My Age of Investment

Despite Xia Jingxing's comfort and understanding, Liu Hai still couldn't be happy.

In his view, the failure of the short bet against Wells Fargo was only a minor factor because the boss did not listen to his advice.

The main factor is that he didn't know the details of Wells Fargo.

Facts have proven that Xia Jingxing's prediction of the financial crisis was 99.99% correct.

The remaining 0.01% should have been checked and filled by their senior executives.

Yet he failed to play his part.

If he could have produced a more powerful and accurate stock analysis report at that time, the boss might have changed his mind. Thinking of this, he suddenly felt regretful.

But Liu Hai didn't dwell on it for too long. After all, as a financial trader, he had to learn to look forward and not be too attached to the past. This was a taboo in trading, and he would not make such a stupid mistake.

After sorting out his mood, Liu Hai continued to report: "In addition to these heavy holdings and option investments, we also short-sold financial stocks totaling US$800 million.

The list includes HSBC, Washington Mutual, East West Bank and other companies. "

The screen suddenly flashed, and Liu Hai showed other investment income charts with lower holding ratios.

The returns were all very good, with a total investment of US$800 million in principal and a total net income of US$500 million.

Then, Liu Hai showed and introduced other individual stock option contracts.

Of the total $6 billion in option contracts, only $1 billion has been sold or exercised.

Not counting the US$400 million in option fees paid on companies such as Bear Stearns, Lehman Brothers, Fannie and Freddie, and AIG, the other US$600 million in option fees were scattered about buying put options on some companies, and a total of 1.5 billion was gained. Net earnings in U.S. dollars.

As the last PPT picture was displayed on the screen, all the total income of the funds managed by Liu Hai's team were classified and summarized in front of everyone.

Individual stock option contracts: A total of US$1 billion in option fees was invested and consumed. After deducting exercise and various costs, a total of US$5.2115 billion was recovered with interest, resulting in a net profit of US$4.2115 billion.

Short selling of individual stocks: A total of US$14 billion was invested in the initial short-selling principal. After deducting various costs and offsetting losses, a total of US$23.57917 billion was recovered including principal and interest, with a net profit of US$9.57917 billion.

In terms of return rate, there is no doubt that options, a more gambling-oriented investment, can have a return rate of up to four or five times, far exceeding the 68.42% return rate of shorting the underlying stock.

Why doesn't Mao Xia Jingxing allocate more funds to investment in individual stock options? Do you think you are making too much money?

In fact, this is not the case, but the capacity of the individual stock options market is only so large and can only accommodate so much capital.

Shorting the underlying stock is the mainstream.

Then, Xia Jingxing and Liu Hai began to review the gains and losses of the US$15 billion investment in a question-and-answer manner.

Xia Jingxing said: "To short the underlying stocks of Goldman Sachs, we invested a total of more than 790 million and nearly 800 million U.S. dollars in principal, which was nearly 40 million U.S. dollars more than Morgan Stanley, but the profit was more than 40 million U.S. dollars less.

Do you think this position configuration needs to be optimized? "

Liu Hai smiled and replied: "Darren, this position configuration is actually reasonable.

I don't mean to excuse myself, but Goldman Sachs has a larger market than Morgan Stanley. There are only so many shares in circulation for each stock, so the principal allocated to Goldman Sachs is slightly more.

Goldman Sachs' performance is much better than that of Morgan Stanley, so the stock price decline is relatively smaller.

But if compared with stocks in other industries, Goldman Sachs is considered a high-quality short-selling stock. "

Xia Jingxing nodded lightly. This is why Vision Capital's investment portfolio does not look so "outstanding".

For example, AIG's stock price fell from nearly 60 US dollars to 2 US dollars. Why did it allocate more than one billion US dollars in funds? Wouldn't it be better to allocate one or two billion US dollars of funds? Can maximize profits.

But the reality is that there are too many institutions shorting AIG. They all know that this is a piece of fat that everyone is watching, and they cannot borrow a particularly large number of shares to sell.

Xia Jingxing said: "Okay, let's not talk about the holding proportion of heavy stocks, but what about the industry sectors?

In this round of decline, investment banking stocks performed the worst. Among commercial banking stocks, except for Citigroup, the share price declines of other banks were smaller than that of commercial banking stocks. "

Liu Hai smiled, "This phenomenon can actually be quoted from what you said before: it takes time for the virus to spread, and the spread of the financial crisis also affects one industry sector to another, from upstream suppliers to downstream suppliers. Such an infection sequence is provided.

In the process of change from the subprime mortgage crisis to the full-scale financial crisis, the hedge funds were the smallest to fall. This was because the value of the CDO assets they invested in dropped sharply, or even became zero, and the funds were forced to liquidate.

Next to fall were investment banks, also because many of their self-operated departments were involved in the CDO whirlpool.

Why Goldman Sachs has the best stock price and financial report performance is because they have a team that shorts CDOs and hedges the losses caused by other departments holding CDO assets.

At the same time, because investment banks have thick health bars, they are more able to sustain and withstand poison than hedge funds!

Lehman held on for more than a year, and it was only this month that it couldn't hold on anymore and declared it was over.

Next, when financial risks spread across the board and the economy suffers a heavy blow, it will be the bank's turn to collapse.

If it weren't for the ban on shorting financial stocks these days and the central banks of various countries urgently replenishing liquidity for banks, there may be countless banks that went bankrupt or suffered runs.

Now the financial industry is in chaos. Each other looks like it is about to go bankrupt. Banks lending to each other are afraid that the other party will go bankrupt the next day and will not be able to pay back the money. "

Xia Jingxing smiled and asked, "Do you think there is still room for bank stocks to fall?"

Liu Haidao: "Yes, no matter how effective the bailout is, it will not be immediate. Looking at this, economic recession is unavoidable, and bank stocks will have a hard time in the future."

Xia Jingxing glanced at Liu Hai with admiration and nodded secretly. Liu Hai has made great progress in recent years. At least his judgment on the financial crisis is very accurate.

The other party followed him to plan the subprime mortgage crisis from beginning to end for two or three years. Even if he was just a middle-aged man, he still had some insights of his own.

That's right, Xia Jingxing plans to continue investing in banking stocks.

Investment banking stocks suffered heavy losses this month, but commercial bank stocks were not particularly affected. Wells Fargo's stock price also soared, causing their short bet to fail.

Xia Jingxing has many basis for his judgment.

Take Citibank, for example, the stock price is still $20.

At this time, many investors rushed in to buy the bottom...

Soon these people will find that they are not copying at the bottom of the mountain, but halfway up the mountain.

Then, you will realize that you have reached the top of the mountain...

"What if the short-selling ban is not lifted next?" Xia Jingxing asked.

Liu Haipin understood Xia Jingxing's intention and smiled: "It's impossible, the short-selling ban cannot last for a long time, and the US stock market will only collapse faster.

However, naked short selling is probably on the verge of extinction and may disappear from the stage of history.

Also, the most critical point is that if we are able to re-enter the market after the short-selling ban is lifted, the size of the short position may not be as large as it is now. "

Xia Jingxing nodded slightly, "This is natural. I plan to divide the recently withdrawn funds into two. The main funds will be long gold, and the remaining funds will look for suitable opportunities to invest in bank stocks again."

"gold?"

Not only the bangs, but also Jiang Ping couldn't help but be interested.

He had previously proposed a plan to Xia Jingxing to do long gold, but had never taken action.

Are you planning to take action now?

Xia Jingxing recounted his verbal agreement with Paulson and Soros.

After listening, Abel clapped his hands and said: "This is a great plan. Now is definitely a good time to buy gold. If it is later, the asset price will be driven up."

Xia Jingxing smiled slightly, "Yes, that's why I proposed to use my main funds to go long gold.

Not counting the funds currently held by Jiang Ping and Abel's team, nor the US$5 billion in options contracts still held by Liu Hai's team, and the US$5 billion in funds in the reserve account.

The New York office recovered a total of US$28.8 billion this time, of which US$15 billion was principal and US$13.8 billion was profit.

I plan to talk to Goldman Sachs and Morgan Stanley again and ask them to keep our triple leverage.

In short, we need to carefully draw up specific plans and actions.

Today I just want to give you a vaccination to give you a general understanding of the next financial actions.

Although this month’s harvest is not small, the New York office alone earned 13.8 billion U.S. dollars, which is nearly 100 billion yuan when converted into RMB.

It sounds like a big number, but it's actually just a phased result. "

Xia Jingxing glanced at the faces of the executives present one by one and said loudly: "Do you still remember the goals I proposed before?

We don’t care about the top ten hedge funds in the world. What we really want to do is to be number one and become the world’s number one hedge fund and alternative asset management institution.

Bridgewater and Blackstone, we must surpass them one by one! "

Hearing Xia Jingxing's high-spirited words and unabashed ambition, the senior executives felt their blood boiling and burning, and there was an indescribable sense of pride in their hearts.

If Xia Jingxing had said these words two years ago, everyone might have thought that he was fanciful.

If it were said a year ago, everyone might be dubious. After all, the company was already almost among the top ten hedge funds in the world at that time.

Now, everyone is convinced.

Excluding leverage and loans, Envision Capital has almost US$20 billion in assets under management from just one New York office.

What if we add the booming Hong Kong Island office and the London office that has always maintained a low profile?

What should be the asset management size of a hedge fund?

It may still be close to surpassing Bridgewater, but there is definitely no big problem in crushing the Paulson Fund, which has reached US$36 billion in asset management scale and ranks third in the world.

As for Blackstone, which has an asset management scale of US$100 billion, it is still a bit difficult to surpass it by relying solely on hedge funds.