Wall Street Financial Truth

Chapter 24 How do rich people make money (7)
We know from the previous article that when operating futures in the United States, it is generally necessary to use a Margin (margin, commonly known as "majin") account. The margin is at least 25 of the total price, which means at least a 010:1 leverage.The margin account for futures is lower than that of general stock margin accounts, only 4% to 5% of the total price.Margin plus futures is leverage plus leverage, and the ratio of profit to risk is higher than that of stocks.However, the profit or loss of "futures traders" can be tens or even thousands of times the principal!
Years ago, American newspapers, tabloids, and TV news were buzzing about First Lady Hillary Clinton. The focus was that she bet $1000 on livestock futures when Clinton was governor of Arkansas, and she made a profit in just 10 months. 10.The reason why Hillary’s livestock futures transaction was suspicious was not only that it was sent out too fast and the profit was too high, but also that the amount of $1000 was too small to bet on the livestock futures market under normal circumstances.Hillary's explanation was that she knew nothing about the futures market and knew nothing about the details of the transaction. The transaction was instigated by her friend, futures expert James Blair and arranged by him .As for Blair, it is not known whether he got any benefits from Governor Clinton because of this.Hillary tried her luck in the futures market and made a small fortune.The opposition party is naturally brooding and making a big fuss. Now it's all right, and futures trading has become a sensational hot topic, and I watch it with relish.

The president and his wife were entangled for several months by their political opponents, but in the end, nothing happened, and the turmoil gradually subsided.It is so easy to make a lot of money, because she is Hillary, we ordinary people must not act rashly, and do not mistakenly think that futures are a shortcut to make a fortune.Because to put it bluntly, futures is a zero-sum game. If Hillary can earn 1000 with 10 bets, ordinary retail investors may lose 1000 with 10 bets.If not done well, the family will go bankrupt.

Judging from the fact that movie futures products are on the trading stage, it is obvious that the success of "Avatar" has aroused the interest of Wall Street.Just imagine, with a capital investment of 5 million US dollars, it will bring in 25 billion US dollars in box office in three to five years, plus later derivatives, including DVDs, books, computer games, toys, etc., the total revenue is expected to exceed 50 billion Dollar!Even if 30% of it is calculated, the net profit of at least 15 billion US dollars is 300% of the investment!With such a return on investment, to borrow Marx's words, what can't be done? !It can compete with the madness of "dot COM".The difference is that most "dot com" companies are burning money, while Hollywood movies are making real money.

The financial tsunami that broke out in 2008 has turned into an economic crisis, causing the real economy of the United States to become extremely depressed.Except for the so-called green industry, there are fewer and fewer bright spots for investment.For companies such as gold, oil, and green energy, the stock prices have long been extremely high, and the profit margins are narrow or even non-existent.More and more economists say that this crisis is likely to evolve into a Great Recession, comparable to the Great Depression before World War II, and the recession will last for 7 to 10 years.

Hollywood rose with the help of the Great Depression. This Great Recession undoubtedly made history repeat itself and gave Hollywood an excellent opportunity.Because the American people in the crisis are traveling less, and other consumption is also reduced, only the box office of movies bucks the trend and rises sharply.It is foreseeable that the movie futures contract will be a hot spot on Wall Street in the next few years.

The world today is flat. In 2010, the domestic Huayi Film Company went public, which coincided with the above news.The domestic media also seems to predict that the most profitable industry in the 21st century is the cultural industry, especially the "money" of film and television companies, which has been coveted by the financial circle for many years.The domestic private film industry, Huayi Brothers, was successfully listed on the Growth Enterprise Market, which fulfilled the predictions of the media. The "star-studded" stars created by Huayi have also stepped into the ranks of rich people, and made director Feng Xiaogang a billionaire. rich man!
The listing of Huayi Company actually allows shareholders to bet on China's film and television industry.Recently, China will also open up its futures market. If you follow the example of the United States and also do box office futures, I believe stockholders will also chase after it!However, I would like to remind you once again in good faith that the risks of ordinary stocks are already high enough. In the futures market, speculation is even more explosive, and a little carelessness can lead to bankruptcy.If you can't afford to gamble, the best investment is to stay away from it!
15. Buffett is not God, he is robbing you

Warren Buffett, respected by the Chinese people as the "God of Stocks", was named the richest man in the world in 2008 by Forbes magazine, and he is also one of the most successful investors in history.Buffett's funds have averaged an astonishing 50% annual return over 31 years.He is most praised by the world for his adherence to the "Buy and hold" (hold for a long time after buying, only buy and not throw away) value investment philosophy, frugal living habits and philanthropy.Therefore, he was one of the 2007 most influential people in the world selected by Time magazine in 100.

Buffett's speech is often described as a mixture of business discussion and humor.Every year, more than 2 participants come from all over the world to the company's shareholders' meeting presided over by Buffett.At this grand general meeting of shareholders, Buffett’s prepared company annual report and letters to shareholders are quoted and interspersed with literary allusions, biblical words, warnings from the Middle East, and countless jokes, so they are often cited by the financial media. reports.He auctions the opportunity to have dinner (or lunch) with him once a year, and the auction price is getting higher and higher. In 2008, Zhao Danyang won the bid for as high as 211 million US dollars.

The media is also most willing to extol Buffett's frugal virtues, comparing him to the extravagant life of Wall Street's bloodthirsty bankers.Because he is the richest man in the world, but he still lives in the small house he bought back then, which cost him only US$31500, and the current market value is only US$70.

Although he later bought a $400 million villa in Laguna Beach, California, the media was "too lazy" to report it. Compared with his astronomical net worth of tens of billions of dollars, $400 million is nothing ?His public image is impeccable.Yet when he spent $1989 million of company funds on a private jet in 1000, he shamefully called it "unforgivable."Because the difference between him and other Wall Street tycoons and CEOs is that he is not luxurious, which is what he is proud of.The United States desperately needs a model of moral elites. Of course, it will not delve into the flaws that Buffett admits.In addition, Buffett has donated 85% of the company's shares to Bill Gates' charitable foundation, and the public's trust in him is even more advanced. He is really like a "god", and he has been praised to the altar.Therefore, his influence is also unprecedentedly great, as you can see from his brilliant investment in China mentioned in the previous chapters.

Buffett, an expert respected by the Chinese people as the "God of Stocks", has not created a penny for the society. The reason why he was able to plunder the stockholders, especially the Chinese people, is because of his "God of Stocks" Effect, his public image of "making money is not for oneself".As long as any company has anything to do with the "stock god", the public will immediately follow blindly.

In October 2008, Buffett invested US$10 million in China's BYD Automobile Company, accounting for 2.32% of the company's shares.Just one year later, Buffett has earned as much as seven times the return on investment from BYD's books, exceeding US$10 billion!It is conceivable that there must be tens of thousands of Chinese stockholders entering the market behind the "stock god".I hope this time the "Stock God" sticks to the end and keeps his feet clean. That would be the great fortune of Chinese investors!
Why do you say that?Because the investment game that Buffett has played over the years, to put it bluntly, is the pyramid game of Wall Street.This kind of game seems legal, but it is a Perfect Crime (perfect crime), which is to grab unimaginable profits for ordinary people and play the money in other people's pockets into their pockets.Because of the monopoly power system of the empire, the rules of the game are formulated by them, so that they can be at the top of the pyramid and laugh at the "ignorant" people who are crushed to death at the bottom.They take everything from home and abroad without exception, and they are relentless.

After the financial tsunami in 2008, this kind of beastly behavior of wolves eating sheep has become commonplace in the Wall Street jungle, but once wolves reproduce faster than sheep, it will be time for wolves to eat wolves.

After Buffett plundered a vote from the Chinese people, he immediately returned to his hometown of the United States and pulled out a tooth in the wolf mouth of the Goldman Sachs Group. On September 2008, 9, the second day after Goldman Sachs announced its transformation into a bank holding company, Goldman Sachs suffered huge losses, resulting in poor capital turnover.Buffett extended a "helping hand" to Goldman Sachs, bought Goldman Sachs preferred stock for $23 billion, and exchanged another $50 billion for warrants on Goldman Sachs common stock.

The reason why Buffett dares to make a bold move is like playing mahjong. He can see the opponent's hole cards clearly.First, the "Stock God" figured out that the government will rescue AIG (American International Group) through the layers of relations between the governments.As long as AIG does not fall, Goldman Sachs will also survive.Sure enough, when AIG received $1800 billion in government bailout funds, it immediately compensated Goldman Sachs with $129 billion (Goldman Sachs "gambled" $40 billion shorting mortgage-related securities).Second, Goldman Sachs will also get $100 billion from the government's bailout funds.Buffett knows very well that as long as Goldman Sachs takes a breather, the big cake in the market is still there, but there are fewer overlords who divide the cake, and he can sit firmly on the Diaoyutai.

On July 2009, 7, the closing price of Goldman Sachs was US$24 per share on this day. The preferred stock subscribed by Buffett was worth US$164 billion, while the stock purchased by ordinary warrants was US$55 billion, plus dividends and reinvested 32 million US dollars, the total amount is US$4 billion, after deducting Buffett's original investment of US$91 billion, the net profit is US$50 billion.In less than a year, the "Stock God" earned a return of 41% on this investment. "Stock God" himself made no secret of his confidence in Goldman Sachs. He said: "My relationship with Goldman Sachs can be traced back to 111. I have been following this company for a long time, and I have more confidence in the status and management of Goldman Sachs Group than anyone on Wall Street. Corporations, they have the best market timing.” Of course, how could he be so bold if he didn’t understand the relationship between Goldman Sachs and the upper echelons of government?
Only God can see everything in the world!Although Buffett is not a god, he can stand at the top of the pyramid like a god and see every move of people under his feet. It is difficult not to call him a "stock god".As long as the Wall Street pyramid model exists for a day, this bloody plunder will not stop, and the world will not find peace.

(End of this chapter)