A-shares have become desensitized to crude oil

The biggest news over the weekend is the hand-drawn candlestick master and future Nobel Peace Prize candidate, Donald Trump, who proposed a plan to charge a toll for oil tankers passing through the Strait of Hormuz due to the failure to reach an agreement on the Iran nuclear issue.

As a result, WTI crude oil surged 8% today, while the Asia-Pacific market generally declined, but the A-shares, especially in the innovation and entrepreneurship sector, performed brilliantly.

It has held up.

The operational difficulty of crude oil LOF is indeed very high.

To be honest, the volatility of crude oil is indeed too large, and due to quota issues, the price fluctuations of on-market LOF after the purchase limit are even greater.

I compared the Southern Crude Oil LOF and the Gold ETF, using KIMI to calculate the returns and volatility of the two assets from April 14, 2025, to today over the course of one year.

The comparison of annualized volatility is 51.53% vs 32.39%.

The annualized volatility of crude oil LOF this year is approximately 1.6 times that of the Gold ETF.

Stimulating.

The higher the volatility, the higher the demands it places on our trading and timing, so making money from crude oil LOF during this period has made me anxious, not to mention considering issues like on-market premium regulation.

So if you want to profit from crude oil LOF, it might be best to drive an oil car and invest in crude oil LOF off-market when oil prices are low, waiting for geopolitical events to trigger a surge in oil prices, especially after the on-market LOF premium skyrockets, then transfer custody and sell.

I have a good friend who operates this way, and this wave of profits has offset the increased fuel costs.

Alternatively, when there isn't much narrative around crude oil, you could allocate 5%-10% of your position at low premium levels, and take profits after a geopolitical event erupts and the premium skyrockets.

Otherwise, it’s better to buy quality oil stocks or ETFs heavily invested in oil stocks.

In situations like this, after an event erupts, oil prices change daily, the on-market LOF premium is very high, and off-market subscriptions are paused, making further operations difficult.

Because besides Trump, no one knows what changes in oil prices will occur tomorrow.

The Growth of the ChiNext Continues

Affected by the dual charges in the Strait of Hormuz, equity assets have adjusted today.

However, today's A-shares and small-cap Nasdaq futures have shown a certain degree of resilience, starting to rise after a brief panic at the opening.

It can be said that Chinese assets have demonstrated sufficient resilience today.

Except for Hengke.

This resilience is in the direction of innovation and entrepreneurship.

The ChiNext 50 surged by 1.3%, and it is about 5% away from the historical peak of 3929.05 in 2015, successfully surpassing the high point of 2021.

Moreover, Ning Wang's stock price has once again reached a historical high.

The three rounds of movements in the ChiNext indeed vividly represent three rounds of industrial cycles.

From 2013 to 2015, it was TMT and mobile internet, but unfortunately, the leading stocks of that wave were LeTV, Storm Media, etc. The bursting of these bubbles did not allow the ChiNext to accumulate quality companies.

From 2019 to 2021, it was pharmaceuticals + new energy, with vaccines and medical devices returning from the US stock market + energy storage and batteries, representing two major betas of public health emergencies + the trend of the new energy industry.

Then from 2025 to now, it is CPO optical modules + energy storage grid, with the former driven by the surge in computing power demand brought by AI, and the latter being the export of China's power equipment after AI-induced power shortages + rising oil prices.

Last Friday, the ChiNext also introduced a new reform package.

One is in the direction of growth, which can absorb more growth stocks for listing.

The other is that ChiNext stock index futures are coming soon, and it can be imagined that future quantitative private equity will also expand the battlefield here.

Then, small-cap indices similar to the Sci-Tech 100 and Sci-Tech 200 on the ChiNext will gradually emerge.

Valuations of US Tech Stocks Are Not That Expensive Anymore

After this round of adjustments, the valuations of US stocks and global indices outside the US have converged, making US stocks not as expensive compared to other stock markets.

Moreover, the valuations of US tech stocks have almost returned to the same starting line as the S&P 500.

So from a valuation perspective, tech stocks are not that expensive anymore.

Of course, the valuation of U.S. stocks is still not cheap.

This morning I saw a chart on X that said the University of Michigan Consumer Sentiment Index fell to 47.6 in April, setting a record low.

It's lower than during the stagflation of the 1970s and the 2008 financial crisis.

Since 2022, the consumption reality here has been a K-shaped recovery, and now this trend in the U.S. is also quite evident.

Wealthy individuals have made a fortune in stocks, gold, cryptocurrencies, real estate, etc. in recent years. The U.S. CPI is high, prices are high, but they are not afraid; they can earn back with assets and businesses.

However, ordinary people do not have so much money, and it is not easy to meet daily expenses. Now they also face the pressure of layoffs brought about by AI replacement.

From an industrial trend perspective, AI is definitely a big opportunity and is unstoppable.

But from the ethical perspective of redistribution, fairness, and the wealth gap in society, the all-consuming AI will certainly encounter resistance.

This is the effort we ordinary people make to solve the problem of food.

So for this round of tech big beta, the problem may not necessarily come from the technology and industrial trends themselves.

In contrast, our consumer confidence index seems to have a tendency to recover upward after the decline in 2022, starting from September 2024.

From my on-the-ground experience, offline dining consumption does seem to have recovered, and business has improved a lot.

Since the continuously escalating geopolitical issues since 2022, the U.S. and Russia have already personally participated, and the U.K. and France have indirectly supported Ukraine.

Only we are firmly seated in the middle, which is reminiscent of the 1930s American script.

If consumption is indeed recovering, then the domestic consumption chain that hasn't risen yet, as well as Hengke, which serves as both a tech option and a domestic demand option, should still have opportunities.

Since 2025, the domestic demand chain has not risen, and Hengke has gone on a roller coaster and returned because it does not focus on hardware; the internet and automotive sectors are essentially consumer stocks.

And since they are consumer stocks, let's wait for further recovery in consumption data