Perfection of Rebirth

Chapter 720 Let those people calm down first

"Ford is still twitching, so don't worry, let's go to the U.S. capital market and short-sell Ford's stock to add some confusion to them," Jiang Hui said.

If history has not changed, affected by the subprime mortgage crisis in the United States, the U.S. stock market will fall all the way from October 2007 to November 10. In just over a year, the Dow Jones Index has reached 2008 points (October 11, 14279) ), the lowest fell to around 2007 points (October 10, 11), a drop of 7800%.

For the majority of stockholders, this is a huge disaster, but for Jiang Hui, this is a historic opportunity. If you miss it, maybe you will never have such a good opportunity in your life.

You need to be afraid when others are greedy.When others are fearful, you need to be greedy.

When the financial crisis comes, everyone, including those old drivers in the investment world, is very afraid.

Of course, companies with high leverage or low competitiveness should indeed be afraid.

Greed is not a good word. It is very difficult to be greedy when others are fearful.

Because most people are afraid, there must be a reason.For example, the giants went bankrupt, even the president seemed to be in a hurry, major companies began to lay off employees, and the headlines reported in the media were "the end of the world", etc.

In this case, the Guanghui Group and a small number of psychological quality and powerful enterprises can maintain greed.

Don’t talk about shorting giants like Fannie Mae, Freddie Mac or Lehman Brothers that are destined to fall in the financial crisis, such as Google, Microsoft, Yahoo, etc. If you short them at this time, you can definitely make a lot of money Bowl full.

"Boss Jiang, are we going to attack again?" Guan Weidong said with bright eyes.

Since July this year, the Brilliance Investment and Finance Department has basically stopped investing in China's stock market. Although overseas oil futures have started to move again in September, the range is far less than before.

Now that Jiang Hui expressed his intention to make some big moves, Guan Weidong was naturally extremely excited.

"Since the U.S. stock market reached its peak in the middle of the month, it has been going down. I don't think this downward trend will change fundamentally in the next year," Jiang Hui said.

"So Mr. Jiang is going to short the US stock market?".

"Short the U.S. stock market? Big brother, you think too highly of me. Just the money we invested in Guanghui? Although it is close to 100 billion US dollars, it is far from shorting the U.S. stock market," Jiang Hui said with a smile .

As the largest stock market in the world, the U.S. stock market is definitely not something that can be easily leveraged by a certain person or company.

As far as 2007 is concerned, the market capitalization of the top ten companies in the United States reached 26825 billion US dollars, needless to say there are countless companies behind.

This understanding, where can someone easily move?
"What do you mean, Mr. Jiang?" Guan Weidong continued to ask.

"We select a group of stocks with inflated prices and short them," Jiang Hui said.

Short-selling refers to the expectation that the market will fall in the future, selling the borrowed stocks at the current price, buying them after the market falls, and then returning them to obtain profit from the price difference.

Its trading behavior is characterized by selling first and then buying.In fact, it is a bit like the credit transaction model in business.

This model can make a profit in the wave band of price decline, that is, first borrow goods at a high level to sell them, and then buy them back after they fall.

For example, if a certain stock is expected to fall in the future, you can borrow this stock when the current price is high (the actual transaction is to buy a bearish contract) and sell it, and then buy it when the stock price falls to a certain level, and return it to the seller at the current price. The difference is the profit.

Specifically, say you are an investor and you want to short 20 shares of Citibank that are currently priced at $100.

At this point, you go to a broker to lend you 100 shares of the stock and sell it immediately.

You now have $2000 in your account, even though the funds are frozen.

Because you don't own the stock, you still need to buy back the same number of shares in the end.

Just wait until the stock price drops, because short selling is a bet that the stock price will fall.

Let's say Citibank's stock price falls to $3 after a disastrous Q15 earnings report.

You buy 15 shares for $100 to repay the number of shares you borrowed, and you repay $1500 to the person who originally lent you the shares.

Because the short-selling profit is the difference between the selling price and the buying price of the investment product.In this example, you sold Citigroup stock for $2000 and bought it for $1500, making a profit of $500 by shorting Citibank stock.

Of course, if you use a certain amount of funds and leverage to borrow money from institutions to sell stocks short, the money needs to pay high interest, and other institutions mainly earn this interest.

So your actual profit will be a little less than $500.

"Short selling? This seems to be okay too. With the funds on hand, we can short sell stocks worth hundreds of billions of dollars," Guan Weidong said.

"You don't need to increase the leverage too much. The current stock market fluctuates violently. Although the general trend is down, there will definitely be a rebound in the middle. If the leverage is increased too high, the position will be liquidated during the rebound, which will be a tragedy. ", Jiang Hui said.

"Besides, even if we are lucky and don't encounter risks, we have nearly 100 billion U.S. dollars. With a high leverage ratio, we can leverage 2000 billion U.S. dollars. This movement is too big. Don't be labeled later. That would be dangerous," Jiang Hui continued.

No matter which country's government it is, it hopes to find the culprit when encountering a major accident. At this time, as long as it looks a bit like it, it will be focused on, and if it is not careful, it will be sacrificed to the flag and flogged.

Guanghui Group still has a long way to go in the future. Although high leverage can make more money in the financial crisis, Jiang Hui is still more interested in the latter than the future of the companies under the Guanghui Group.

"Then I will go short with five times leverage first?" Guan Weidong said a relatively conservative data.

"You can play like this for two months, and then adjust according to the situation," Jiang Hui said.

"Okay, Mr. Jiang, do you have any companies that you want us to short? Except for Ford Motors," Guan Weidong said.

"Financial stocks and Internet stocks are fine. In the past ten years, financial stocks have been the most popular and fastest-growing on Wall Street. Things are going to be reversed. This round will definitely fall badly.

As for Internet stocks, although the valuation of Internet stocks has become much more rational since the last Internet bubble burst, the Internet is inherently relatively inflated in terms of valuation, and it is basically inevitable to be wrongly killed in a crisis.In which crisis, there are not many unjust dead ghosts? ", Jiang Hui said.

"Okay, then I'll arrange it right away, let the Ford Motor group calm down first," Guan Weidong said.

……

(End of this chapter)