 2015 and the beginning of 2016, I bought liquor stocks and a leading consumer goods company.
The order in which we look for liquor is to look for high-end liquor first, then sub-high-end liquor, and then affordable liquor. This is because China’s economic recovery usually focuses on supporting infrastructure first. With the increase in business entertainment, the demand for high-end liquor will increase. Afterwards, the economy recovers and the people Once you have money, the mid-range wines start to rise, and then move on to the low-end wines.
Liquor is a very representative brand of consumer goods, and I have always paid close attention to it. At the end of 2012, eight regulations were introduced, and the liquor industry was extremely depressed. After that, we bought liquor stocks at the bottom at a price-to-earnings ratio of about ten times. The business model of liquor is particularly good, and the pattern is very clear. We can sell it to you at ten times the PE. It is really Good deal. For a while, everyone was talking about the overcapacity of liquor production and calculating how much liquor China has per capita. However, the overcapacity of domestic liquor is only the overcapacity of bulk liquor. Wine worth 800 yuan does not compete with wine worth 8 yuan. I said at the time, just For example, the overcapacity of bags in the world has nothing to do with the sales of LV and Hermès bags.
In 2013, I wrote an article "Contrarian Investment". In comparison, food and beverage is an industry suitable for reverse investment. When I first arrived at Wedge Capital, the company's fund managers bought the shares of a world-renowned fast food chain brand during the mad cow disease scare. A few years later, the share price of this fast food chain company tripled. This was my reverse trend. The first lesson in investing. There is also a leading food company whose stock price fell by almost half in 2011 due to its involvement in the plasticizer incident. However, when the company's stock price was at its highest in 2012, it nearly tripled compared to the low point in 2011. After food safety incidents, everyone will gradually "forget". For example, during the SARS period in 2003, Hong Kong people did not dare to eat chicken. Looking back, we still have to eat meat. What's more, wine is addictive, and the main reason for the decline of liquor is measures such as the Eight Regulations. Compared with the impact of plasticizers, it is not a fundamental blow to the product.
What is the difficulty of reverse investment?
Qiu Guolu: After twenty years of investing, I deeply understand the principle of taking what others abandon. Reverse investment is an important source of excess returns. Most of the masters in the investment field have strong reverse investment capabilities.
But reverse investment is not easy, and often the buying and selling points are not perfectly grasped. You often buy too early because you think it is cheap, but it may be even cheaper. For example, for a good company, you may think that a price-to-earnings ratio of four or five times is really cheap, but after you buy it, it may fall to three or four times. We often sell too early. For example, if the intrinsic value of a stock is 50 yuan and we buy it for 20 yuan, it may eventually rise to 100 yuan, and we may sell it for 60 yuan. Because we are talking about the margin of safety, the last period of increase is often not profitable. It doesn’t matter. I can look for other more undervalued things. The
market is an auction system. The final peak is always the craziest person setting the price. Just like in the auction, the final buyer must be the most fanatical person who is willing to pay the highest price. Extreme prices are often determined by the biggest fools, so the stock price is over-rising when it rises and over-sold when it falls. During the Nasdaq bubble in 1999, I met a professor of behavioral finance. He had a hedge fund and lost a lot of money by short-selling Internet stocks that year. He lamented: I knew they were stupid, but I didn’t expect them to. So stupid. This professor recently won the Nobel Prize in Economics.
This is the difficulty of reverse investment. The top and bottom are just one area. You will definitely not be able to buy at the lowest price or sell at the highest price. You will probably buy the bottom halfway up the mountain.If you buy early, you still need to be able to endure it. If you are two steps ahead, you will become a martyr. As long as you can endure it, it is still possible to become a pioneer.
does not care about the short-term gains and losses of the last drop, which is an essential quality for contrarian investors. Therefore, reverse investment is the simplest and least easy to learn investment method, because it is not a skill, but a character. Character cannot be learned and can only be slowly honed through practice.
In a market like A-shares that is eager for quick success and quick profit, there are still not many people who can and are willing to endure it. Therefore, reverse investment will continue to be an important source of excess returns in the future.
"Stocks are just bonds wearing stock clothes to attend the Wall Street masquerade with a long-term capital return of 12%." Remembering what Buffett said in 1977 may help you be more patient.
Be short on mobile games, movies, and P2P in 2013: short-term stupid, long-term correct
Is value investing effective in China? You have been back in China for ten years. When was the most difficult time for investing?
Qiu Guolu: Everyone says that value investing does not work in China. In fact, it works very well. The A-share market is immature and highly volatile. Some high-quality companies often have very good buying points, giving value investors great opportunities. .
I have been back in China for ten years, and there are only two times when value investing was more difficult: 2013 and the first half of 2015. In 2013, the CSI 300 fell by 7%, and the GEM index rose by more than 70%. When I left the South in early 2014, the Shanghai Composite Index was over 2,000 points, which was the lowest period for value investing. But as Joel Greenblatt once said: First, value investing is effective; second, value investing is not effective every year; the second point is the guarantee of the first point. Just because value investing is not effective every year, it is effective in the long term.
At that time, when everyone was the most pessimistic, the account I managed was always close to full. Although there would be certain fluctuations at that time, looking back, it was a very good buying point. Many traditional high-quality companies had their price-to-earning ratios dropped to five times, and I bought the fund. The upper limit allowed is my heavy holdings. These are leading companies with price-to-earning ratios of 3 to 4 times. The returns are very good in two to three years, and the risks taken are very small.
In the second quarter of 2015, we were not involved in the last wave of crazy rises in small stocks. There was some pressure from customers at that time, but by the third quarter, customers called to express their gratitude.
This is also the difficulty of reverse investment. You must have a strong will and withstand huge pressure for a considerable period of time.
When I first entered the industry, I experienced the bursting of the Nasdaq bubble and later the Internet bubble. I was alert to bubbles and could identify them. In April 2015, at the "Institutional Investor Summit" held by your newspaper, I talked about the seven new characteristics of the new bull market. I proposed that small stocks are very risky and we should pay attention to avoiding risks, but blue chip stocks have investment value. I also pointed out that, This is the only bull market in the history of China's stock market that has truly widespread leverage. Once it falls, a stampede will inevitably occur.
At that time when chickens and dogs ascended to heaven, it was very difficult to persist in value investing. Later, the market quickly reversed.
I have never wavered on the path of value investing. I have been in the industry for 20 years. I have seen the madness when queuing up to buy warrants in 1992, experienced the 1999 Nasdaq technology stock craze and the subsequent crash, and also participated in the hedge funds’ attack on Wall Street investment banks during the 2008 global financial crisis. Runs, we are well aware of the black swan and fat tail phenomena in the financial market, and a once-in-a-century crisis will occur every ten years. Because we have a profound understanding of risks and have formed our own investment logic and system, we will not be kidnapped by short-term market trends.
In 2013, the GEM index rose by more than 70%. At that time, you wrote an article that poured cold water on the mobile games, movies, and P2P Internet finance that were hotly speculated in the market. It was very controversial for a while. It turns out that time is on your side, and now, these industries have been disproven.
Qiu Guolu: In 2013, everyone loved to speculate on three things: movies, mobile games, and P2P Internet finance. I remember that at that time, more than 20 companies transformed into mobile game companies, and many companies acquired movie studios. A company changed its name to "Pi Tu Pi" in order to speculate on its stock price.
Investment needs to be a friend of time. How can one be a friend of time? We must grasp the essence of the matter and know what the business model is, what the industry structure is like, and what the company's core competitiveness is. My analysis at the time was very clear: 70 to 80 percent of the revenue from mobile games must be allocated to the platform, and the product life cycle is short and user stickiness is weak; the cash flow of movies is very poor and uncertain; and online banks are not Due to the large number of users, a grid effect will be formed or user experience will be improved, and the essence of finance is risk control capabilities, which is missing in P2P Internet finance.
A-shares are characterized by their tendency to go to extremes. Any concept or theme, whether true or false, as long as it is new and dazzling enough, can be hotly speculated. However, a sharp rise may be followed by a sharp fall.
Some of my judgments seem silly in the short term because it takes time to verify. After I wrote this article in September 2013, the GEM continued to strengthen. Although the market turned blue-chip style in the second half of 2014, the GEM surged again in the first half of 2015. In the past year and a half, it seemed to me that I felt like a fool, but five years later, looking back now, it’s very clear.
Why time proves you are right, it is what you insist on, which is in line with the objective laws of the industry. Of course, sometimes this time is not one or two years, but five, eight or even ten years.
Judging from the data disclosed by a third party, the fund you manage not only leads in performance, but also has a smaller drawdown. When the market plummeted by 50% in 2015, the maximum drawdown of the products you managed was around 10%. How can you achieve a smaller drawdown? Retracement?
Qiu Guolu: Gaoyi was just established in 2015. Our products were released not long ago and we haven’t accumulated much positive income yet. Because I didn’t want my clients to lose money, I used a risk budgeting method to operate at that time. When the product dropped to a certain level, I would reduce my position. When the net value fell by ten points, I would only have a small position. Because the company was newly established and I had recently switched from public to private, it would be difficult for customers to accept if the retracement was too large all at once. Therefore, I had strict position control in the first three years. Objectively speaking, it's not perfect, and looking back, my returns would have been much higher if I hadn't strictly controlled my positions.
In the future, I will adjust my strategy to maintain high positions most of the time, and only take small positions when the degree of bubble in a few markets is high, because in the long run, equity investment has a high probability of outperforming cash. Moreover, it is very difficult to choose the right time, like fortune telling and betting, which are basically uncontrollable. However, I can still judge the bubbles, especially the more obvious ones, because then I cannot find those that meet our standards. A reasonably valued stock.
In recent years, the GEM has fallen again and again. Will it lose its value? Will you buy GEM stocks?
Qiu Guolu: I am not saying not to buy the GEM. GEM companies are also within the scope of our research. I bought a GEM stock last year, and it has brought good returns so far. The company is a private enterprise with good genes and a decent business model. It is the leader in the market segment, but its market share is very small and the industry structure is not yet clear. It has newly recruited core management personnel. It should be said that it already has our partners. It has the characteristics of what Zhuo Liwei calls "shark seedlings", but this is still a bit like looking at old age at three years old, and it is not in line with my principle of looking at old age at 30 years old, so I won't be particularly heavy on the position.
The GEM plunged again this year. I bought another GEM, which is considered the absolute leader in the industry. It belongs to an industry where the winner is decided, and it has also achieved positive returns.
We have been continuously expanding our investment scope to build stronger and wider research capabilities.
Study diligently and read and think a lot, keep common sense in mind and follow the rules
You used to be the investment director of Southern Fund Company and also managed special account products. Now, you are the chairman of Gaoyi Assets and also manage funds. Will it be too long? nervous? How to allocate time for investment and management?
Qiu Guolu: I don’t think there is any problem. My time management is okay. In American fund companies, whether public or private, many founders have to manage both companies and fund managers.
An investor once said that being the founder and manager of a company mainly involves doing two things: one is fortune telling, which means figuring out some big strategic issues; the second is fortune telling, which means selecting people. Therefore, in terms of company management, I spend most of my time recruiting people, mainly interviews. The interview process is actually a learning process.
Private equity fund management is actually very simple. The main thing is one thing - to achieve good performance, and everything else is secondary. Gaoyi is a partnership company with multiple partners. The division of labor is very clear. Moreover, our colleagues are all excellent. We can find the most suitable person for anything and then fully authorize it.
I love investing. There is no definite percentage of time invested and managed, but investment is definitely a priority, and I spend relatively more time on investing. In the first year or two, I may need to spend more energy on management. Now that Gao Yi is on track and each department has relatively capable people, the company has entered a stable cruising period, and I feel relaxed. I will definitely continue to invest in
. My father once said that if you want to be a good department chair and dean, you must be a good professor. Although my father passed away fifteen years ago, I still remember many of what he said. I remember it very clearly. I agree with my father's view. Managers with a business background will have a better understanding of the matter itself, and it will be easier for them to do things with ease.
You have been in the industry for 20 years and have achieved good results whether investing abroad or domestically. The Gaoyi assets you created have also developed very well. How do you evaluate yourself?
Qiu Guolu: I am a very hard-working person. I work long hours every day. I spend a lot of time reading and thinking. I will read a lot of books, read a lot of reports, communicate with a lot of people, and do a lot of thinking.
I try to find universal investment rules and industry rules that can stand the test of time. If I have achieved some achievements in investment, I just mastered a few common sense, mastered a few general industry rules and basic investment rules, and then applied these rules repeatedly. In fact, in many cases, my performance is not particularly outstanding, but after a few years, I can lead most people. This is my style.
Gao Yi has developed quite well in the past few years, mainly due to the contributions of other partners and teams. We also follow the rules of the asset management industry. Of course, luck also plays a large role.
Whether investing or running a company, some people like to follow the trend to find the trend. We follow the rules, find out the unchanging rules, and then follow the rules, regardless of short-term gains and losses, and the time is slightly longer. , the effect comes out. Just like a cook trying to solve a problem, it is easier to follow the laws and principles of things. If it violates the inherent laws, it will be very difficult to continue.
Previous high-quality articles
[How does the United States shear sheep around the world? ]
Let’s first summarize the reasons why the Federal Reserve has successfully become the world’s central bank:
. After World War II, most of the established powers were very injured. The United States was far away from the world battlefield at that time and had the ability to plan a new world structure, forming a dollar-centered currency. System - Bretton Woods. 2. Realized the peg between the US dollar and gold. Although decoupling was announced in the 1970s and the U.S. dollar became a currency backed by the trust of the country, in the era of frequent oil crises, Saudi Arabia reached a consensus with the U.S. dollar and oil was priced in U.S. dollars. At this time, oil became the backer of the US dollar.
3. With the development of time, the US dollar has become the currency for international settlement of various commodities. 70% of international reserves are US dollars. If every country wants to participate in international trade, the US dollar is the currency that must be reserved.
The above is the simple formation of American hegemony.
