Although on the surface, the trigger is the recovery of US bond yields, southern fund Luo Shuai said that this is only a secondary reason. More importantly, the valuation is too expensive. In the past year or two, the cumulative increase has been huge, which is far from the long-term balanced compound annual growth rate that the equity market can give. However, Luo Shuai also pointed out that from the perspective of the big interest rate environment, the valuation should be regarded as a given factor at the same time, and it cannot be said that the current valuation level is unreasonable. The valuation of some high-quality growth stocks is higher than that of low-growth companies, which will last for a long time, so we should be tolerant of high valuation.

As for the pro-cyclical market after the Spring Festival, Luo Shuai believes that the pro-cyclical sector as a whole is close to the peak of the boom, but industries such as home and hotels have obviously benefited from the strong economic recovery after the epidemic. From the industry research data, some of them have not even returned to the normal level, so the valuation is still low. For the consumer goods industry, Luo Shuai said frankly that he did not recognize the criteria for classifying the leaders of various sub-sectors as core assets. In his view, the core assets are more reflected in the business model, which can be held or even operated for a long time without worrying too much. Just like a pyramid, all the good things are at the top, but the more you get to the top, the less. What really conforms to long-term holding is something rooted in human nature, with luxury and social attributes.