1928: The rise of giant merchants

"I'm more than happy." Franklin himself has a lot of money rolling around in the U.S. stock market, but compared to Red Star United Group, the so-called large securities investment companies in New York are completely inferior, and the profit margins he brings are extremely low. Sometimes You will also lose money.

However, just putting funds into the Hongxing United Group to buy and sell stocks does not require such a big battle at all. Ma Murui, Old Joseph and Little John were also called in for a meeting.

Franklin knew that Ye Luo and the others had a deeper plan, so he did not rush to answer, but waited quietly for Huixin's next words.

"Mr. Governor, if you just put your money into the stock market to buy some high-priced stocks, even if you keep making money, it will be difficult for 1 million U.S. dollars to become 10 million U.S. dollars, right." Huixin said according to the lines arranged by Ye Luo in advance.

"Haha, Mrs. Dewitbucket, you are joking. To turn 1 million US dollars into 10 million, it is equivalent to a profit rate of 1000%. Do you know how much profit rate is required to be defined as a high-quality securities investment company in the stock market? ?15%.”

Franklin's heart skipped a beat. He had already learned about this woman's madness from the New York Stock Exchange, but hearing such words in person still felt a little strange.

He invested US$500,000 in the largest securities investment company, and after a few months of operations, it has now become US$820,000. These anonymous transactions were even printed on leaflets by the company as benchmark performance.

This is only about a 60% profit margin, which is far from the 1,000% that Huixin said.

"Really? I'm not very interested in this kind of thing. A 15% profit margin can only allow me to generate 150,000 US dollars from one million US dollars. If it takes several months to earn this amount of money, then it's really It's meaningless." Huixin spread her hands, looked at Ye Luo, and motioned for him to answer, "I'm only interested in huge profits. As for how to multiply the money 100 times, Ye Hui will explain in detail."

Getting back on track.

Franklin and the others subconsciously sat up straight and looked at Ye Luo, who had been silent since just now.

Ye Luo knew that the time was ripe, took a sip of coffee and said with a smile: "What do you think of the U.S. stock market?"

"The stock market bubble will eventually burst"

Old Joseph blurted out.

His views also represent those of the vast majority of upper-class Americans.

It would be damning if such an abnormal stock market could continue for another ten years as Hoover said.

Now hot money keeps pouring in and bubbles keep inflating, creating a false phenomenon of prosperity.

Of course, speculators will not miss this good opportunity and are rushing to make this bubble bigger and bigger.

But the bubble will eventually burst.

By then, the U.S. stock market will plummet, and the economy will also oscillate.

This is the consensus.

However, no one knows when the stock market will collapse and what impact it will have.

In fact, Franklin and others were optimistic about the economic situation after the stock market crash.

If Ye Luo had told them at this time that the collapse of the U.S. stock market would bring about an economic crisis sweeping the world, they would have felt that Ye Luo was being alarmist.

So Ye Luo changed his approach.

"Yes, it will burst one day. Such a bull market will not last long. And in the bull market, even the fried rice vendor below our company knows to buy a large number of stocks, as Mrs. Dewittbucket said , how much profit can such a transaction bring?"

Ye Luo looked at them with a smile, lit a cigarette, and said leisurely,

“If you want to make big money, you have to go short!”

"Short?!" Franklin frowned.

This kind of sniping at the market is also a disguised form of harm to the country's foundation. Therefore, politicians don't like big short sellers like Livermore, but it has to be said that short selling is indeed the best way to make money against bubbles.

Borrow a large amount of stocks at a high price, then use high leverage to leverage more capital, wait until the stock price falls, and then buy those stocks back at a low price and return them to the borrower, completing a short sale.

This approach can maximize profitability, but the risk also increases by several orders of magnitude.

Old Joseph and others remained silent.

It's not that they haven't thought about short selling, but the risk is too high.

First, since you want to go short, why don’t you add leverage? If you add leverage, do you dare to take this kind of risk?

Second, can you be sure that your time to short is right? For the vast majority of traders, short selling is like gambling. If you are not careful, you will lose everything!

Third, you must have sufficient funds to go short. If your short-selling behavior is noticed by the exchange, once the stock market collapses, a large amount of funds will come to rescue the market and forcibly hold the stock price up, preventing you from succeeding easily. At this point, it’s a battle to see who has more money.

Several people present were wealthy, but when it came to shorting the U.S. stock market, they were not confident.

"Is this too risky?" Little John asked in a low voice.

Franklin and others nodded at the same time and looked at Ye Luo.

"The risks are certainly high, but the returns are also amazing. I know you have concerns, so I will make a small short position first to show you." Ye Luo replied with a smile, "You can see my situation at that time, and then Consider whether to join or not.”

"However, don't join directly now. I will wait until I complete a short sale before joining the stock. I will charge a certain commission at that time." Ye Luo added, "Join us now, and I will not charge any commission from you."

Ye Luo's words seemed to have magic power, making Franklin and others hesitate.

To short-sell the U.S. stock market, the capital would be at least tens of millions, and it would be spread evenly to each of them. Five to six million dollars would not be able to escape.

This is almost the limit of liquidity they can come up with.

According to the previous commission rate of 20%, if you earn 1 million by then, you will have to pay Ye Luo a commission of 200,000, which is not a small amount.

Not charging any commission means that they are short-selling jointly, temporarily uniting into a huge free capital to harvest leeks in the stock market.

To be honest, Franklin was moved.

But after thinking about it for a while, the four of them shook their heads.

"This amount is too huge. I hope to see your operation first before making a decision." Franklin said truthfully.

The other three nodded.

"No problem. As long as everyone can approve my short-selling measures, there are always opportunities for cooperation. Of course, I hope that during this period, Mr. Governor can give me the green light for my transaction." Ye Luo looked at him with a smile.

With Franklin as a check and balance on the public officials of the New York Stock Exchange, he can also operate more conveniently.

Although the New York Stock Exchange does not prohibit short selling at this time, it is only for short sellers who do not have strong capital.

Ye Luo has a big appetite, but he wants to swallow the entire U.S. stock market.

This is equivalent to shaking the country's financial foundation, and no one wants to see him succeed.

Of course, he won't reveal all of his goals now.

"No problem, then I will wait for Ye's good news." Franklin smiled faintly.