National Tide 1980.

Chapter 1291: Great Strategies

It is absolutely true that human nature is to seek profit and avoid harm, to be selfish, lazy, and to follow the crowd.

But all this can only be explained as animal instinct.

After all, the definition of human beings is advanced animals, and these things can only reflect the biological basis of human beings.

The light in human nature frees people from the shackles of animal nature and can reflect the difference between humans and animals. Those things that can be called "higher attributes" can only be achieved by restraining and violating animal nature.

And those individuals who can do this are often the best in the human group.

These people are like people with unlocked genes. Their ideas and ways of thinking are absolutely different from those of ordinary people.

Ning Weimin is like this.

When he was in a dilemma, he suddenly had a sense of déjà vu.

Thinking of Yin Yue who had caused trouble and was now in danger and facing imprisonment, I also felt so worried.

Then, the voice that made him suddenly enlightened at that time also rang out, and Kang Shude’s suggestions and teachings are still ringing in his ears.

"Zhuangzi said, the clever ones are toiling while the wise ones are worried; the incompetent ones have nothing to seek, and they are content to eat and wander about..."

"If you really want to do great things, it's not enough to just have the ability to do things. You must not only take on tasks, but also be able to take on responsibilities..."

"If people are faced with a dilemma, the easiest choice is often the wrong one..."

Every sound and every sentence seemed to be spoken to his heart.

Especially when looking at the master's face that was already over sixty years old, Ning Weimin felt as if the person in front of him had become his own master.

At this moment, the master seemed to have seen his hesitation and difficulty, and said with great sympathy, "Of course, this matter has nothing to do with you, and I understand that the risk is not small, and it is indeed possible to lose money. This is just my personal idea and wish, so I still say the same thing, you can refuse my request, my friend, you don’t have to worry about anything, even if you say 'no', it will not change the relationship between us, I promise..."

People's true feelings are very contagious.

Therefore, facing the master's tolerance, Ning Weimin could no longer say the word "no".

"No, no, I'm happy to help you with this. I'll join in. As I said just now, as long as you ask, I will do my best."

He even felt that he could not face the master's gentle gaze, so he quickly avoided the master's sight by pretending to lower his head in thought.

"Oh? Really?" The master showed a stunned expression, still a little bit unbelieving, "My friend, you have to think it over carefully."

Ning Weimin was deeply shocked and tried to cover up his retreat and guilty conscience so he spoke nonsense in a serious manner.

"Don't get me wrong. I am indeed surprised that you have such a deep emotional bond with the Weiden family that you are willing to take such a financial risk for this friend. But my hesitation just now was not because I was worried about the risk or afraid of financial losses. I just felt that if we were to fight head-on now, the timing would be unfavorable for us. We would be passive in the fight, which would be a huge disadvantage. So don't we have a better way to solve this problem? In other words, is it possible for us to get what we want at a lower cost and in a different way..."

It is understandable that he said that.

The master finally felt relieved, was stunned for a moment, then nodded to him and gave him a trusting smile.

"Oh, have you thought of something? Then just tell me. I know that your way of thinking is different. It always inspires me and surprises me..."

"I……"

  Seeing that the master was so expectant of him, Ning Weimin immediately fell into the embarrassment of being trapped in his own web, and was inevitably at a loss for words.

Oh, Heaven and Earth, he just said this casually.

  Why did the master misunderstand?

How can you be so confident in him?

He really wanted to slap himself so that he wouldn't be so rude in the future.

But as the saying goes, great ideas are often forced out.

Perhaps it's just that the conversation has come to this point.

In this situation, it would be too embarrassing if I didn't say something.

Or maybe Ning Weimin is indeed naturally intelligent and has a quick wit.

It might even be that factors that Ning Weimin himself couldn't explain were at work - it was very likely that he had long had a desire and impulse in his heart to try to change some major historical events, and was no longer satisfied with just going with the flow and waiting to die.

Anyway, in this critical situation, he was like Ikkyu-kun, and an idea came to him at lightning speed.

"Mr. Carton," Ning Weimin coughed, smoothed his throat, and suddenly asked, "I'm not familiar with the Paris Stock Exchange, and I don't know which is the largest brokerage firm here. What I want to know is, how many ways are there to play stocks here? Which brokerage firm here has margin trading business?"

"Hmm? Do you mean to borrow money from a brokerage to buy stocks?"

Pierre Cardin pondered for a moment, and his subsequent answer was somewhat dull.

"We have also thought about the method you mentioned. France's BNP Paribas and CLSA both provide these services. The United States' JPMorgan Chase and the United Kingdom's Barclays Securities can also provide these services. However, due to the economic downturn in France and the sluggish stock market for many years, the amount of financing provided by these securities firms is not high, at most 30% of the stock market value. The interest rate is not low, and it is 14%. Moreover, from another perspective, if we adopt this method, then of course the other party can also do so. Doing so will only increase our costs and will not help at all."

However, he did not expect that Ning Weimin was not discouraged, but instead a smug smile appeared on his face.

And Pierre Cardin was right about one thing: Ning Weimin's way of thinking is different from others.

"No, Mr. Carton, I don't want to raise funds, I want to borrow stocks. Do you know which brokerage firm has LVMH shares? As long as these brokerage firms are willing to provide us with the borrowing service of this stock, it will be fine."

“Short lending? You also need to sell LVMH shares!”

"Yes. Why not? LVMH's stock is already overpriced. If we continue to buy together, the other party will try to snatch chips from us, and of course it will rise even higher. Then LVMH's stock will seriously deviate from the fundamentals because of this war. In this case, it is correct to sell the stock. Sooner or later, the stock price will return to normal, and we will definitely make a profit. Why don't we sell?"

"But...but...what about the veto power?"

"We will still proceed according to your plan. Just use the 500 million US dollars we have pooled together to buy it!" It would have been better if he hadn't said these words. After Ning Weimin said these words, Master Pierre Cardon was really confused by him.

"So...are you going to buy or sell? I...why don't I understand your plan?"

"Haha! Of course we buy first and then sell."

"This……"

Looking at Pierre Cardin putting down his coffee cup and wiping the sweat from his forehead with a handkerchief, Ning Weimin laughed again.

"Mr. Carton, please don't be anxious. Let me explain it to you slowly. In fact, there is no contradiction in this."

As he spoke, he simply took the paper and pen and continued explaining while drawing a diagram.

"Please see, we first use funds to buy 4% of the shares in order to help your friend Henry get a veto power, so as to ensure that his key interests in LVMH are not infringed and he can always stay on the board of directors. These shares are very important and are our basic plate. Of course, we will not sell them once we buy them. No matter how much we pay to buy them."

Pierre Carton nodded.

Although he was still generally confused, at least up to this point, he understood and agreed.

"But other shares are more manipulable. For example, if we use securities lending to short sell this stock, it is because these stocks are not worth so much money. I want to make money through arbitrage in this almost risk-free way to make up for the capital loss caused by our high-priced purchase. In fact, this kind of transaction is a hedging transaction, the purpose is to reduce risks and offset the additional capital loss while ensuring our equity rights. To put it bluntly, we just sell off the LVMH held by the brokerage, which has nothing to do with the LVMH shares we hold."

Don’t say it, a master is a master. Although he is old, his mind is still very smart.

Although I was stunned for a moment, I quickly figured it out, just like I had solved a word problem correctly.

The French old man's mental state also became excited.

"You mean, as long as we buy and sell at the same time, it means that we are not actually affected by the stock price increase. In the end, the cost of buying the stocks is just the commission paid to the brokerage firm and the interest on the securities lending."

"Yes, you are absolutely right. That's exactly what I mean. Of course, for safety reasons, we can split up several accounts, or use other people's accounts for different buying and selling transactions. The buying transactions can be open and aboveboard, but the selling margin transactions must be carefully hidden, so that our real intentions will not be discovered by the opponent."

"Good, great." The master was so happy that he couldn't help but hug Ning Weimin excitedly. "My friend, I will never forget everything you have done. I will call Henry now and I want you to meet."

However, the master's cheerfulness only lasted a few minutes. When he went to make a phone call, he soon noticed some problems.

"No, wait, wait..."

He stopped what he was doing, thought seriously for a moment, put down the phone and walked back.

"Ning, your plan seems to have a key problem that is difficult to solve. I mean, if your idea can work, it requires a prerequisite, that is, we must ensure that LVMH's stock falls back quickly from the point where we sell it, but how can we guarantee this? I mean, what if MH continues to spend money to buy it? What if LVMH's stock is pushed up by them, or attracts others to take advantage of the situation and keep it at a high level? Have you ever thought that if this happens, our losses will be multiplied..."

For a moment, Pierre Cardon seemed to have seen the most terrifying situation, and his face immediately turned ugly, as if he was frightened by his own words.

However, it was different from what he thought. Ning Weimin remained calm and said firmly.

"No, please believe me, this kind of thing you are worried about will not happen. It will never happen."

"But where does your confidence come from? How can you be 100% sure?"

However, in Pierre Catton's view, it is impossible for Ning Weimin to find convincing evidence.

If the basis of his persistence is just subjective emotions, it would certainly be dangerous.

"Perhaps I didn't word it properly. Let me put it another way. I wonder if it can give you more confidence."

Ning Weimin understood the change in the master's expression and realized that his wording might be a bit absolute.

So he stopped being stubborn and simply changed his approach to comfort the master again.

"Okay, I admit that the situation you mentioned may happen. But even if it happens, it will not have much impact on us. Again, what we are doing is hedging transactions, not gambling. The number of stocks we short sell must be the number we already have. As long as we maintain this ratio, no matter what extreme situation occurs, we can handle it without any major problems."

"What's the worst possible outcome? Even if the stocks we sell go up to the sky, several times higher than our purchase price, we still have enough stocks in our hands to get out of this mess unscathed. The worst that can happen is that we lose tens of millions of dollars every year and hand it over to the brokerage firm. With the income from Pierre Caton and the gains from my personal assets, we should be able to hold on for a few years without any problem."

"But think about it, how difficult is it to make LVMH's stock move in this way? You also said that the French economy is not good and the stock market is sluggish. Even if the internal strife of the company is no longer a secret, it has attracted many people to fish in troubled waters to make trouble. But the stock price is at a high level that deviates from the fundamentals, and it requires a huge amount of funds to support it. How long can it last?"

"Even Bernard Arnault and the Lazard investment bank behind him don't have this ability. Their funds still have to bear the financing costs. And their goal is of course to gain control of the company at the lowest cost. They will not spend money that can be avoided. They will not do business that loses money."

"What's more, our allies are also members of the LVMH board of directors. If they get a veto, they can't control the company's management, but they can always make trouble, right? In Japan, there is a kind of people called "professional shareholders", who buy enough shares of companies and then use their veto power to make the companies unable to operate normally, in order to blackmail the companies for profit. Once such news comes out, can LVMH's stock price remain high?"

"Also, the reason why I transferred the speculative funds from Japan overseas is because the Japanese stock market has risen too much, and I have already felt the danger strongly. Maybe the overall situation of the French stock market is fine, and it has not been exaggeratedly hyped. But the problem is that the conditions for communication between countries have greatly improved. The major stock markets in the world are increasingly influencing each other. Whether it is the Tokyo stock market or the US stock market, as long as one of them has problems, I am sure that it will be the arrival of an avalanche. What will happen to LVMH then?"

Ning Weimin's explanation was not in vain, his inference shocked Pierre Cardon.

He thought about it carefully and was successfully convinced.

Although probability is invisible and intangible, it is an objective existence that conforms to logical thinking.

He now understood two things: Ning Weimin was a genius, and he also took this matter seriously.

But it's not over yet.

Just when Pierre Cardin didn't know what to say and wanted to hug Ning Weimin again, Ning Weimin actually said again.

"To be honest, in my opinion, the probability of this happening is increasing. I predict that it will happen in half a year to a year. So in my opinion, this is even a chance for us to turn defeat into victory. Time is on our side. We should keep hoarding funds, delaying and paralyzing our opponents, and when there are major changes in the market, we will buy up all the LVMH shares. Then, as one rises and the other falls, we will turn defeat into victory. By then, your friend will get his company back. Of course, this is my personal opinion. Whether to do this or not depends on you. Do you really trust me unconditionally?"

This time, the ball was passed back to Pierre Cardin.

(End of this chapter)