In trading, professional traders make calculated bets on the key points of the mainstream sectors, with a plan and psychological expectations, to achieve financial freedom (because the real major mainstream does not trap people). The new mainstream of the second height and four firsts is the heart and soul of the market, representing the consensus of market elites and the direction of market sentiment! It can resonate with the overall market! Therefore, confirming the mainstream is a matter of life and death for investors and speculators, and one must always remain alert! How to determine the mainstream and hold onto the mainstream and the major uptrend is the eternal truth of investment and speculation. Logical thinking must start from the second height and the four firsts as standards! The second height refers to: ① The highest political level, the core task led by the Political Bureau (the electronicization and AI of information), and the semiconductor industry chain’s lithography chain is the cornerstone of this electronicization and AI! ② The mainstream industry with the highest future prosperity globally! It must reference the investment directions of Wall Street tycoons! The four firsts are: ① The leading scale in the industry with the highest future prosperity is the world’s number one! ② The product is globally unique and monopolistic! ③ The consensus and collective direction of global elites and capital! ④ Anti-human nature and anti-retail investor thinking, self-control, and discipline are paramount! This is the future industry that the smartest and most elite market forces agree upon and empathize with! In fact, every class bull market only has one core mainstream industry defined by the second height and four firsts! The leading stocks in this core mainstream industry can rise two to three times, for example, the Belt and Road Initiative in 2015 was core and also the highest political level at that time! The core CRRC tripled in 70 days (Xiao Yang made millions). In 2020, the new energy vehicle sector was core and also the highest political level of that year! The core CATL quintupled in one year! Elite forces also first confirmed the future mainstream industry of the market! The industry with the highest prosperity in the next 1 to 5 years, for example, the essence of the universe is information, and the electronicization and AI of information is the mainstream industry with the highest prosperity in the next decade! The gene of striving for first place in cultural achievements! Moore’s Law has accelerated the electronicization of information! Over the past seventy years, it has undergone four iterations and four major growths! It has continuously set historical highs! Production and output value have increased by 165 times! Meanwhile, JDP has only grown by 15 times. After the elite forces reached a consensus, they collectively banded together! For example, in 2-3 years, elite forces like Zhang Jianping banded together at 100 yuan, and Hanwuji rose to 1500 yuan. On September 16, Huawei predicted that by 2035, the total computing power of society will increase by 100,000 times, breaking the constraints of the traditional von Neumann architecture in the fields of computing architecture, materials, devices, engineering processes, and computing paradigms, achieving disruptive innovation that will become the “new fuel” and new power driving the development of artificial intelligence. The demand for AI storage capacity will increase by 500 times by 2025. The objects connected by communication networks will expand from 9 billion people to 900 billion intelligent agents, achieving a leap from the mobile internet to the intelligent agent internet. Additionally, emotions must be stable; when the main forces start playing stocks in the mainstream industry, they are playing on the normal human emotions of greed and fear, as well as the information gap that retail investors are unaware of! In the A-share market, not participating in the mainstream is very painful. It not only means missing out but can even lead to reverse losses. The consensus and collective action of the main forces in playing mainstream stocks is a mindset, and it is a bottomless pit of human greed and fear. The main forces use human nature to operate in reverse to cut the leeks. Watching others play stocks for years and lose everything, as a novice, always holds a kind of expectation; those around them are making money, and naturally, they will envy and be jealous, which is a normal human reaction. I know several friends who have been long-term losers. Moreover, the greedier one is, the more they lose; the more they lose, the worse their mindset becomes, and the worse their mindset, the easier it is to backfire. Playing stocks is about a person’s mindset; those with a poor mindset are prone to collapse and mental unrest. For example, if one makes money on a given day, they are overjoyed. If they lose money that day, their mood will be bad all day. Some people who originally had no money borrow money from others, only to end up losing both the principal and interest, leaving them in tears. Borrowing money to trade stocks is a big taboo, as it directly affects one’s mindset, because those who borrow money are always thinking about winning. Trading stocks without buying into the mainstream sectors and the elite consensus on the future industries with the highest prosperity is not just about winning or losing; sometimes, it can cost one their future life. Now is the time to embrace the faith in mainstream industries and computing power. Recently, I learned a new term from studying the US stock market: backlog. I first encountered this term while reading the 2024 financial report of Vitec. At that time, I thought this company was quite unfortunate, working hard for a year only to find that they had more than ten billion dollars in unfulfilled orders. Moreover, the backlog of 7.1 billion dollars gave me a small shock regarding AI computing power. Subsequently, the situation spiraled out of control. First, at the end of July, Google announced in its Q2 earnings call that the backlog of Google Cloud had reached 106 billion dollars. Last Friday, Broadcom announced in its Q2 earnings call that the backlog had reached 110 billion dollars. Last night, Oracle dropped a bombshell in its quarterly earnings call, revealing that the remaining performance obligations had reached 455 billion dollars (essentially understood as backlog). After hours, the stock surged by 30%. The world’s greed for computing power still opened my eyes. For a long time, my holdings have primarily focused on AI computing power, computing, storage, and the three together, from AI giants to GPUs, ASICs, and then to cooling and optical modules, but I still do not consider myself to have a faith in computing power. From time to time, I question what the output of so much investment in computing power is, and whether it will turn out to be another scam that quickly becomes oversaturated, holding onto it with a sense of unease. This is likely due to entering the industry at its peak, witnessing the hasty end of the metaverse and the overwhelming competition in new energy, which has led to a natural skepticism towards computing power. But this time, it is time to embrace the faith in computing power. After all, the backlog orders of terminal CSP manufacturers do not lie, and the increasing usage of AI by myself and those around me over the years does not lie, and the human nature’s pursuit of laziness does not lie! Currently, AI and computing power seem to belong to a great beta for our generation. We must admit that the vast majority of us are not Buffett, not smart enough to catch alpha all day long, but choosing a beta and sticking to it is still achievable. Broadcom’s backlog will take at least a year and a half to fulfill, Google Cloud’s backlog will take at least two years, and Oracle’s backlog may not be fulfilled in less than three years. Additionally, NVIDIA’s GPUs and the CUDA ecosystem have significant advantages, allowing it to maintain a 70% gross margin. Recently, the inference side has suddenly exploded, and Jensen Huang’s prediction of 4 trillion dollars in global data center spending by 2030 may be conservative. One of NVIDIA’s main suppliers, Quanta, stated that NVIDIA’s GB300 AI servers are facing unprecedented demand, and the trend of a massive market will continue for the next few years! Market demand far exceeds expectations. Furthermore, Huawei released a report predicting that by 2035, computing power will grow by 100,000 times. Based on the current situation, at least for the next five years, the faith in computing power is solid. Next, I will continue to focus on computing power for tracking research. Sequoia Capital’s five major tracks for future AI investment 【Investment Logic】 In the next decade, there will be 10 trillion dollars in AI capital expenditure, and the investment logic is mainly based on three major trends in current technological development: First, the automation penetration rate in the service industry is only 0.2%; second, reinforcement learning is landing, AI is penetrating the physical world, and computing power is surging; third, computing power is becoming a new production factor, affecting the commercial value distribution of the upstream and downstream industrial chains of various industries. 【Five Major Tracks】 1. Persistent memory technology, focusing on AI long-term memory and identity continuity issues 2. Seamless communication protocols, establishing communication standards for AI agents 3. AI voice interaction in education and customer service will land first 4. Full-chain AI security 5. Open-source AI ecosystem. The investment market is essentially a fishing game, and one must view the fisherman from the fish’s perspective (the elite forces). The truth of fishing is the truth of investment. The first time I went fishing, I did not have high expectations. Isn’t fishing just a process? Sometimes you catch a lot, and sometimes you come back empty-handed; investment is the same. Those who truly understand fishing know that baiting is actually the easiest part. In the investment market, capital, hot topics, and news are like the main forces creating the bait, attracting people’s attention and capital to a specific target or mainstream sector, which can drive the overall market index up! But in reality, most people lose precisely because of this patience. Fishermen like to frequently change locations, always thinking, “There are no fish here; if I change places, there will be some,” but as a result, they do not hold onto any spot. Investors are the same, always thinking that this stock is not moving, and if they switch to another, it will move faster, only to miss the real market trend. Fishing experts often bait well, find the main force’s mainstream, and then quietly wait for the breakthrough of the mainstream after a strengthening pullback to buy in. Investment experts often choose a mainstream industry direction, endure the loneliness, and do not act all the time but quietly wait to act decisively when the opportunity arises. The philosophy of fishing ultimately boils down to two words: waiting. The philosophy of investment can also be summarized in two words: patience. Many people see investment as a contest of skills, but in reality, it is more like a cultivation of character. The market rises and falls every day, just as the water surface has ripples every day. But what truly determines your harvest is never those surface fluctuations, but whether you can hold your position in the mainstream industry over time. Fishing has taught me that many things in life require the same mindset. Running requires long-term accumulation, investment requires long-term cash positions, and managing your hands daily is crucial; even learning and growth require day-to-day patience. Many people think success is a beautiful big bullish line, but in reality, true success is the accumulation of countless inconspicuous small actions, the result of numerous “cash positions” waiting for the next opportunity. Those who have sat by the pond know that fishing is not about the fish, but about the leisurely emotional value provided by that beautiful time spent sitting still! The fish caught are merely a byproduct. Investment is the same; it is not about every short-term rise and fall, but about maintaining a clear mind in the long-term game of the market, keeping pace with the rhythm of the future mainstream industry and recognizing the industries with the highest future prosperity! A strong interest in the innovation of cutting-edge products such as semiconductors and electronics (for example, Apple’s AI phone, Tesla’s autonomous driving, and the continuous iteration of new technologies that drive and change the progress of human civilization) brings a self-happiness and emotional value! The profits from investment and speculation are merely byproducts of joyful emotional value. Ultimately, you will find that the greatest gain is not the fish, nor the profits, but the patience and character cultivated while waiting in the mainstream! The four emptinesses and the emotional value of transcending desires. Therefore, fishing and investing are merely two expressions of the same thing. If you can hold onto a piece of the pond, you can hold onto the mainstream industry’s major uptrend. If you can endure loneliness, you can enjoy a bountiful harvest! Recently, the hot topics have been a bit convoluted, starting from the retreat of the old mainstream in early September: On September 2, the old mainstream computing power showed signs of retreat; on September 5, the new energy sector appeared with a horizontal double 7, indicating that two segments of the new energy sector became high-scoring hot spots. According to our system’s evaluation standards, the new energy sector was established as the new short-term mainstream. Although at that time, the new energy sector reached the standards recognized by our system as the new mainstream, the hot topic environment had clearly changed. How did it change? On September 8 (last Monday), the article “New Mainstream Established! But There is One Thing That Must Be Noted!” reminded of this change, which was the transition from the previous strong environment to a rapidly rotating hot topic environment. In the new environment, the mainstream is merely nominal; in reality, it can only dominate the rankings more frequently during the rotation process, which is not fundamentally different from the auxiliary sectors. As a result, by September 11 (last Thursday), computing power made a comeback, regaining a score of 7, while new energy lost its momentum. However, after that, computing power did not show a vertical double 7, meaning it did not regain its mainstream status. The short-term mainstream is still new energy, and the hot topic environment remains one of rapid rotation. Looking at today, new energy has regained strength, with Ning Wang rising several centimeters, while computing power has started to weaken again. However, computing power is definitely a long-term mainstream. Here, I want to clarify that the mainstream we are talking about is the short-term mainstream; while many people’s perception of the mainstream is actually the mid-term or even longer-term mainstream. The reason we focus on the short-term mainstream is that any mid-term mainstream develops from the short-term mainstream, emerging from high-scoring hot topics or even double 7 hot topics. More importantly, the short-term mainstream has clear quantitative standards that can be determined at the moment it starts, and can be continuously tracked and evaluated dynamically. During this process, one can clearly know when it retreats and when to give up; while many people’s perception of the mid-term mainstream requires waiting for it to rise for a long time to discover, relying on vague subjective judgments. The advantage of this approach is that if the judgment is correct, one can earn more, but if the judgment is wrong, one can lose a lot, as it takes a long time to realize that the mainstream has ended. Of course, both methods of identifying the mainstream have their pros and cons; I just want to avoid any misunderstandings. Additionally, determining the short-term mainstream is only the first step; the next step is to track timing and find suitable low-entry opportunities! That said, in a rapidly rotating hot topic environment, it is more favorable to ambush mainstream sectors. Because the mainstream is gold! Finding diamonds within gold! Even if it is bad, it is still gold! Do not look for gold among garbage behaviors! A small misstep in buying garbage stocks can lead to devastating losses. Therefore, first, ① On a macro level, the US-China relationship and domestic and foreign policy orientations; the domestic market has already created a ten-year high! The long-term major mainstream will always be king. ② Logically, the essence of the universe is knowledge and information! Insist on the electronicization and intelligence of information as the long-cycle mainstream industry. ③ Technically, the leading stocks in the mainstream have broken through the large platform with a continuous 39 three-dimensional breakthrough nine times, and three new highs are true breakthroughs. For example, on August 29, Ningde Times broke through the three-dimensional platform after nine consecutive 39 breakthroughs, and after four small 39s were washed out in the morning, five large 39s formed a true reversal in the afternoon. ④ Emotionally: On the leading stocks in the mainstream, one must counteract greed and fear! Because the main forces in the mainstream utilize normal people’s psychology of greed and fear! They use the information gap to operate in reverse! Playing with ordinary retail investors repeatedly cuts the leeks! ⑤ In intraday T+0, the proactive three-dimensional rise in the morning reflects the good and bad news from the previous night. If it cannot hit the limit, it is likely to fall sharply in the afternoon. If the tail market actively innovates a new high in the three-dimensional, it can be bought back, expecting a rise tomorrow (especially noted: because the market rose sharply that day, the passive tail market innovation high following the market should instead be sold). ⑥ When interacting with others: Less paternalism, following others’ human nature is also great wisdom. Betting on the key points of the leading mainstream requires a stop-loss bet, and it must be done in a diversified manner for proper position management. Even if the bet is wrong, it can be endured. Make detailed plans and assess the current conditions; if the win rate is over 90%, then it can be tried! Step by step, with patience and persistence in this plan, betting on the major uptrend of the mainstream at key points will break through one’s limits! Just like Xiao Yang, achieving financial freedom!
Additionally, special attention should be paid to the direction of lithography machines. In the context of US-China relations, the high-tech blockade, and the Israeli Prime Minister’s statement that they can control all American electronic products and devices, which can become bombs and attack weapons! Therefore, the strategy of self-control is more urgent!
Our DUV lithography will be completed by 2026 at the latest, and EUV lithography by 2028 at the latest; it will only be advanced, not delayed. Lithography machines are products; they are not something as difficult as climbing to the sky; they are equipment that can be produced. Previously, they could not be produced because there was no market, as there were not many customers worldwide. Even if developed, they could not be sold. Now the situation has changed; if we want to do it ourselves, then let’s do it. Think of the spirit of making the atomic bomb in the movie “The Great Leap Forward”.
I believe we will definitely succeed! Now, in addition to the existing companies, new enterprises will emerge, with established teams being allocated, using a national system combined with market methods. We are already familiar with this approach. First, let’s get things done; semiconductor equipment and lithography machine companies need to go public, not immediately valued at hundreds of billions or trillions? Why, in addition to the original companies, do we need to build new enterprises? The reason is very simple: the teams are purer, the sense of mission is stronger, the efficiency is higher, the shareholding structure is simpler, and the technology roadmap is clearer. From the beginning, it is aimed at becoming world-class, achieving small success in three years, medium success in five years, and great success in ten years. Everyone knows this is the biggest trend; the specific situation should not be inquired about. These big directions and the core tasks led by politics have never been wrong, as the facts are right there.