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After the surge, the adjustment arrived as expected. In the process of a bull market, adjustments are an inevitable phase, and this is a widely accepted consensus.

Before the adjustment came, many investors were looking forward to it, hoping to add more positions at a lower level after the adjustment; but when the adjustment really arrived, many people became hesitant, starting to question the reliability of the bull market, and were reluctant to add more positions. They even cut their losses and reduced their holdings.

This speculative behavior is a typical lack of conviction and going with the flow - when the market rises, the bullish sentiment is strong, and they follow suit; when the market falls, the bearish sentiment emerges, and they follow suit as well. The result is chasing gains and cutting losses, and they are unable to seize the opportunity window.

As the stock saying goes, "A thousand gold is hard to buy a bull's turn back!" After a surge, there must be a sharp drop; the sharp drop gives investors outside the market the opportunity to get on board, so it is "hard to buy with a thousand gold."

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The reason why many people dare not get on board is, in the final analysis, a lack of firm belief in the bull market. If there is indecisiveness at the strategic level, it is easy to go with the flow at the tactical level. The remedy is to return to the market itself, continuously review and reflect on the positioning of the bull and bear market. Whether it is a bull or a bear, it is not important. What is important is that you always have to believe in one.

Bull markets have the best strategies for bull markets - hold and wait for the rise, not afraid of fluctuations; bear markets also have the best strategies for bear markets - sell high and buy low, take profits when it's good. Only by determining the bull and bear market at the strategic level can the operational logic be determined at the tactical level.

There is still disagreement in the market about whether this round of market is the starting point of a new bull market, but investors need to have their own views and try to be consistent. Personally, I believe that this round of market is the starting point of a new bull market, for the following reasons:

Firstly, under the support of a combination of policies, the impact of the real estate downturn is approaching the end. The 926 Political Bureau meeting clearly demanded "to promote the real estate market to stop falling and stabilize, and to strictly control the increase, optimize the stock, and improve the quality of commercial housing construction", which can be seen as the policy bottom for housing prices to stop falling and stabilize. The 1012 Ministry of Finance press conference further clarified that special bonds are allowed to be used to reclaim idle land and purchase existing commercial housing, which is expected to effectively optimize the supply and demand structure of real estate and help stabilize housing prices.

From the perspective of the market's inherent support, at the end of August, the national average residential rental yield of 100 cities was 2.25%, slightly higher than the yield of 10-year government bonds, and significantly higher than the 1.8% interest rate of major banks' 5-year deposits. Considering that real estate has high holding and transaction costs, the current yield difference is not enough to attract a surge in new investment-driven housing demand, but for existing property holders, selling and renting becomes more attractive, which helps optimize the supply and demand structure of real estate and helps stabilize housing prices.

Subsequently, as the US dollar enters the interest rate reduction cycle, there is still room for further decline in China's market interest rates, and the rental yield advantage will become more prominent, which is expected to provide more powerful support for housing prices to stabilize.Secondly, it is imperative for fiscal policy to take action, and the stabilization of domestic demand is highly visible. A significant part of the recent market correction is due to concerns that fiscal efforts may fall short. Combining the stance from the 926 Political Bureau meeting and the 1012 Ministry of Finance press conference, although the central fiscal leverage space has not provided a clear figure, there is a high probability that it will exceed market expectations.

The 926 Political Bureau meeting explicitly demanded the "issuance and use of ultra-long-term special government bonds and local government special bonds to better leverage the role of government investment in driving growth," and emphasized the need to "combine promoting consumption with improving people's livelihoods, to promote income growth for low and middle-income groups, and to enhance the consumption structure." At the 1012 press conference, Minister Lan stated that "through comprehensive measures, a balance of revenue and expenditure can be achieved, and the annual budget targets can be met," and repeatedly emphasized that "the central finance has a considerable debt space and room for deficit expansion," leaving ample room for market imagination and expectations.

Taking fiscal expenditure as an example, from January to August of this year, the broad fiscal expenditure (public fiscal expenditure + government fund expenditure) decreased by 2.86% year-on-year (previous value decreased by 2.03%), which is still a drag on economic growth. The annual budget target for broad fiscal expenditure is a year-on-year increase of 7.9%, and according to this calculation, the growth rate of broad fiscal expenditure from September to December needs to reach 24.86%.

Based on this, it is almost certain that fiscal expenditure will significantly increase in the fourth quarter, and the stabilization of domestic demand is highly predictable.

Thirdly, the micro-ecosystem of A-shares is undergoing significant changes, which will attract continuous inflow of external funds, supporting the continuous rise in the valuation of high-quality companies. In recent years, A-shares have been sluggish, and regulatory authorities have taken the opportunity to introduce a series of reform measures, driving significant changes in the micro-ecosystem of A-shares. This is manifested in the significantly enhanced awareness of high-quality companies to reward shareholders, which is expected to reverse the A-share "heavy financing, light investment" ecological environment, laying a micro-foundation for a long bull market.

In addition to optimizing market supply, regulatory authorities have also cleared institutional obstacles for long-term funds to enter the market. Coupled with the bottom-up support provided by the central bank's targeted financing tools, the enthusiasm for long-term funds to enter the market has greatly increased. In a low-interest-rate environment, long-term funds face a shortage of high-quality assets and already have a strong motivation to increase the allocation of equity assets. The optimization of the stock market's micro-ecosystem will transform this motivation into action.

Against the backdrop of continuous inflow of long-term funds, A-shares have a bottom; having a bottom, in turn, will strengthen the enthusiasm and motivation of funds to participate, and it is a high probability event that the valuation center of high-quality A-share companies will continue to rise.

In summary, whether it is the basic or capital side, A-shares have solid conditions for a long-term bull market, and this round of market should be seen as a reversal rather than a rebound. From a long-term perspective, the current situation is still at the starting point of a long-term bull market, and we should be confident, patient in holding shares, and seize the buying opportunities brought by the "bull turning back."

The recent rapid rise and fall of the market itself has emotional and transactional capital-driven characteristics, which are very common in the early stage of a bull market and are within market expectations. Faced with such fluctuations, new investors may not be accustomed to it, but many old investors are quite calm.

In a sense, this is also the first lesson for new investors to enter the market, to adapt to fluctuations. If you can't bear this kind of bumpiness, participating in stock market investment is unwise, and it is impossible to make money in the stock market regardless of bulls and bears.Back to the current market situation, after several days of adjustment, the valuations of many industries have become attractive, and the buying opportunities brought by the adjustment should be seized.

At the broad market index level, as of October 14th, the price-to-earnings (P/E) ratio and price-to-book (P/B) ratio of the CSI 300 Index are at 50.6% and 22.7% of their historical range since listing, respectively. The Wind All A Index's P/E and P/B ratios are at 36.5% and 7.9% of their historical range since listing, respectively, both of which are in relatively low positions. At the industry level, as of October 11th, among the 31 first-level industries, the P/B ratios of 20 industries are below the 20% historical range since listing, and the P/E ratios of 10 industries are below the 18% historical range since listing, indicating there is still a significant selection space.

In summary, the current market is still in a favorable buying window period. If one believes in a bull market, they should actively seize the opportunities. In terms of operational thinking, a bottom-up approach, buying high-quality leaders at reasonable valuations and holding them patiently, remains the best strategy to navigate through the turbulence of a bull market.