During the Spring Festival of the Year of the Horse, we wish everyone good health and successful investments. This year's Spring Festival Gala attracted significant attention, featuring four prominent domestic robotics companies: Yushu Technology, Yinhe General, Songyan Power, and Magic Atom. These companies participated in various performances, including skits, songs, dances, and action segments, demonstrating both the agility of their robots and interactive capabilities. Compared to last year's gala, where Yushu's robot performed a yangko dance with somewhat clumsy, pre-programmed movements, this year's presentations incorporated human-robot interaction scenarios.

Clearly, China's robotics industry has evolved significantly over the past year, with robot performances impressing many viewers. The gala was rich in technological elements, including AI designs, highlighting China's leading position in technological innovation. With many programs featuring robots, some online commentators joked that the director must be heavily invested in robotics stocks, possibly even trapped at high positions—though this was meant in jest. China's robotics industry is already at the global forefront, benefiting from the world's most complete supply chain and solid preparations in both hardware and software.

In the realm of large language models, ByteDance's Doubao model stood out during the gala, while its Huoshan model also garnered market attention. Major models launched last year, such as DeepSeek, Qianwen, and Yuanbao, further demonstrated China's significant advantages in this field. In hardware, breakthroughs in chips and semiconductors have laid a solid foundation for developing AI applications. Humanoid robots represent the ideal scenario for AI+ consumer applications, with AI+ education, AI+ healthcare, and AI+ finance also expected to gradually materialize. The year 2026 is likely to mark the beginning of commercial adoption for humanoid robots and a full-scale explosion of AI applications.

In capital markets, the technology sector has been one of the top performers in the Year of the Horse. While it may no longer be the sole focus, technological innovation remains a central theme for investors. The year 2026 marks the start of the 15th Five-Year Plan, which emphasizes key areas such as industrial robotics, chips and semiconductors, computing power and algorithms, solid-state batteries, biomedicine, and commercial space exploration. However, the technology sector may experience significant divergence in 2026. Companies achieving genuine technological breakthroughs, securing major contracts, or delivering strong earnings may continue to perform well, while those with speculative valuations and lacking substance could face substantial declines. Therefore, investing in technology stocks requires careful fundamental analysis rather than mere speculation on trends.

Value investing principles apply not only to traditional industries but also to technology and innovation sectors. Evaluating tech companies should focus on their potential to significantly impact work and life and their ability to translate potential into actual earnings. A comprehensive understanding of value investing should include growth considerations, as growth stocks also hold value investment merit. Warren Buffett, a master of value investing, has also excelled in growth investing by holding high-quality companies that delivered decades of sustained growth, creating remarkable investment returns.

According to Berkshire Hathaway's Q4 report last year, the company continued to significantly reduce its U.S. stock holdings, including top positions like Apple and Bank of America, while substantially cutting its stake in Amazon. Only minor increases were made in other sectors, resulting in an overall decrease in equity exposure. For the first time, cash holdings exceeded stock positions, with equities now accounting for less than 50% of the portfolio. As a model of value investing, Buffett typically reduces positions during bull markets and patiently waits for market declines to buy during bear markets, embodying the principle of "being fearful when others are greedy and greedy when others are fearful."

There is considerable divergence in market views on U.S. stocks. In a dialogue last year with investment veteran Jim Rogers, he stated that he had completely exited U.S. equities, citing extremely high bubble risks and the potential for a historic decline. Conversely, many investors remain bullish on U.S. stocks, particularly the "Magnificent Seven" tech giants, believing that AI technology will profoundly transform work and lifestyle with immense future potential.

Regarding the outlook for U.S. stocks, a balanced perspective is advisable—neither as pessimistic as some veteran investors nor excessively optimistic. Volatility in U.S. stocks is likely to increase significantly in 2026, with several stocks potentially reaching peak levels. Market performance since the start of the year reflects this trend, with tech leaders like NVIDIA continuing to rally. Following a major order from Meta, investor optimism remains high, while other giants like Amazon, Google, and Apple have experienced adjustments. Market divergence and sector rotation are intensifying. Investors should exercise caution with high-premium U.S. stock index ETFs to guard against potential peak-and-decline risks.

Following the Spring Festival, the A-share market is expected to initiate a spring rally, with a established trend of a slow and prolonged bull market gradually demonstrating profitable effects. A popular topic during holiday gatherings was investment returns from the previous year, which is likely to amplify wealth stories, enhance the market's wealth effect, and attract additional capital.

From a policy perspective, the U.S. Federal Reserve is expected to continue its interest rate cutting cycle in 2026, with the first cut likely in June. This timing coincides with the end of Chair Powell's term in May, after which former President Trump is expected to nominate Kevin Warsh as the new Fed Chair. Trump's nominee is likely to align with his preference for rapid rate cuts to alleviate U.S. government debt pressure, stimulate the economy, and pave the way for the midterm elections. The U.S. may see two to three rate cuts in the second half of the year, each by 25 basis points. The Fed's easing will provide the People's Bank of China with greater room for monetary policy relaxation, maintaining a low-interest-rate, high-liquidity environment to support economic recovery. A key policy goal for China in 2026 will be promoting moderate price increases, with a return to positive CPI and narrowing PPI declines serving as positive signals of economic recovery. Further proactive macroeconomic policies will aim to boost consumption, increase investment growth, and stabilize the economic foundation, which is essential for sustaining the slow bull market.

In conclusion, investors are advised to maintain confidence and patience, applying value investing principles to select high-quality stocks and funds to capitalize on the opportunities presented by this prolonged bull market and achieve wealth growth.