The method is very simple, which is to prepare some funds, about 20 million US dollars, to perform the opposite operation to Leeson.
If you lose, then the 20 million will be wasted, which will be the icing on the cake for Leeson; but if you win, then all the risks Leeson took will be converted into AXA's earnings.
Seeing that Lisen's current risks were so huge, Li Laosan finally agreed to Zhou Zhibo's move, but he only agreed that Zhou Zhi would use part of his "change" to do this, which is regarded as the AXA Fund." "Operation on behalf of clients" will not affect the credibility and income of the fund.
After the preliminary preparations were in place, the Nikkei Index has been rising slowly, gradually approaching Zhou Zhi’s liquidation point. Even though Zhou Zhi was working hard on exams at the time, he was often harassed by Li Lao San, meaning to ask him Do you need to stop loss?
Zhou Zhi simply added another 30 million and told Li Laosan not to harass him anymore.
On January 18, the Kobe Earthquake struck, and in the following days, the Nikkei Index began to fall crazily.
On the one hand, Leeson suffered greater losses. In order to make up for the losses, he started to purchase a larger number of Nikkei Index futures contracts to avoid liquidation, hoping that the Nikkei Index would quickly rise back to the ideal price range. .
On January 30, Leeson began to use the 10 million pounds he received from Britain every day to buy Nikkei futures and short-sell island government bonds.
On February 10, Leeson created a record number in the history of Singapore futures trading, holding 55,000 Nikkei futures and 20,000 island government bond contracts.
However, as long as the index is falling, these rescue measures are destined to be in vain, and the larger the number of transactions, the greater the loss.
On the contrary, Zhou Zhi's account entered a stage of crazy money-making. After authorizing Li Laosan, Li Laosan began to use the index decline income obtained in the futures market to purchase government bonds of island countries, further increasing their prices.
As long as the stock index continues to fall, this is a virtuous cycle. The blood that was sucked away by Leeson now flows back at a rate of ten times.
On February 23, 1995, the last day of Bahrain futures, Leeson's efforts to influence the market direction completely failed. Nikkei's stock price closed at 17,885 points, and Leeson's long risk position in Nikkei futures has reached more than 60,000 contracts; as the prices of island government bonds have been rising, his short risk position has also reached 26,000 contracts. The losses caused by Leeson to Bahrain finally reached a high of 860 million pounds while Bahrain's senior executives were still dreaming of dividends the next day. At this time, all the share capital of Bahrain Bank was Only £470 million!
The Great Kansai Earthquake that took away thousands of lives a month ago ended the life of Barings Bank, the oldest bank in the world, a month and a half later.
On February 25, the Bank of England announced that Barings Bank would no longer be able to engage in trading activities and would apply for asset liquidation. The prestigious Barings Bank, which has a history of more than 230 years, went bankrupt.
In fact, to be precise, Zhou Zhi's reverse operation is also a big gamble, but the only difference from Li Sen is that one can afford to lose and the other can't afford to lose.
On March 2, the police arrested Leeson. This "genius" used a contract of more than 100 million pounds to cause a loss of 860 million pounds to Barings Bank, a leverage amplification effect of nearly eight times.
Zhou Zhi is also about the same, but because of the opposite direction, it has changed from 50 million US dollars to 400 million US dollars. After deducting the "labor fee" for Li Laosan, there is still more than 300 million US dollars. However, this was only the beginning. The news of the bankruptcy of Barings Bank Group shocked the international financial market and immediately caused a series of strong fluctuations in the financial circles in Asia, Europe and the Americas. The exchange rate of the pound against the mark in the Tokyo stock market fell to its lowest point in nearly two years, and the London stock market also plummeted, with the Dow Jones index falling directly by 29 percentage points.
These situations have already been predicted by AXA Fund, which started making crazy money after the Great Kansai Earthquake. It is equivalent to AXA foreseeing this next month in advance. Two months of international financial market trends.
If he still needs careful guidance at this point, Li Laosan is not worthy of being called the little financial prince of Hong Kong Island. In the season when Leeson's liquidation was a foregone conclusion, AXA Fund launched an all-out attack and showed off in the global financial market. Short term operation.
Compared with many of Zhou Zhi’s unscrupulous buying choices in technology stock decisions, this time the collapse of Barings Bank is acceptable in Li Laosan’s eyes. Everyone except Zhou Zhi himself I feel that he discovered the clues in Leeson's operation, and then asked the Intelligence Department to re-analyze, and finally grasped the full picture of the crisis in the Bahrain banking system in advance, and then boldly reversed the operation.
Originally, I just wanted to make waves in the slightly larger fluctuations of the Nikkei Index and make some money in the short-term decline. Unexpectedly, I just caught up with the big earthquake and suddenly suppressed the index to the bottom. This round of profits is really quite big.
In the eyes of outsiders, this is half manpower and half God's will, but at least the plot logic is reasonable.
And just when everyone was frightened by the volatility of the global stock market crash, Zhou Zhi took the more than 300 million US dollars he had just earned and joined the long list. Those technology stocks that we were optimistic about increased their positions during this nearly 30% drop.
The logic this time is even simpler. Before the Bahrain Bank crisis broke out, the market was only in the initial stage of the bull market. In a sense, if there had not been an emergency such as the earthquake, Leeson's judgment on the market was actually correct. .
His mistake was just to overestimate this judgment overly optimistically, ignore the possible sudden risks, and excessively reduce the risk resistance ability of his operation in order to maximize profits. This is obviously a gambler's mentality. , wanted to "seek wealth and wealth", only to suffer a disastrous failure in the end.
But his failure, or the bankruptcy of Barings Bank, does not mean that the situation of the world's financial markets has changed. Therefore, although you can be short for one or two months in the short term, if you do not If you turn around in time before a wave comes, you will not only be unable to enjoy the dividends brought by the new wave, but may even overturn the boat, causing the previous harvest to capsize into the sea again.
For Zhou Zhi, this wave of short-term operations of Barings Bank is purely a windfall. If he hadn't discovered it in the report of the Intelligence Department, Zhou Zhi might not even think about it, let alone go further. Investigated in detail.
AXA Fund is still making money, and no one knows how much it can make until the dust settles.
The 300 million U.S. dollars Zhou Zhi had was still his "pocket money." It was a rare windfall, so he might as well support himself.
On March 4, the first of the Ellsworth Four Seasons Auctions, designed according to Zhou Zhi's advice, was a great success. (End of this chapter)