My Age of Investment

One thousand one hundred and sixty-nine, demon stock rich country

“The above is the entire process of our short selling of Lehman stock!”

As soon as Liu Hai finished speaking, Xia Jingxing took the lead in applauding as if he was possessed by Brother Ma, and at the same time he praised: "Wonderful!"

Other executives also clapped their hands vigorously and looked at Liu Hai with admiration and envy.

Looking at the K-line chart with the stock price trend similar to the letter W on the big screen, as well as the three short selling positions and three position closing positions marked with red arrows, everyone was very convinced by this god-like operating level. No one can grasp the timing.

Short selling, all sold near the three protruding peaks at the top of W;

To close the position, all purchases are completed at the two bottoms at the bottom of W;

The last bottom of the closing position has actually destroyed the shape of the W. It can no longer be called a bottom. It is more appropriate to describe it as "underground".

Faced with the admiring looks from his colleagues, Liu Hai felt his face getting a little hot because he really deserved it!

He moved his gaze to Xia Jingxing, who nodded gently towards him.

This nod, on the one hand, means to affirm the efforts and achievements of Liu Hai and the team, and on the other hand, it means to ask Liu Hai not to make any noise everywhere. As the boss, he does not have to come out to grab any credit.

Just give flowers and applause to Liu Hai, and Xia Jingxing can just collect some affordable profits for himself.

Liu Hai and Xia Jingxing have been working together for so many years. They have a good understanding of each other and immediately understood the latter's meaning.

So he no longer hesitated and continued to report: "In terms of options, we bought 30 million put options and paid a total of US$75 million in premiums.

When the option expired, we bought 30 million shares of Lehman stock from the market at a price of less than $1, and then sold them to the put option seller at an option strike price of $30.

After deducting various costs, the profit from this option investment was US$800 million. "

Looking at the options investment results displayed on the screen, the executives present were so impressed by Liu Hai.

I invested US$75 million and earned a net income of more than ten times the principal in nine months.

In the past, they only thought that Liu Hai's stock trading operations were very good, but they did not expect that this colleague was actually a hidden option investment expert.

This made them sigh that Liu Hai was moving from a rising star fund manager on Wall Street to an investment legend.

Then, Liu Hai began to introduce and show the stock trading team's two investment returns on Freddie Mac and Fannie Mae.

These two companies are the largest residential mortgage financiers in the United States, holding or guaranteeing US$5 trillion in residential mortgage loans, accounting for 42% of the US$12 trillion in total residential mortgage loans in the United States.

At the same time, these two mortgage giants are also the source of the subprime mortgage virus. The housing mortgage loans they lend have varying customer qualifications.

The two companies actually don't have that much loan principal, but they can sell these mortgage assets to various investment banks, such as their good brother Lehman.

Lehman then designed and packaged these viral mortgage assets into CDO products, sold them to various financial institutions, and then resold and peddled them layer by layer. In the end, the toxic assets flowed to investors around the world.

Their fate was a little better than that of their good brother Lehman.

Fannie Mae's market value plummeted from US$38.9 billion at the beginning of the year to US$7.6 billion, Freddie Mac's market value plummeted from US$22 billion at the beginning of the year to US$3.3 billion, and the stock prices fell by more than 80%.

Envision Capital invested a total of US$2 billion in shorting Fannie and Freddie's shares and buying put options.

In July, the U.S. government took over the moribund Fannie and Freddie.

Vision Capital successfully retired with US$2.5 billion in short-selling profits.

After showing his investment performance in Fannie and Freddie, Liu Hai then showed off other heavy holdings.

"Goldman Sachs short-sold 4 million shares at an average price of US$198.87, closed the position at an average price of US$129.8, invested US$795.48 million in principal, and made a net profit of US$276.28 million."

"Morgan Stanley short-sold 16 million shares at an average price of $47.39, closed the position at an average price of $27.21, invested $758.24 million in principal, and made a net profit of $322.88 million."

"Merrill Lynch short-sold 8 million shares at an average price of US$49.45, closed the position at an average price of US$19.5, invested US$395.6 million in principal, and made a net profit of US$239.6 million,"

"Citibank, short-sold 40 million shares at an average price of $49.06, closed the position at an average price of $20, invested $1.9624 billion in principal, and made a net profit of $1.1624 billion."

"Bank of America short-sold 64 million shares at an average price of $38.5, closed the position at an average price of $30.58, invested $2.464 billion in principal, and made a net profit of $506.88 million."

"AIG Group's underlying stock sold 20 million shares short at an average price of US$57.91, with an average closing price of US$2.05, a principal investment of US$1.1582 billion, and a net profit of US$1.1172 billion."

“Buying 30 million AIG put options, investing US$85 million in premiums, resulting in a net profit of US$780 million.”

"JP Morgan short-sold 24 million shares at an average price of $45.72, closed the position at an average price of $35.77, invested $1.09728 billion in principal, and made a net profit of $238.8 million."

"Wachovia Bank short-sold 40 million shares at an average price of $37.65, closed the position at an average price of $10, invested $1.506 billion in principal, and made a net profit of $1.106 billion."

"Wells Fargo, short-selling 32 million shares at an average price of $28.21, closing the position at an average price of $33.43, investing a principal of $902.72 million, and a net profit of -$167.04 million."

When he was introduced to Wells Fargo Bank, the smile on Liu Hai's face suddenly faltered, and his face gradually became ugly.

He said with a somewhat heavy tone: "With respect to the investment in Wells Fargo, my team and I made some mistakes. Not only did we not make any money, we actually turned our profits into negative numbers.

This is like dropping a drop of ink on a beautiful answer sheet, ruining the beauty of the entire test paper. "

At this time, all the executives present saw Wells Fargo's net profit data marked in red fonts. Among the rows of positive profit data, this negative number was indeed a bit conspicuous, and it also made people feel a bit regretful.

Jiang Ping comforted him: "It is normal for a horse to stumble. As long as the fund as a whole makes a substantial profit, it will be fine. Don't take the loss of one stock too seriously."

"Yes, William, the performance of your investment portfolio is already good enough. Wells Fargo lost more than 100 million US dollars, so what does it matter? Citibank's profits can basically cover the losses."

"That's right, if this investment performance is disclosed, William can directly book himself into the top three of the "Alpha" magazine's hedge fund manager rankings next year. It is not impossible to be ranked first."

Everyone spoke out to comfort Liu Hai, but some people felt that Liu Hai was too pretentious.

Which fund manager has never suffered a loss?

A fund manager who has never lost money is not a qualified and mature fund manager.

Even if the entire fund loses money, it doesn't matter. Just relax and earn it back next month or next year, turn the rate of return to positive, or increase it from low to high.

After all, it is not a mutual fund (public offering), and hedge fund managers do not have short-term performance burdens.

What's more, the entire fund operated by Liu Hai made so much money. They felt that Liu Hai was a little too picky.

Some people think that Liu Hai's words were deliberately told to his boss, hoping that he would encourage (praise) him.

Xia Jingxing didn't say a word. To be precise, it wasn't that Liu Haima made a mistake, but that he messed up.

In July, Wells Fargo's stock price fell to around $20, reaching a new low in more than half a year.

At that time, Liu Hai suggested to close the position first and then find a higher position to go short.

This plan was rejected by Xia Jingxing.

Within two days, Wells Fargo released its financial report. The performance far exceeded the expectations of analysts and the market. It also announced a dividend of US$0.34 per share, which not only greatly alleviated investors' concerns about financial stocks, but also announced a dividend of US$0.34 per share. It also directly led the U.S. stock market to complete a rebound.

Wells Fargo's own share price naturally took off. On the day the financial report was released, the share price soared 32.76%, erasing all of Vision Capital's efforts in it in the past six months.

Therefore, Xia Jingxing asked Liu Hai to wait for the full outbreak of the financial crisis.

This month, the financial crisis did come as promised, but Wells Fargo not only was not affected, but its stock price rose, from US$30 to US$40 today.

At the same time, due to the promulgation of the SEC short-selling ban, Xia Jingxing could only let Liu Hai choose to stop the loss and close the position.

Therefore, in the final analysis, this matter must be blamed on Xia Jingxing himself. He was seriously misled by inertial thinking. He felt that the financial crisis was coming and financial stocks would go cold.

Even though Wells Fargo's fundamentals are good, it still can't beat the general trend. At most, its stock price will fall less.

As a result, the market has taught me that you should not be too arrogant when investing. Even if you are familiar with the trend, you may not be able to perform short-term operations.

"Liu Hai, I can't blame you for this! Wells Fargo is indeed a high-quality stock. Even when the market is so bad this year, it can still maintain a good level of profitability and even grow against the trend.

Alas, no wonder old man Buffett likes it so much. It is indeed difficult to deal with. "

Xia Jingxing shook his head and smiled bitterly as he spoke. Up to now, he had inferred Wells Fargo's performance during the financial crisis through his past life memories and a series of events he encountered this year.

Wells Fargo is indeed a monster stock. Even if there is a general trend, it is not easy to succeed in shorting.

However, it is only "not easy", not "absolutely impossible".

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