My Age of Investment

  Chapter 1005 Buffett gets on the car

  In an instant, the time has come to the end of January.

  After more than half a month of opening a position, Envision Capital has established a short position of US$14 billion in US stocks, which is only the underlying stock and does not include put options.

  These days, Goldman Sachs and Morgan Stanley's divisions for Vision Capital Services are busy, contacting institutional investors everywhere to match put option transactions between major financial institutions and Vision Capital.

At present, this matter is already somewhat eye-catching. If everything goes well in the follow-up, Vision Capital will allocate all the remaining US$6 billion as put options, plus 14 billion of underlying stock shorts, which will constitute a net short position of up to US$20 billion. Position.

  In terms of stock index futures and options and other derivatives, Vision Capital has also established a short position of up to 10 billion U.S. dollars for the three major stock indexes, and the remaining 10 billion U.S. dollars will be invested later.

  Vision Capital paid USD 20 billion in deposits to Goldman Sachs and Morgan Stanley, and the two investment banking giants provided a total of USD 60 billion to Vision Capital.

  US stocks are the world’s largest stock trading market, accounting for a little more than half of the global stock trading share.

  Xia Jingxing estimates that investing 40 billion US dollars in US stocks is almost the same, leaving 20 billion US dollars, and he wants to invest in markets outside the United States.

  If it cannot be digested outside, the remaining funds will be invested back into U.S. stocks.

  Involving shorting of financial products such as stocks, indices, options, etc., it is not compared with shorting subprime bonds the year before and last year. Trading requires more caution and more concentration.

  CDS contracts are all carried out through counter transactions. Both parties of the transaction can negotiate via email or phone. Follow-up only need to endure the previous loss, wait for the appreciation of the policy, and finally sell it and make a profit.

  The second wave of short-selling this year is slightly different. The rebound of stock prices and indexes needs to be paid attention to. If you are not careful, you will easily capsize.

  The CDS contract was a bet on the general trend, and the stock price and the index need to be more finely controlled.

   Therefore, Xia Jingxing has not been idle these days, and has participated in the formulation of various short-selling plans.

   Generally speaking, he is still sure of most of the short-selling operations this time, and a small part of the operations is inaccurate, which is the result of analysis by the team led by Liu Hai and Jiang Ping.

  …………

  …………

  In the small house in Omaha, the two old men Buffett and Charlie Munger finished a table tennis match, took the towel that Li Lu handed over, and wiped the sweat from his forehead.

  "Young people, missed the opportunity to short subprime mortgages last year, and saw that others made billions of dollars, or even more than 10 billion U.S. dollars, do you feel regretful?"

  While speaking, Buffett pretended to give Li Lu a casual glance. The latter looked as usual and seemed to have no regrets at all. This made Buffett nod secretly, his temperament was okay.

  Li Lu lightly shook his head and said with a look of relief: "Mr. Munger told me that although short subprime loans can make a lot of money, it is ultimately the government and taxpayers who pay for it.

  Hearing this, I suddenly woke up and gave up short selling. "

  Li Lu spread his hands towards Buffett, “So, there is nothing to regret. There are still a lot of investment opportunities in the market.”

  Charlie Munger smiled and became more satisfied with his Chinese disciple.

  Buffy nodded characteristically, "Yes, value investment allows countless failures, but speculation... as long as you fail once, you may die.

   Earning quick money will paralyze a person’s investment judgment and investment sense, and it is also very addictive. "

  Li Lu nodded and laughed on the surface, but he was very bitter in his heart!

  Go to speculation!

  Obviously, he has already determined the investment direction, but these two old men dissuaded himself...

  Well, he gave up because of his lack of determination.

  "Are you still in touch with Darren recently?" Buffett glanced at Li Lu's yellow face.

  Li Lu shook his head, “I don’t have much contact. Now I and him are not on the same level.”

  Buffett laughed suddenly, walked over and patted Li Lu on the shoulder: "Don't be discouraged, I am more optimistic about your future development!"

  Speaking of this, Buffett sighed up to the sky, his tone full of regret: "Dylan used to be a great guy! But...it's a pity! He now seems to be infected with the stinky problems on Wall Street."

  Buffett didn’t go any further, he believed that Li Lu should understand what he meant.

  Li Lu did understand, and a poem quickly popped up in his heart: watch him get up a tall building, watch him entertain guests, watch his building collapse...

  He accurately predicted the subprime mortgage crisis, and kindly shared this information with Xia Jingxing.

  At that time, the other party had obviously begun to short subprime loans, but he pretended to be nonchalant and paralyzed him, causing him to give up short subprime loans.

  It was because he lacked confidence at the time. If he knew that Envision Capital was also short-selling subprime loans, he would have to get in the car if he said anything.

  As for Munger and Buffett’s dissuasion, it is just the comfort he finds for himself.

  The three people came to the living room of Buffett’s house and chatted. Li Lu mentioned a recent market news.

  "Goldman Sachs and Morgan Stanley have recently released a lot of news that there is a powerful buyer who wants to buy a large number of the five major investment banks and the five major banks, as well as AIG's put options."

  Buffett narrowed his eyes, and Li Lu's words reminded him of his classic operations on Coca-Cola.

   "If I'm not wrong, it should be those big shorts who made a lot of money last year are looking at the downturn and want to short the financial stocks by this means."

   Munger agreed with the old man’s judgment, and nodded: “Yes, those greedy guys are afraid that a serious financial crisis will not break out in the United States.”

  Li Lu smiled and asked, "Do you two think there will be a financial crisis?"

   Buffett said indifferently: “There is a high probability that it will break out, but it is still difficult to draw conclusions about the scale of the crisis.”

  Li Lu nodded slightly, feeling reasonable. Now the Fed is doing its best to rescue the market, and the situation has not collapsed to the point where it is difficult to save.

   "The put option you mentioned, I have also analyzed it carefully these days, and I think I can sell part of it."

  Buffett said with confidence: “Banks are very good investment targets, worthy of long-term investment. Even if the stock price drops for a while, it will quickly rise back.”

  Li Lu listened carefully. Buffett is not only a master of stock trading, but also a master of options trading. In these years, there has been almost no failure in the options market!

  Berkshire Hathaway often uses options to play some subtle operations, and obtains a large amount of royalties by selling options, also called option premiums.

  You may face a large loss in the early stage, but after the stock price rebounds, you will get the return of the stock price rebound and the investment income brought by the option premium and the option premium.

  "If you are interested in options, you can also try to play."

  Buffett looked at Li Lu with a smile. For the sake of this young man's well-behaved and sensible, he didn't mind playing with him.

  Buffett brought himself to play with him. Li Lu didn’t even think about such a good thing, so he blurted out immediately: “Okay! Just to learn from you.”

"Hahaha!"

  Buffett smiled happily, "Okay, let me show you my investment philosophy."

  (End of this chapter)