What's wrong with me being a rich man?

Chapter 689 Index (4k)

The day after the UK's Brexit vote, Asian markets, which were not open due to time differences, experienced a sharp decline, with global stock markets losing over $2 trillion in market value within 24 hours.

The weekend was a good window of opportunity for policy adjustments, but the market will likely continue to decline on Monday.

Yu Xing received interview requests from well-known media outlets such as Time magazine in Lingang. Whether in person, by phone, or in any other form, they were all eager to learn about the short sellers' operations in this round.

Such interviews were naturally declined as always, but following the investigation by the Hong Kong Securities and Futures Commission, the UK Financial Conduct Authority (FCA) also came forward with an investigation, with a similar focus on insider trading and market manipulation.

As a minority in the market and a major short seller still under investigation in different regions, Yu Xing is easily subject to scrutiny. However, other institutions have also taken similar actions this time. Guo Shanfeng was only questioned, not formally charged.

Over Peak hedge fund has no unusual transactions, discloses information truthfully, and has top-tier legal counsel; therefore, the inquiry does not appear to be escalating.

However, besides the fund's operations, Brexit itself has great geopolitical significance, and people in the city are also curious about Mr. Yu's judgment. So, on Sunday, they took the opportunity of the new energy policy meeting to let him talk about his thoughts on this matter.

Facing the gazes of the leaders, Yu Xing, in addition to discussing his observations on the macro environment and his peers, emphasized a very novel argument.

He said with great seriousness, "Our company, Silicon Carbon Data, has developed a short video app called MusVid overseas. It's basically the same model as TikTok. It has developed very rapidly in the past two years and has a good user base in Europe and the United States."

"In response to the possibility of Brexit, we created an internal 'Mus Index' specifically to study real user behavior."

“We specifically filtered and screened by region and eligibility, selecting only users with UK IP addresses and aged 18 and above. We included keywords from two opposing camps: the pre-referendum televised debates, immigration control, and job security, and then built a model for evaluation.”

"The range is 1-100, with 50 points being the critical value. The higher the number, the more obvious the intention to leave the EU. The index reached 73.2 in the last round, which ultimately prompted us to take a risk and adopt a niche funding strategy."

"In hindsight, the model was somewhat distorted. The actual voting results differed by less than 4 points, so the risk was quite high."

"There was a lot of luck involved this time."

Yu Xing gave a comprehensive introduction to the new index based on the scientific model, which left everyone in the conference room deep in thought.

It sounds like such a so-called "Mus Index" is indeed quite distorted, with a score of 73.2, while the difference in the vote count is not that large. If the result is reversed, up to $20 billion in funds could be lost immediately.

However, we don't need to make those assumptions anymore; the Peak Fund has already won.

Chen Rijun, director of Lingang, who also attended the meeting, asked curiously, "President Yu, I didn't expect this to be so scientific. Have you tried using this to test the voting process in the United States?"

Yu Xing smiled naturally and said, "We are busy correcting the distortion of this model. We just did a casual test and didn't see much of a difference. It seems that the gap between the two people in the United States is not as big as the media there predicted."

Currently, it is widely believed that hope Po will win against A Chuan, and by a huge margin.

Yu Xing subtly used the tone of the Mus index to avoid taking the majority stance.

Chen Rijun looked at the others and said with a smile, "It's quite interesting. Now we have to do everything scientifically. There's not that much difference. This can almost be called 'Mus divergence'."

Contrary to popular predictions, the index pointed to the other end.

Yu Xing chimed in, "Director, that's a good point. We took a gamble based on multiple factors, so the pressure was immense, but we also got lucky."

Another leader nodded: "It's luck that's on the side of science. Science can make money well. Aren't there sciences in carbon silicon cars too? It's about applying what you've learned."

That was the end of that matter, but Yu Xing also submitted his Mus index, which included details of the model building process, the publicly available data used, and calibration corrections.

Regardless of how you cross the mountain, if you're on the right side, it's still somewhat of a reference point.

After the meeting, Chen Rijun returned to Lingang in the same car as Yu Xing. On the way, he was even more amazed: "President Yu, I never thought, I really never thought, that you could use software like this to make investment decisions."

“Director, this is just speculation,” Yu Xing said with a smile. “But we’re referencing the MUS index this time, and we don’t really trust its accuracy. We’re keeping our funds conservative; the fund mainly earns management fees.”

Chen Rijun glanced at him and said, "President Yu, I know you're not asking me for money. Your fund's money is also subject to regulation in Hong Kong."

Yu Xing kept his thoughts to himself; money under supervision isn't something that can't grow legs.

He smiled slightly and talked about the recent developments of the Silicon Carbon Group, mentioning the investment in battery technology and its subsequent impact.

Chen Rijun listened very attentively. While it was interesting to see hedge funds betting on the right things, what Lingang really valued was the construction and upgrading of its industries. The performance of the Silicon Carbon Group was a treasure for Lingang.

He naturally didn't understand battery technology, but he felt that CTB, which Mr. Yu mentioned, sounded quite logical.

Chen Rijun made his usual statement of support, and then asked about the latest frontline details of silicon carbon.

"The reduction in subsidies has had some impact, after all, it's real money, and our positioning is relatively high." Yu Xing didn't mince words. "But we are now offering interest-free loans to car owners with interest subsidies, and the response has been quite good. It can basically offset the impact of the reduction. This year, carbon silicon sales will be around 16 units."

As the production capacity of the silicon carbon group has increased, the Jiuzhou has become relatively stable. The interest-free policy was not actually implemented when the subsidies in Shanghai and Zhejiang were phased out, but was used now to accumulate orders, so we can see the market feedback.

Chen Rijun listened to President Yu's casual tone and his face remained calm, but he was thinking about the prediction of 16, which was basically double that of last year!
He chatted and laughed with General Manager Yu all the way back to his office in Lingang. Thinking about the current development of silicon carbon, he finally couldn't help but sigh to his secretary, "The sales trend of silicon carbon is really taking off, it's practically growing horns!"

With its port location, coastal location, and horns on its head, silicon carbon has a very bright future.

The secretary echoed her sentiments with a few words of agreement.

However, while the two were chatting privately about silicon carbon in the office, another related piece of news spread like wildfire: Tesla, the well-known overseas electric vehicle company, is reportedly seeking to build a factory in China to expand its production capacity, with Shanghai and Guangzhou being among the candidate cities.

Tesla's Model 3, released this year, has received an overwhelming number of orders, but as many analysts have worried, its production capacity has become a major constraint.

China has long been on Tesla's radar for resolving its problems, and there was even contact a couple of years ago. So, this move is not entirely unexpected.

Chen Rijun considered the impact of this news and estimated that the city would still actively strive for it.

Yu Xing naturally noticed the movements of potential competitors immediately, but the domestic new energy market was still in the development stage, and carbon silicon was busy advancing the technology required for pure electric vehicles. In addition, the cooperation between cities for industrial considerations was not affected by his side, so he put it aside after a simple consideration.

The market needs to be expanded, and the primary target for competition remains similarly positioned gasoline-powered vehicles.

Yu Xing didn't take it seriously, but he quickly received inquiries from his peers on his phone. Li Bin and He Xiaopeng both sent messages mentioning the possibility of Tesla entering the Chinese market, especially the latter, whose ideas for building cars were largely based on Tesla's, and he was paying close attention to this matter.

Yu Xing could not confirm the veracity of the rumor, but he could confirm that Tesla would definitely come to compete in the domestic market.

To his surprise, when he talked to Wang Chuanfu about CTB that evening, Wang also mentioned Tesla. The new Model 3 Standard Range version released this year costs $3.5 in the United States, which is about 23 RMB.

“Before his domestic factory is built, the price of importing alone will definitely be much higher, and the price of 20 yuan will probably not be enough,” Yu Xing said with a smile. “Mr. Wang, to be honest, I see that you have the Denza brand, which is a joint venture with Mercedes-Benz. It may take a lot of time to establish and transform the brand image. Denza is also worth taking a chance on.”

Wang Chuanfu was about to discuss it further, but then he thought that at their current price point, they really didn't need to worry about it. As for Denza, they were already negotiating with Mercedes-Benz, but there was a significant price difference between the two companies.

He simply said, "Mr. Yu, the orders for Model 3 are still very strong, so I'll leave it to you. Let's see how to get the battery sorted out first."

Yu Xing replied, "It takes more than one day to achieve this."

Neither of these tasks can be accomplished overnight.

Yu Xing felt the shock from his domestic counterparts. Thinking of the glory of the Model 3, he actually had another exchange with Cui Zhiyu, discussing the design of pure electric vehicles. Due to CTB's considerations, most of the current designs have been scrapped and redesigned.

Tesla won't be coming in anytime soon, but this timeframe might just allow them to have a head-on confrontation.

Cui Zhiyu didn't really object to his boss's idea. The most important factor was that even if it was difficult to cross paths, the competition between the two would still generate a lot of topics and actually bring more attention and discussion.

However, all of this depends on whether the battery engineering design can be implemented.

Yu Xing pondered the latest developments in the car market competition and didn't forget to check the trends in major global markets on Monday. After two days of psychological adjustment over the weekend, the declines in major stock markets indeed narrowed.

That evening, the Bank of England announced it would provide £2500 billion in liquidity support and pledged further easing if necessary. Meanwhile, G7 finance ministers issued a joint statement pledging to take necessary measures to stabilize financial markets.

Clearly, such a move will stabilize major stock markets, and a weak recovery may occur the following day.

Peak Fund has anticipated the market recovery and currently only holds safe-haven assets such as gold. According to observations of its peers, their operations are similar.

However, the far-reaching impact of Brexit still needs to be carefully considered, and it may very well bring other opportunities.

Domestic and foreign media outlets continue to receive numerous calls, expressing ample curiosity about whether Guo Feng has capitalized on this market trend. Even some long-time followers may share similar sentiments.

Yu Xing then received a call from Zhang Chaoyang.

After Zhang Chaoyang got through, he started talking at length about Brexit.

Yu Xing listened patiently for a while, but didn't hear any constructive suggestions, so he asked, "Mr. Zhang, did you lose money? Did you cut your losses this time?"

Zhang Chaoyang's voice rose, and his tone became slightly urgent: "What do you mean by losing money? My strategy is to never cut losses. As long as I don't cut losses, that money is in the stock market, and I can withdraw it as soon as it recovers."

Yu Xing joked, "No wonder, Mr. Zhang. I see that you know the British reaction to Brexit like the back of your hand, have a clear understanding of safe-haven assets, and are well aware of the impact on commodities. The market is truly an all-powerful teacher."

Zhang Chaoyang was silent for a few seconds; this was indeed something he had quickly learned in the past few days.

He calmed himself down and said calmly, "Of course, this knowledge was bought with money."

Yu Xing laughed loudly.

"You, a big short seller, made money here and then mocked us victims. You deserve to be investigated." Zhang Chaoyang was a little indignant at being laughed at.

Yu Xing said, "If they can't find anything, it's the same as not being investigated at all."

"That's too arrogant, Mr. Yu, you're too arrogant." Zhang Chaoyang exclaimed repeatedly, and then casually added, "We at Sohu have created a finance account on Douyin. When would you be available to support it? I think Douyin's commercialization is quite interesting."

Yu Xing thought for a moment and said, "Mr. Zhang, you're always stuck in Sohu's old ways. Why don't you try to break out of that mold?"

Zhang Chaoyang seemed to have realized something.

After a moment of silence on the phone, he slowly said, "You mean, short selling?"

Yu Xing: "..."

Zhang Chaoyang then asked, "President Yu, could you give me some pointers?"

Yu Xing sighed: "I can't give you any pointers. Never mind, Mr. Zhang, let's leave it at that. We can talk again when we meet sometime."

Zhang Chaoyang didn't get an interview opportunity for the account he had invested heavily in, but he wasn't disappointed. Instead, after thinking it over, he called Xu Xin of Capital Today to talk about Brexit and short selling.

Xu Xin listened for a while and then felt confused: "President Zhang, shouldn't you go find President Yu? Why did you talk to me about Shanfeng?"

Zhang Chaoyang said matter-of-factly, "Aren't you all part of a short-selling gang?"

Xu Xin was furious: "President Zhang, you're overthinking it!"

Zhang Chaoyang's tone was full of laughter: "I'm overthinking it? I was even planning to ask President Li to invest in your fund."

Xu Xin, her anger barely contained, retorted: "These are all unrelated matters. If you want to find someone, go find them. If you want to invest money, go find him. If you want to enter the mountain peak, go find Yu Xing!"

Zhang Chaoyang asked curiously, "You guys have a pretty clear division of labor. So what did you want to talk to me about?"

Xu Xin's hand holding the phone trembled slightly before she hung up the call.

Thinking about President Xu's reaction, Zhang Chaoyang concluded that the people in this group all liked to pretend.

(End of this chapter)