Chapter 381 Risk Betting
"A bet?" Collins was also provoked by Xing Baohua's words.
Their hearts pounded with excitement as they stared at each other, one old and one young.
No one spoke.
Time seemed to stand still, making Collins' office unusually quiet.
The term "betting" made this old financier seem to forget some of his professional ethics.
All I could think about was Xing Baohua taking over 10 billion yuan to turn into Lehman Brothers Bank.
He also holds a 3% stake in this bank.
People go crazy when self-interest overrides reason.
After a long while, Collins, as if he had just survived a fierce battle, took a few deep breaths and waved his hand at Xing Baohua, saying, "Lehman won't go crazy with you."
Fortunately, reason prevailed over greed. Collins knew that he had almost been driven mad by Xing Baohua's gambling mentality.
But a seed of even greater greed was deeply buried in his heart.
Xing Baohua walked out of the old finance professional's office with a slight smile on his lips.
He knew that Lehman Brothers would definitely conduct a series of analyses. They would proceed if they were more than 60% certain of winning their bet against Xing Baohua.
Lehman Brothers was extremely aggressive in the investment industry.
As one of the four largest investment banks in the United States, they have offices and financial operations all over the world, especially in futures and stocks, where they have many top analysts who make profits in the simplest way.
This bank is basically present in any profitable financial sector.
It inherently carries a gambling element.
Sure enough, after Xing Baohua left, Collins flew from the Wall Street office to headquarters.
The matter is too big to be decided without going through the board of directors.
He wouldn't mind taking a gamble on a betting project worth over 10 billion yuan if he could take it on.
Lehman Brothers' top analysts from around the world also rushed to the headquarters.
Analyze the possibility of Xing Baohua shorting the two major stock indices.
Amid the global economic crisis, Lehman Brothers understood the situation better than anyone else.
Exchanges around the world are generally experiencing price increases, some with significant increases and others with slower growth.
Behind the seemingly skyrocketing prices, we're actually on the verge of a precipice.
Everything is an illusion and a mirage.
What Lehman Brothers needed to do was analyze where Xing Baohua was shorting the stock.
Where to profit?
When will the two indices fall, and when will they rise?
If a bear market arrives and the entire market falls, Lehman Brothers will not be able to continue its bet with Xing Baohua.
Because they also expect an overall decline.
They just couldn't calculate the exact point at which the price would drop.
After three full days of calculations, they predicted that a financial storm would erupt in the two indices within one and a half to two months, with the scale of the storm uncertain.
Lehman Brothers still had great faith in their analysts; even if there were slight deviations, they weren't far off. The general consensus was that the storm would erupt between early November and mid-December.
Judging from various data from the United States, the root cause is their own economic expansion, which has led to damage to the interests of the real economy.
With unemployment rates remaining high, the number of companies filing for bankruptcy is also gradually increasing.
Coupled with excessively high stock prices and market capitalization, all signs indicate that the economy of the United States is like a balloon about to burst.
Analysts had previously pointed out that the global economy had shifted from high-speed growth to slow growth.
This could indirectly or directly lead to an economic slowdown, halting the soaring stock markets in various countries. Or, perhaps, a soft landing will be used to address the economic crisis.
But more than half of 1987 had passed slowly, and it seemed that the fear of an economic recession had not immediately materialized.
Western stock markets experienced astonishing gains in August of this year. Many economists in those countries have issued warnings.
In a frenzy of making money, who cares about those annoying economists?
The expected decline did not occur, just like weather forecasts, which are often inaccurate.
But Lehman Brothers was different. They believed it would definitely happen, but they couldn't pinpoint the exact time; they could only guess a general timeframe.
How to make money in a falling market?
For finance professionals, these are just a few simple operations.
The statement that risk and reward are commensurate is correct.
To gain more wealth, one must take risks. Lehman Brothers was like Xing Baohua shorting the two major indices – simply betting on a certain direction for a particular phase.
Everyone knows that the only person who can make two fingers turn in opposite directions is God.
Is Xing Baohua God?
Obviously not! Let's have someone from the East. Does he understand the Western stock market, which has a history of several decades?
At least his country doesn't.
As for his profits in the Hong Kong stock market, it's simply because he has abundant funds and the ability to support the market.
After speculative investors cut their losses and retreat, they also need to analyze the reasons for their failure.
The most crucial issue was also uncovered: they never imagined Xing Baohua would be so wealthy.
Unlike Buffett, many investors don't invest in a company they believe in and make a long-term investment.
Their motto for making money is to buy and sell quickly.
During that showdown, Buffett's investment company did not hold shares in Xing Baohua's two companies for the long term.
Lehman Brothers had drawn up an agreement for them to bet against each other. If Xing Baohua wanted to bet against Lehman Brothers, then he should play by their rules.
So Collins, along with the rules of the game they had devised, met with Xing Baohua in person.
When Huang Xingyao learned of Collins's intentions in coming in person, he felt as if the world had gone mad.
Moreover, they are also disrupting automation and breaking some taboos by their own hands.
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