We are all reborn, who wants to be the richest man?

"It's too hot."

This is Hong Kong Island, not Tokyo. The current stock market madness is not a good thing.

"Yes, it started out as just the technology sector, but now it's driving the entire market to follow suit."

Robert frowned and looked a little worried, "According to the current situation, we will have to reap the benefits of this wave of profits even if we don't want to."

It has been ten days since Far East Chip announced its split, and the Hang Seng Index has risen by 21.4%.

This is not a major policy adjustment, it is just a split of Far East Chip. Such an increase is really exaggerated.

"But this is understandable. The importance of Far Eastern companies in Hong Kong stocks is self-evident, and they account for too large a proportion."

It is not an exaggeration to say that the current Hong Kong stocks are Far Eastern stocks.

There are 58 companies in the entire Hong Kong stock market with a market capitalization of more than HK$51 billion, of which are related to the Far East Group.

Either they are Far East-related companies, or they are companies that have developed relying on the Far East.

For example, many companies in the island country, although not invested in by the Far East Group, are indeed growing stronger by relying on the Far East Group's industries. The most typical ones are Seiko and Tokyo Precision.

The former is a manufacturer of bearings and precision machinery in the island country with a large market share in the field of automotive accessories. It was once a partner of Nissan and is now one of Audi's partners.

In 92, Island Seiko's subsidiary, Hong Kong Island Seiko, was listed on the Hong Kong stock market with a market value of over HK$ billion.

In fact, Hong Kong Seiko can be said to be Island Country Seiko, because Island Country Seiko has gathered all the unexpected businesses of the island country under this company.

The purpose of doing this is simple: financing.

Seiko is a listed company in the island country. The island country does not allow dual listing, so there is no way to list on the Hong Kong stock market.

But now the island country's stock market is sluggish, and Seiko cannot raise too much funds.

So this company tried a trick: if the island country's stock market is not doing well, then we will just let it go bad and let our subsidiary business be re-listed with a new shell.

The two hottest stock markets in the East and West are the U.S. and Hong Kong stock markets, and Seiko's largest client is the Audi Group, so it will definitely be listed on Hong Kong Island.

The same is true for Tokyo Precision. This island semiconductor giant with related businesses in semiconductor front-end manufacturing, wafer substrates, packaging manufacturing and testing also chose to split and reorganize and list in Hong Kong after the bubble crisis burst.

These two companies are just representatives, and there are many more examples like this.

The island nation's stock market is sluggish, and many companies with good business development have flocked to the Hong Kong stock market to save themselves.

In addition to island country companies, there is another region whose companies have also made a significant contribution to the Hong Kong stock market, and that is Taiwan’s companies.

The high manufacturing costs have caused many semiconductor companies in the United States to move abroad, with South Korea and Taiwan being the biggest beneficiaries.

Companies in South Korea and Taiwan have introduced semiconductor technology from the United States and taken advantage of the opportunity to rise.

Among them, South Korea is not so bad. Hynix is ​​the representative of the Far Eastern Group in South Korea, while the semiconductor companies under Samsung, Hyundai, Daewoo, and LG are still in the stage of spending money to buy technology and conduct independent research and development.

However, Taiwan's semiconductors are different. Although they are also at this stage, they are under tremendous financial pressure because there is no consortium behind them to provide them with financial support.

Therefore, Taiwan's semiconductor practitioners can only obtain funds through financing or listing, and Hong Kong stocks become the key.

In the East during this period, the best choice for semiconductor companies to go public was the Hong Kong stock market, so a large number of semiconductor manufacturers in Taiwan were listed on the Hong Kong stock market and their development was quite good.

Especially in the low-end market, relying on price advantages, Taiwan has also produced several large companies, which has also contributed to the current prosperity of Hong Kong stocks.

However, Luo Nianzhong did not consider these questions. “Have you discovered that there are external forces behind this?”

"Yes, but they are just adding fuel to the fire. The source does not come from them, but from the people."

The split of Far East Chip means that more Far East companies listed on the Hong Kong stock market will also be split?

Over the years, Far East has had more than 100 companies of all sizes listed on the Hong Kong Island, and more than 20 of these companies have a market capitalization of more than HK$100 billion, not counting those that have invested in companies such as Cheung Kong Holdings and China Electric Power.

For these companies with a scale of hundreds of billions of Hong Kong dollars, one share costs at least 30,000 to 50,000 Hong Kong dollars.

For the current middle class in Hong Kong Island, it is not difficult to invest hundreds of thousands of dollars in the stock market, but things cannot be viewed that way.

You can't just take out HK$100,000 to buy one share, right? Do you understand the concept of diversified investment?

Therefore, a very interesting phenomenon has emerged in the Hong Kong stock market in recent years. Everyone knows that buying stocks of Far Eastern companies will earn money, but their liquidity is poor.

On the one hand, although many companies do not have high first-hand stock prices like Far East Chip and Honor Computer, they are not cheap either.

On the other hand, the people who hold these stocks are wealthy individuals and institutions, and these people have a longer-term vision.

It is also for this reason that a large number of middle-class Hong Kong citizens have begun to invest in small companies with development prospects. The Hong Kong citizens have made an indelible contribution to the financial development of Taiwan's semiconductor listed companies.

The situation is different now. It is reported that these large companies in the Far East Group will gradually split their stocks. This is the reason why the Hong Kong stock market has been crazy recently.

"What is the current P/E ratio of listed companies in Hong Kong?"

"About 28 times."

28 times, may not seem high, but it is actually very high.

I remember that during the Internet bubble, Cisco's price-to-earnings ratio reached 132 times, and many Internet technology companies had price-to-earnings ratios of around times.

But no one noticed that when the Nasdaq index reached its peak, its price-to-earnings ratio was only more than 40 times.

The same is true for Hong Kong stocks now. The price-to-earnings ratio of 28 times relies on the pull of the big truck in front. The stability of the middle layer drives the following trucks.

If we single out the top 10% of companies in Hong Kong stock market capitalization, it is possible that their price-to-earnings ratio could exceed times.

If the situation continues to develop uncontrollably and the share prices of leading companies collapse, Hong Kong stocks will be the first to experience the disaster that happened on Nasdaq.

There is no need to be afraid of the stock price collapse of leading companies, because their price-to-earnings ratio is indeed too high. The key issue is that they will drive up reasonable stock prices, and those companies with low price-to-earnings ratios that are undervalued will also collapse, which will eventually become a vicious cycle.

This is why Robert said that if the current trend continues, the leeks in Hong Kong Island will be harvested even if they don’t want to.

The Internet bubble has initially formed. Although there are few listed Internet companies in Hong Kong, only about a quarter of that in the United States, there are many semiconductor companies and even more representative companies with high market capitalization.

The base is large, and every 1% fluctuation in market value is a huge fortune.

Internet bubble? Ha, that was created by big financial giants. Do you think they will lose money?

This is just like doing business. What should you do after the crazy investment creates a bubble?

Of course, you should change to the small one. The big one is enough to make back the investment. It can’t be too noticeable. The small one is the one waving the sickle.

This is a default harvest war, it just depends on whose sickle is faster.

Originally, Luo Nianzhong thought that the price-to-earnings ratios of companies in Hong Kong were not that exaggerated, so it would be convenient for him to cover the losses.

Now it seems that it is basically impossible.

“Is the Fed going to cut interest rates again?”

"Yes, another 25 basis point cut is expected."

"Ugh".

Luo Qi sighed helplessly. The stock market was overheated, and normally interest rates should be raised, but this institution had obviously become the executioner of capital.

Many people don’t understand what the Federal Reserve is cutting interest rates for, but it is actually the federal funds rate.

Don’t be fooled by all the various research reports issued by the Federal Reserve, which study banks, housing, and savings rates. They are useless.

For the Federal Reserve, there are two ultimate research goals: one is prices and the other is employment.

That is, stable prices and full employment.

Lowering interest rates leads to higher inflation and lower unemployment, while raising them does the opposite.

This situation is still good. Generally speaking, these two are opposite.

Lowering interest rates will stimulate prices and employment, leading to higher inflation and lower unemployment.

Raising interest rates has suppressed inflation, but the unemployment rate has risen again.

So if prices and unemployment are like a seesaw, one high and one low, it will be easy for the Federal Reserve to control them.

But the problem is that they are both high at the same time, because if you push down one side, the other will become more and more serious, and this is economic stagflation.

The United States is now embracing the Internet boom as global capital flows in, and this is a time of inflation.

On the other hand, not only is employment low, there is even a shortage of talent.

At this time, interest rates should be raised to reduce inflation, but the other party is aiding and abetting it.

The problem is that if it does this, Hong Kong will have to follow suit, and now Hong Kong is also one of the gathering places for global capital, so it cannot raise interest rates.

If official channels don’t work, or even seem to be completely closed, then we have to think of other ways.

"Gold is a good thing."

"Are you planning to throw it?"

Robert, the financial master, instantly understood what Luo Nianzhong meant.

If the Federal Reserve cuts interest rates, theoretically U.S. stocks, U.S. bonds, global stock markets, other countries' currencies, gold prices, and oil prices will all rise because of the large outflow of U.S. dollars.

Of course, this assumes that nothing changes in the world and other variables remain unchanged, and this phenomenon will occur in the market.

But the world is changing all the time, so theories are just theories.

In most cases, these theories are broken, which means the opposite is true.

But there is one thing that is different: gold.

In history, when the Federal Reserve cut interest rates, gold broke the law and did not rise only once, and that was the major rate cut from 89 to 92.

But that was because it coincided with the Gulf War and the bursting of the island nation bubble. Everyone went to harvest, so who would buy gold?

But it is different now. The Internet is overheated. Where there is excitement there is naturally fear, and gold has become an investment target.

"Sell first and buy later, it's nice to make some quick money."

Luo Nianzhong's words startled Robert. After he reacted, he said, "Are you saying that the Federal Reserve will raise interest rates next time?"

Gold is now strong because of the interest rate cut. As long as interest is generated, gold will inevitably fall.

"That's right, this way our funds won't enter the stock market."

Far East holds a huge cash flow, and all this money is used to make money. Entering the gold market, harvesting a wave in the short term, can also suppress the popularity of Hong Kong stocks. Don't forget that people follow the crowd.

In Hong Kong Island, there are indeed many followers, and everyone is watching the direction of Far East Capital.

But there is a condition for this, which is to generate interest.

Luo Nianzhong is very sure about this.

Even though the Federal Reserve has cut interest rates again, a rate hike is imminent. No matter how much trouble the big capital in the United States makes, it knows that it cannot cause the domestic financial system to collapse.

Once the Internet bubble bursts, massive unemployment will necessitate a rate cut. If interest rates are not raised, will they fall to negative levels?

But now, because of the interest rate cut in the United States, a large number of workers have come to the United States, which means that once the economy collapses, there will be more people unemployed.

By that time, the number of applicants for a position will increase from ten to a hundred, and it will be strange if the people in the country can grab the jobs.

Introduce policies to control it? Forget it. They are all beautiful Chinese people. How can we control it?

The United States is truly free, so free that even at parties, the leaves are barely drizzling. This is a country where fake certificates are rampant to the extreme.

As the saying goes, there are policies from above and countermeasures from below. Don't your states have laws that minors cannot drink alcohol or check into hotels? If an operator is found to sell cigarettes, alcohol or check into hotels to minors, the maximum penalty is to cry behind bars.

Many Asians praised and praised such regulations.

But no one tells you that 30% of alcohol in the United States is bought by minors, and eight out of ten young couples in hotels are minors.

For just $15, a fake adult ID can be delivered to your home.

In the United States, almost half of the students have fake IDs. They use these fake IDs to buy cigarettes and alcohol, rent rooms for fun, and go to bars and adult clubs.

Can I check it? Yes, I can.

Is it easy to check?

But no one will check, as long as you are not stupid enough to show off in front of the police with a fake white ID when you are obviously black.

Even if you are a 16-year-old black man holding a fake ID with a photo of a 40-year-old black man, the police will at most take a closer look.

Of course, there are also people who are short of money, but two hundred dollars or two bottles of good whiskey can solve the problem.

This is an industry in the United States, an industry that mobilizes hundreds of billions of dollars a year.

Not to mention ordinary people, even among judicial personnel, how many do not have fake certificates?

As for those factory owners, I don’t care whether you use fake certificates or not. The economy is bad and what I want is low-cost labor.

So once a large number of people become unemployed, even if you have stipulated that jobs can only be provided to local nationals, I have only one suggestion, which is to hire whoever is cheaper.

The police come to your house? Who cares? They have warrants.

Fake ID? That's your business. I'm not a policeman, how do I know it's fake ID?

At worst, you can arrest these people, or I will drive them away, and then recruit another group of workers and the situation will still be the same.

The top leaders in the United States also know about this situation, so they dare not go too far, for example, they want to control the number of foreign population. Now it is big enough, it is time to stop.

But in Robert's view, capital is greedy, and the United States is now the only superpower. Will it really stop?

“Don’t forget Asia.”

Luo Nianzhong's reminder made Robert slap his forehead.

What did the big interest rate cuts from 89 to 92 do besides harvesting capital from the island countries? They caused a large outflow of US dollars and also made money.

What should we do with so much money? It is impossible to repatriate it.

It was necessary to find somewhere to invest, which led to the subsequent Asian financial crisis.

"It has reaped the rewards of Asia and once again stimulated the Internet industry. I can't believe that this bubble will stop. Human nature is greedy, and Wall Street is not a human being, but a synonym for greed."

The flesh on Robert's face was trembling, and he was obviously too excited.

Yes, how can we let this collapse continue? That means more funds will enter the market.

It is impossible for Europe. The capital of the island countries has already reaped a part of the profits and is still recovering. Now Southeast Asia, where money makes money, has become the target.

A large amount of capital, only a large amount of capital acquisition can allow the Nasdaq to continue to rise and achieve the goal of harvesting the world.

How big is the Internet bubble in this life? Luo Nianzhong doesn't know, but it is definitely more powerful than the one in the original life.

It's almost 96 years old. If nothing unexpected happens, the falling out with the Luo family will begin in 97 years.

Accumulating food and slowly becoming king?

I don’t know whether he is king or not, but large amounts of cash are king.