The Son of Finance of the Great Age

  Chapter 667

  Compared to a fund management scale of 20 to 30 billion U.S. dollars, a loss of 1.5 billion U.S. dollars is nothing, at most a 5% loss. But for this year's Quantum Fund, this number is very important.

  Quantum Fund’s performance in the first half of the year was 4.3%. This return rate looks poor, but compared with most hedge funds and the S&P 500 Index, this is already a very impressive result. Due to the economic downturn, the deterioration of the environment, the sudden increase of systemic risks, and the frequent outbreak of black swan events, the entire market is in an extremely unstable state. In this case, the hedge fund group with a bolder and more aggressive investment style has suffered a lot.

  Countless hedge funds lost money, and many hedge funds were directly liquidated and disappeared completely. Measuring the performance of hedge funds is no longer the traditional alpha value, but who has fallen less than the S&P 500 index. Under such circumstances, Quantum Fund's ability to rise against the market has to be said to be a great achievement.

   But Soros was very dissatisfied, very dissatisfied. Because this huge loss almost vomited out all the profits he got from shorting the other three investment banks. Coupled with the poor performance of other managers, Quantum Fund has reached a critical point, that is, whether there will be a breakthrough in the performance of the whole year of 2008. Whether the final performance is positive or negative depends on the performance in the next three months.

  The pressure on performance forced Soros to make a more extreme decision, betting heavily on the European market. As a result, he soon suffered another huge loss, which made Quantum Fund's 2008 a complete failure.

  These are all things for later, let’s not talk about it for now. Besides, the market situation is so extreme, those who have huge losses will naturally have huge profits. In fact, there are quite a few similar hedge funds. Although John Paulson did not replicate last year's myth this year, the news that he made a huge $1 billion in the bankruptcy of Raymond Brothers still spread through various channels.

But these are all speculations from the outside world. The actual situation is that the Paulson Fund participated in Soros' short-selling plan and earned more than 1 billion US dollars in profits from the three investment banks of Bear Stearns, Lehman Brothers and Merrill Lynch. Not just the Raymonds.

  The outside world does not know the real situation inside the Paulson Fund, so it is rumored that the Paulson Fund has once again made another $1 billion. But all this is exactly the effect Paulson wants, because such performance can allow him to attract more funds.

  On Monday, Paulson did not appear in his Manhattan office as usual, but went to Hong Kong on the other side of the world. Here, he wants to visit his Bole—Zhongshi.

   "It's really bustling here!" Standing on the highest floor of the international financial center, Paulson looked down at the night view of the entire Hong Kong Island, as well as Kowloon Island, which is only one port away, and sighed sincerely.

  As the most prosperous area in Hong Kong, Victoria Harbor has always been a great place to watch the night scene. Some good people once listed this place as the top three night scenes in the world, which is enough to show its prosperity.

  The tide fluctuates, reflecting the bright lights; the heavy traffic shows the crowds. Standing at the top of Hong Kong's landmark buildings, John Paulson stared blankly for a long time, his expression flickering with the neon lights, and he sighed after a long while.

   "Is there something for you to come here this time?" Zhong Shi felt something in his heart, and asked lightly, "How is it, what's happened to Soros recently?"

"I don't know about that." John Paulson's face tightened, and he replied respectfully, "I followed your orders a long time ago and withdrew after Raymond Brothers went bankrupt. But according to the previous strategy, I believe Soros Still shorting Stanley and Goodman. I guess Soros is struggling right now!"

   After he finished speaking, he took a deep look at Zhong Shi, and the two smiled knowingly at the same time.

  Yes, Paulson is the biggest internal response of Zhongshi to Soros. It is also a coincidence that after Paulson's great success, Soros took the initiative to find him. What Soros never thought of was that Paulson's fortune was inextricably linked with Zhongshi, and the personal relationship between the two reached an extremely close level.

   This time, Soros was completely in the light, and Zhongshi was hidden in the dark. And this secret, I'm afraid Soros will never know.

   "That's right!" Zhong Shi's eyes flashed a hint of sternness and sternness, "If he still chooses to fight against me, I don't mind continuing to dig holes for him."

  The grievances in the financial circle are not like other grievances that will be fought to the death. But liquidation like the Everlasting Flower Fund is basically the same as killing the fund manager. Of course, a long-established figure like Soros is basically unbeatable, unless Zhongshi can control the global market, but obviously this is not realistic.

   Therefore, Zhongshi can only set up trips and dig holes for Soros, but cannot "beat him to death".

   Paulson tactfully did not say much. He knew that with his current self, he was far from being able to compare with these two. He was still a little fortunate in his heart that he wisely chose Zhongshi's side in this secret battle of fund bosses, otherwise Soros' end might be his end. Soros can afford to lose so much money, but Paulson may not be able to afford it.

  Paulson would never have imagined that two years later, he would once again burst out with such amazing energy that the whole world would be amazed. Since then, Wall Street has worshiped him, and he has completely replaced Soros, becoming the veritable "God of Making Money" on Wall Street.

"Tell me, what is the purpose of coming to me this time?" After a little demonstration, Zhong Shi didn't continue to entangle on this topic, and asked John Paulson again, "Let me guess , have you encountered confusion recently?"

"That's true!" Paulson said with a frown. "According to my opinion, after the US government launched the bailout policy, the turmoil in the entire market may stop here. Although there will be companies that will get into trouble one after another. , but the overall economic situation has stabilized. But this time the aftermath of the subprime mortgage crisis will not just subside. According to my judgment, at least in the next three to five years, the global market economy will be in trouble. There is no hope for a revival in the short term."

"This means that, including emerging markets, the economic growth in recent years will be unsatisfactory. In order to stimulate rapid economic growth, governments of various countries will reduce the cost of funds and inject a large amount of liquidity into the market. Stimulate the economy. What's more, it will lower long-term interest rates to create a liquidity trap, allowing funds to flow to the production sector."

"The scale of QE will be further expanded, and inflation will not be the primary condition for governments to consider. In this case, the depreciation rate of banknotes will be beyond imagination. Although there will be no hyperinflation, the psychology of governments about inflation After all, the lower limit will be further expanded. Accompanied by inflation is rising prices and shrinking wealth. This is not only happening in China, but also in the United States. The dollar is very likely to improve imports and exports through depreciation and stimulate the export of local goods as soon as possible.”

"Once the U.S. dollar as an international currency depreciates, the effect will be that other major currencies will also depreciate. There will be no currency wars, but rising prices in various countries will be inevitable, at least in major economies. In economic downturn, demand will shrink , In the case of rising prices, there are not many investment methods that can preserve or even increase value.”

  Zhong Shi listened quietly, carefully analyzing the logic of this passage. When he heard the last, his eyes lit up, "Do you want to tell me that gold will be your next investment priority?"

   "That's right, it's gold!" Paulson responded excitedly, "That's true, Mr. Zhong, you are really amazing."

   "No, you are the one who is amazing!"

Zhong Shi looked at Paulson and said calmly, but his heart was full of turmoil. This guy is so powerful, he is simply a genius in macroeconomics. "Historically, the trend of gold has always shown a negative correlation with the dollar. As a former currency and precious metal, the value of gold is needless to say. Although funds tend to move to Europe as a safe haven, how can Europe, the global economic union, avoid this crisis. And for some For safe countries, the influx of too much capital raises the value of their currency, affects exports, and may force them to defend their currency. In the end, the cost of exchange is greater than the cost of hedging, and the gain outweighs the loss.”

"In this case, precious metals that can preserve value have become the first choice for these funds. It is foreseeable that in two or three years, the price of gold will inevitably rise steadily. This is indeed a predictable and very good investment method. Not only gold, but also precious metals such as silver and platinum will rise in varying degrees.”

   Paulson did not speak, and his heart was also not at peace. At the beginning, he only made a rough analysis of the macroeconomics, but he did not expect Zhong Shi to grasp the key points at once, and continued to develop along with his words. Although it is not quite consistent with what he thinks in his heart, it is basically the same.

Thinking of this, Paulson took the opportunity to express his reason for coming, "It's like this, Mr. Zhong. Now the commodity market has seen a gradual decline in prices, and I have also taken some short positions. But now there is a problem, because The decline in correlation and the sharp drop in oil prices have promoted the rise of gold to a certain extent. But the current situation is that the value preservation effect of precious metals is far from being reflected, and for funds, wait and see or even short in the market It is the main investment method. Most importantly, the price of gold is currently under great pressure due to the decline in demand and the year-on-year increase in gold output, which also means that in the future, that is, in various countries The true value of gold will not be reflected until the money is issued sparingly.”

"I think I understand what you mean!" Zhong Shi smiled and waved his hand, "You are worried that price fluctuations will affect my judgment, and then withdraw funds, right? You can rest assured that your point of view is successful today convinced me. I think that in the next few years, if there are no major problems on my side, I will not withdraw my investment in the Paulson Fund. Don't worry about this, I chose you at the beginning , I believe that you will bring me considerable profits. Now it proves that I have not misunderstood the person, and I believe you will not let me down."

   "I will not let you down!"

   In front of Zhongshi, Paulson was as excited as a schoolboy. With Zhong Shi's guarantee, he can flex his muscles. "By the way, I recently realized that there is a focus in the market, which is in Europe." He seemed to think of something suddenly, and said hastily.

   "Europe?" Zhong Shi tilted his head and thought for a while, then said abruptly, "You're not talking about Porsche's acquisition of Volkswagen, are you?"

   "It is indeed this!" Paulson was startled, and then came to his senses, forced a smile, "I'm sorry, Mr. Zhong, I was too rude. I didn't expect that Mr. Zhong had already paid attention to the Porsche acquisition case."

Zhong Shi chuckled and said, "Who wouldn't pay attention to such a big case. But John, the Paulson Fund should not get involved in this transaction. I won't explain it now, but you will soon understand the whole thing." What happened."

   "What the **** is going on here?"

   Until Paulson got on the plane back to New York, he didn't know what was going on. However, he listened to Zhong Shi's advice honestly and did not invest a penny in the Porsche acquisition.

   It turns out that you can never be wrong to listen to Zhongshi.

   Thanks to book friend fanren_99 for the reward! At the same time, I am very happy to thank my friend Hanjiang Hong for his support for this book!

  (end of this chapter)