socalfunplaces Chapter 117 Li Ziyu
Chapter 117 Li Ziyu
While Dell was conducting its acceptance test, Ling Yun was waiting for someone in the hotel coffee shop. Suddenly, someone pushed open the glass door and came in. He was wearing a leather jacket and jeans, and his hair looked like it had been casually tousled. The person glanced around, his gaze settling on Ling Yun, and strode over, his footsteps loud.
"President Ling?" He extended his right hand, his palm sweaty as he shook hands, his grip firm. "I am Li Ziyu." He then pulled out a chair and sat down, the chair legs scraping against the tiles.
The waiter came over. Li Ziyu didn't look at the menu: "Do you have anything to eat? I'm starving."
"We have light meals, sandwiches..."
"Give me the most filling one." Li Ziyu interrupted her, then grinned at Ling Yun, "I flew in from Beijing this morning. That guy Zheng Bin insisted I take the early flight, saying you shouldn't be late. He's afraid you'll run away with the two million you owe him."
Ling Yun poured him tea: "The money won't run away."
"That's right." Li Ziyu took the teacup, gulped down a large mouthful, and winced from the heat. "He said you helped him earn 30% in a week in the US last year, is that true?"
"Market conditions are favorable."
The sandwich arrived. Li Ziyu grabbed it and took a bite, finishing half in three bites before asking, somewhat unclearly, "So, what about now? Still trading US stocks?"
"It's in progress," Ling Yun said, "but we're preparing to withdraw."
Li Ziyu slowed his chewing. He swallowed the food in his mouth, took a sip of tea, and put the rest of the sandwich back on the plate.
"Withdraw? Aren't US stocks still rising? I see on the news that the Nasdaq is hitting new highs every day."
"The price has risen enough," Lingyun said. "I plan to sell off my holdings around March."
"Why March?"
"Several factors." Ling Yun took out a printed table from his bag. It was only one page long and contained charts of several tech stocks. "Look at Yahoo. Since its IPO last April, it has increased sixfold. Its price-to-earnings ratio is unbelievable. And Netscape, its stock price is fluctuating more and more. Market sentiment is too hot."
Li Ziyu took the form and examined it carefully. He traced the candlestick chart with his finger and then looked at the trading volume at the bottom.
"How much does this cost?" he asked, pointing to Yahoo.
"Around three yuan and eight fen."
"Now... it really is time to go." Li Ziyu put down the form. "But what happens after you clear out your inventory?"
"We'll see if there's an opportunity," Ling Yun said vaguely.
Li Ziyu stared at him for a few seconds, then suddenly smiled, a smile that conveyed an "I understand" meaning. "You definitely have a next step, right? Zheng Bin said you never fight a battle you're not prepared for."
"I have an idea, but it's not ready yet," Ling Yun said. "We'll have to wait for the funding to come in before making any decisions."
"What direction? We need a general direction, right?" Li Ziyu leaned forward. "Should we continue trading US stocks, or switch to other markets? Hong Kong stocks? Japan? Or domestic?"
"Anything is possible." Ling Yun still didn't give a specific answer. "It depends on which market opportunity is most obvious in March."
Li Ziyu leaned back in his chair, his fingers tapping lightly on the table. He glanced at Ling Yun, then at the window, and then turned back.
"Zheng Bin said you owe him two million." He suddenly changed the subject. "He said he's not in a hurry to pay it back and wants you to make money from it."
"10% annualized interest."
"Then he'll definitely be satisfied," Li Ziyu said. "Now, I'd also like to hitch a ride."
"The risk is not small," Lingyun warned. "I'm taking profits now, but if you enter the market now, the cost will be high, and if the market corrects before March, you may lose money."
"I won't go in now," Li Ziyu said. "I'll follow your rhythm. If you say go in, I'll go in. If you say clear, I'll clear."
Ling Yun smiled and said, "I estimate I won't resume trading US stocks until the end of this year. I won't be entering the stock market at all this year."
"Is that so?" Li Ziyu said. "Then tell me, where do you initially plan to allocate the cleared funds, and what percentage of each will be allocated?"
Ling Yun took out a document from his bag. It was only three pages long and contained a summary of economic data in English.
Li Ziyu wiped his mouth with a tissue and took the document. He read it slowly, scanning the numbers line by line. The casualness he had while eating noodles was gone, and his eyes were very focused.
After reading it, he put the document back on the table. "Not many people in China know this data."
"Wall Street knows," Ling Yun said. "Hedge funds are already making their moves. Soros' Quantum Fund started building short positions in the Thai baht last year."
"Do you think it will collapse?"
"It's not just a feeling, it's inevitable." Ling Yun pointed to a figure on the document. "Thailand's current account deficit is 8% of GDP, which is unsustainable. It will either depreciate sharply or be forced to depreciate after its foreign exchange reserves are exhausted. It's just a matter of time."
Li Ziyu took a big gulp of water. "You want to work with Soros?"
"I won't follow suit. I'll do my own thing. My capital is small and flexible. I'll just follow along and get a little scrap of the pie," Lingyun said. "I plan to start reducing my US stock holdings after the Spring Festival and clear them out by April. Then I'll gradually build up short positions in Southeast Asian currencies, mainly the Thai baht and Indonesian rupiah, along with stock index futures."
"What about the risks?"
"Very significant," Ling Yun stated frankly. "First, there's the time risk. It could take six months to a year to collapse. Second, there's the policy risk. Southeast Asian countries might impose capital controls, restricting short selling. Third, there's the leverage risk. Forex futures have high leverage; misjudging the direction could lead to a margin call."
Li Ziyu pulled out a pack of cigarettes—Hongtashan brand. He took one out, then thought for a moment and put it back. "How confident are you?"
"Seventy percent," Ling Yun said. "The other thirty percent is due to unforeseen circumstances. For example, a sudden large-scale aid from the International Monetary Fund (IMF), or intervention from the United States. But given the current situation, the probability is low."
Li Ziyu took out a lighter and twirled it in his hand. The metal lighter clicked as it opened and closed.
He suddenly changed the subject, saying, "Last year, when Jiangnan Province was attracting investment, many Southeast Asian businessmen came, mainly from Thailand and Malaysia. They talked about the domestic economy with great anxiety. They said that the real estate market had crashed, the stock market had crashed, and the number of bad debts in banks was alarming."
He paused for a moment: "At the time, I thought it was a problem with their own management. But looking at your data now, it might be a systemic issue."
"It's a systemic problem," Ling Yun said. "It's not just Thailand; Indonesia, Malaysia, and the Philippines are all the same. Overheated investment, excessive borrowing, and fixed exchange rates. This is the classic recipe for a crisis."
"Economics have cycles; bubbles burst and imbalances correct themselves. I'm just on the right side before the correction happens."
Li Ziyu laughed, but this time the laugh wasn't so casual; it was sharp. "That sounds like something a philosopher would say. But in practice? How exactly is it done? Through what channels?"
"I opened an account in Hong Kong through international investment banks," Ling Yun said. "Goldman Sachs and Morgan Stanley can both do forward and option trading in Southeast Asian currencies. You have a way to get the funds out of the country, right?"
"Yes," Li Ziyu said without elaborating, but his tone was certain. "How much time will it take?"
"Once the funds are in place, it will take a month to build the position. We can't invest all at once; we have to do it in batches to avoid being discovered."
Li Ziyu took a small notebook out of his bag—not a regular notebook, but the kind of work log used by cadres. He turned to a blank page and drew a simple timeline with a pen.
"Expected returns?"
"If the Thai baht depreciates by 50%, with our leverage of five times, the theoretical return would be 250%. After deducting costs and risks, the target is 100%-150%," Ling Yun said. "The timeframe is six to nine months."
"What is the probability of losing everything?"
"If we completely misjudge the direction, and the Thai baht appreciates instead of depreciating, and we're fully leveraged, we'll lose everything. But I'll set a stop-loss line, limiting the maximum drawdown to 30%."
Li Ziyu closed his notebook and put his pen back in his pocket. He leaned back, crossed his arms, and looked out at the garden.
"This is a serious matter," he said. "I need to think about it."
"Of course," Ling Yun said. "You can go back and study the data, ask someone knowledgeable. Just give me a reply within two weeks."
"Not two weeks," Li Ziyu turned back. "Three days. I'll call you in three days. But I have conditions."
"you say."
"First, a weekly briefing, via email or phone, explaining positions and profits/losses. Second, any drawdown exceeding 20% must be communicated to me, at which point I can choose to exit. Third, all trades must be recorded, and I need to review the transaction history afterward."
"Okay," Ling Yun said. "I will prepare the agreement."
"There's one more thing." Li Ziyu leaned forward, lowering his voice, "Don't let Zheng Bin know the details. If he asks me, I'll just say you helped me trade some US stocks and we made a little money. Don't mention the Southeast Asian stuff."
Ling Yun nodded. He understood. The fewer people who know about this kind of thing, the better.
Li Ziyu stood up and held out his hand: "Contact me in three days. Until then, just go about your business as usual, and pretend you've never seen me."
He shook hands, this time with a lighter touch. He glanced at his watch, then stood up: "I have to fly to Shanghai this afternoon for a meeting. Send me the finalized agreement via fax. The money will be in place by the end of February."
"No rush," Ling Yun said, standing up as well. "It won't start until early March."
"Get ready as soon as possible." Li Ziyu extended his hand, this time shaking it more gently. "By the way, I heard Zheng Bin mention your optical mouse. How's it?"
"It's alright, Dell is conducting a factory inspection today."
"Let me know if it works out." Li Ziyu blinked. "My old man lives in Jiangnan Province. Maybe he can help out and promote it."
Thanks.
"I'm leaving." He waved and strode away, the hem of his leather jacket swaying with his steps.
Ling Yun sat back down and watched Li Ziyu walk across the courtyard until his figure disappeared into the hotel lobby.
This person, seemingly carefree, asked very insightful questions. His terms were also comprehensive, providing both room for maneuver and a backdoor for risk control.
Outside the window, the sky was overcast, as if it were about to snow.
With the year-end approaching, there are many things we need to get on track with.