Starting with a fully invested A-share portfolio to become a capital...

Chapter 285: The Four-Cycle Wealth Creation Theory; Caiyan.com's Registered Users Exceed 10 Million

[Tonight's Mechanical Ascension]: It's Buffett! My goodness! Even Buffett agrees with Zhang Yang's investment logic!

[Bathing Little Sheep]: Selecting stocks from daily life, hahaha, I've figured it out, I've attained enlightenment! In the future, Zhang Deshuai will definitely have a place on the list of top-performing stocks!
[Your emotions move me]: I vaguely remember an interview with Buffett where he said that the reason he bought Coca-Cola stock was because he himself likes to drink Coca-Cola. It turns out that the path of investment has always been by my side.

[Putting an Elephant in a Refrigerator]: I'm just showing off in an adult product factory. If you don't understand something, just ask: How should I choose stocks?

[Message in a Bottle]: It depends on how heavy your factory's production tasks are. If there are many orders and you're working two shifts, it means there's a buyer's market. You can directly buy the corresponding listed company's stock.

At this moment, the live stream chat rooms on various platforms were flooded with comments, with dense white text almost taking up the entire live stream screen.

No one expected that Warren Buffett, the world-renowned "Oracle of Omaha," would appear at the small Shangri-La Hotel.

Standing next to Buffett, Xu Zhirou smiled and looked at Zhang Yang with more approval. She thought to herself, "No wonder they haven't responded for so long, letting the public opinion fester. It turns out they invited Mr. Buffett to keep things under control. If nothing unexpected happens, in a few hours, all the financial media will be rushing to report what happened at the Shangri-La Hotel today, including media from Hong Kong, Macau, and Taiwan, and it might even spread overseas."

Not only Xu Zhirou thought this way, but Shen Jun and Yi Zheng were also completely misled.

"Damn it, even Buffett has been brought in. Does Zhang Yang have connections everywhere?"

"A meal with Buffett costs $320 million. Inviting him to China would cost $3200 million! Zhang Yang is quite the spender. No wonder he hasn't responded yet. His trump card is here!"

The two men stared intently at Buffett, a man they hadn't expected.

A single kind word from Buffett for Zhang Yang is worth more than a thousand words from others.

There are many people who are good at stock trading, but only one person can be called a "stock god"!
Take, for example, Jesse Livermore, the "King of Speculation." No one would have thought he was bad, but he eventually went bankrupt and committed suicide.

Many traders are short-lived, some leaving a lasting mark on the history of world finance, while others are just a few strokes in the pan. But Buffett has been a constant presence throughout the history of modern finance, which is extremely rare. He is also the only trader who has repeatedly and accurately timed market tops and bottoms, maintaining an annualized return of over 20% year after year.

What does it mean to consistently maintain an annualized return of over 20%?
A principal of 1000 yuan is not significant, and you can earn 200 yuan a year. But what if the principal is tens of billions of dollars?

Who can guarantee that they can consistently earn 20% from stock trading every year?

It's important to know that the so-called dollar tide can cause the world's dollars to flow back to the United States with just 5%, let alone a stable 20%. Even during the Cold War between the United States and the Soviet Union, the highest deposit interest rate for the US dollar was only 19.1%, which was reached in June 1981.

At this moment, not only Shen Jun and Yi Zheng, but also Zhang Yang on the stage was very surprised, because Buffett was not the savior he had invited at all.

Can he get Buffett to come?

Do not make jokes!
It's important to know that the $320 million charity lunch was attended by people who came because they had a charitable foundation; it wasn't for profit.

Given Buffett's net worth, even $3000 million might not be enough to get him to make a trip.

However, Zhang Yang reacted very quickly. In the instant he came to his senses, he calmly replied to Buffett, "It is an honor for me to have an in-depth discussion on investment with Mr. Buffett. The technique of selecting stocks from daily life is actually borrowed from your investment model. Coca-Cola is an example."

Buffett's investment in Coca-Cola began in 1988, was completed in stages over seven years, and finally established as a long-term holding strategy in 1994.

他在1988年6月至1989年3月，以平均成本41.85美元买入1417万股，又在1989年以47美元均价增持918万股，累计投入10.24亿美元，持股占总股本的7%。

In 1994, he added another 660 million shares. After Coca-Cola's stock split, Buffett's total holdings reached 1 million shares, with a total cost of $12.99 billion, or less than $12 per share.

As of November 29, 2009, Coca-Cola's stock price was $57.18.

Without a doubt, Buffett's investment this time was very successful, yielding a profit of over 10 billion.

It's worth mentioning that, thanks to the extreme cost-cutting efforts of Coca-Cola and Pepsi, the carbonated beverage "Cola" is unlikely to face any new competitors. They are both reliable "cash cows," so there's no need to worry about its market share.

"By applying what you've learned, you've achieved a 625 million-fold return; you've already forged your own path."

Buffett said with a smile.

He had originally planned to transfer to Shenzhen in the afternoon, rest for a night, and then visit BYD's production plant the next day. However, after witnessing Zhang Yang's impressive returns, he decided to postpone his trip by a day.

“Kid, a 625 million-fold return in a year, I really look forward to talking to you.” Charlie Munger suddenly stood up and brought his face close to the microphone that Buffett was holding.

"Charlie's here too?"

Larry Fink was surprised again, and looked at Zhang Yang on the stage. He now seriously suspected that this kid was "one of their own".

There's a saying on Wall Street: if Warren Buffett is the god of stocks, then Charlie Munger is his shadow; neither can exist without the other.

It's worth noting that Charlie Munger accepted Warren Buffett's invitation in 1978 to become the vice chairman of Berkshire Hathaway. The two have been working together for over 30 years. Their investment in Coca-Cola was a spur-of-the-moment decision, as they both enjoy drinking cola and felt it had potential.

Zhang Yang recognized Charlie Munger at a glance; the two had met a few times in their previous lives.

The last time was in 2019, when Charlie Munger expressed his hope that Zhang Yang would join Berkshire Hathaway, where he could spend decades gaining experience and perhaps become the company's third-generation leader.

However, Zhang Yang, a "rising star on Wall Street," completely failed to grasp the meaning he was trying to convey and continued to act recklessly on Wall Street. It wasn't until more than a decade later, when his plane was hit by a missile and crashed, that he understood Charlie Munger's implied message.

"It is my honor to have the opportunity to communicate with you both," Zhang Yang said, remaining humble.

After Buffett and Charlie Munger made their appearances and statements, they handed the microphone back to Xu Zhirou and then sat down in their seats.

This briefing on "Fuchun Road" has far exceeded everyone's expectations, and Zhang Yang's investment ideas have even been endorsed by two "stock market gurus".

With over 60 billion yuan in available funds at his disposal, Zhang Jianping, affectionately known as "Master Zhang" by retail investors, looked at Zhang Yang with a hint of admiration. He never imagined that someone could turn their money 625 million times in a year.

It took him 10 years to earn 50 billion yuan. Xu Xiang and Qiu Baoyu, as well as several other big names in futures trading, all took about 10 years.

What about Zhang Yang?
Less than a year!!

From March to November 29th, that's a total of 9 months.

He earned 50 billion yuan in 9 months. If there weren't so many people around, he would have knelt down before Zhang Yang and begged for his stock trading secrets.

Are there any more questions from reporters?

Zhang Yang scanned the audience.

A group of reporters immediately raised their hands.

Xu Zhirou was also aware of Zhang Yang's thoughts. This time, she chose a reporter from the Economic Daily, which is an authoritative media outlet on macroeconomics in China. Using this media outlet as the closing question for the briefing was very reasonable.

"This is the Economic Daily, I am reporter Li Yangyang. Mr. Zhang Yang, it is often said that wealth in life depends on economic cycles. What is your view on economic cycles? We are now at this critical juncture in 2009. How should we utilize the cycle to plan for potential industries in the future?"

That concludes my remarks, thank you.

Li Yangyang handed the microphone back.

"Well, that's a problem..."

Zhang Yang, standing on the stage, thought for a moment and replied, "For ordinary people who want to get rich, focusing on economic cycles is indeed a shortcut. I will explore cycle-related content in depth on the member channel of Caiyan.com later."

"Of course."

Zhang Yang then changed the subject, smiling faintly, "Since so many people are here today, I can briefly talk about the economic cycle. This is paid content, so please listen carefully."

When the words "paid content" were uttered, many people perked up, while Shu Yimin just sneered: "If you want to fleece people, just fleece them. Why call it paid content?"

"Don't underestimate cycles. The so-called 'hot trends' are actually related to the economic cycle," Xu Haiou reminded in a low voice.

"I dare not say anything else, but a genius with formal training in academia has a theoretical level that far surpasses ours," Xu Xiang also stated.

In terms of trading skills, he believed he was second to none, including Warren Buffett and Charlie Munger sitting in the back.

However, when it comes to theoretical knowledge and macro-level issues, this touches on Xu Xiang's weakness of not having attended university.

"Listen to what he says."

Sun Guodong was unusually quiet.

It wasn't just the members of the Ningbo limit-up daredevil team; the CEOs of Eastmoney and Tonghuashun, professors from various universities in the Yangtze River Delta, including BlackRock CEO Larry Fink, Warren Buffett, and Charlie Munger, all focused their attention on it, and ordinary investors were eager to take notes.

After briefly organizing his thoughts, Zhang Yang began to explain the theory of cycles: "Many people come into contact with and understand cycles starting with the Kondratiev wave. In fact, besides the Kondratiev wave, there are also the Juglar cycle and the Kitchin cycle. What are the differences between them?"

"The Kondratiev wave has a long time span, so we can understand it as a long cycle. It was proposed by the Russian economist Kondratiev, and its core is technological revolution and industrial transformation."

"In his view, each economic cycle is accompanied by a major technological breakthrough, such as the steam engine, electricity, and information technology. Technology drives the global economy through periods of prosperity, recession, depression, and recovery."

"The Juglar cycle is different from the Kondratiev wave. Its time span is 7-11 years, and it was proposed by the French economist Juglar."

"The Juglar cycle and the Kondratiev wave are not contradictory; rather, the Juglar cycle is more like a detailed supplement to the Kondratiev wave. Juglar believed that companies would adjust their fixed asset investments according to market demand, such as equipment upgrades and factory construction, thus forming a cycle of investment expansion, overcapacity, and investment contraction. This is typically manifested in the fluctuations in the prosperity of the manufacturing industry, such as the automotive and machinery industries."

"The Kitchin cycle is even shorter, lasting only 3-4 years. It is also called the inventory cycle and was proposed by American economist Kitchin."

"He discovered that companies adjust their inventory levels according to changes in market demand, increasing inventory when demand rises and decreasing inventory when demand falls, thus creating short-term fluctuations in production and sales, and this fluctuation cycle often lasts for 3-4 years."

Zhang Yang paused for half a second, as if to organize his thoughts, and then said, "These three cycles are nested together and together constitute the cyclical laws of economic operation. For example, a Kondratiev wave cycle contains multiple Juglar cycles, and each Juglar cycle is composed of several Kitchin cycles. They explain the underlying logic of economic growth, industrial transformation and market fluctuations from long, medium and short dimensions."

Why is it said that wealth in life is determined by cycles?

"The economy is like a wave, similar to stock trading. If you bet on the right economic turning point, it's like buying at the bottom."

"In addition to these three economic cycles, there is also a debt cycle that is quite useful. Everyone should understand that every economy is actually borrowing to develop. To put it bluntly, it is using future money to develop the present. Whoever still has the room to borrow still has the room to develop."

"Okay, that's all for now. For more detailed knowledge about cycles, you can stay tuned to the Caiyan.com member channel. I will take the time to explain it in detail."

Zhang Yang's remarks were brief and to the point.

Those who can thoroughly understand the four cycles will rarely feel confused about investing, because they have a profound understanding of the economy. Economic development is cyclical, and so is investing; many things actually already have answers to follow.

Zhang Yang's restraint immediately sparked discussion among viewers in the live stream.

[Favorite Chicken Leg Rice]: Ugh, can't Joker just finish explaining everything at once? I need to be able to judge whether the macroeconomy is at its bottom. Do I have to become a member?

[Central University of Finance and Economics Junior Sister]: The debt cycle is divided into small cycles and large cycles. If Zhang Yang, the big shot, were to give a complete explanation, it would take at least half an hour. It's worth spending a hundred or so yuan to become a member of the financial research website.

[Favorite Underpants]: Oh no, Joker, how did you even mention the economic cycle? So many people know about the four cycles theory, how am I supposed to exploit information asymmetry to fleece people now?
[Middle-aged people striving to get rich]: In fact, the debt cycle can be summarized in one sentence: how many ordinary people and businesses are willing to take out loans? If no one takes out loans, the economy will stagnate. From the current point of view, our country's debt capacity is exceptionally high because people keep flocking to cities. If they want to stay, they must first buy a house, thus taking on decades of debt.

[Old Spirit]: As a small-time investor without formal training, Zhang Yang's words were a wake-up call. I should systematically study cycle theory and use cycles to position myself for economic turning points, thereby achieving financial freedom.

Many retail investors know that cycles can lead to wealth, but if you ask them to explain the underlying logic of how cycles work, they will likely be completely lost and won't understand why they, as stock traders, need to delve into economic cycles.

In fact, the so-called economic cycle can be regarded as an economic system.

For example, you might earn $15 an hour in the United States, but only $1 an hour in Rwanda, Africa. That 15-fold income difference is simply due to the different environments. You are still you, with no difference whatsoever.

When economic cycle indicators are trending upward, making money is relatively easy; you might only need half the effort to achieve a 200% return. However, when economic cycle indicators are trending downward, even if you put in your best effort, the return might only be 10%, or you might even incur a loss.

When the economic cycle changes, wealth is redistributed.

……

Zhangjiang, the capital of Shanghai.

Changtai Plaza, Block A.

With repeated mentions of Caiyan.com and the hook of the debt cycle, viewers on various live streaming platforms searched for "Caiyan.com" and clicked on the website to register.

634 million.

659 million.

688 million.

In a short time, the number of registered users on Caiyan.com reached 700 million.

At this moment, in the live broadcasts on various platforms, Zhang Yang once again expressed his gratitude: "Thank you very much to all the audience members who came to the scene and those who watched the live broadcast online. Thank you for being willing to listen to my explanation of the story of the Fuchun Road seat. See you on the Caiyan.com member channel in the future."

He bowed in thanks.

Caiyan.com, on the other hand, saw a surge in registrations.

730 million.

794 million.

855 million.

In the blink of an eye, Caiyan.com's registered users exceeded 900 million, and the membership payment rate was extremely high.

A return of 625 million times is enough to scare any retail investor.

"My God, it's still going up!"

"Will it break 1000 million today?"

"Awesome! No wonder it's Mr. Zhang. This is simply the greatest trading I've ever seen. He has a firm grasp on the psychology of retail investors!"

"916 million! At this rate, we'll surpass Eastmoney and become the number one financial website in less than two days!"

"Looking forward to the year-end bonus!!"

In the Caiyan.com office, the employees were all laughing loudly. With Zhang Yang, their top "trader," they were truly winning without lifting a finger.

At that moment, someone shouted, "934 million!"

"953 million!"

"966 million!"

"972 million!"

Everyone stared intently at the website's operations screen, and every time the numbers jumped significantly, they couldn't help but comment.

"988 million!"

"993 million!"

"999 million!"

When the last person registered, Caiyan.com's registered user count successfully surpassed ten million, entering the ranks of major websites.

The main reason for the rapid increase in registered users is the emergence of Buffett, which directly ignited the entire Chinese internet.

At this time, the hashtag "Buffett appears in Shanghai" firmly occupied the top spot on Weibo's trending topics list, even overshadowing the flamboyant hashtag "625 million times return".

This situation arose because of the public relations efforts of Caiyan.com.

The name "Buffett" is far more effective than "showy." Even people who don't trade stocks might click on the entry to gossip about it.

While the situation was causing a stir on the mainland, the Hong Kong capital market was also reeling.

Unbelievable! The identity of the "mysterious mainland short seller worth billions" has been revealed—he's actually the boss of a financial company…

"Warren Buffett's Personal Account: Fuchun Road and Mr. J are Actually the Same Person! Read on to Learn About His Legendary Life!"

How long would it take 800 to earn 50 billion RMB? A mysterious mainland short seller provides the answer: only 9 months!

Hong Kong media did not disappoint; their news headlines instantly attracted a large number of gossip enthusiasts, and together with financial research websites, they spread like wildfire across Hong Kong Island.

"Have you heard? The mysterious mainland short seller with billions in assets is named Zhang Yang. He's the owner of Caiyan.com. He made over 20 billion yuan from the China Unicom deal alone!"

"Zhang Yang? Caiyan.com? I can't believe it was him! He's such a good imposter!"

"You made 20 billion yuan in less than half a month? Is Boss Zhang Yang still taking on apprentices? I don't want to work anymore. I want to make money, play with young models, and die on a woman's belly."

"To say something that people don't want to hear, I'm thinking of waiting until I make some money to sexually harass female celebrities."

"When I am rich, I am lustful; when I am poor, I am fickle; when I am powerful, I am submissive. Hehe."

The people of Hong Kong Island were talking about it non-stop. In less than half an hour, the name Zhang Yang had spread throughout Hong Kong's financial circles.

Meanwhile, on the other side, in the Cheung Kong Center, is the Goldman Sachs office floor.

Solan Avery hurriedly knocked on David Smith's office door and said impatiently, "President, Mr. J's identity has been exposed!"

"who is it?"

David Smith suddenly stood up.

If he could, he would tear this guy who caused him to lose tens of millions of dollars to pieces and throw him into the sea.

Following China Unicom's defeat, Goldman Sachs appointed a new president to Hong Kong Island to share power with David Smith, something he could not tolerate.

"Zhang Yang!"

Solan Avery revealed who was behind it all.

David Smith: "Exaggeration?"

“Yes, Zhang Yang!” Solan Avery nodded in confirmation, and then continued, “He is the owner of Caiyan.com. This website received investment from Alibaba in a very short period of time and also merged with Baidu Finance. Its development speed is terrifying. It is a leading financial website in mainland China.”

“Financial Research Network… I remember now, Zhang Yang is the one who had dinner with Buffett.” David Smith’s mind flashed with Zhang Yang’s face, and he asked, “How did you know that?”

"Zhang Yang held a 'Statement Meeting' to explain the issue of the Fuchun Road fake account, and incidentally brought up the matter of shorting China Unicom."

As he said this, Solan Avery's eyes flashed with amazement, and he couldn't help but exclaim, "I really didn't expect that Zhang Yang, a mere 21-year-old, would be the mastermind behind the Hong Kong financial market."

"Oh, right!"

Suddenly, he thought of something and said, "Buffett and Charlie Munger both went to the high-profile public meeting. It feels like they have some kind of private relationship and said they wanted to exchange ideas on investing."

Upon hearing this, David Smith considered a possibility and whispered, "Charlie Munger and Warren Buffett are both here. Could Zhang Yang be one of us? What is his hidden role?"

“It’s possible,” Solan Avery suddenly interjected, adding, “Zhang Yang’s rapid rise must be backed by a powerful figure, perhaps a mole of BlackRock or Vanguard Capital.”

"hope so."

David Smith murmured.

To ensure the smooth progress of the plan, it was reasonable to deploy more spies, but he did not completely believe that Zhang Yang was one of his own and needed to verify further.

Besides Goldman Sachs knowing the identity of the mastermind behind the massive short-selling of China Unicom, CEOs of financial institutions such as HSBC, Standard Chartered Bank, Morgan Stanley, Tai Fook Securities, and Citibank also learned of Zhang Yang's identity. They were all surprised, as no one expected that the man who stirred up trouble in Hong Kong was only 21 years old!
(End of this chapter)