My Age of Investment

   Chapter 1154 Demon stock rich country

   "The above is the whole process of shorting Lehman shares!"

As soon as    Liu Hai finished speaking, Xia Jingxing seemed to be possessed by a little pony, and the "papapa" took the lead in applauding, and at the same time he praised: "Wonderful!"

  The other executives also clapped their hands vigorously, and their gazes towards Liu Hai were full of admiration and envy.

Looking at the candlestick 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 closing positions marked with red arrows, everyone is very convinced by this god-like level of operation. There is no one else's grasp of timing.

   Short selling, all of which were sold near the three peaks protruding from the top of W;

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

   The last unwinding valley has actually broken the shape of the W and can no longer be called a valley. It is more appropriate to use "underground" to describe it.

   Facing the admiration glances from colleagues, Liu Hai felt a little hot, because he really deserved it!

   He turned his gaze to Xia Jingxing, who nodded lightly at him.

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

   Send flowers and applause to Liu Hai, and Xia Jingxing will just collect some affordable income.

  Liu Hai has cooperated with Xia Jingxing for so many years, and they have a tacit understanding with each other, and immediately understood the meaning of the latter.

   So he no longer hesitated, and then reported: "In terms of options, we bought 30 million put options and paid a total premium of 75 million US dollars.

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

   After deducting various costs, the profit of this option investment is 800 million US dollars. "

   Looking at the options investment record displayed on the screen, the executives present were already full of admiration for Liu Hai.

   Invested $75 million and earned a net gain of more than ten times the principal in nine months.

   Before, they only thought that Liu Hai's stock trading operations were very good, but they didn't expect this colleague to be a hidden options investment expert.

   This makes them have to sigh, Liu Hai is moving from a rising Wall Street star fund manager to an investment legend.

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

  The two companies are the largest U.S. home mortgage financiers, holding or guaranteeing $5 trillion in home mortgages, or 42 percent of the $12 trillion in U.S. home mortgages.

   At the same time, these two home loan giants are also the source of infection of the subprime mortgage virus. The home mortgage loans lent by them have uneven customer qualifications.

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

   Lehman designed and packaged these virus-carrying mortgage assets into CDO products, sold them to various financial institutions, and then resold and peddled them layer by layer. Finally, the toxic assets flowed to investors all over the world.

  The fate of the two of them was a little better than his good brother Lehman.

   Fannie Mae's market value plummeted from $38.9 billion at the beginning of the year to $7.6 billion, and Freddie Mac's market value plummeted from $22 billion at the beginning of the year to $3.3 billion, with share prices down more than 80 percent.

  Vision Capital invested a total of US$2 billion to short the underlying shares of the two houses, while buying put options.

  In July, the U.S. government took over the dying two rooms.

   Vision Capital also successfully retired with a profit of 2.5 billion US dollars.

   After showing his investment record in the two houses, Liu Hai then showed other heavy holding stocks.

   "Goldman Sachs, short selling 4 million shares at an average price of $198.87, with an average closing price of $129.8, investing a principal of $795.48 million, and making a net profit of $276.28 million."

   "Morgan Stanley, sold 16 million shares short at an average price of $47.39, with an average closing price of $27.21, invested $758.24 million, and made a net profit of $322.88 million."

   "Merrill Lynch, short selling 8 million shares at an average price of $49.45, closing the position at an average price of $19.5, investing $395.6 million in principal, and net profit of $239.6 million,"

   "Citibank, short selling 40 million shares at an average price of $49.06, with an average closing price of $20, investing $1.9624 billion in principal, and net profit of $1.1624 billion."

   "Bank of America, short selling 64 million shares at an average price of US$38.5, with an average closing price of US$30.58, invested capital of US$2.464 billion, and net profit of US$506.88 million."

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

   "Buy 30 million AIG put options, invest $85 million in premium, and make a net profit of $780 million."

   "JP Morgan, sold 24 million shares short at an average price of $45.72, with an average closing price of $35.77, invested $1,097.28 million, and made a net profit of $238.8 million."

   "Wide Bank, sold 40 million shares short at an average price of $37.65, with an average closing 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, with an average closing price of $33.43, investing $902.72 million in principal, and net profit of -$167.04 million."

  …

   When I was introduced to Wells Fargo, the smile on Liu Hai’s face suddenly stagnated, and his face gradually became ugly.

   He said with a heavy tone: "For the investment in Wells Fargo, my team and I made some mistakes. Not only did we not make any money, but we turned the profit into a negative number.

   This is like putting a drop of ink on a beautiful answer sheet and ruining the beauty of the entire test sheet. "

   At this time, all the executives in attendance saw the net profit data marked by Wells Fargo in red font. Among the rows of positive profit data, this negative number is really conspicuous, and it makes people feel a little regretful.

  Jiang Ping comforted: "It's normal for a horse to stumble. As long as the fund as a whole makes a substantial profit, you don't have to worry too much about the loss of a single stock."

   "Yes, William, the performance of your portfolio is good enough. Wells Fargo lost more than $100 million, what is it? Citibank's profit can basically make up for the loss."

   "Yes, if this investment performance is disclosed, William can directly book the top three of the "Alpha" magazine's list of hedge fund managers next year, and the first is not impossible."

  …

   Everyone comforted Liu Hai one after another, but some people felt that Liu Hai was too hypocritical.

  Which fund manager has never lost money?

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

   Even if the entire fund loses, it doesn’t matter, just relax your mind, make it back next month or next year, turn the rate of return to positive, or pull it up from low to high.

   After all, it is not a mutual fund (public offering), and hedge fund managers have no short-term performance burden.

   Not to mention that the entire fund operated by Liu Hai has made so much money, and they feel that Liu Hai is too critical.

   There are also people who think that what Liu Hai said was deliberately said to the boss, and wanted the boss to encourage (compliment) aloud.

  Xia Jingxing didn't say a word, to be precise, it wasn't Liu Haima who stumbled, but he smashed it.

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

   At that time, Liu Hai proposed to close the position first, and then look for a higher position to short.

   This plan was rejected by Xia Jingxing.

Then within two days, Wells Fargo released its earnings report, which far exceeded analysts and market expectations. It also announced the good news of a dividend of $0.34 per share, which not only greatly eased investors' concerns about financial stocks, It also directly led the US stock market to complete a wave of rebound.

   Wells Fargo's own stock price naturally took off in place. On the day the financial report was released, the stock price rose by 32.76%, which wiped out all the efforts of Vision Capital in the past six months.

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

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

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

   So, in the final analysis, Xia Jingxing himself has to be blamed for this incident. He was seriously misled by inertial thinking and felt that the financial crisis was coming, and financial stocks would be cold.

   Even if Wells Fargo's fundamentals are good, it still can't beat the general trend, and at most the stock price will fall a little less.

   As a result, after being educated by the market, you should not be too arrogant in investing. Even if you are familiar with the trend, short-term operations may not work.

"Liu Hai, I can't blame you for this! Wells Fargo is indeed a high-quality stock. Even in such a bad market this year, it can still maintain a good level of profitability and even grow against the trend. It can be said that even God is there. Bless it!

  I now finally know why old man Buffett likes it so much! Really hard to deal with. "

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

   Wells Fargo is indeed a demon stock, and even if it has a general trend bonus, it is not easy to sell successfully.

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

   There is a lot of data, and it hurts my head to check, and I have to calculate and read the previous article, and finally fill in the hole. So it's a bit late, everyone, please forgive me, and don't think water is fine.

   (end of this chapter)