Looking at the latest valuation data, it's quite interesting.

The STAR 50 Index currently has a static PE ratio of 103x, and the forward PE is even more exaggerated—115x. What about the ChiNext Index? The static PE is also 103x, but the forward PE has dropped to 62x. In contrast, the CSI 300 Index has a static PE of 14x and a forward PE of 12x.

That's a stark contrast, right? The cheap stocks are left untouched, while the expensive ones are being chased. The market just loves to do these counterintuitive things.

Suppose we give the CSI 300 a bit of a premium and push its PE up to over 20x? Stock prices would double immediately. But in reality, capital favors high-valuation targets, while low-valuation sectors keep slumping.

Looking ahead, which is more likely to rise? Which is more likely to keep falling? The valuations have already given the answer—it's just a matter of whether the market is willing to acknowledge it.