2003: Starting with Foreign Trade

Chapter 596 Old Mi got his fill of harvesting leeks!

“从9月份第一个交易日开始，到我们正式结束效果的10月10日，30个交易日里美股大三指数的平均跌幅在30%左右。”

"So far, the US stock market has fallen by nearly 40 points this year, which is the second largest drop in US stock market history. The unemployment rate in the United States has also soared to 6.8%."

Hong Kong, inside a hotel.

Cheng Linfeng reported to Tan Jincheng bit by bit on the work progress of the past month and the dynamics of the US stock market.

Crude oil prices hit a 20-month low, retail prices fell 8%, and car sales dropped 30%, which is worse than expected. Old Obama has really inherited a mess.

This guy has it tough too.

Cheng Linfeng continued, "Among the stocks we shorted, besides Lehman Brothers, the one that made the most money was Blackstone, which fell by 90%. Also, Burshire Hathaway's stock price more than halved, so we made a lot of money from that as well."

There are many ways to short the US stock market, including directly shorting stocks, shorting ETFs and indices, or using futures and options. In this kind of market crash, Wall Street also needs to short sell to hedge against risks.

Through various short-selling methods, this wave has really made a lot of money, which only took about 30 trading days.

Because they acted early, the 20 billion yuan in funds could be fully absorbed. Even though the index fell sharply in the later stages, there were actually not many chips left. This thing is the same everywhere; the wealthy get to eat first.

If the brokerage firm refuses to lend you money, what can you do?

"How much did you make this time?"

The state of the US economy is something Obama and his team need to worry about. Businesses will be affected to some extent, but not significantly. Currently, Flashpoint and Orange Technology's main businesses are still primarily focused on the domestic market.

What he cares about most is how much money he makes.

"Haha, I made a lot of money this time. I really didn't expect to make such a profit during this year's bear market."

When it comes to his earnings, Cheng Linfeng beamed with joy. He not only receives a senior executive's salary at ByteDance, but he is also a shareholder and can participate in profit sharing at the end of the year.

In addition, their entire team will also receive a significant share of the profits from this venture.

In this round of short selling, Tan Jincheng gave the entire team a percentage of the profit, with Cheng Linfeng deciding how to distribute it. With a principal of 20 billion yuan plus leverage, even a percentage of profit is quite high.

During the bear market that lasted for more than half a year, the company's securities department had almost nothing to do. Most of the staff were only receiving basic salaries, and their income was greatly affected, but no one dared to complain.

Compared to the constant bankruptcies of private equity firms and the frequent layoffs at securities companies, ByteDance's base salary is already quite high, at least enough to ensure a decent standard of living.

Tan Jincheng laughed and said, "Stop keeping me in suspense, tell me how much you made. You guys are all grinning from ear to ear, so it must have been pretty good."

"Hahaha, that's right! Everyone who came this time made a fortune. Thank you, boss, for giving us this opportunity."

"Then you have to make up for the wedding gift I gave to President Gu. You can't forget that."

The atmosphere in the trading room was very relaxed. The formal trading had ended, and all that was left was to figure out how to get the money back. Some team members had already gone out shopping, preparing to spend some money.

I've been here for so long, and I haven't even left the house yet.

"That's for sure. As for the profits, you can decide for yourself, boss."

Cheng Linfeng stopped dawdling and pushed the computer over. The boss was just passing through Hong Kong and had to go to Xiao Rizi's place, so he wouldn't be staying for too long.

"The leverage ratio and the amount of capital invested are different for each product, but on average, we keep it within the normal leverage range as the boss intended, which is about 3.2 times."

Short selling has relatively high leverage, usually around 2x, and 10x leverage is not uncommon. If you play it well, you can really get rich overnight, but if you play it poorly, many people end up on the roof.

Tan Jincheng has reason to believe that while some people certainly made a fortune during this subprime crisis, a considerable number of investors also ended up on the rooftop.

"You made 39.68 billion yuan?" Gu Qingqing, sitting next to Tan Jincheng, asked in surprise.

Cheng Linfeng smiled and nodded. Based on the principal of 20 billion, the actual return in just over a month was about double. ByteDance's advertising platform really does operate for three years without opening, but when it does, it feeds you for three years.

For two consecutive years, unlike other companies that are only busy once or twice a year, the revenue can be off the charts.

"Is your commission included in this?"

Gu Qingqing was very surprised, but Tan Jincheng was not so surprised. He had already let them use leverage, and the index had dropped by 30 points. If the actual return on the principal was still not doubled, then their level was too poor.

In a market where one thought can lead to heaven or hell, an investment of such a large amount of capital should at least yield a return of double to be considered acceptable.

"Yes, besides our commission, I've already deducted all the remaining fees, interest, etc., so this is practically pure profit." Cheng Linfeng nodded.

One investment has brought ByteDance's cash flow to over 50 billion yuan, placing it in the upper-middle range of domestic investment institutions. Not bad at all.

Now I don't have to worry about Weilai Auto's funding problems anymore. Great! I, the gullible investor from my past life, have finally turned my life around. Damn, maybe in the future someone will even compare me to Lei Jun (CEO of Xiaomi), hahaha.

In high spirits, Boss Tan waved his hand and said, "Then take out 5000 million yuan. In addition to your team, the whole company will also participate in the bonus distribution. After you go back, President Cheng, make up some detailed rules. When I come back from Xiao Rizi's place, I will sign and distribute the bonuses!"

With a wave of his hand, he issued an extra 1000 million yuan, and a cheer of "Long live the boss!" erupted in the trading room.

Since the clearance sale last year, the remaining employees have suffered for a whole year, and now they can finally enjoy a real treat.

"Haha, it has to be the boss! We only work once a year and we can earn what other companies earn in several years. The boss is brilliant."

"That's right, boss, you have to keep this pace. We're still thinking about slacking off for half a year and then working for a month to achieve financial freedom."

The more money you give, the more saccharine the flattery can be.

"Stop talking nonsense. You'll be busy when you get back. The country has started to loosen monetary policy, and the A-shares market is waiting for you to buy at the bottom."

"Besides, there's no such thing as a free lunch. You'd be lucky to have this kind of opportunity once in your life, let alone every year."

A bull market is a once-in-a-lifetime opportunity. As long as you don't get carried away, even a novice investor can make a good living. Just like in 2015, according to Tan Jincheng's past life, quite a few people actually made money in the 2015 bull market.

However, it's unknown how much will be left in the end; most of it will end up tied up in houses.

"Actually, I wanted to short Orange Technology, but I decided against it. On the one hand, I was afraid of being penalized for related-party transactions, and on the other hand, I didn't make as much money as other stocks."

After seeing his team members off, Cheng Linfeng chatted with Tan Jincheng and Gu Qingqing about the details of the past month.

Tan Jincheng specially approved a sum of money for the team members to use for shopping.

“Indeed, this time they ripped off more than 500 million US dollars from the US, which is almost equivalent to several Orange Technology’s fundraising. There’s no need for them to short sell and leave themselves with leverage,” Gu Qingqing echoed.

She was the most opposed to shorting Orange Technology, and she often mentioned it to Tan Jincheng, fearing that he would not be able to resist the temptation of profit.

"That's 5.66 million US dollars. You've gotten a good share. That's enough. Go back and get some rest. You've worked hard these past few days."

The prize money from ByteDance's advertising platform now exceeds 60 billion yuan in cash, including the principal. Of this, 15 billion yuan belongs to a family trust, and it seems unnecessary to bring it all back to China.

After considering for a moment, Tan Jincheng said to Tan Chenglinfeng, "Leave a few people behind and set up another investment company in Hong Kong. Keep 10 billion each of the company's capital and trust funds in this company."

Flash Group's controlling shareholder is a foreign company, as is ByteDance's engine. However, for companies with pure cash flow, having too much cash on hand is not always a good thing, as it can easily attract the covetous eyes of certain individuals.

This can also attract the attention of some fraudulent companies. Scams are rampant in the business world. Once they know that your company is all cash, scammers will try every means to trap you.

Tan Jincheng plans to keep 20 billion in cash in Hong Kong as a way to secure his future.

In addition, having an investment institution registered in Hong Kong would be much more convenient for future overseas investments, as Hong Kong's financial status will remain unshakable in China for at least the next five or six years.

Cheng Linfeng nodded, understanding his boss's behavior.

"I know someone here. I've already spoken to them. You can ask them for help if you need any."

Tan Jincheng was referring to Li Jiamin, the brokerage manager who initially helped Tan Jincheng open an account. Now, he is a completely different person. His Tencent stock rose from HK$5 to a high of HK$72, until it fell to around HK$60 during the subprime mortgage crisis this year, which scared him into selling all his shares.

A 12-fold return! There were even times when I added to my position, and I made a fortune.

He also benefited from Tan Jincheng's success. At the beginning of this month, Li Jiamin officially resigned and plans to start his own small business to support himself in his old age. He even called to congratulate Tan Jincheng on his wedding at the beginning of the month.

He originally planned to go north to thank Tan Jincheng in person, but Tan Jincheng said he would be passing through Hong Kong on the 15th, so he waited for him in Hong Kong.

Tan Jincheng handed his business card to Cheng Linfeng, asking Cheng Linfeng to contact him so that it would be much easier to establish an investment company in Hong Kong with the help of a local industry insider.

As for meeting, Tan Jincheng doesn't have time; he's flying to Nagoya tonight.

Leaders from Xiangcheng and Zhejiang Province were also with him; there was no time for him to meet someone who wasn't particularly important.

"Okay, I'll contact him. What's the company's name?"

The company names registered in Hong Kong are quite unusual. For example, state-owned enterprises, central enterprises, and some well-known companies can register as long as the name of the company you register in Hong Kong is not exactly the same as that of their branch offices.

This bug is quite large. Many scammers take advantage of it by registering a shell company with a similar name in Hong Kong, then returning to China to set up a shell company to scam investors and make money out of thin air.

In the days when information was scarce, a branch or office with a name similar to that of a state-owned enterprise or central enterprise could really fool people.

"We can't use the same name as the existing company, lest someone take advantage of the situation," Tan Jincheng thought for a moment and said, "Let's call it Jinqing Investment Co., Ltd."

(End of this chapter)