Q: May I ask Chongyang Investment, how do you interpret the central bank resuming government bond purchases and sales?
A: On October 27, Pan Gongsheng, Governor of the People’s Bank of China, stated at the Financial Street Forum that the current operation of the bond market is generally sound and that open market treasury bond trading operations will be resumed. After being suspended in January this year, this monetary policy tool has been reactivated after a 10-month hiatus.
Why is treasury bond trading being restarted at this time?The temporary easing of interest rate risks in the bond market and the need to provide liquidity support to the market are important reasons. Earlier this year, the reason the central bank suspended treasury bond trading was due to overly optimistic sentiment in the bond market, which caused rapid declines in treasury yields, leading to the continuous accumulation of interest rate risks. Additionally, the excessively fast decline in treasury yields widened the spread between Chinese and U.S. bonds, increasing pressure to stabilize the exchange rate. Since July this year, with improvements in risk appetite for stocks and commodities, some speculative and allocation-driven funds have flowed out of the bond market. Amid fragile trading structures, the bond market experienced a rapid downturn, with the yield on 10-year treasury bonds rising quickly from 1.6% to over 1.8%. It has now been fluctuating narrowly around this level for about a month, significantly alleviating interest rate risks in the bond market. Meanwhile, as the Federal Reserve has once again begun cutting rates, U.S. treasury yields have started to decline, narrowing the spread between Chinese and U.S. bonds. The central bank has further guided the gradual appreciation of the renminbi through adjustments to the central parity rate, bringing exchange rate risks under control. This macroeconomic backdrop provides favorable conditions for the central bank to restart treasury bond trading. Moreover, since the beginning of this year, there has been a relatively large issuance of long-duration government bonds, resulting in overall tightness in long-term liquidity within the banking system. To ensure sufficient room for next year’s fiscal policy, the central bank also needs to expand its base money supply...

Editor's Note
Volatility is not risk itself; the real risk lies in 'permanent loss.' However,Volatility is a manifestation of risk: it triggers investors' fear and behavioral biases,turning risk into reality while providing counterparties with profit-making opportunities.
This has led to three perspectives on volatility:
Risk-averse individuals believe that volatility equals risk and is something to be avoided.
Risk-seeking individuals believe that volatility equals returns and is something to be embraced.
Value investors believe that volatility is neutral, and investment risk only stems from permanent losses caused by operational risks of enterprises.
——BY Thought Steel Seal
Below, I wish you fruitful reading.
Notice: The content published on this official account is for reference only and does not constitute any investment advice or offer to sell. If you are interested in Chongyang products, please feel free to contact us for more information.
Source of text and images/ WeChat Official Account [Thought Steel Seal]
Author/ Thought Steel Seal, this text and image content has been authorized for reprint. For reprints, please contact the original author.
The views expressed in this article are solely those of the author's independent personal opinions.
01
It is not the wind that moves, but the heart that moves.
Fund A has a long-term annualized return of 15%, but during market corrections, it often experiences drawdowns exceeding 20%; Fund B has a long-term annualized return of 10%, but during each market correction, the drawdown does not exceed 5%. Which fund do you think is better?
This question is similar to the following chart, which I have referenced in multiple articles in the past. The returns of several stocks are identical, but...On those stocks with smaller fluctuations, ordinary investors find it easier to make money...

Q: How does Chongyang Investment view the performance of the A-share mid-term report for 2025?
A: As of August 31, the mid-year reports for A-share listed companies have been fully disclosed, showing a performance characteristic of "overall still bottoming out, significant structural differentiation" in the first half of the year.From the perspective of overall performance, the profitability of listed companies is still bottoming out.According to statistics from GF Securities, the year-on-year revenue growth rates for A-shares overall and non-financial enterprises in the first half of the year were -0.02% and -0.53%, respectively, showing some improvement compared to the first quarter. However, the cumulative year-on-year growth rates for net profit were 2.42% and 0.98%, respectively, which declined compared to the first quarter. From a quarterly perspective, the sequential growth rate for non-financial enterprises in the second quarter hit a seasonal low since 2010, with the net profit growth primarily contributed by financial enterprises. From the perspective of Return on Equity (ROE), the ROE (TTM) for A-shares overall and non-financial enterprises in the second quarter were 7.76% and 6.55%, also declining compared to the first quarter. A DuPont analysis indicates that while the net profit margin stabilized somewhat, the asset turnover ratio continued to decline, reflecting that the recovery of economic supply and demand requires more time. From a cash flow perspective, although the mid-year report for 2025 shows that corporate net cash flow has not yet turned positive, operating, investing, and financing cash flows have all improved. The free cash flow for non-financial real estate companies remains historically elevated, indicating a strong potential for dividends. Overall, the profitability of A-share listed companies is still in the process of bottoming out, and improvements in profitability will still depend on the revival of demand.From a structural perspective, ...

Q: How does Chongyang Investment view the recent continuous increase in M1 growth rate?
A: On August 13, the People's Bank of China released financial data for July, indicating that the year-on-year growth rate of M1 in July was 5.6%, which represents a further increase compared to the previous month, continuing the upward trend that has been sustained since the fourth quarter of last year.The continuous rebound in M1 growth is primarily driven by a significant increase in demand deposits from enterprises and households.From the enterprise perspective, following the regulatory halt on manual interest compensation by banks in April last year, there was a rapid outflow of demand deposits from enterprises and institutions, leading to an extremely low base during that period. Starting from May this year, the scale of year-on-year declines in institutional demand deposits has decreased significantly, turning positive in June, which is a primary reason for the rapid rebound in year-on-year M1 growth beginning in May. Additionally, the faster issuance of government bonds in the first half of this year has resulted in fiscal deposits gradually entering the expenditure phase, promoting the recovery of institutional demand deposits. As of now, the issuance scale of special bonds for debt management has exceeded 1.88 trillion yuan. This portion of funds will remain in the form of demand deposits on the accounts of debt repayment entities before repayment, thus facilitating the recovery of enterprise demand deposits. Another important reason is the noticeable increase in enterprises' willingness to engage in foreign exchange trading due to the weakening of the US dollar index and the strengthening of the renminbi this year. Data from the State Administration of Foreign Exchange indicates that the foreign exchange trading balance in July was 22.8 billion USD, marking a rapid increase compared to the negative balance at the beginning of the year, which has also contributed to the rise in enterprise demand deposits. From the household perspective, as the yields on time deposits, money market funds, and wealth management products continue to decline, there is a demand for asset reallocation among households. Since the beginning of this year, Chinese equity and commodity asset performance has...

Investment can be said to be a combination of science and art. Science refers to aspects such as the assessment of macroeconomics, analysis of corporate fundamentals, etc., which can be framed using Algo. Art refers to the cognitive and behavioral frameworks of investors. This aspect is also very important, but from the perspective of investment practice, most investors, especially individual investors, place a lot of emphasis on scientific aspects, while the emphasis on investment cognition and investment behavior is relatively insufficient.
This episode of Chongyang Talk is hosted by Shutangfeng, a partner at Chongyang Investment and a financial writer, inviting the renowned behavioral finance expert, Professor Zhu Ning, Vice Dean of the Shanghai Advanced Institute of Finance at Shanghai Jiao Tong University, to discuss who is a friend of the investor and who is the investor's enemy.
[Full text 9224 words, a lot of practical information, but also very long. Welcome to download the 'Little Universe' APP and find 'Chongyang Talk' to listen to the audio version.]
(1) Zhu Ning talks about his relationship with his mentor Robert Shiller.
Shutai Feng: Professor Zhu Ning studied under Professor Robert Shiller, a famous master of behavioral economics and Nobel Prize laureate in economics. I would like to ask Professor Zhu to share his experiences with his mentor and what kind of inspiration he received from him.
Zhu Ning:Actually, I feel particularly lucky. During my studies in North America, I had three different mentors, all of whom helped me not only in academic research but also significantly influenced my character and behavior through their teachings. In addition to his research achievements, I believe Professor Shiller had two particularly...

Chongyang Speaking
Mr. Charlie Munger has a famous saying: "In my life, I have never seen anyone who is wise without reading. Not one. Warren (Buffett)'s reading volume may astonish you. I am like him. My kids joke that I am a book with two legs."
Friends familiar with Chongyang surely know that reading has always been a highly regarded path for growth.
Now, we hope to persist in reading together with you.
In each column, we will continue to discuss books, which may include book reviews, reading lists, or excerpts.
Each issue will have a communication topic, and we hope you will interact with us through comments.
We select high-quality books and will randomly send them out based on the quality of the comments.
The world is vast, and time is desolate; reading generates the power of thought. May you feel that your thoughts have depth and direction, opening up everywhere, allowing you to wander freely.
Notice: The content published by this public account is for reference only and does not constitute any investment advice or sales offer. If you are interested in Chongyang products, feel free to inquire.
[Good Book] Issue 292: "Warren Buffett: From Investor to Entrepreneur"
[American] Todd A. Finkle (Todd A. Finkle) authored
Wang Guanya translated by the Machinery Industry Press.
Recommender: Marketing editor Guo Biao
July 2025
Interactive Topics:
Based on this book,
，
Please share your views on 'How Buffett navigates through crises.'
。...

Chongyang Speaking
Mr. Charlie Munger has a famous saying: "In my life, I have never seen anyone who is wise without reading. Not one. Warren (Buffett)'s reading volume may astonish you. I am like him. My kids joke that I am a book with two legs."
Friends familiar with Chongyang surely know that reading has always been a highly regarded path for growth.
Now, we hope to persist in reading together with you.
In each column, we will continue to discuss books, which may include book reviews, reading lists, or excerpts.
Each issue will have a communication topic, and we hope you will interact with us through comments.
We select high-quality books and will randomly send them out based on the quality of the comments.
The world is vast, and time is desolate; reading generates the power of thought. May you feel that your thoughts have depth and direction, opening up everywhere, allowing you to wander freely.
Notice: The content published by this public account is for reference only and does not constitute any investment advice or sales offer. If you are interested in Chongyang products, feel free to inquire.
[Good Book] Issue 291: "Security Analysis"
[American] Benjamin Graham [American] David L. Dodd authored
Translated by Ba Shusong and Chen Jian, published by Zhanlu Culture / China Financial and Economic Publishing House.
Recommender Marketing Editor Lin Ta
June 2025.
Interactive Topics:
...

Chongyang Speaking
If we exclude the short-term fluctuations caused by sudden tariffs from Trump, the market's performance in the first half regarding the broad-based Index was relatively calm, but the structure was highly differentiated, with high-quality stocks in the technology, innovative pharmaceuticals, and new consumption sectors constantly reaching new highs, while sectors related to the traditional economy were sluggish. Why has the market exhibited such extreme differentiation? What are the deeper reasons? Looking ahead to the second half of the year, will it be a continuation of differentiation or a switching of styles? This episode of the Chongyang S4 Roundtable will discuss these issues.
"Chongyang S4" is an abbreviation for the model where multiple fund managers at Chongyang jointly manage the same fund. Specifically, under the unified strategic guidance of the company's investment decision committee, the same fund is managed collaboratively by multiple fund managers through separate accounts, allowing each fund manager to operate relatively independently within their assigned scope. Practice has shown that the multi-fund manager co-management model helps build a super capability circle in investment management, achieving sustainable investment performance, iterative research and investment capabilities, replicable investment styles, and expandable management scale. The multi-fund manager co-management model originated in the United States and has become a widely adopted investment management model among the majority of leading funds in the global asset management industry today. Chongyang is the pioneer of the multi-fund manager co-management model in the domestic private equity sector.
This roundtable discussion features the partner and head of the strategic research department at Chongyang Investment, Kou Zhiwei, along with fund managers Tan Wei, Hu Min, Chen Fentao, and Zhao Yang.
Note: This public...