King of Capital

Chapter 101 Quantitative Trading
1500 million.

——The next morning, Xie Jingxing resumed his normal work. As soon as he arrived at the office, he received the news that Didi’s second round of subsidy plan burned 1500 million cash on the first day.

“Tell Cheng Wei that he doesn’t need to report the data every day.”

He threw the document aside. If Kuaidi doesn't stop burning money, Didi won't be able to stop, and vice versa. Now everyone is trapped in the prisoner's dilemma, and there is no point in staring at the data every day.

Song Anli responded with a "yes" and spread out a folder in front of him: "This is today's morning paper."

[The United States and India announced that they will jointly invest in railway and shipping infrastructure projects in the Middle East to connect India, the Middle East and Europe, shortening the trade time between Europe and India by 40%... The People's Bank of China and the Central Bank of Albania signed a bilateral currency swap agreement between China and Albania...]

Xie Jingxing glanced at the immature macroeconomic morning report. Domestically, everything was calm and there was nothing interesting to watch. Internationally, China had just announced the "Silk Economic Belt" strategy for the first time yesterday, and the United States was about to start a fight in the Middle East with its little brother India. I'm afraid it's a bit stressful.

"These are the items that need to be discussed at the meeting this week." Song Anli felt relieved.

There was a person in the company who wrote a macroeconomic analysis morning report, and she needed to extract the key points from it and compile a copy. During this period, every morning was a tribulation for her, and her palms were sweating from being randomly checked and asked questions by Xie Jingxing.

Mobile games, educational services, and O2O, the projects submitted by the following investment teams that need to be approved by the investment decision-making meeting are basically concentrated in these three hottest investment areas this year.

Xie Jingxing scanned various business plans like a scanner, taking an average of three minutes for each project. He thought that he had to change the topic of the meeting later and explain the general direction and prospects of various industries to the employees, so as to improve the direction of subsequent project screening and make everyone's work easier.

"Are you hungry?"

Xie Jingxing was thinking about this when he was stunned when he saw a business plan that had just been opened in front of him. This project had already passed the investment decision meeting and was confirmed to follow up on the investment.

"Uh, this one was submitted by Grapefruit Capital."

Song Anli was prepared to add an explanation: "He Chuan found the project himself. Mr. Tang took a look and thought it was worth following up."

"This project is being followed by Xiao Shen's team at Taihe, right?" Xie Jingxing thought about it and picked up his pen to sign the document.

After he took over Taihe, he naturally gave all the top projects on hand to Suhe, and divided the second-priority projects equally among other teams. After Shen Xin finished "Budu", he decided to follow up with "Ele.me".

Xiyou only gave Tang Man one Didi project, but Xiyou had sufficient funds in its account, so it was impossible for it to just focus on Didi.

Since He Chuan discovered Ele.me through his own efforts, there is no reason for him to favor one over the other and not allow them to do the project. It all depends on their abilities and whoever wins the project gets it. Anyway, he is making a lot of money.

After processing and approving all the paperwork in order, I held an investment decision-making meeting and time passed quickly until lunch break.

…………

Xie Jingxing left Taihe's office and walked into Grapefruit Capital, which was across the corridor. Tang Man and He Chuan were both away on business trips, and the office was deserted. Only the sole securities investment manager was sitting at his workstation, dozing off in front of the computer screen.

"Mr. Wang, I'm sorry, I had something urgent to do last night. Are you available now?" He pulled a chair from the next workstation and sat down, explaining apologetically.

Wang Xueqing bent down and took out a mug from the drawer. He picked up the thermos cup with black wolfberry and ginseng and filled the mug with water. "Boss, you can just call me Lao Wang. Drink some water... This cup was just given to me by my girlfriend. It's clean and has never been used."

"...Okay, thank you." Xie Jingxing forced a stiff smile.

Wang Xueqing, who has a slightly high hairline and thick glasses, has a very typical resume. He was born as a small town test-taker and became the ultimate test-taker. He has been in the industry for more than ten years and has been working in front of computer screens 24 hours a day. He is still unmarried at the age of 35 or 36. It is said that he has a young and beautiful girlfriend recently.

The overall IQ is above average, but the EQ attributes remain a mystery.

Xie Jingxing was quite used to this, so he simply skipped the small talk and went straight to the point: "I've seen the quantitative trading strategy you made, and today I mainly want to talk to you about some analysis of market fundamentals."

The quantitative trading model developed by Wang Xueqing is the most mainstream "quantitative factor strategy", which is to select stocks worth investing in by screening the price-earnings ratio, cash flow, market value and other data indicator factors of thousands of stocks in the market.

This quantitative strategy is very suitable for professional institutions that easily control tens or hundreds of billions of funds. On the other hand, the disadvantage is that the "factors" are prone to failure. For example, in the upcoming bull market next year, the reference value of data indicator factors such as price-to-earnings ratio and cash flow is extremely low.

The most basic data indicator factors in the market are often based on the rules summarized from historical market conditions. When these data indicator factors become invalid, we can only introduce personal subjective analysis and judgment of the fundamentals and future market conditions.

In short, purely rational mathematical models don’t work, so we have to use our irrational brains to add some passion and try some human-machine integration.

Xie Jingxing's greatest advantage happens to be his ability to analyze and judge future market conditions. He can even barely arrange and combine the stocks with the highest gains based on his memory of the bull market trends for the next two years, and summarize the data indicator factors with the highest similarity among them, and incorporate them into trading strategies.

Wang Xueqing had no doubts about Xie Jingxing's market analysis and the specific factors he mentioned, because he did not know how to quantify, and there were few institutions in the country that could understand quantitative trading.

The U.S. capital market is mature and there are fewer retail traders. The public is accustomed to entrusting their money to professional institutions, and professional institutions have a consensus on the perception of value.

It's like there is a piece of wood. The top players in the market all think that this piece of wood is worth 500 million yuan, so it is worth 500 million yuan. When the price of wood is lower than 500 million yuan, everyone wants to buy it. On the contrary, when the price is higher than 500 million yuan, everyone wants to sell it. The rules of the game are in a relatively rational state.

A-shares are completely different. Too many retail investors have led to extreme market emotions. If the price of a piece of wood worth 500 million yuan drops to 400 million yuan, then it is worthless. Everyone wants to sell it but no one dares to buy it.

If this piece of wood worth 500 million yuan increases in price to 600 million yuan, it will be a priceless treasure and everyone will frantically raise the price to buy it.

The big players in the international quantitative trading field walked into the A-share market with their heads held high to build positions, but ended up leaving with nothing but tears. The reason for this is not only that there are too many bandit leaders in the A-share market, but also that the majority of retail investors do not play by the rules.

Wang Xueqing was very familiar with Xie Jingxing's talk about quantitative trading. The elites who returned to China after the financial crisis were all like this. They talked about advanced investment strategies and looked down on their domestic counterparts. They had to be beaten to the ground by the domestic market several times before they realized that locals have their own way of playing...

He took everything Xie Jingxing said seriously. After all, he was a small boss and the investment strategy was independently formulated by him. With a return of 25%+ in just over a month, now was the time to be full of confidence.

Wang Xueqing sipped black wolfberry and ginseng water while typing on the keyboard, determined to play the role of a tool to execute the strategy. After all, when the headhunter recruited him to join Xiyou, it was made clear that this was the job, and the loss of money could not be blamed on him.

"Quantitative trading will inevitably become the mainstream trading method in the market in the future. Our cooperation with Jiaotong University is very important. At the same time, we will set up a quantitative trading team. If you are interested in quantitative trading, you can learn more about it."

After Xie Jingxing finished talking about the market fundamentals forecast analysis and the specific needs for quantitative trading strategies, he finally gave a kind reminder.

Wang Xueqing's age means that the investment logic in his mind is basically fixed. It is enough for him to be an excellent execution tool for the time being, but only temporarily.

In the future, Xiyou's secondary market business will be based on two trading strategies: quantitative and subjective. The former requires long-term and persistent technical polishing and accumulation of research on each effective factor, and the professional capabilities of the trading team members are top-notch in the industry.

There is no need to say much about the latter. Xie Jingxing is confident that he will be one of the best investment managers in the world for at least the next ten years.

In this situation, if Old Wang, who is now middle-aged and has no other choice, cannot exercise his subjective initiative, there will be no place for him in Xiyou in a year.

"Mr. Xie, these quantitative factors you proposed really broadened my horizons. Uh... this is very novel. I will study it carefully later."

Wang Xueqing boasted in a strange way: "I used to hear that there is a famous fund manager abroad who likes to judge the macroeconomic situation by looking at the men's underwear consumption index. I always thought it was a joke, but now I believe it. Foreign investment concepts are indeed far ahead."

"In addition to the quantitative factor model, the high-frequency trading model should also be promoted as soon as possible. You should communicate more with the Jiaotong University Research Institute when you have time." Xie Jingxing automatically ignored his words.

Compared with the 'quantitative trading factor' model, the high-frequency trading model is a completely opposite extreme, which can be described in four words - speed wins.

Relying on trading models to quickly buy and sell, Wall Street's high-frequency trading model can enable a capital account to issue thousands of buy and sell trading instructions per second, and complete at least hundreds of thousands of trading operations every day.

The advantage is that there is basically no loss, and the price difference earned from the extremely small market fluctuation range accumulates over time.

The disadvantages are equally obvious. The capital capacity is very small. If any institution dares to use billions of funds to play like this, the fund manager does not even need to go to court. The army can directly come to the door to execute the death penalty by cannon fire.

Taihe Capital's office in Singapore has high-frequency trading business in the securities market, but it is far from the level of its counterparts on Wall Street. Now that it is cooperating with the Institute of Finance of Jiaotong University, it is natural to use resources to speed up the progress of model development.

Xie Jingxing and Wang Xueqing talked for a long time and finally reached an agreement, then stood up and said goodbye.

"Boss, are you responsible for the technical interviews for our recruitment of quantitative trading team employees?" Wang Xueqing asked, suddenly thinking of something.

Xie Jingxing sighed: "I'll take responsibility. You can talk to Assistant Song later. If you need any internal referrals, please contact me directly."

"Okay, thank you boss." Wang Xueqing nodded repeatedly.

"Okay, you go ahead and get busy."

Xie Jingxing left in a hurry without giving Lao Wang a chance to speak. He was in a hurry to go to the Jiaotong University Financial Research Institute in the afternoon to sign a contract and accept an interview. The Jiaotong University Financial Research Institute has national-level projects, and it has to conduct a "background investigation" on the cooperating companies and obtain approval.

Xie Jingxing was in agony. He had to climb into Zhou Fenglan and Yu Tong's bed, so he must have gone through hundreds of national tests...

　Sorry, that’s all for today.

I have written 18 words so far this month, an average of 4 words a day, which may not be a big deal for other authors. But readers who have followed my previous book and are familiar with me should know that I can't even write K words a day, so it's a good thing to update about words a month.

So the update speed is a bit limited now. The skin on the five fingertips of my right hand are already worn out and calloused, and I have tendonitis, and I am shaking like I have Parkinson's disease.

At this point, I predict that some readers will comment, are you trying to abort your sexual desire and are you looking for an excuse in advance?

No, I'm just explaining the reasons for the unstable updates in the last few days at the end of the month. I will still try to stick to 6K. Once I get used to this intensity and rhythm, it should be fine.

　
(End of this chapter)