My Age of Investment

The meeting place between Xia Jingxing and David Einhorn was in a secret private club.

After a brief exchange of greetings, and looking at the brown-haired man in his forties opposite, Xia Jingxing slowly said, "I heard that people outside call you the Don Quixote of the hedge fund world?"

Einhorn picked up the coffee on the table and took a sip. Then he put down the cup gently, leaned over slightly, stared at Xia Jingxing, and said slowly and slowly: "As long as I succeed, they will call me "The next Buffett."

Xia Jingxing laughed loudly, "Man, you are quite humorous, Buffett never shorts the company!"

"But he often sells puts."

Einhorn and Xia Jingxing looked at each other, then leaned back and spread their hands, looking very casual.

"Lehman Brothers is not easy to deal with. Fuld must be gnashing his teeth in hatred for you now."

Einhorn still had an indifferent tone, "Isn't it just a report to the SEC? I have experienced a lot over the years. If Darren, you have doubts about Greenlight Capital's operations, you can redeem it during the next redemption period." The $100 million you invested.”

Xia Jingxing smiled and said nothing, not angry at the arrogant attitude shown by the other party.

This guy was successful at a young age, and his life was as smooth as cheating. He had not experienced many beatings from society, so it was normal for him to be arrogant.

In his previous life, he had read the autobiography "Cheating All the Way to the End" published by the other party. Although the title of the book was exaggerated, it was all about the other party's personal experience. It also introduced in detail the story of the start of Greenlight Capital.

After working in investment banks and hedge funds for several years, Einhorn jumped out to go it alone in 1998, when he was 28 years old. He raised $900,000 from relatives and friends, and co-founded Greenlight Capital with former colleagues. , started his own investment legend.

The reason why the company is called Greenlight Capital is because his wife gave him... the green light.

In order to save money at the beginning, Greenlight Capital had to work at free workstations provided by the main brokerage, and shared printers and other equipment with five other small hedge funds.

But in such a difficult environment, Greenlight Capital achieved astonishing results in the first year of its establishment. There was not a single month of loss throughout the year, and the asset management scale quickly increased from US$900,000 to US$75 million.

Since then, Greenlight Capital has become famous for bursting the Internet bubble and shorting the Nasdaq index.

In 2002, Greenlight Capital shorted a financial company called United Capital. Einhorn stood in front of the stage and gave a public speech, expressing his doubts about the company's suspected fraud. United Capital's stock price plummeted.

This was the first time he publicly expressed his bearish views, and then he got into a lawsuit. United Capital filed legal proceedings and asked the SEC to investigate Greenlight Capital.

The SEC investigation lasted for five full years, and finally last year it was confirmed that United Capital had committed fraud. Greenlight Capital and Einhorn won, and their reputations increased.

However, in terms of asset management scale, Greenlight Capital, which manages billions of dollars, is still a junior on Wall Street and is just a medium-sized hedge fund.

Therefore, Envision Capital's fund of funds has the opportunity to invest in each other. Large-scale funds such as Bridgewater and Desha have no shortage of investors, and they will not take money from potential competitors.

Through his autobiography, Xia Jingxing got to know Einhorn quite well and joked: "What if the lawsuit between Greenlight Capital and Lehman Brothers also lasts five years?"

Einhorn glanced at Xia Jingxing and said confidently: "We can't wait that long! What I mean is that before the day of trial, Lehman Brothers will be in trouble!

Their accounting methods are very interesting, but no matter how hard they cover up, the risks related to subprime mortgage assets will overflow sooner or later.

Then Lehman Brothers will expand infinitely like a balloon until it explodes with a "pop"! The whole world has become quiet! "

Xia Jingxing smiled and said, "But I see that Lehman Brothers has nearly 100 billion US dollars in cash and rapidly liquidating assets on its books."

Einhorn sneered, "That's because you haven't noticed that they have more than $600 billion in subprime-related assets. Once Lehman's capital is eroded, it will be a huge mess.

Goldman Sachs ensured its own profits by shorting subprime mortgage assets. Merrill Lynch and Morgan Stanley made quarterly impairment losses on subprime mortgage assets. Although their stock prices fell sharply, their own credit remained.

Lehman's secretive behavior is equivalent to gathering all the explosives together, and the explosion effect must be far beyond everyone's imagination. "

Xia Jingxing remained silent, thinking.

Einhorn asked: "Darren, I still say what I said, if you want to redeem the funds, Greenlight Capital will never set up any obstacles."

Xia Jingxing shook his head, "I'm not trying to redeem the funds. US$100 million is just a small investment for Vision Capital, and it's not worth my own investment.

I'm looking for you because I have something more important to discuss with you. "

"oh?"

Einhorn sat up straight, his whole body suddenly interested.

Envision Capital is also considered a big fund on Wall Street. Last year, it made a lot of money by shorting subprime debt assets. It was the biggest winner after Paulson Fund and Clary Capital.

Could it be that he also wants to short Lehman?

Einhorn seemed to have some realization, but he did not ask, waiting for Xia Jingxing to take the initiative to reveal the answer.

“I want to buy Lehman Brothers!”

Einhorn could no longer remain calm. He looked at Xia Jingxing as if he had seen a ghost, "Darren, your joke is not funny!"

"I'm serious. Vision Capital's business spans the stages of startup incubator, seed stage, angel round, VC, growth stage equity investment, buyout, secondary market, etc. It only lacks one investment banking business."

Xia Jingxing picked up the coffee on the table and took a sip, "With this last link, our entire financial industry chain will be completely complete."

This large amount of information gave Einhorn some indigestion. He thought for a while before asking: "Isn't Envision Capital not big enough to take down Lehman Brothers? Even if we take it down by force, you don't have enough funds." To help him get back up and running."

"So we need your help!"

Xia Jingxing looked at Einhorn with sharp eyes, "And we will ask to divest all subprime loan-related asset portfolios. We only want a clean Lehman.

Especially Lehman's Asian business, Envision Capital is determined to win.

The first-quarter financial report shows that Lehman Brothers’ brokerage business revenue in Asia has reached a new high, and it has a good reputation and competitiveness in the region.

You should know that Envision Capital also has a huge investment layout in Asia. The IPOs of startup companies invested by our funds alone are enough to maintain the operation of an investment bank for several years. "

After hearing this, Einhorn finally confirmed that the other party was not joking, but had carefully analyzed Lehman and fully considered the complementary relationship between the investment bank and its own business.

"Why are you looking for us?"

Xia Jingxing smiled and said, "Because we invested in you, and you happened to short Lehman. It's that simple."

Einhorn smiled and said: "What benefits can we gain from helping you?"

"Vision Capital can invest in you again to help you short Lehman more calmly."

Einhorn pointed a finger and said, "I need a billion dollars."

After Xia Jingxing thought for a while, he happily replied: "No problem, it's such a happy decision."

Einhorn smiled and held out his hand, "Happy cooperation!"

Xia Jingxing stretched out his hand to shake it, and replied with a smile, "Happy cooperation."

Vision Capital is not suitable to stand in front of the stage, so a fast and sharp knife is needed to complete what the big shorts should do on their behalf.

And Greenlight Capital was the knife he chose.