Group 1 - The core narrative for the global market in 2025 includes the long-term weakening of the US dollar credit, restructuring of global supply chains, gold as a new anchor for the monetary system, AI as the infrastructure for a new industrial transformation, and non-ferrous metals as the new oil [1][8][36] - Domestic assets in 2025 are driven by fundamentals such as external demand and new industries, while high-yield assets are concentrated in non-ferrous metals and AI-related sectors [1][9][10] - The existence of a "temperature difference" in the medium term indicates that new industrial investments are concentrated, with emerging sectors showing high prosperity, while traditional sectors are weak [1][10] Group 2 - In 2026, a "mirror" relationship may form, with global narratives expected to converge, leading to reduced uncertainty in the global trade environment [2][11] - The expected recovery in investment gaps during the first year of the 14th Five-Year Plan may stabilize the real estate sector and improve consumption rates [2][13] - The profitability of industrial enterprises is projected to improve, with an expected increase in profit growth from approximately 3% to 6.6% [3][14] Group 3 - The transition of macroeconomic policy from "counter-cyclical" to "expanding domestic demand" is expected to enhance fundamental pricing power [3][15][16] - The combination of converging narratives and reduced temperature differences will impact asset pricing characteristics, with a shift from forward pricing to a combination of near and far pricing for commodities [4][17] - The normalization of risk preferences among residents will lead to an increase in rental yield pricing power in the real estate sector [4][18] Group 4 - The next round of narratives may include themes such as industrialization in southern countries, the second wave of globalization for Chinese enterprises, AI scenario applications, and a new quality of consumption [5][20] - The traditional investment research framework faces challenges from these narratives, necessitating an optimization of the investment research framework to incorporate narrative analysis [5][21] - Key assumptions for economic judgment in 2026 include a moderate recovery in investment gaps, improvement in consumption, stable export fundamentals, and a stabilization of real estate decline [6][22][23][26]

Core Viewpoint - The article discusses the impact of "narrative trading" on asset pricing, emphasizing that asset pricing is influenced not only by fundamentals but also by popular narratives such as the restructuring of the dollar credit system and the new technological revolution [1][12]. Group 1: Narrative Economics - The influence of narratives on economic phenomena consists of a series of elements: a popular, easily spread story, public behavior, and an epidemiological model for macro-level dissemination [2][16]. - The concept of "herding behavior" is used to illustrate how narratives affect micro-level decision-making, with varying strengths across different phases of narrative development [2][18]. Group 2: Herding Effect in Asset Allocation - Traditional studies of herding behavior focus on individual stocks and short-term market sentiment, but the current narrative-driven environment poses challenges for asset allocation due to the breakdown of continuity in global fiscal, monetary, and trade environments [3][20]. - The article suggests that the herding effect can be quantified and applied to investment portfolio optimization and asset timing strategies [3][20]. Group 3: Measurement of Herding Effect - Four common indicators of herding behavior are identified: Cross-Sectional Absolute Deviation (CSAD), the quadratic coefficient of return dispersion, standard deviation of beta coefficients, and cross-correlation [4][23]. - The CSAD index, which measures the deviation of asset returns from the average, indicates the presence of herding behavior when returns cluster around a certain average level [4][23]. Group 4: Current State of Herding Effect - The CSAD index for major asset classes shows a right-skewed distribution, indicating a tendency for extreme herding behavior, with a mean-reverting characteristic suggesting that extreme trends are difficult to maintain [5][28]. - Since May 2025, the CSAD has decreased significantly, indicating a rapid herding effect, but has started to rebound slightly, suggesting a potential shift towards more balanced asset performance [5][28]. Group 5: Strategy Integration - The article proposes integrating the herding factor into a macro risk parity framework, which has shown superior annualized returns compared to traditional models [6][34]. - The new framework suggests increasing allocations to equities and commodities while reducing bond exposure, indicating a shift in investment strategy based on herding behavior [6][34]. Group 6: Domestic Equity Market Analysis - The herding effect in the domestic equity market, as measured by the CSAD, has shown a decline in right-skewness, indicating lower dispersion compared to historical levels [7][40]. - The herding effect has gone through phases of fermentation, intensification, and now a slight loosening, suggesting a gradual return to individual rationality among investors [7][40].

Core Viewpoint - The article discusses three types of contrarian investors and their approaches to investing during market bubbles, emphasizing that participating in bubbles can sometimes be a rational choice despite the inherent risks involved [4][10]. Group 1: Types of Contrarian Investors - Aggressive contrarian investors directly oppose the market by short-selling bubbles, which is a challenging strategy due to the psychological and financial pressures involved [12][17]. - Lonely contrarian investors maintain cash positions or minimal investments, facing social isolation and pressure from prevailing market sentiments, which can lead to a "spiral of silence" where they refrain from expressing their views [18][21]. - Active contrarian investors, like deep value investors, continue to invest in undervalued stocks during bubbles, often referred to as "old economy stocks," which can lead to criticism for not participating in the prevailing market trends [24][25]. Group 2: Psychological Aspects - The phenomenon of "fear of missing out" (FOMO) drives many investors to participate in bubbles, as investment returns are often tied to social status [7][10]. - The "martyr complex" can lead contrarian investors to view themselves as lone heroes fighting against the bubble, which may disconnect them from reality and hinder their decision-making [34][36]. - The article highlights the importance of maintaining an open mindset and engaging with others to alleviate the pressures faced by contrarian investors [36].

Core Insights - The article highlights a significant divergence in the Chinese gold market, where investment demand is surging while consumer demand for gold jewelry is declining sharply [1][2][5] Group 1: Market Trends - International gold prices have surpassed $4200 per ounce, marking the strongest increase since 1979, while domestic gold jewelry prices have reached 1200 RMB per gram [1] - In the first half of 2025, investment gold bars and coins saw a year-on-year sales increase of 23.69%, contrasting with a 26% decline in gold jewelry consumption [1] - The revenue of A+H share listed companies in the Chinese jewelry sector fell by 8.2% year-on-year, with net profits down 36.84% in the same period [2] Group 2: Consumer Behavior - The rising gold prices have led to a significant increase in the price of gold jewelry, with a 30-gram gold chain rising from 20,000 RMB in 2024 to over 30,000 RMB in 2025, while disposable income growth for residents was only 5.4% [2] - Consumers are shifting towards smaller weight jewelry or directly purchasing investment gold bars due to the widening gap between gold prices and income growth [2][4] Group 3: Company Performance - Lao Pu Gold, referred to as the "Hermès of gold," experienced a remarkable sales increase of 249% and a net profit growth of 291% in the first half of 2025, despite a decline in overall jewelry consumption [1][5] - The company's gross profit margin decreased to 38.1%, indicating a shift in the gold industry from "value preservation" to "brand premium" [1][5] Group 4: Strategic Shifts - Lao Pu Gold is adopting a luxury brand strategy, moving away from traditional pricing models to a "one-price" strategy, which has led to increased sales [4][8] - The brand's consumer base overlaps significantly with luxury brands like LV and Hermès, with a 77.3% similarity in customer profiles [8] Group 5: Challenges and Opportunities - The rapid increase in gold prices has led to a decline in gold jewelry consumption and a surge in the second-hand market, posing risks to Lao Pu Gold's luxury positioning [9] - The company is expanding internationally, with its first overseas store in Singapore, and plans to increase its presence in Shanghai, a key luxury market [10][12] Group 6: Future Directions - Continuous product innovation and the integration of online and offline sales channels are essential for maintaining competitive advantage [13] - Lao Pu Gold aims to build a strong brand identity based on cultural value, craftsmanship, and narrative, as the market shifts towards a dual demand for financial assets and emotional consumption [13][14]

Group 1 - The article discusses the impact of grand narratives on asset pricing, emphasizing that economic behavior is influenced not only by rational analysis but also by prevailing narratives, as proposed by economist Robert Shiller [1] - It identifies five leading asset classes in 2025: precious metals, non-ferrous metals, emerging market stocks, technology assets, and alternative assets, all influenced by narratives such as the reconstruction of the dollar credit system and the reshaping of global supply chains [1] - The interconnectedness of these narratives creates a "narrative constellation," which is more influential than individual narratives [1] Group 2 - The rise of narratives is linked to changes in global macro variables, where traditional economic assumptions of continuity are challenged by significant non-continuous changes in fiscal and monetary conditions, trade environments, and geopolitical factors [2] - The influence of narratives poses challenges to traditional investment research methodologies, as the long timelines of grand narratives can bypass short-term validations and disrupt mean reversion assumptions [2] Group 3 - To adapt to the influence of narratives, the article suggests differentiating narrative levels for better risk-return matching, utilizing thematic asset categories that align with narratives, and increasing the use of momentum strategies during narrative-driven phases [3] - It also recommends establishing objective indicators for narrative validation and recognizing the potential for narrative bubbles, advocating for a diversified approach to narrative investments [4] Group 4 - The article notes a divergence in asset narratives during the third week of October, with U.S. stock markets rebounding amid the end of the Fed's balance sheet reduction, while Japanese stocks experienced a pullback [5] - Precious metals narratives strengthened, with gold and silver prices reaching new highs, while copper prices showed signs of retreat [6] Group 5 - The article highlights the performance of global stock markets, noting a rebound in U.S. stocks, while European stocks remained subdued due to fiscal expectations and export concerns [5] - It also discusses the dynamics of commodity prices, with gold and silver showing strong performance, while oil prices declined due to geopolitical factors and OPEC+ production increases [7] Group 6 - The article emphasizes the importance of monitoring the U.S. government's ongoing shutdown, which could impact market confidence and policy risks if it extends into November [11] - It also mentions the potential for the Fed to end its balance sheet reduction in the coming months, shifting focus towards employment risks and liquidity stability [13] Group 7 - The article discusses the recent credit fraud incidents in U.S. regional banks, highlighting vulnerabilities in the credit system under high-interest rate conditions [15] - It suggests that these incidents may not pose systemic risks but indicate weaknesses in the credit structure that could lead to further risk reassessment in the market [16] Group 8 - The article outlines the current state of China's asset pricing, noting a rise in the pricing power of Chinese assets amid global market uncertainties [9] - It highlights the performance of various sectors within the Chinese market, with a shift towards value styles and a pullback in high-growth narratives [10] Group 9 - The article reports on the recent developments in China's fiscal and monetary policies, including the expansion of the central bank's balance sheet and the need for effective credit support for the real economy [21] - It emphasizes the importance of infrastructure investment and the government's commitment to enhancing domestic demand and stabilizing the economy [29] Group 10 - The article discusses the ambitious goals set by China's government for electric vehicle charging infrastructure, aiming to significantly increase the number of charging facilities by 2027 [25][26] - It highlights the expected compound annual growth rate of 29.8% for charging facilities from 2025 to 2027, reflecting the government's commitment to supporting the electric vehicle industry [26]

Group 1 - The core viewpoint is that the asset pricing paradigm is undergoing a profound transformation, shifting from a static world based on certainty to a dynamic ecosystem based on uncertainty [1][2] - The financial market is transitioning from a Newtonian mechanical worldview to a quantum characteristic market, where asset prices exhibit both "particle" (real value based on cash flow) and "wave" (narrative value based on consensus) properties [2][3] - The new pricing paradigm emphasizes the importance of technology, new productivity, and collective consensus as key factors in asset valuation [12][16] Group 2 - The three pillars of asset pricing are changing: the curvature of pricing in time and space has been altered, the definition of value is expanding from "atomic value" to "bit value," and the traditional risk-return equation is being rewritten [2][3][10] - Investors need to transition from being "valuation accountants" to "paradigm geographers," utilizing tools beyond financial statements and discount models to include technology roadmaps and narrative networks [4][5] - Traditional valuation models like DCF and DDM are losing their explanatory power due to high uncertainty and sensitivity to assumptions, making them less applicable to high-growth or volatile companies [6][7][8] Group 3 - The classic economic cycle models, such as the Merrill Lynch Clock, have become ineffective due to structural changes in the macroeconomic environment, requiring a shift in asset allocation strategies [8][9] - The concept of "safe assets" is diminishing as traditional safe havens like government bonds face challenges from fiscal credit erosion and the politicization of monetary policy [10][11] - The definition of safety is evolving from unconditional trust in sovereign credit to seeking systemic resilience in extreme situations, with gold and cryptocurrencies emerging as new forms of value storage [10][12] Group 4 - The new asset pricing paradigm should focus on the sources of value creation in the digital economy, including technological advancements, new productivity, and collective consensus [12][13][14] - The A-share market is becoming a battleground for new productivity and valuation reassessment, moving away from traditional macroeconomic cycles towards sectors aligned with national strategic intentions [16] - The U.S. stock market is evolving into a core pricing arena for global technological innovation, with tech giants being valued not just on current cash flows but also on their potential as platform-based options for future infrastructure [16][17] Group 5 - Gold's role is shifting from a simple inflation hedge to a decentralized consensus vehicle, reflecting global capital's distrust in fiat currency systems [17] - Cryptocurrencies represent an extreme experiment in asset pricing, relying on technology architecture and global consensus rather than traditional fundamentals [18] - The asset allocation strategy must evolve from passive tracking of economic cycles to proactive identification of key sectors representing technological progress and new productivity [18][19]

Core Viewpoint - The surge in gold prices is deviating from traditional economic models, driven by factors such as the U.S. government shutdown and rising expectations of interest rate cuts, leading to a historic breakthrough of gold prices above $4200 per ounce [2][6]. Group 1: Gold Price Trends - Gold prices have increased from $1614 per ounce to over $4200 per ounce in just three years, with a 27% rise last year and over 50% this year [2]. - Goldman Sachs predicts that gold prices could reach $4900 per ounce by December 2026, reflecting a significant upward revision of $600 from previous estimates [2][10]. - As of October 13, domestic gold-themed ETFs have surpassed 200 billion yuan in total scale, with some ETFs doubling their returns this year [2][12]. Group 2: Historical Context of Gold - Gold's origins trace back to cosmic events over 4 billion years ago, making it a rare and irreplaceable asset [3]. - Throughout history, gold has represented a universal value consensus, serving as a form of trust and wealth across civilizations [4]. - The establishment of the gold standard in the early 19th century led to unprecedented currency stability and international trade prosperity, but it also limited governments' ability to respond to economic crises [5]. Group 3: Shift in Gold's Role - The traditional relationship between gold prices and U.S. real interest rates has broken down, particularly after the onset of the Russia-Ukraine conflict, with gold prices continuing to rise despite high real interest rates [6][8]. - The current demand for gold is increasingly seen as a substitute for U.S. dollars, as central banks globally are restructuring their reserve assets, with gold reserves surpassing U.S. debt holdings for the first time in 30 years [8][9]. Group 4: Future Outlook - The current gold market is characterized by a significant shift in buyer structure, with individual investors and central banks becoming the main buyers, particularly as Western ETF investors return [10][11]. - The ongoing trends of de-dollarization and geopolitical uncertainties are expected to sustain gold's appeal as a hedge against sovereign credit risks [9][11]. - The potential for a new economic cycle driven by the AI revolution could influence gold's long-term value, as it reflects a broader strategy of balancing risk assets with safe-haven investments [12][13].

Core Insights - The article discusses the evolution of asset pricing theories and the need for a new approach to asset allocation that goes beyond traditional models, emphasizing the importance of risk-adjusted returns and dynamic risk management [2][10][25] Group 1: Traditional Asset Pricing Theories - Traditional asset pricing theories, such as the Capital Asset Pricing Model (CAPM), are based on strict assumptions like market efficiency and rational investors, which fail to explain market anomalies like momentum and value effects [2][4] - The limitations of these traditional theories were highlighted during financial crises, revealing their inadequacies in tail risk management [2][4] Group 2: New Asset Allocation Approach - The new approach focuses on systematically and proactively enhancing the risk-adjusted returns of investment portfolios rather than merely seeking absolute returns [2][4] - This shift represents a comprehensive innovation in philosophy and methodology, aiming for long-term and stable risk-return profiles within clearly defined risk budgets [2][4] Group 3: Dynamic Correlation and Risk Management - The article emphasizes that asset correlations are dynamic and can change with market conditions, making fixed historical correlation-based frameworks risky during crises [7][10] - Understanding the underlying logic of correlation changes is crucial, as traditional low-correlation "free lunch" strategies may diminish in effectiveness during market turmoil [10][12] Group 4: Investment Framework and Strategies - The investment framework proposed by the company is a three-dimensional model that incorporates technological advancements, new productivity measures, and narrative-driven investing [13][20] - The investment process is modularized into pre-investment, during-investment, and post-investment phases, each with specific goals and quantifiable standards to ensure systematic and disciplined operations [14][15] Group 5: Multi-Asset Investment Strategy - The newly launched multi-asset fund aims to provide a robust alternative to traditional fixed-income products by incorporating low-correlation assets like A-shares, U.S. stocks, gold, and bonds [16][18] - Statistical analysis shows that the probability of all four asset classes declining simultaneously is only 1.61%, indicating the effectiveness of low-correlation diversification [16] Group 6: Future of Asset Pricing - The future of asset pricing is seen as a transition from historical data reliance to a focus on understanding technological trends, industry changes, and collective human behavior [25] - The article concludes that continuous questioning and reflection on traditional beliefs are essential for adapting to new paradigms in asset pricing and investment strategies [25]

Core Viewpoint - The article emphasizes the need for a paradigm shift in asset pricing and investment management, moving from traditional models to a more dynamic and adaptive approach that considers the non-linear relationships between assets and their roles within a portfolio [4][11][18]. Group 1: Asset Pricing Theory - Traditional asset pricing theories, such as the Capital Asset Pricing Model (CAPM), are based on strict assumptions of market efficiency and rational investors, which fail to explain market anomalies like momentum and value effects [4][12]. - The article argues that asset prices are influenced not only by their expected returns and risks but also by their roles in the overall investment portfolio and the dynamic relationships with other assets [4][11]. Group 2: Investment Strategy - The new investment philosophy focuses on systematically and proactively enhancing the risk-adjusted returns of investment portfolios rather than merely seeking absolute returns [4][11]. - The investment framework proposed is not about finding the "true value" of assets but about creating an adaptive system that can achieve stable growth across different market environments [7][16]. Group 3: Multi-Asset Allocation - The article discusses the importance of low correlation among assets in a multi-asset allocation strategy, which can significantly reduce the probability of negative monthly returns [22][23]. - A two-stage strategy combining CPPI (Constant Proportion Portfolio Insurance) and risk budgeting is suggested to enhance traditional methodologies and improve risk-adjusted returns [17][23]. Group 4: Market Dynamics - The article highlights that the correlation between assets is dynamic and can change with market conditions, which poses risks to traditional asset allocation frameworks that rely on historical data [12][15]. - The concept of "free lunch" in asset allocation, derived from low correlation, may diminish as market environments evolve, necessitating a deeper understanding of the underlying factors driving asset correlations [15][18]. Group 5: Future of Asset Pricing - The future of asset pricing is seen as a transition from a focus on historical data to an understanding of technological trends, industry changes, and collective human behavior [34]. - The new asset pricing framework is described as a three-dimensional investment model centered around technological advancement, new productive forces, and consensus-driven narratives [18][28].

Core Viewpoint - The international gold price has reached a historic high of $4000 per ounce, marking a significant increase from $1614 per ounce three years ago, with a 27% rise last year and over 50% this year, indicating a rare upward trend in the market [1][3]. Group 1: Factors Driving Gold Prices - The surge in gold prices is attributed to a fundamental shift in its pricing logic, evolving from a mere safe-haven asset to a sovereign credit hedge [3][4]. - The first driving force is the wave of de-dollarization, with global central banks increasing their gold reserves, surpassing U.S. Treasury holdings for the first time in 30 years, and China's central bank has increased its gold reserves for 11 consecutive months, exceeding 2300 tons [4][6]. - The second driving force is the trust crisis stemming from de-globalization, where geopolitical uncertainties have led to a heightened demand for "hard currency," with gold being the most direct beneficiary [6][7]. Group 2: Market Dynamics and Future Outlook - The narrative surrounding the decline of U.S. hegemony and the dollar's status as the world currency has created a self-reinforcing cycle of belief and buying in the gold market [7][8]. - Historical data suggests that gold bull markets last an average of 32 months with a 172% increase, and the current bull market has lasted 34 months with an 88% increase, indicating potential for further growth [9][10]. - Short-term fluctuations in gold prices will be influenced by the Federal Reserve's interest rate decisions, while mid-term trends will continue to be supported by ongoing de-dollarization and geopolitical tensions [11][12]. Group 3: Investment Strategies for Individuals - Individuals are advised to avoid large-scale purchases at current high prices and instead consider gradual investments or dollar-cost averaging to mitigate risks associated with gold's lack of yield [16][18]. - A reasonable allocation of 5%-10% of household assets in gold is suggested to enhance portfolio resilience without causing significant disruption from price volatility [17]. - The focus should be on responding to trends rather than predicting specific price points, as the underlying logic for gold's value remains intact amid ongoing geopolitical and economic uncertainties [18].