Chapter 1216: Cunning
"Coca-Cola, 120 million put options contracts, the transaction price is US$15 per share, the term is one year, and the option fee is US$2 per share."
Xu Liang sat in the office, looking at the options trading contract sent by Morgan Stanley with interest, and the seller was specifically indicated in the document - Berkshire Hathaway.
He touched his chin, which had already grown green stubble, and Old Man Ba was actually coming to this muddy water, which somewhat surprised him.
"Do you want to pick it up?"
Xu Liang examined the contract and analyzed silently.
From now until the end of January 2009, during this year, as long as the share price of Coca-Cola is less than US$15, minus the option fee of US$2, that is, less than US$13, you will make a profit.
If Coca-Cola's stock price falls to $10 in the next year, it can buy it from the market for $10, and then sell it to Old Man Ba at the contract price of $15.
After deducting option fees, you can make $3 per share, and 120 million shares are profitable.
The principal invested is the $200 million option fee, and the rate of return can reach 180%.
Moreover, in addition to exercising options when the option expires, if Coca-Cola falls sharply before the option expires, the option price will rise sharply. You can also sell the put options in your hand at a price of $3, $4 or even higher, without having to wait until the option expires.
This can lock in profits in advance and avoid the risks of profit rebates and losses caused by the stock price rebound.
Of course, some business in the world make money, and some naturally lose money.
In which case will you lose money?
If Coca-Cola's stock price does not fall below $15, Hanhua Pacific Fund will naturally not be able to do a loss-making business such as "spend $16 or even higher to buy stocks, and then sell it to Buffett for $15".
The $2 option fee was wasted, while Buffett's side made a profit because he sold 120 million put options and made a net profit of $240 million.
This transaction was formed by the two parties based on different judgments on the stock price trend of Coca-Cola in the next year.
Whoever has a better vision will cut the other side of the leeks. "Have you read this information?" Li Jinling nodded.
As an assistant, she has indeed read this information. "Do you think Coca-Cola can fall to $10 in the next year? Or break-even point of $13?" "Mr. Xu, I don't know much about finance, and I'm afraid I can't give you useful advice." "It doesn't matter, just say your own judgment and listen to me." Xu Liang smiled.
He is not short of professional financial data now. Hanhua and Hongyan Research Departments have detailed Coca-Cola financial reports and operating data over the past ten or twenty years.
But professional financial people often have a blind eye because they understand it too much, and they are stuck in it and can't extricate themselves. Sometimes bystanders can see some practical problems.
Li Jinling nodded, "Now Coca-Cola's stock price fluctuates around $28, and the decline must reach more than 50%.
Normally, this is difficult to achieve, otherwise Buffett would not sell such put option contracts.
Unless the subprime mortgage crisis this year's unprecedented power, it will be too difficult to halve the stock price."
Xu Liang nodded in agreement. Bank stocks must have suffered a lot in the secondary debt crisis, and it is highly likely that they will be cut in half.
But Coca-Cola is different, as one of the most popular beverage companies in the world.
Its operations are healthy and its profits are good.
Even if it is affected by the subprime mortgage crisis, it may be difficult to cut it in half.
"Mr. Xu, the concept of 'healthy diet' is now being paid more and more attention. Since 2003, the low-sugar diet has set off a wave of low-sugar diets across the United States. Atkins diet and ketogenic diet have been popular one after another, while sales of high-sugar beverages have been falling continuously.
The stock prices of Coca-Cola, Pepsi and other companies have fallen to varying degrees.
If it weren't for the growing Chinese market support, their stock prices would have fallen more.
If we use Xu's media channels to promote the concept of "healthy diet" in China, it will definitely have a huge impact on Coca-Cola's sales.
At that time, it is not impossible to cooperate with the subprime debt crisis and reduce its share price by half. ”
Xu Liang's eyes lit up quickly.
"Sister Li, it seems that I will ask you more opinions in the future."
"You have over-the-win results, and I am just a well-known simple opinion."
"Haha, this is not a simple opinion.
It's a killing of two birds with one stone."
Kanghua's "Arctic Ocean Coke" has invested heavily in promotion and promotion.
The share of the domestic cola market is only about 20%.
It is always difficult to surpass Coca-Cola and Pepsi.
If the "health concept" is used as publicity, it will undoubtedly be beneficial to the "Arctic Ocean Coke".
Because when Arctic Ocean Coke started to promote and promote promotion, it always claimed to be "healthy", and competed for the market with zero sucrose without adding any additions.
After so many years of promotion and promotion, this concept has become more and more popular.
If we continue to attack the two cola with the concept of health, it will naturally make the Arctic Ocean's slogan of "0 sucrose without adding" that is deeply rooted in people's hearts and makes more profitable.
Of course, it is possible to kill a thousand enemies and lose eight hundred of them.
But just make money.
Li Jinling smiled. She didn't know why the big boss said, "Two kills two birds with one stone." As long as her answer satisfies the boss, it would be enough.
After calming down, Xu Liang looked at the information on the table, thought for a while, and put it aside for the time being.
Coca-Cola is not in a hurry to make a decision.
In addition to Coca-Cola, old man Ba also sells put options Wells Fargo, American Express, rating agencies Moody's, Washington Post, Xishi Candy, United Bank, New York Mellon Bank, food giant Kraft, etc.
Almost all of them are heavily held by Berkshire Hathaway.
He has a total of 13 companies invested 450 million put options, with a contract worth $9 billion, and he can receive a total of $940 million in option fees.
If the stock prices of thirteen companies fell less than 50% this year, he would easily put the $940 million in his pocket.
It's a total no-cost deal!
Making a lot!
Even if the decline reaches 55% or even 60%, the $940 million option fee can offset almost all the losses, or a small loss.
Only when the decline reaches more than 60% or even greater, Buffett will suffer a big loss.
But extending the timeline to three, five or even longer, value investment should be able to fill all losses.
If it is more intuitive, it can be expressed by probability.
That is:
The 70% probability of making this $940 million is earned, the 20% probability of not losing or losing a little, the 10% probability of losing a lot...
The 10% probability of losing a lot is based on the overall decline of thirteen companies that have reached more than 60%. The more the decline exceeds 60%, the more the loss is.
I have to say that Buffett's abacus is quite good.
Moreover, all the put options he sells are heavily invested by Berkshire Hathaway, and he understands the operating and financial status of these companies.
I have absolute confidence in my heart, and with the financial situation of these companies, he will not lose money. "I'm so cunning, I count everything." Xu Liang sighed in his heart.
But this is normal. It is not worthy of being famous. Old Man Ba has been scattered in the financial market for half a century. If he had no real skills, he would have been lying down long ago.
"Send this information to Qiu Heng and take it all."
Old man Ba's plan is seamless, but he underestimated the impact of the sub-debt crisis on the United States, on the global financial and commercial markets.
It can be said that this is the worst economic crisis that broke out around the world after the Great Depression in 1929.
Not to mention Coca-Cola, even the bad Apple, which released new phones, and Google, the darling of the Nasdaq market, have been halved by the subprime debt crisis.
Coca-Cola will only be more serious.
The S&P 500 index fell 59.12% in a year.
It can be seen that it is tragic.
So, he was not worried about losing at all.
Li Jinling agreed to take the information and handed over another information. "Mr. Xu, Hongyan Fund has completed the merger and acquisition of the 'Violia Transportation Business', this is the detailed information."
Xu Liang took it. "It's done so quickly? Is Lao Qiu very efficient?" Qiu Youren, director of the Merger and Acquisition and Restructuring Department of Hongyan Fund. "We are all our own people, and we don't have so many concerns when we talk, so it's normal to have a fast speed." After saying that, Xu Liang looked through the information in his hand.
"Connex?"
"Connex is the original name of Veolia Communications." Li Jinling reminded.
Xu Liang suddenly realized.
Veolia Environmental Group's four major business matrices: water, waste management, energy management and transportation.
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In addition to the water service, it is named after Veolia, everyone has its own brand.
There are: Olusi Waste, Dalke Energy and Connex Transportation.
The reason is also very simple. They are all companies acquired by Vidiwang, so they retained the brand.
It was not until the establishment of the Veolia Environmental Group and the independence of the Vivendi Group that the four major businesses use the Veolia brand uniformly.
Now that the transportation business is divided from Veolia, it is naturally necessary to use the original brand.
Open the information.
After briefly glanced at the asset list of transactions, he mainly looked at the transaction volume.
$4.1 billion in cash, plus $3.5 billion in debt, totaling $7.6 billion.
According to Veolia Environment's financial situation, it is basically a 14-fold price-to-earnings ratio, which is a good valuation for a public utility company.
After seeing him finish watching, Li Jinling continued.
"Mr. Xia asked me to ask if you have any specific plans for the next development of 'Connex'?"
"Next? He thought more comprehensively than me."
He left Connex simply and felt it was a pity to sell it, but he never thought about the specific development.
"Do he have any suggestions?"
"President Xia didn't say it."
Xu Liang nodded, and Xia Changsheng might have just asked, so as not to catch him off guard if he had any explanation.
However, his words were a reminder to himself.
Since Connex is left behind, it is impossible to leave it alone.
Especially, the subprime mortgage is coming soon, and the global assets depreciate greatly, which is a good opportunity to buy at the bottom. "Tell Lao Xia that since he asked, let him bring Hongyan's strategic consulting department to come up with a practical development report.
Of course, submitting a few more copies is also OK. ”
”Okay. "
Li Jinling just left, the phone on his desk suddenly rang.
Pick it up and took a look. It was Jiang Xiaoyang.
He just answered the phone, "Xu Liang, look, the Federal Reserve has cut interest rates, and the US stock market has rebounded! ”
Xu Liang's heart sank, he quickly turned on his computer and logged into the official website of the New York Stock Exchange.
Asolutely, the screen was full of green.
It looks like a lot of vitality, but in the eyes of Hanhua and Hongyan, it is full of murderous intent!
"Since Berkennan announced the Fed's interest rate cut, U.S. stocks rose 10% today. The $118 billion short positions that have entered the market not only erased previous profits, but also lost $2.1 billion.
If U.S. stocks continue to rise sharply, our risk exposure will also be rapidly amplified!"
Jiang Xiaoyang's tone was quick.
Xu Liang calmed down and comforted: "Don't worry, it's not the first time Bernanke cuts interest rates.
And from last year to now, do you think he has any other actions besides the rate cut?
No.
This old man probably has the same ability as Cheng Yaojin.
So we can't panic!
In addition, if the bank deposit interest rate is lower, investors will withdraw the money deposited by the bank, and the market liquidity will increase, effectively prevent inflation and slow down the economic recession.
But America is now terminally ill, with a huge hole of 62 trillion US dollars that God cannot fill even if he comes.
This thunder will collapse sooner or later.
Now, we must keep our feet firm. ”
Listening to his calm tone and attitude, Jiang Xiaoyang, who was originally anxious, gradually calmed down.
"Goldman Sachs and Morgan Stanley asked us to add margin. I have asked Sun Zhenping to pay $5 billion."
Hongyan has leveraged $220 billion through triple leverage, but the US market has accommodated $150 billion.
But Hongyan still holds a cash reserve of $120 billion.
Enough to deal with various situations.
Currently, the two major hedge fund Hanhua Pacific Fund and Indian Ocean Fund have invested nearly US$120 billion in short selling funds in the global market, accounting for 60% of the US market.
But Hanhua still holds nearly $200 billion in cash in his hand.
The risk resistance is stronger than that of Hongyan.
So they don't have to panic at all.
"By the way, although the rebound of US stocks has caused a considerable floating loss to us shorting stocks, this is probably an opportunity.
At least our option contract should be able to take this opportunity to talk about a better strike price and lower option fees.
In terms of shorting the underlying stocks, you can also wait for opportunities to make some adjustments, and look for opportunities to close the position and short at a higher position.
From the meaning of the Federal Reserve, it should have not given up treatment yet, there are still some fun later. "Xu Liang said quickly.
Before Lehman went bankrupt, the Federal Reserve had been actively saving the market.
If the bears want to usher in a big carnival, they still have to have a tug-of-war.
And since it is not a one-sided market, there will be no spectacular situation like flying down three thousand feet. Therefore, if you want to reduce cost losses and even make small profits during this period, you have to do some short-term operations. "I understand, I'll call Sun Zhenping right away." Xu Liang responded, and the two of them chatted for a few simple words and hung up the phone.
Soon, Li Jinling knocked on the door and walked in, holding a document in her hand, with a solemn expression.
"The three major stock indexes, including S&P, Nasdaq and Dow Jones, rebounded across the board, and their profits were given up a lot."
Xu Liang took the document and took a look. The S&P 500 index rose 2.14%, from 1310.41 points to 1338.6, up 28.2 points.
After a simple calculation in my mind, Hanhua currently holds 720,000 S&P 500 futures contracts, with a point of fluctuation that is, the contract multiplier 250 times the contract number 720,000, that is, 180 million US dollars, and multiplied by 28.2 points, a loss of 5.076 billion US dollars.
No wonder Jiang Xiaoyang couldn't sit still. He lost so much at once, so it would be strange if he could sit still.
I looked at the Nasdaq futures contract and the Dow futures contract again, and the losses were also serious.
Fortunately, the previous floating rise was supported, but in fact, Indian Ocean Fund and Pacific Fund did not lose much.
But this sign is not very good.
(This chapter ends)