Chapter 46#

In today’s European continent, a new transformation is proceeding vigorously. The European Community, which has been built step by step since World War II, is seeking a closer way of cohesion. The Maastricht Treaty passed in 1991 replaced the former Brussels Treaty, and the framework of the European Union has been established. After the disintegration of the Soviet Union at the end of 1991, affected by the drastic changes in the world pattern, the development of the EU also entered a period of high-speed operation. The new generation of the European continent is regaining its glory, keeping pace with the powerful United States, and even far surpassing the other side seems to have become the most beautiful dream of the heads of European countries.

However, the most critical European Economic and Monetary System in the EU Treaty is not as perfect as their ambitious plan. That extremely complex European Exchange Rate Mechanism has become a classic case of serious loss of control in financial engineering in human history. From 1979 to the birth of the Euro in 1999, the European Exchange Rate Mechanism suffered a total of 18 adjustments, affecting the central exchange rate 56 times. It also caused two amazing currency crises.

In this rare exchange rate adjustment in the world, international money market funds led by hedge funds became the most terrible enemies of European governments. Using the loopholes in the foreign exchange mechanism, financial crocodiles launched fierce attacks around the transforming Europe, and pieces of rich profits torn off entered the pockets of these financiers. In 1992 alone, Soros alone obtained a huge fortune of more than 2 billion US dollars, and what the British government lost in the offensive and defensive battle of the pound exchange rate was more than billions of pounds.

But the crisis was not only the one in 1992. Unlike what most people know, these bloodthirsty financiers did not stay away from the European market. Only 11 months later, in August 1993, the second exchange rate mechanism crisis occurred. The main targets of this crisis were the French franc and the Italian lira. Unlike the previous pound crisis, the hedge funds in 1993 hid their sharp claws and annihilated the situation under the hidden current. The movement of money was as quiet as flowing water.

If one really has to choose an investment direction, then this exchange rate crisis can be described as the biggest opportunity in 1993. In Chen Yuanming’s memory, the founder of the Tiger Fund in front of him was among those who made the most profit in the European market this year. It is only early June now, and there are still two months before the real start in August. Establishing a new private equity team and gathering larger-scale funds within this period is Mr. Robertson’s top priority.

And Chen Yuanming’s bond operations in the European market are not just to make profits, but more importantly to attract winners who can win in this battle. His current assets are only more than 30 million US dollars, which is simply insignificant in the foreign exchange war of hundreds of millions. Moreover, the complexity and changeability of the foreign exchange market are not something he can master immediately. So instead of acting rashly, it is better to take advantage of the east wind of these winners and wait for the rich returns to be credited.

Now that the other party has lifted the veil of hypocrisy and revealed sharp fangs, he is naturally happy to follow the advice and enter this financial feast.

Smiling and nodding, Chen Yuanming’s not-so-standard American pronunciation carried a hint of interest, “Everyone envies Soros’s achievements, don’t they?”

Mr. Robertson sitting opposite frowned slightly. In his mind, his Tiger Fund is not inferior to Soros’s Quantum Fund, but the pound sniping won too much reputation for that guy, making him the second best invisibly.

Just as he wanted to say something, the teenager opposite changed the subject.

“However, compared to the Quantum Fund, I am more optimistic about the steady style of the Tiger Fund in recent years. What I need is not showing off, not the glory of making a certain country bow its head, but real profits and victory. There is a saying in China, ‘When there is no tiger in the mountain, the monkey becomes the king.’ The tiger itself does not need to show off, its strength represents everything.”

As soon as this sentence came out, even Mr. Robertson, who had maintained a polite smile, laughed out loud. For him, he had heard many compliments more exaggerated than this, but the words of this Chinese teenager hit the thing he was most proud of and confident in his heart. In the financial market, only victory is everything. Being a financial crocodile who can change the political situation of a country and talking big under the neon lights is very tempting, but that is not his main business. Hidden attacks and fierce predation should be the style of large felines like tigers.

With this laughter, the atmosphere in the conference room immediately became intimate. In Robertson’s philosophy, the partner’s money is not the most important thing, but compatibility is the key. After all, hedge funds are not investment banking businesses. Its concealment and small scale mean that the cooperative group needs closer contact, and an excellent partner is often more important than a huge capital injection. Although the teenager in front of him looks surprisingly young, he already has the basic conditions of a qualified financier. If viewed according to the long-term concept of holding potential stocks, investing in such a person is a highly profitable business.

With such an idea, after a detailed discussion, a secret agreement was reached. As a new partner of the Tiger Fund, Chen Yuanming invested 30 million US dollars to participate in the next sniping action against the European foreign exchange market. After the action is over, the funds can be gathered and withdrawn from the fund. Partners who enter hedge funds for such a short term are not unheard of, but they are not many after all. When Mr. Robertson asked about this matter and his views on future European bonds, Chen Yuanming just smiled and shook his head.

“I still have some important things on hand that need this money, and the current European bonds have also shown signs of overheating. Although I haven’t personally experienced the disaster in 1987, the hidden dangers caused by too much international hot money are still alarming. The current European market may not be repeating the situation of that year. So I am not optimistic about the European bond market next year.”

These words made Robertson frown slightly. He was a person who had personally experienced the terrible scene of “Black Monday” in 1987 and knew the disastrous consequences of the stock market crash all too well. But now it is only the middle of the year, and the funds pouring into the European bond market are far from reaching saturation. This teenager dares to evaluate the trend of next year. Should he be said to be too bold or too cautious?

However, since the other party has no intention of doing long-term, there is no point in forcing it. Without more clauses and agreements, after the two shook hands again, the deal was concluded. The next day, 30 million funds will be transferred to Mr. Robertson’s account, and richer profits will fall into Chen Yuanming’s pocket in the near future.

After the business was concluded, at the other party’s warm invitation, the two enjoyed a steak dinner worth hundreds of dollars at the famous “Smith & Wollensky” steakhouse at the intersection of Third Avenue in New York. This time without the worries of business, the topic seemed relaxed and casual. Chen Yuanming also heard with interest a lot of news about Wall Street and privacy not known to ordinary people. For this great financial empire, his knowledge was indeed too superficial.

But Mr. Robertson did not discriminate against Chen Yuanming because of his ignorance. On the contrary, increasingly different from the first impression, this Chinese teenager showed quite interesting financial concepts. Some of his ideas were not as rigid and old-fashioned as the old-school Wall Street elites, but contained very novel things. Maybe these ideas are still a bit too fashionable for Wall Street today, but they may not be unrealizable in the days to come.

This “simple meal” truly achieved the expected goal, and the originally unfamiliar relationship also made considerable progress. After a polite farewell, the three left the bustling restaurant and drove the Land Rover Defender back home. After entrusting the funds to the Tiger Fund, Chen Yuanming’s short-term layout in Wall Street has been completed. The rest is just to hand it over to Song Kevin and let him be responsible for continuous follow-up.

The profit ratio that can be obtained from this investment may not be as exaggerated as in China. After paying a management fee as high as 20%, at most 60% or 70% of profit feedback can be obtained, but for the capital base, it is still not to be underestimated. In the current Chinese stock market, investing 30,000 or 50,000 to earn hundreds of thousands may be a very easy thing, but investing 100 million, the board that has not yet been split and expanded cannot accommodate such huge funds. No matter for which stock, this is a number that can become a dealer. It is already quite difficult to earn back 100 million with 100 million.

But in the United States, such high investment to obtain higher returns is not uncommon. The boards of those business giants have unimaginable capacity and growth potential, and the profits from dividends sometimes far exceed the profits from short-term investments. So just as the stock god Buffett said, buying good stocks and holding them for the long term is the best profit model. However, such a large investment is not something Chen Yuanming can do now. He is too short of money. How to use short-term to revitalize and expand the scale of funds is the most important thing now.

Can only take it step by step slowly… After explaining the remaining details to Song Kevin, Chen Yuanming walked back to his bedroom. Through the still smooth glass wall, he looked at the glorious concrete jungle in the distance, with an indescribable emotion in his heart. Now just scratching the surface, one can vaguely glimpse the power of money under Wall Street. So in the near future, can he stand on a similar starting line with these giants?

In the next few years, there are still so many thrilling events and so many coveted opportunities. This is an era where financiers leverage the world, defeat governments single-handedly, and manipulate the economic lifeline. He only hopes that before that day comes, he will have more substantial capital and do some more worthwhile things…