Core Viewpoint - The article argues that the recent rise in the stock market, particularly the Shanghai Composite Index reaching 3600 points, is not fundamentally driven but rather influenced by cross-border capital flows, challenging the traditional view that stock markets reflect economic fundamentals [3][10][16]. Group 1: Economic Data and Stock Market - Critics of the stock market's rise cite economic data, particularly real estate and restaurant revenue, as indicators of underlying economic health [5][9]. - The article emphasizes that the stock market's performance is more closely tied to the return of overseas capital rather than domestic economic indicators [10][13]. Group 2: Capital Flow Dynamics - The return of overseas capital through mechanisms like currency exchange and northbound trading is identified as a primary driver of stock market increases, while improvements in domestic consumption lag behind [14][15]. - The article highlights that the cost of capital flow through northbound channels is significantly lower (under 1%) compared to gray market channels (around 10%), influencing investor behavior [15]. Group 3: Relationship Between Stock and Real Estate Markets - The article posits that the stock market leads the real estate market, with real estate prices lagging behind stock prices due to the different risk appetites of investors [16]. - It suggests that only when the stock market rises sufficiently to alter risk preferences will the real estate market stabilize and begin to rise [16]. Group 4: Investment Strategy Implications - The article warns against relying on fundamental economic indicators for stock investment, suggesting that such an approach may lead to poor investment outcomes [17]. - It concludes that the stock market has evolved to become a reservoir of wealth, attracting overseas capital, rather than being a mere reflection of economic conditions [16].