Riding the wind of rebirth

The method is very simple, which is to prepare a portion of funds, about 20 million US dollars, and perform the opposite operation of Leeson.

If it loses, the 20 million will be wasted, which will be icing on the cake for Leeson; but if it wins, it will be a small risk for a big gain, and all the risks taken by Leeson will be converted into profits for AXA.

Seeing that Leeson was now facing such a huge risk, Li Laosan finally agreed to let Zhou Zhi take this chance, but he only agreed to let Zhou Zhi use part of his own "change" to do this, which would be considered as "operation on behalf of the customer" by AXA Fund and would not affect the fund's reputation and returns.

After the preliminary preparations were in place, the Nikkei index continued to rise slowly, gradually approaching Zhou Zhi's margin call point. Even though Zhou Zhi was studying hard for the exam at the time, he was often harassed by Li Laosan, who asked him whether he needed to stop loss.

Zhou Zhi simply added another 30 million and told Li Laosan not to harass him anymore.

On January 1, the Kobe earthquake occurred, and in the following days, the Nikkei index began to fall wildly.

On the one hand, Leeson suffered greater losses. In order to make up for the losses, he bought a larger number of Nikkei Index futures contracts to avoid a margin call, hoping that the Nikkei Index would quickly rise back to the ideal price range.

On January 1, Leeson began to use the 30 million pounds he received from Britain every day to frantically buy Nikkei index futures and short sell the island nation's government bonds.

On February 2, Leeson set a record in the history of Singapore's futures trading, holding 10 Nikkei futures and 55000 island government bond contracts.

However, as long as the index is falling, these rescue measures are doomed to be futile, and the greater the number of transactions, the greater the loss.

On the contrary, Zhou Zhi's account entered a stage of crazy money-making. After authorizing Li Laosan, Li Laosan began to use the index decline profits obtained in the futures market to purchase island government bonds, further raising their prices.

As long as the stock index continues to fall, this is a virtuous cycle. The blood that was previously sucked away by Leeson is now flowing back at a speed ten times faster.

  On February 1995, 2, the last day of Bahrain futures, Leeson's efforts to influence the market completely failed. The Nikkei stock price closed at 23 points, and Leeson's Nikkei futures long risk position had reached more than 17885 contracts; while the price of its island government bonds continued to rise, its short risk position had also reached 6 contracts. The losses Leeson brought to Bahrain finally reached a high of 26000 million pounds when Bahrain's senior executives were still dreaming of dividends the next day. At this time, the total equity funds of Bahrain Bank were only million pounds!

Man proposes, God disposes. The Great Kansai Earthquake that took the lives of thousands of people a month ago ended the life of the world's oldest bank, Barings Bank, a month and a half later.

On February 25, the Bank of England announced that Barings Bank could no longer engage in trading activities and would apply for asset liquidation. Barings Bank, which had a history of more than 230 years and a prominent reputation, went bankrupt.

In fact, to be precise, Zhou Zhi's reverse operation was also a gamble, the only difference between him and Leeson was that one could afford to lose and the other could not.

On March 3, the police arrested Leeson. This "genius" used a contract of more than 2 million pounds to cause a loss of million pounds to the Bank of Barings, with a leverage magnification effect of nearly eight times.

Zhouzhi was similar, but because the direction was opposite, it went from 50 million US dollars to less than 400 million US dollars. After deducting the "labor fee" for Li Laosan, there was still more than 300 million. However, this was just the beginning. The news of the bankruptcy of the Barings Bank Group shook the international financial market and immediately caused a series of strong fluctuations in the financial circles in Asia, Europe and America. The exchange rate of the pound against the mark in the Tokyo stock market fell to the lowest point in the past two years. The London stock market also plummeted, and the Dow Jones Index directly fell by 29 percentage points.

These situations were predicted by AXA Fund, which began to make crazy profits after the Great Kansai Earthquake. This was equivalent to AXA foreseeing the trends of the international financial market in the next two months one month in advance.

If he still needs careful guidance at this point, Li Laosan does not deserve to be called the little prince of Hong Kong Island finance. When the Leeson margin call was a foregone conclusion, AXA Funds launched an all-out attack and demonstrated some short-term operations in the global financial market.

Compared with Zhou Zhi's previous many fantastic buying choices in technology stock decisions, the collapse of the Bank of Bahrain was acceptable in Li Laosan's eyes. Except for Zhou Zhi himself, everyone thought that he had discovered clues in Leeson's operations, and then asked the Intelligence Department to re-analyze it. In the end, he grasped the full picture of the crisis in the Bahrain Bank system in advance, and then boldly took the opposite action.

Originally, I just wanted to make some waves in the slightly larger fluctuations of the Nikkei Index and make a little money in the short-term decline, but I happened to encounter a major earthquake, which pushed the index to the bottom at once, so I made a lot of money in this wave.

In the eyes of outsiders, this is half human and half God's will, but at least the logic of the plot is reasonable.

Just when everyone was trembling with fear in the face of the global stock market crash, Zhou Zhi took the more than 300 million US dollars he had just earned and joined the ranks of long positions, increasing his holdings in the technology stocks that he had been optimistic about during this nearly 30% drop.

The logic this time is even simpler. Before the Barings Bank crisis broke out, the market was only in the initial stage of a bull market. In a sense, if there had not been the sudden event of the earthquake, Leeson's judgment on the market would have been correct.

His mistake was that he overestimated this judgment and ignored the possible sudden risks. In order to maximize his profits, he excessively reduced his ability to resist risks. It was obvious that he had the mentality of a gambler and wanted to "seek wealth and fame by taking risks", which ultimately led to his miserable defeat.

However, his failure, or the bankruptcy of the Bank of Bahrain, does not mean that the situation in the global financial market has changed. So although you can go short for one or two months in the short term, if you don’t turn around in time before the next wave comes, you will not only fail to enjoy the dividends brought by the new wave, but you may even capsize the boat, and let the previous gains fall back into the sea.

For Zhou Zhi, this wave of short-term operations by the Bank of Bahrain was pure windfall. If he had not discovered it in the report of the Intelligence Department, Zhou Zhi might not have remembered it at all, let alone further investigated it in detail.

AXA Fund is still making money, but no one knows how much it can earn until the dust settles.

The 300 million US dollars from Zhou Zhi was still his "pocket money". It was a rare opportunity for him to make such a fortune, so he might as well support himself.

On March 4, the first of the four-season auctions designed according to Zhou Zhi's suggestions, the Spring Auction, was a huge success. (End of this chapter)