Reborn, back to a small county town to become a wealthy family

Chapter 832: Bold Attempt
"Chairman, I have already made the arrangements."

Zhao Pengcheng had also guessed that Luo Yang would be coming to monitor the market in the next few days, so he made preparations in advance: "Not only have we assigned some excellent traders, but we've also arranged for a dedicated analyst to monitor market information every day."

"Yes, I'll be here to keep an eye on the market starting tomorrow night."

Luo Yang nodded and said, "The relevant confidentiality system remains the same as last time, especially since we recently recruited a batch of new people, we need to be even more careful."

"Chairman, please rest assured on this point."

Zhao Pengcheng immediately replied, "Even newly hired employees are industry elites who are quite familiar with industry practices. Coupled with our security measures, we can definitely ensure that information is not leaked."

As the two were talking, Chu Jing came over with a cup of tea.

"Chairman, your tea."

"You heard my conversation with Mr. Zhao just now, right?"

Luo Yang tossed a cigarette to Zhao Pengcheng and said to Chu Jing, "Starting tomorrow, you should also adjust your schedule. Follow me to monitor the market tonight. Also, book a room at the Hilton Hotel, just like last time."

This hotel is very close to the group's headquarters, only a four or five-minute walk away.

Before Luo Yang bought the Hongqiao Villa, in order to prevent Jiang Fan from suddenly coming to Shanghai, he specially arranged for the board office to book a suite at the Hilton Hotel.

Later, I found that staying in a hotel was more convenient while monitoring the stock market, which led to the explanation I just gave.

Chu Jing immediately nodded in agreement.

"Chairman, are we going to sell everything this time?"

Seeing Chu Jing leave the office to make a phone call, Zhao Pengcheng immediately lowered his voice and asked, "Our fund still has four months left before the contract expires. It's such a waste to keep such a large sum of money in hand. Do you have any other plans?"

The fund was originally scheduled to end in December of this year, and based on his understanding of his boss, he would never waste so much time for no reason.

There must be a backup plan.

"Who said we were going to clear out all the stock?"

Luo Yang glanced at Zhao Pengcheng: "I just feel that the risks in the US crude oil futures market are relatively high, so I've decided to secure some of the profits first and settle accounts with China Merchants Bank. This way, I won't need to use leverage for further operations."

The first half of the sentence is relatively normal and conforms to the logic of knowing when to stop.

The implied meaning in the second half of the sentence is quite intriguing.

"Chairman, I also think it would be safer to stop using leveraged financing in the future."

Zhao Pengcheng immediately realized what was going on and reported to Luo Yang, "Moreover, China Merchants Bank called us recently to ask if we needed a larger amount of leverage. Obviously, they noticed our extreme trading tactics from the past few times. You must have made this decision from the perspective of capital security."

"Oh?"

Luo Yang looked at Zhao Pengcheng in surprise: "China Merchants Bank even called you?"

"Yes, and it wasn't just once."

Zhao Pengcheng frankly stated, "Once they asked us if we needed to increase our leverage limit, and the other time they invited me to a dinner party, but I declined both times."

"tsk"

Luo Yang clicked his tongue and said, "They're trying to test our resolve!"

"Testing our resolve?"

Zhao Pengcheng frowned and thought for a moment, then suddenly realized, "I almost fell for it!"

If Gray Rhino Capital is actively seeking to increase its leveraged financing, it indicates that the company will have significant moves in the US crude oil futures market.

Whether you're bearish or bullish on crude oil futures, the back-end system is monitored by China Merchants Bank.

Because of the impressive track record and 100% success rate of the previous operations, it's hard to guarantee that China Merchants Bank won't follow suit.

If the amount of money following the trend is small, it's fine. But if the amount of money entering the market is relatively large, it may attract the attention of big players. Although the gray rhino had already established a position below the 80 mark and was not at risk of being shaken out, these accounts are now being watched, and any further operations will be very risky.

Putting everything else aside, according to Luo Yang's plan, once the price of crude oil exceeds 100 US dollars per barrel, he intends to liquidate all the futures contracts he purchased with leverage.

I will use part of the principal to buy more crude oil futures until the price exceeds 110 US dollars per barrel, and then I will liquidate the position.

Once your accounts are targeted by those on Wall Street, you can forget about having any peace of mind.

It's not impossible that even a small butterfly effect could cause crude oil prices to stop at $100 per barrel this year.

"So these next few days will be our last chance to operate under their watchful eyes."

As Luo Yang tapped his fingers on the desk, he slowly said, "Although I haven't seen the actual trading data yet, I estimate that the price of US crude oil futures will experience a significant movement in the next few days. Crude oil prices are very likely to break through the $100/barrel mark in a short period of time, and then quickly pull back and fluctuate."

"That possibility is quite high!"

Zhao Pengcheng recalled the market information he had been monitoring over the past few days and, combined with Luo Yang's analysis, replied: "Take the day it climbed to the 97 mark, for example. It didn't hold and quickly pulled back. This wave must have caused many small and medium-sized institutions to suffer heavy losses. At the 100 mark, it is very likely that it will happen again."

"We'll try it out with 20-30% of our capital at that time."

Luo Yang smiled and said, "If my judgment is correct, we can make a small profit in the final stages."

"Chairman, this can't be considered a small profit."

Zhao Pengcheng immediately chimed in, "Our current capital pool is already quite large. Even if we only use 20-30% of our positions, it's still in the billions of US dollars. With tens of thousands of lots bought, even if the price of crude oil fluctuates by 1 US dollar, our unrealized profit will be tens of millions of US dollars. The small amount you mentioned can almost cover the returns of this fund product."

Indeed, this fund only raised a total of 9300 million US dollars.

Even with the highest return of 50%, it would only require less than 5000 million US dollars.

"Moreover, after this round of operations, we will no longer use leverage. As long as the market continues to fluctuate and adjust in the 90-100 yuan range, and eventually breaks through the 100 mark and continues to rise, we can reap a risk-free profit in the opposite direction."

Zhao Pengcheng exaggeratedly slapped his thigh and exclaimed, "Chairman, that was a brilliant move!"

How could a seasoned financial manager like him not see this?
But these words made Luo Yang very happy.

"This is just a concept; we'll need to assess the overall market situation before making a decision."

Luo Yang waved his hand and said with a smile, "I came here to talk to you about something else." As he spoke, Chu Jing pushed open the door and walked in.

It seems like the room reservation has been arranged.

"You might as well sit down and listen to what's going on."

Luo Yang waved to Chu Jing: "You'll need to coordinate with President Zhao on the follow-up of this matter."

Chu Jing immediately walked over and sat down next to Zhao Pengcheng.

"It is now basically certain that Gray Rhino Capital's first private equity fund product launched to the public has been a success, and the results are quite impressive."

Luo Yang started with a high-profile statement, and then continued: "Once the first fund product realizes its returns, this product will definitely become Gray Rhino Capital's star product, so organizing the sale of the second batch of products should not be a big problem. However, this time we will not make short-term products, and the scale of fundraising can be appropriately increased."

"Chairman, as long as our product is successfully redeemed by mid-December, it will definitely become a star product in the Shanghai investment and wealth management market."

After agreeing, Zhao Pengcheng immediately asked the practical question: "If we raise funds again, I believe it shouldn't be a problem to triple or even quintuple the investment. But what are your plans for the product's lifespan? How large is the fund? What is the annual rate of return?"

"The product cycle is between 3 and 5 years, and the funding scale is more than 5 million US dollars, the more the better."

Luo Yang expressed his thoughts: "As for the annual return on investment, it's roughly between 15% and 20%."

"so tall?"

Chu Jing, who was sitting to the side, suddenly exclaimed in surprise.

She was then met with the gazes of Luo Yang and Zhao Pengcheng, which startled her so much that she immediately covered her mouth.

"Is it very high?"

Luo Yang looked at Chu Jing with a smile: "Don't cover your mouth, tell me your thoughts, why do you think it's so high."

Sensing that this wasn't a joke, Chu Jing immediately began to organize his thoughts.

"Boss, you probably don't go to the bank counter very often."

When she first spoke, her voice was not loud and her tone was weak: "When depositors go to the bank to make deposits or withdrawals, bank staff will recommend wealth management products to them. These wealth management products have a minimum term of six months and a longer term of three to five years. The returns are also linked to the length of time. However, the highest annualized return that these wealth management products can offer is only 4% to 5%, and most of them do not guarantee a minimum return."

"What you're saying about investment products without a guaranteed return are high-risk products, right?"

"Yes, that's exactly what I meant."

Chu Jing nodded and said, "These kinds of financial products may result in losses, and some are even high-risk investments where you want others' interest while others want your principal."

Actually, she didn't need to explain in such detail; Luo Yang already knew about these kinds of financial products.

A few days ago, Fu Bin and Wei Chaoping wanted to launch two fund products through Gray Rhino Capital, with an annualized return of 10% to 12%.

However, the "gray rhino" actually doesn't get that much return because banks and regulators charge handling fees and intermediary fees. After cutting these, the remaining products are packaged and sold at bank counters. The returns on these wealth management product packages based on real estate company projects are only about 4% to 5%.

This type of product is relatively safe because real estate companies like Sante and Sunshine are relatively healthy, and the real estate market has been performing well in the past two years, so the project's returns are guaranteed.

The most dangerous type is the asset package made with bridge financing.

When the real estate market is not doing well, some small and medium-sized real estate companies' projects fall into a cash flow shortage. In order to avoid bankruptcy, they will seek funds in the market with interest rates as high as 15% to 18% or even higher.

The company lending the funds charges a substantial interest rate, the guarantor charges a guarantee deposit, the bank and regulatory agency charge a handling fee, and the intermediary charges a brokerage fee.
With such high interest rates, after deducting various costs, the remaining amount is packaged into wealth management products and sold to the public.

The project is very risky. If the company goes bankrupt or the project fails, the investment product will not be able to recover the principal and interest.

The company that lends the funds can acquire the land for the project, but the customers who purchase this financial product will suffer huge losses and may not even be able to recover their principal.

"Leaving aside wealth management products sold at bank counters, even high-quality wealth management products recommended internally by banks generally do not yield more than 10% annualized returns."

As Chu Jing spoke, his words became more fluent: "As for the publicly offered fund products in Shanghai, let's not even talk about the returns of public funds. Private funds are said to have an annualized return of over 20% to be considered high. However, according to the latest statistics, there are only 90 private funds with performance updates over the past ten years. The average return of these 90 products over the past ten years is 177.36%, which translates to an average annualized return of about 9.81%. In other words, nearly 80% of private funds do not meet this standard, and more than half of the private fund products have an annualized return of less than 10%."

Luo Yang saw a radiance on his secretary's face.

"It turns out that Director Chu also pays close attention to the collection of information on the financial market."

Zhao Pengcheng first gave Chu Jing a small compliment, then looked at Luo Yang and said, "Chairman, Director Chu is right. Gray Rhino also has data on this. Most private equity funds in Shanghai can't achieve such high annualized returns, but..."

"But some people have managed to do it, right?"

Luo Yang knew why Zhao Pengcheng had left out half the sentence, so he continued, "Our first private equity fund achieved a 50% return in six months, which made us famous. So we must maintain the brand effect of this product."

Chu Jing hesitated, as if he wanted to say something but then stopped.

“I know what you want to say, and I know you are considering the company’s interests, which deserves praise.”

Luo Yang smiled at Chu Jing, then said with certainty, "But you have to have confidence in Gray Rhino and confidence in me. This private equity fund can definitely achieve an annualized return of over 50%, or even higher."

As previously stated, this private equity fund product intends to invest in US stocks, specifically technology stocks.

Over the next decade, US stocks have maintained a high growth rate, especially the leading technology stocks, whose growth rates are staggering.

For example, Nvidia's ten-year growth rate was 10519%, AMD's was 4342%, Tesla's was 2756%, Netflix's was 1010%, Meta's was 985%, Apple's was 984%, and Microsoft's was slightly lower, but still reached 846%.

Even without using leverage, buying these stocks normally would yield an annual return of no less than 100%.

What's so special about giving clients 15% to 20% annual returns?
This small investment is practically free in terms of the benefits the gray rhino reaps.

Since Luo Yang had already gone this far, Chu Jing naturally couldn't raise any further objections.

"In addition, we will launch a new fund product, which will take about 3 to 5 years and will be around 30 billion RMB in size."

This is about Hengrui Medicine; my initial plan was to become a shareholder through stock trading.

Luo Yang finally believed Song Wan this time.

It was also his first step in trying to trust professional managers, stepping out of his own realm of prophecy, and trusting the analysis of professionals.

Whether the outcome is good or bad, it will directly affect Luo Yang's future behavior.

(End of this chapter)