Group 1 - The report highlights the importance of balanced asset allocation amid market volatility, particularly in the context of recent adjustments in technology stocks and increased global market volatility [2][3]. - Major indices such as the Nikkei 225, KOSPI, NASDAQ, and Hang Seng Tech experienced declines of 4.1%, 3.7%, 3.0%, and 1.2% respectively, with significant pullbacks in large AI-related companies [2][3]. - The report suggests that the current technology market is approaching a critical juncture similar to 1998, recommending a more balanced sector allocation for 2026 [3][4]. Group 2 - The report identifies two main catalysts for the recent market fluctuations: disruptions in AI narratives and liquidity pressures, with the former being the dominant factor [3][4]. - As of Q3 2025, the capital expenditure to revenue ratio for the Magnificent 7 (Mag7) reached 17.4%, marking a new high since 2023 and surpassing levels seen during the ".com" boom [3][4]. - The liquidity environment remains tight, with interbank liquidity pressures persisting despite expectations of interest rate cuts, as indicated by rising TGA account balances and a decline in bank reserves [4][5]. Group 3 - The report emphasizes the need for risk management strategies, advising investors to reduce long positions and consider hedging through derivatives or increasing exposure to VIX [5]. - Despite the current market challenges, the report maintains that there is still medium-term investment value in Hong Kong technology stocks, particularly in the context of China's AI industry development [5][6]. - The report notes that the valuation of Chinese stock indices remains attractive compared to global peers, supported by the "14th Five-Year Plan" which emphasizes technological self-sufficiency [5][6].