Core Insights - The report focuses on the funding mechanisms driving the A-share bull market, analyzing the characteristics of capital flows during previous bull markets and providing scenarios for the current bull market based on three types of funds: "FOMO chasing funds," "right-side profit-taking funds," and "break-even funds" [3][4][10] - The analysis covers five significant bull markets since 2005, highlighting the role of "FOMO chasing funds" in driving market trends and the importance of understanding the relationship between net buying, transaction volume, and valuation levels [4][9][10] Funding Types and Market Dynamics - The three types of funds exhibit different behaviors and impacts on the market: - "FOMO chasing funds" typically enter the market early in a bull run, accelerating their entry due to fear of missing out, thus providing incremental momentum [8][9] - "Right-side profit-taking funds" begin to sell off as profits reach expectations, potentially creating temporary pressure on the market [8][9] - "Break-even funds" are those investors from the previous bear market who choose to exit when the market returns to their cost levels, often leading to increased transaction volume and reduced upward momentum [8][9] Historical Bull Market Analysis - The report reviews five historical bull markets, detailing their start and end points, as well as the overall index gains: - Bull Market 1: July 18, 2005 - October 16, 2007, with a gain of approximately 602% - Bull Market 2: November 4, 2008 - November 23, 2009, with a gain of 143% - Bull Market 3: April 28, 2014 - June 12, 2015, with a gain of 226% - Bull Market 4: January 28, 2016 - November 13, 2017, with a gain of 38.24% - Bull Market 5: October 18, 2018 - December 13, 2021, with a gain of 88.67% [11] Future Market Scenarios - The report outlines three potential future market scenarios based on the behavior of the three types of funds: - In an optimistic scenario, "FOMO chasing funds" continue to drive the market, leading to sustained high transaction volumes and positive net buying [10][29] - In a neutral scenario, the market may experience moderate growth with potential fluctuations as "right-side profit-taking" and "break-even funds" begin to exert pressure [10][29] - In a pessimistic scenario, significant outflows from "right-side profit-taking" and "break-even funds" could lead to negative net buying and a potential market correction [10][29] FOMO Dynamics - The report emphasizes the role of FOMO (Fear of Missing Out) in shaping market dynamics, noting that this sentiment typically peaks after a 20% increase in the index, indicating a strong psychological component to market movements [26][30] - The distribution of FOMO funds varies across different bull markets, with significant concentrations observed during mid to late stages of bull runs, suggesting that the timing and intensity of FOMO can significantly influence market trends [26][30]