On November 12th, the internal views of the private equity firm Pangjing Investment, with a market value of billions of dollars, were revealed through channels. The top private equity firm, led by former public fund annual champion Zhuang Tao, stated to its high-net-worth clients that in the future, they will focus on trading from the perspective of "policy variables", with a focus on industry leaders in the A500 index and leading internet companies in the Hong Kong stock market. This is the first private equity firm in the circle to explicitly state that they will focus on investing in the weighted stocks of the A500 index. Zhuang Tao, who was once adept at stock selection, also admitted that in the current chaotic valuation system, investment logic based on the fundamentals of listed companies has become more difficult. Risk of "speculative trading" Regarding the recent upward trend in the market, Pangjing Investment summarized to its clients that the impact of the previous bear market, the rapid expansion of the passive ETF market, and the accelerated spread of information through self-media platforms have collectively contributed to the emergence of a preliminary bull market phase, with institutional holdings performing below expectations. However, this billion-dollar private equity firm cautioned that in the current market situation, speculative trading dominates, and while market sentiment is high, there is a lack of solid investment logic and fundamental support. Increased difficulty in fundamental investments Pangjing Investment revealed to its clients that starting from value growth investments with performance support, they have positions in the A-share, Hong Kong, and U.S. stock markets. In the A-share market, in the context of the chaotic valuation system, investment logic based on the fundamentals of listed companies has become more difficult. Although liquidity is ample and market sentiment is high, the prevalence of thematic concept stocks has made institutional participants hesitant. Regarding the Hong Kong stock market, this private equity firm believes that valuations are at a low point, with internet, consumption, and technology stocks holding significant weights. Structural market trends have made hedging difficult, for example, the strength of the semiconductor sector can support the index, but on the other hand, there is a downtrend in the Hang Seng technology sector. Limited downside potential in the market Zhuang Tao further pointed out that the US dollar index approaching the annual high has caused renewed pressure on the Renminbi, and after a rapid rise in the short term, A-shares may return to a volatile pattern due to overseas liquidity risks, with market sentiment under pressure and a decrease in risk appetite. However, domestic policy and financial bottoms have repeatedly appeared, and overall downside potential is limited. In view of this, Pangjing Investment will maintain a flexible and diversified investment strategy in domestic and overseas markets, adjusting its positions timely. Investing around the "A500 index" During the index volatility period, Pangjing Investment will actively reserve investment varieties for the next phase and increase positions opportunistically. Future investment strategies will focus on two areas: Firstly, from the perspective of policy variables - stable growth policies may continue to exert efforts, and industry leaders in the A500 index and leading internet companies in the Hong Kong stock market are expected to continue to benefit. As ETFs are currently the main source of incremental funds, they support this strategy financially. Secondly, from the perspective of industry trends - focusing on the forefront trends in technology such as AI-related software and hardware, intelligent driving, robotics, and other areas with large industrial space. The national security mainline focuses on defense, information technology, and semiconductor industries in controllable areas. This article is a reprint from "Wall Street View" by author Sun Jiannan; GMTEight editor: Jiang Yuanhua.