Core Insights - The article features insights from Chen Heng, a fund manager with 17.4 years of experience in the securities industry, focusing on his investment philosophy and market outlook as the new year approaches [1][5]. Investment Philosophy - Chen Heng aims to balance between "optimal decision-making" and "satisficing decision-making," seeking to avoid both perfectionism and mediocrity while focusing on long-term growth potential, reasonable valuations, and controllable risks [3][9]. - The investment approach emphasizes the importance of deep cognitive understanding over mere speed of information acquisition, advocating for a stable mindset throughout market cycles [3][9]. Industry Selection Framework - Chen Heng's investment methodology is based on a five-dimensional framework derived from traditional Chinese wisdom: - "Dao" focuses on quality factors, targeting leading companies with competitive advantages rather than short-term speculative themes [4][10]. - "Tian" involves observing industry cycles, avoiding sectors that lack favorable conditions regardless of their price [4][10]. - "Di" emphasizes reasonable valuation positions to prevent over-investment in overheated sectors [4][10]. - "Jiang" is about selecting true leaders within niche markets [4][10]. - "Fa" refers to the flexible use of various financial instruments for dynamic adjustments and risk management [4][10]. Market Outlook - For 2025, Chen Heng identifies two main themes: non-ferrous metals and AI, predicting that these sectors will perform prominently throughout the year [4][10]. - As market valuations adjust and industry logic evolves, other sectors are expected to reveal improved cost-effectiveness, leading to a more balanced and diverse A-share market [4][10]. Sector Focus - Chen Heng finds the risk-reward ratio in the non-ferrous metals sector attractive due to global demand and value reassessment [5][11]. - Additional sectors of interest include: - Power equipment, which represents a new core competitiveness for Chinese manufacturing and is essential for AI [5][11]. - Chemicals, which may benefit from a dual boost in profitability and valuation due to commodity reassessment [5][11]. - Aviation, which is experiencing improvements in supply-demand dynamics and overall industry recovery [5][11].