Previously, investors focused on financial news. Since Trump’s return, they also needed to pay attention to his Twitter (a private version). The trade war continued to escalate, leading to a sharp decline on April 7th, which was quickly followed by a rebound. This time, though, are people still willing to jump in?

Background Review

On April 7, 2025, following the impact of the U.S. implementation of an “equivalency tariff” policy, global stock markets experienced a “Black Monday.” The A-share market plunged, with the Shanghai Composite Index falling by 7.34% and the Shenzhen Component Index plummeting by 12.5%, with over 4,300 stocks declining by more than 9%. The Hang Seng Index in Hong Kong also fell by 13.22%, along with European and U.S. stock indices exceeding declines of 4%. China subsequently stabilized the market through state-owned enterprise (SOE) purchases and intervention by Huishang Securities.

On October 10th, U.S. stocks suffered another significant decline, with Chinese HShares falling by 6%, driven primarily by expectations of escalation in the U.S.-China trade war. Trump signaled a further increase in tariffs on China, and the U.S. would also impose hefty fees on Chinese ships. China announced retaliatory measures and levied special port fees, compounded by a government shutdown, declining consumer confidence, and market panic selling for safety.

Original Link

Position Control

Currently, the state of short selling in A-shares isn’t a complete short position; there’s a small portion invested in index funds within Fixed Income Plus, but the bulk is still in the Hong Kong market. Xiaomi has already incurred principal losses, and Meituan remains a shareholder. The position control is somewhat unbalanced. Should we jump in and gamble on Monday? It’s a question to consider – currently, we don’t have enough cash flow. If we need to enter, we would rely on old friends like Alipay’s Jiebei for bridging funds. Greedy snakes swallow elephants – the position control is extremely unreasonable, and we should look for opportunities to reduce our holdings later.

Compared to April 7th, the current position isn’t considered a low-level one; many stocks are at relatively high levels, particularly the technology stocks within the Heng Seng Tech index. If we were to add to positions, it would be more appropriate to use an ETF rather than individual stocks – for example: Turned around and couldn’t find anything suitable; gains were 20%-30%.

Regarding the domestic market, long-term trends point towards a period of consolidation and decline, with potential for significant rallies in the short term. To make profits, it’s best to execute profit-taking operations within this timeframe.

Associated Term Definitions

Black Swan

The term “Black Swan” originates from Nassim Nicholas Taleb’s book The Black Swan.

• Concept: Refers to events that are extremely unlikely, unpredictable, but upon occurring, they generate extreme impact and disruptive consequences.
• Characteristics:
  • Rarity/Unpredictability: These events have no precedent or warning signs before they occur, exceeding all conventional expectations and model predictions.
  • Extreme Impact: Once they happen, they can cause catastrophic effects on markets, economies, and even societies.
  • Post-hoc Rationalization: Despite being impossible to predict beforehand, people tend to find reasons and explanations after the event occurs, making it appear “understandable.”
• Source Legend: Before the discovery of Australia, Europeans believed all swans were white until black swans were discovered in Australia, completely overturning thousands of years of knowledge. Therefore, the Black Swan symbolizes unforeseen and cognitive breakthroughs.
• Stock Market Examples:
  • The “9/11” terrorist attack in 2001 (a short-term shock to global markets).
  • The initial impact of COVID-19 on the global economy and markets (although some argued it had grey rhino characteristics, its sudden outbreak and global spread, as well as the extent of its impact, were largely considered Black Swans).

Gray Rhino

The term “Gray Rhino” was coined by Michele Wucker.

• Concept: Refers to a potential crisis that is highly probable, has a significant impact, and yet is ignored or selectively delayed in addressing due to its obvious warning signs.
• Characteristics:
  • High Probability/Predictability: The event has clear indicators and evidence before it occurs, making it a known risk.
  • Easily Ignored: Because it’s not sudden but rather long-term or slowly developing, people become numb, exhibit optimism bias, or procrastinate, failing to take timely action.
  • Significant Impact: Once it erupts, due to the lack of effective responses beforehand, it triggers a chain reaction and causes severe destructive consequences.
• Source Allusion: A gray rhino is large in size and has a slow reaction time; people can see it from afar, but often fail to avoid it because of negligence or indifference. Once it charges towards you, it will cause a fatal collision. Therefore, the gray rhino symbolizes obvious yet ignored major threats.
• Stock Market Example:
  • The 2008 Global Financial Crisis (many experts had already warned about the high risk of the US subprime mortgage market, but were largely ignored).
  • Sovereign Debt Crises, severe asset bubbles, systemic risks from climate change (these are long-accumulated, traceable major risks).