In the following trading days, the Nikkei index fluctuated.
On the surface, the daily candlestick chart shows a downward trend, indicating that the bears are in control.
Actually, that's not the case. The undercurrents within are never known to the outside world.
Led by Quantum Fund, Tiger Fund, Bridgewater Associates, Millennium Management, Citadel Investments, and dozens of other hedge fund managers, all gathered together.
They seemed to be discussing something.
This is not the first time such a meeting has been held.
"Shit, those damned pigs..."
“Robertson, you need to control your emotions. Getting angry won’t actually do us any good for our next move.”
On the side.
George said calmly, puffing on his cigar.
The two have known each other for many years. In the financial field, they are not only rivals, but also friends who respect each other in private.
In contrast, other fund managers all seemed indifferent and aloof.
One is the head of the Quantum Fund, and the other is the head of Tiger Fund.
This wasn't the first time the two had bickered, and it certainly wouldn't be the last.
Obviously.
Nobody wants to be the punching bag.
at this time.
Bridgewater's founder, Ray Dalio, stepped in to smooth things over, saying...
"We're here today to discuss and come up with a solution."
"If this drags on, we'll only become more and more passive."
The words had barely left his mouth.
Robertson interrupted with a disdainful expression.
What countermeasures do you have?
"My idea is to concentrate our firepower and drive the index down in one fell swoop, instead of fighting a war of attrition with the island nation."
Robertson's words were met with agreement from many people.
The top dozen fund managers manage funds in the hundreds of billions.
To everyone's surprise, the tenacious islanders seemed to have gone mad.
Don't they know how much of their country's bubble is inflated?
The value of a plot of land in Tokyo is enough to buy the entire United States.
Are you kidding me?
It's obvious that this is impossible.
However.
No one expected this.
This will be a protracted battle.
Like moths to a flame, investors in island nations flock to the stock market one after another.
Originally, this was a good thing.
The principle of international hedge funds is to be good at identifying problems and correcting them in a timely manner.
The idea that a large number of ants can kill an elephant is just a hypothesis.
This actually happened in real life; it was a situation no one expected.
At the beginning.
More than a dozen quantum funds adopted a three-pronged approach.
The foreign exchange market, stock market, and stock index futures markets operate simultaneously.
The path Chen Dong chose was exactly the same.
They borrowed a large amount of shares from securities firms and opened short positions in stock index futures.
After a frenzied sell-off in the island nation's stock market, the Nikkei 255 index will experience a sharp decline.
Therefore, opening a short position in stock index futures can generate huge profits.
Now I feel powerless to continue.
This wasn't just Robertson's opinion; everyone present thought the same way.
Nothing more!
The bullets fired were all caught by the swarming island nation stock market investors.
The Nikkei 255 index is indeed declining, and at the same time, their cost basis for building positions is also decreasing.
Stock index futures.
Opening a short position lowers costs, meaning fewer points are earned and profits decrease.
Similarly!
Opening multiple contracts can lead to increased costs, which is also a way to reduce profits.
Under such circumstances.
The Quantum Fund's total number of short contracts is constantly increasing, but its profits are not increasing.
What's worse is that they have limited funds to add to their positions.
It's not that managing hundreds of billions of dollars means you can come up with that much money.
The relationships involved are very complex.
Investors entrust their money to hedge funds and sign agreements.
Only after signing a high-risk agreement.
Only clients' funds can be used in the extremely risky investment industry of stock index futures.
Those contracts that guarantee principal and interest can only be used to purchase relatively stable financial products such as government bonds.
So, if you do the math...
The funds, amounting to hundreds of billions, have shrunk considerably.
The combined total of more than a dozen hedge funds barely exceeds 10 billion US dollars.
There is another problem.
With tens of billions of dollars, leveraged 100 times, the total scale of funds will reach trillions.
You don't even need to think about it.
At that time, no securities firm in the world had the capability to undertake this task.
"George, what's your stance?"
After Robertson finished speaking, he looked at George.
At this time, George had not yet become the legend he would later become.
However, his insightful investment ideas have already begun to make a name for themselves on Wall Street.
"I have no problem with that, but how should the profits be distributed?"
These words were spoken.
Everyone fell silent.
Using more funds to suppress stock prices and stock index futures also means that the cost of building a position will increase significantly.
The earlier positions are still manageable.
But how should this loss be calculated for new positions?
We can't just do the work for someone else, can we?
final.
After a heated debate, the group decided to contribute a total of $2 billion according to a certain ratio for a new round of suppression.
The profits earned will be distributed in accordance with the terms of the agreement.
Friday, June 22.
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