Core Insights - The article discusses the investment strategy of Yao Chenfei, a fund manager at Agricultural Bank of China Asset Management, focusing on accumulating excess returns through investing in high-quality companies with reasonable valuations and strong cash flows [1][2]. Group 1: Investment Philosophy - Yao emphasizes a balanced approach between growth and value investing, believing that both styles can coexist and that there are opportunities in the market for companies with stable profits and reasonable valuations [1][4]. - The investment strategy is characterized by a focus on low-valuation, high cash flow companies, with a preference for those that have stable management and growth or dividend capabilities [2][5]. - Yao's investment philosophy is centered around achieving "high win rates and low odds," preferring steady accumulation of excess returns over chasing high-risk, high-reward opportunities [5][6]. Group 2: Market Strategy - The current market environment is described as volatile, prompting Yao to adjust the defensive and offensive components of his portfolio based on market conditions [4][6]. - Yao's approach includes a dynamic management of portfolio holdings, where he takes profits from overvalued stocks and adds to positions in fundamentally sound companies that have been oversold due to market fluctuations [7]. - The strategy also involves a "high-low cut" investment approach, focusing on identifying stable companies with high cash flows as the market transitions into a phase of sustained volatility [6][7]. Group 3: Sector Focus - Yao's background in the chemical industry informs his investment choices, leading him to prioritize individual stocks over sector trends, particularly in traditional industries where he has extensive experience [2][3]. - The investment portfolio includes a mix of defensive sectors like banking and utilities, alongside growth sectors such as electronics and military, to enhance overall portfolio resilience [4][6]. - The emphasis on companies with strong cash flows and reasonable valuations is seen as a way to navigate the anticipated long-term box-like market conditions in A-shares [6][7].