In February 2021.

To be precise, it was the first trading day after the Spring Festival, February 18th.

The Shanghai Composite Index opened at 3,721 points, surged to 3,731 points after the opening, and then began a continuous decline, heading into a bear market without looking back.

As of July 2024, this bear market has lasted for a long 42 months, and there is still no clear signal of an end.

Many people ask, is there still a bull market?

Some also ask, why has it been falling for so long and still falling?

I think many people are also very confused, when will this market stop falling?

Some people like to blame the market's decline on the main force that can make money by short selling.

But they don't really understand that the risk of short selling is much greater than that of long buying.

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In mature foreign markets, there are various short-selling tools, but there are not many people who make money by short selling, but rather by forming a group to buy long.Because stocks have intrinsic value, continuously short-selling to make money can backfire.

In the past two years, why have high dividend stocks performed well? It's because they have high intrinsic value.

Banks with a price-to-earnings ratio of 5 times, with a dividend rate exceeding 5%, or even 7%, how can short-selling make money?

Bullish parties can keep buying, as if buying an asset that pays dividends year after year, and bearish parties can't move at all.

Most of the profits from short-selling come from individual stocks with poor performance and high fluctuations in intrinsic value.

And the culprit of this long bear market is actually these individual stocks.

Careful investors should have noticed that this year's market is doing one thing, which is to retain the good and eliminate the bad.

Blue-chip stocks that have been criticized and looked down upon have been continuously rising.

Banks, coal, electricity, oil, and the like, are advancing high, at least not looking back.The stocks of small and medium market capitalization are mostly hitting new lows and continuing to decline.

The end of a bear market is signaled by the cessation of the decline of these small-cap stocks.

Of course, for some stocks, the end is not a halt in the decline but delisting.

These low-value, highly volatile stocks will eventually fade away.

And those big-name stocks that were not originally highly valued but were wildly speculated on in the bull market will also return to their deserved valuation levels.

To be precise, this bear market has reached a point where everything points to a market valuation return and value reconstruction.

Perhaps many people do not understand what this means.

It means that through continuous ups and downs, a market with a value consensus is ultimately formed.

And the underlying logic of this market has become stable dividend returns.

Because the current market no longer has good investments that can provide stable returns.Compared to five years ago, when money market funds offered returns of 3-4%, nowadays the interest rates on bank deposits and government bonds are around 2%.

Dividends, which were previously overlooked, have now become highly sought after.

The shift in market capital, or the direction being considered, has led to a situation where the dividend rate is more important than the so-called speculative topics and profit-making effects.

At least that's the case in this bear market.

Of course, I believe that ordinary retail investors should not misunderstand and think that just because the market is expected to rise in the future, it will still be the high-dividend stocks that rise.

All stocks are speculative when they rise.

Speculation requires expectations, not intrinsic value; the essence of speculation is to tell a story.

So, when the market returns to a bull market, the stocks that are still speculative are those with stories to tell, not these high-dividend blue-chip stocks.

Even the big white horses of the past were just a story.

Moreover, when those big white horses were speculatively driven to high levels, the dividend yield was only around 1%.So, the market has been making a value return all the way, and they need to fall by about 30% to get the dividend yield back to 3%, and return to the ranks of blue-chip stocks.

The so-called dividend yield is just a benchmark to measure the intrinsic value of these stocks and the standard of their volatility.

As for those loss-making stocks, their intrinsic value is almost zero.

Those with almost zero value should be directly cleaned up in the bear market, there is no need to exist.

Because these stocks, whether they are mowing the leeks or not, ultimately bring almost zero return to the market.

Stocks without dividends do not create value for A-shares, and they will not be allowed to exist in A-shares for a long time in the future.

We do not know when the long bear market can really end.

But historically, regardless of the economic situation, there are almost no bear markets that last more than 48 months.

From 3478 in 2009 to 1849 in 2013, the longest duration was 48 months.From 2245 in 2001 to 998 in 2005, the longest duration was also 48 months.

This also means that, in the worst case, this bear market will end in January 2025.

At most, it will take about another 6 months to endure.

However, the most terrifying thing is not that the bear market will end soon, but that at the end of the bear market, the speed at which the market's sickle swings will be faster.

At the beginning of 2022, the market experienced the first sharp decline, falling from 3718 to 2863.

Many retail investors said they lost money during that period, and some even suffered a 50% loss, while some fund investors lost 20-30% at that time.

But now, the market is still hovering around 3000 points.

You will find that most people have lost more money than in 2022, and it's not just a little bit.

Especially starting from the beginning of 2024, the speed of losing money is very fast.

In the second half of 2023, although the market seems to be not good, many people did not lose money, because the market hype was still good.But in 2024, the market basically does not speculate on hot spots, and the ones that rise are all blue chips and heavyweights.

That is, at the tail end of the bear market, the market is accelerating in harvesting chips.

Once the bull market starts, the most precious thing is the chips, so it is necessary to catch up at the tail end of the bear market and get as many chips as possible.

The way to get the chips is relatively cruel and simple.

One is to keep killing the panic plate.

Whether it is the decline in January this year or the decline in June, there is almost no rebound in the middle.

It is just that the intensity in June is a bit smaller, and the essence is the same.

This way of killing the panic plate is very fatal.

Because the feeling of retail investors is despair, not just panic.

In despair, in order to alleviate emotions, they will stop loss and leave the market, handing over the chips.One is continuously blowing an electric fan.

The market is always rotating, with almost no main line existing.

The rotating market is a situation where chasing rises and killing falls will inevitably lead to losses.

To make money, what is needed is to lurk, but lurking too early means losing money.

Retail investors always believe what they see, and they are always on the road to chasing rises, because they will think there is an opportunity when it rises.

Using the weaknesses of human nature, in a market with scarce funds, exhausting the last chips is an inevitable event at the end of a bear market.

And when they are tossing and turning, and the chips no longer come out, the bear market can also be concluded.

At most, there are still 6 months, calmly waiting for the dawn of the real bull market.