Securities Times reporter Yang Bo
In the early 1990s,Current Affairs in a small village in Zhoushan Islands, Zhejiang Province, a teenager often climbed to the top of the mountain and looked into the distance. The 10,000-ton ship docked at Beilun Port, the main port of Zhoushan Port, was magnificent. The teenager dreamed of becoming a captain one day and traveling around the world. Thirty years later, this young man has grown into an excellent fund manager. He is Zhu Hongyu, the chief research officer and fund manager of China Merchants Fund.
Zhu Hongyu is a master of engineering in Tsinghua University. After graduating from master's degree in 2005, he joined Huaxia Securities Research Institute, and later worked in Galaxy Fund, Huaan Fund and SDIC UBS Fund. In July 2013, he was transferred to vice president of sequoia capital china, and later co-founded Hongshang Assets; In January 2020, he joined CMB Finance as the general manager and investment manager of the equity investment department; In May 2021, he returned to the public offering, joined China Merchants Fund and served as the chief research officer.
According to public information, Zhu Hongyu achieved good investment performance. From May 2011 to July 2013, the Shanghai and Shenzhen 300 Index fell by nearly 30%, during which the public offerings he managed only fell by 0.47%, and the excess returns were significant. After returning to the public offering, the core competitiveness of the first product managed by Zhu Hongyu has achieved remarkable results. From April 13, 2022 to September 30, 2023, the fund achieved a return of 34.54%, with an excess return of 41.98%.
A few days ago, a reporter from Securities Times interviewed Zhu Hongyu exclusively. He told about the setbacks and growth he encountered on the road of investment. He said that the reason why people suffer is that they are obsessed with themselves. When investing, they should let go of their obsession with themselves, know themselves objectively and rationally, and move from themselves to their true selves. The famous saying "Know yourself" engraved in the Delphi Temple in ancient Greece, to some extent, condensed Zhu Hongyu's thinking on investment.
"Successful experience in the past.
May destroy you at a critical moment. "
Securities Times reporter: You started your investment career in 2011 and achieved good results. You have won many industry awards. What do you think of these achievements?
Zhu Hongyu: Looking back, I feel very lucky. Those years were a bear market, and several industries I am familiar with just performed better, so my performance was better, so sometimes historical performance has a certain element of luck, and our ability is usually overestimated.
Securities Times reporter: In 2015, the market surged and plummeted. What's your situation?
Zhu Hongyu: In mid-2015, the volatile market retreated a lot, but later, the net product value rose back, and it achieved a high positive income that year. In 2016, the market fluctuated, and the performance of the products I managed was acceptable. The real challenge is around 2017.
Securities Times reporter: What challenges do you face in 2017?
Zhu Hongyu: I thought I had the experience of Sequoia Capital and mastered the investment methods of technology stocks and growth stocks. At that time, I invested in many small-cap technology stocks, but the performance of technology stocks in 2017 -2018 was very poor. For the first time, I felt that my investment methods were completely ineffective. I didn't know how to deal with the changes in the economy, industry and market, and I didn't know what went wrong.
This is a huge turning point in my investment career. I have always been very smooth before, and I firmly believe in what I have done. I didn't expect it to be a bubble. The powerful and glamorous self that has been built for so many years in the past suddenly disappeared, so it was particularly confusing and painful. How smooth the past was, how lost and frustrated it was at that time.
Securities Times reporter: That is to say, the more successful you were in the past, the more careful you should be?
Zhu Hongyu: Even if you are correct in the past 20 years, you may make mistakes one day. It is your success that destroys you. Your so-called successful experience in the past may give you a fatal blow at a certain key point. It is the same as doing business and investing.
Securities Times reporter: Do you feel like an enlightened moment?
Zhu Hongyu: During this period, I have read several books about Su Dongpo. Su Dongpo is cynical and conceited. At the age of 45, he was exiled to Huangzhou. Because he didn't have enough money, he needed to farm to subsidize his life. The ground was full of weeds. He set a fire and burned all the weeds in the ground. I remember a book that said: It didn't burn weeds, but Su Dongpo's obsession in the first half of his life. From then on, he was thoroughly remoulded, put down his obsession, became more experienced and transparent, and his poems were completely different from the past.
This comment in the book deeply touched me, and made me feel that I must put down my obsession and my obsession with myself when investing. If there are too many fetters in my heart, it means that cultivation is still far away.
Securities Times reporter: What is your obsession with investing?
Zhu Hongyu: Why do people suffer? Because they cling to "me". There are three realms in life: ego, ego and no ego. It is a great leap from ego to ego. We need to lower our posture, listen to your voices and have a more objective and clear understanding of ourselves. For example, when investing, don't be too self-righteous when the performance is good, and don't sell yourself short when the performance is not good, because there is a lot of randomness in the short term, which is beyond your control. I thought I still had some ability. After 2017-2018, I realized that I was just one of the sentient beings.
Securities Times reporter: Where are you now? Can you calmly face the fluctuation of net worth?
Zhu Hongyu: I'm deeply ashamed. I'm at most in the process of "self" to "ego". I can only say that I will be more calm than before. John Berg's book has inspired me a lot. From the historical statistics of the United States, no matter how talented and savvy a fund manager is, in the long run, his ability to obtain excess returns will be 5%-10% higher than that of other fund managers, and the probability of beating the market is 60%-70%, which means that you will fall behind the market in 30%-40% cycles.
Therefore, first, we should clearly understand ourselves and accept our own normality; Second, we should accept impermanence and short-term randomness, don't let emotions fluctuate too much with short-term performance, and don't give up when performance is low.
High returns of technology enterprises
Just survivor bias
Securities Times reporter: What specific changes have you made in methodology?
Zhu Hongyu: In the past, I was always full of predictions about the future, thinking that I had the ability to predict the economy and industry, and my portfolio was based on the judgment of the future. It was incredible for me to think about it later. Specifically, I used to pay attention to the judgment of the future first, and then to the size of the odds. I first predicted what industries could rise and what fields could rise, then calculated how high the odds were, and then decided whether to invest. Why will I suffer in 2017? Because I always feel that technology stocks have high odds.
Securities Times reporter: When did you change your view on technology stocks?
Zhu Hongyu: I read a book on quantitative analysis of stock investment, and I took apart the historical data of the American stock market one by one, and gained a lot. In the past few decades, the industry with the highest rate of return in the United States is consumer goods, and the industry with the worst rate of return is technology. Why? Because the pattern of compulsory consumer goods industry is very stable, and the technology is changing with each passing day, it will always be the wave after the wave, and many technology enterprises in the early 21 ST century have been forgotten, and the dead enterprises will not make a sound. And we see the high returns of technology companies, which is only the deviation of survivors.
In addition, the investment in the primary market and the secondary market is different, and the investment operation mode and portfolio construction mode are different. The primary market is driven by high odds, and the secondary market has investment ratio restrictions, so it can't earn this money. Instead, it should pursue a balanced and steady investment portfolio, and the medium and high odds are enough.
Securities Times reporter: Have you figured it out at the technical level?
Zhu Hongyu: It's hard to say that I fully understood it. I just said that I used to be driven by prediction and odds. Today, odds and winning percentage are both important, and winning percentage is more important in a sense. This is a very important change in my methodology.
Securities Times reporter: Will you use methods other than value investment, such as technical analysis and quantification?
Zhu Hongyu: There has always been a voice in my heart that I should lower my posture, lower it a little bit, and not only emphasize the margin of safety, but also look at the world more inclusively. Don't think that self-promotion is a value investment, so you can belittle other methods, including looking at pictures, technical analysis, quantification, etc. They are also a perspective and method to look at stocks and industries. If we look at industries and companies with fundamental methods, we may not be as good as looking at pictures. Why? Because there are relatively simple standards and signals for looking at pictures, it is not easy to make big mistakes. Many fund managers who lose a lot of money are just looking at fundamentals. What I am most afraid of when investing is blind confidence in my own ideas and methods, and I don't accept other perspectives and methods to see problems, and I don't want to admit my mistakes.
Securities Times reporter: Do you attach great importance to the long term?
Zhu Hongyu: If something is particularly difficult in the short term, but meaningful in the long term, it is worth doing. If it is meaningless in the long term, but there are many temptations in the short term, try not to do it, because it will be addictive after doing it. I have met some entrepreneurs who think they have taken advantage of many others, but in the end they may be losers because they have lost the most important reputation and reputation of their practitioners. Merits and demerits, not only depends on how much you have today, some people may seem to lose and still be respectable, and some people may win for a while and still be losers.
May face severe challenges. "
Securities Times reporter: What do you think of the future market?
Zhu Hongyu: In fact, the short-term and medium-term market is very difficult to judge. I am relatively cautious and optimistic about the future market, and I am also relatively optimistic about pharmaceutical, military and technological growth and dividend assets, but we may face very severe challenges in investment methods.
Securities Times reporter: Why?
Zhu Hongyu: The market is like a pendulum, swinging back and forth, and the world is a bigger pendulum. The contradiction of wealth distribution between countries and within countries is already relatively large, and the huge income gap between classes may not be solved by means of market-oriented monetary policy, but the wealth game within countries and between countries can only be ironed out by financial means, but this requires a price, that is, higher inflation and higher capital cost.
It is impossible for an enterprise to exist without society, and it is unrealistic to talk about investment without environment. We should jump out of the enterprise and look at the larger social environment. When the environment changes, the risk premium and duration of the investment enterprise should also change.
Securities Times reporter: The current macro environment is indeed more complicated.
Zhu Hongyu: We investors should be aware of major social changes and major social turning points. At present, most institutions in the A-share market, including foreign investors, are still stuck in the investment paradigm of the past ten years, and most people are still full of expectations for growth. When the interest rate of US debt comes down, everyone starts to invest in growth again. Is this effective? I think there should be a question mark.
The formation of anything has both historical contingency and historical inevitability, and it is inevitable that we have come to the present. We should face up to the changes that have taken place in the times.
Securities Times reporter: In this context, how should we invest?
Zhu Hongyu: If the duration is very long, in a further dimension, investing in companies with high dividends and low valuations may be a better response. On this basis, if we find a good industrial trend like the mobile Internet in 2012, we can break the current deadlock, bring about global division of labor and improve efficiency, and we may find stocks with good growth. If you can't find it, honestly seek a steady return.
Securities Times reporter: Stocks with low dividend valuation have been shown for some time. Is there any chance in the future?
Zhu Hongyu: In recent years, the style of low valuation and high dividend is very good. I also looked at the data and accidentally found that the proportion of dividend ETF in the whole ETF is less than 3%. No matter from the big historical background, the influence of internal and external environment on investment, the market configuration structure and the mindset of market participants, I think that low dividend wave may be a very important methodology in the future.
Securities Times reporter: You began to pursue a relatively stable income. Why?
Zhu Hongyu: At the end of September this year, my products were withdrawn a lot, and some customers began to redeem them. In the future, the net value of my products may reach a new high, and I may make money again, but the customers have already left, and I can't enjoy the later returns. I feel very sad, so I have been thinking about how to optimize the combination, improve the winning rate, reduce fluctuations, make the customer experience better, hold it for a longer time, and have a higher probability of making money.
As fund managers, we should really create value for our customers and strive to bring sustained and steady returns to our customers for a long time. We should not make good performance when we are small, but not make money when we are large, so that our customers can't have a long-term good experience.
The more awesome hedge fund
The higher the proportion of companies with investment.
Securities Times reporter: Should fund managers have higher requirements for their professional ethics?
Zhu Hongyu: Public Offering of Fund manages wealth on behalf of customers and has a fiduciary responsibility. We should have higher requirements for our own moral standards. We should manage customers' money just as we manage our own money.
Many hedge funds in the United States have put their own money into products for many years. The bigger the company, the higher the proportion of their own money in the company's assets. Some companies don't put any money in themselves, it's all the customer's money, and then they gamble with the customer's money, get the bonus for the right bet, and pay the bill for the wrong bet. Is this fair? This is what Taleb called asymmetric risk.
Securities Times reporter: Did you buy it yourself?
Zhu Hongyu: Almost all the money I can control in my family is in the products managed by me and our colleagues. It is our duty and basic professional ethics to put our own interests together with those of our customers. I hope to convey this concept to young people. We can't decide the result, but we can decide the process. We should stand with our customers with real money. If we can't even do this, how can we win respect?
Securities Times reporter: How do you evaluate yourself?
Zhu Hongyu: All assets are assets of the times, all enterprises are enterprises of the times, and individuals are also people of the times. I don't think I am much better than my parents, but I am luckier than them. Everything we have is given by the times. It's just that you just got on the right boat, and this boat just got to the right place. It's not that you can change the direction of the water.