Chapter 468: The Fearless Lu Jiaxin
Chapter 468: The Fearless Lu Jiaxin
Lu Jiaxin, who had skipped a grade and was now in her senior year, quickly adapted to her new classes as she had already previewed the course material. However, with the stock market crash just over a month away, she was constantly worried about this impending event.
On Sunday, Lu Jiaxin called Mo Libin and instructed him to sell off all the stocks under her name within a week and to also close her Nikkei index futures position when it expired.
The American stock market was in a frenzy, and the stocks Lu Jiaxin had bought had seen incredible gains. The one with the highest increase had risen more than fivefold, while the lowest had still more than doubled. Such astounding gains made Mo Libin uneasy, but Lu Jiaxin had assured him that it wasn't time to sell yet, and so he patiently waited. Now that he had received her call, he finally felt relieved.
That evening, when Nie Zhan came over, Lu Jiaxin shared her plans with him. "I think the stock market has peaked. Ah Zhan, I want to short the Dow Jones index."
Nie Zhan was astonished. "What are you saying?"
"The stock market in Hong Kong is overheating, but the American market is even more frenzied. I've already called Mo Libin and asked him to liquidate all the stocks within a week. As for the Nikkei index futures, I'll close the position when it expires later this month."
Nie Zhan rubbed his temples, feeling that this was less like investing and more like outright gambling. "Jiaxin, use only half of your funds for shorting the market and keep the rest in your account for now."
He, too, felt that the stock market had likely peaked after such a remarkable rally. However, no one could predict the exact day when the snow would start falling. What if it happened two or three months from now? They would face margin calls and lose everything. Even though he was already a billionaire, the thought of losing over two billion yuan still made his heart palpitate.
Lu Jiaxin casually replied, "This money was all earned from the stock market, futures, and foreign exchange. If I lose it all, I'll just consider it a dream that didn't come true."
At that moment, Nie Zhan saw Lu Jiaxin as a financial gambler.
As Nie Zhan was about to say something more, Lu Jiaxin waved her hand and interrupted, "I've already made up my mind, so don't waste your time trying to persuade me. Nie Zhan, I want to find someone to audit my overseas accounts to ensure the safety of my funds. Do you have any reliable candidates in mind?"
Although Mo Libin was Nie Zhan's classmate, they were talking about several hundred million yuan in funds, and this was a critical moment. They couldn't afford to make any mistakes, or the losses could be catastrophic.
Knowing that he couldn't change her mind, Nie Zhan agreed to help. "Transfer your overseas funds to my account, and I'll handle it from there."
Lu Jiaxin thought it would be good to diversify her short positions, but she still wanted to conduct an audit. "Once the funds are back in my account, I'll transfer the money to you," she said.
Whether it was stocks or index futures, she only had a rough estimate of her profits. The exact amount would only be known after selling. She couldn't possibly transfer all the money to Nie Zhan, and even if she did transfer half of it, she would want him to follow her instructions.
"For the Dow Jones index, I want to use ten times leverage. Starting from the beginning of October, we should be able to reach full capacity within two weeks, right?" asked Lu Jiaxin.
Starting to build the position on October 1st, they should be able to reach full capacity in a little over two weeks.
"Approximately how much money are we talking about?" asked Nie Zhan.
"Around four hundred million yuan," Lu Jiaxin replied.
Nie Zhan nodded. "We can definitely reach full capacity within two weeks. However, with ten times leverage, we'll face a margin call if the increase exceeds eight percent. The risk is enormous, Jiaxin. Please reconsider."
Lu Jiaxin waved her hand, dismissing his concerns. "Anyway, this money was earned from the stock market, foreign exchange, and futures trading. If I lose it, I'll just focus on running the clothing company."
After a brief pause, she continued, "But if I win, I'll have the money to acquire big-name clothing brands and skincare companies, building my own business empire."
"After some careful thought, Lu Jiaxin realized that while real estate was lucrative, it wasn't her forte. Her strengths lay in industries like fashion, jewelry, skincare, and perfume. So, after the stock market crash, she wouldn't acquire any real estate companies. However, she could increase her stakes in Yuan Sheng Real Estate and Wansheng Real Estate and hold more stocks in Cheung's Group and Sun Hung Kai Properties."
"The two most profitable industries in Hong Kong are real estate and finance. While she had given up on real estate, her biggest advantage was her knowledge of the upcoming economic turmoil in the new millennium."
Nie Zhan reluctantly agreed.
The next day, Lu Jiaxin called Nie Jingwen and expressed her desire to use the antiques and paintings stored in their bank as collateral again.
Nie Jingwen found this a bit odd, as he hadn't heard of any major projects she was undertaking. However, he wasn't one to turn down a business opportunity presented to him. "Certainly," he said. "How much do you plan to mortgage?"
"Naturally, the more, the better," Lu Jiaxin replied.
Nie Jingwen let out a slight laugh. "One million and five hundred thousand dollars is the highest I can offer. Anything more, and I'll have to answer to the board and our shareholders."
He had personally appraised all the antiques and paintings stored in the bank, and they were indeed rare and invaluable treasures. Especially the ceramics—a smaller piece from the same collection had sold at an auction for 6.6 million just last month.
Lu Jiaxin thanked him with a smile but also made a request: she hoped that he would keep this matter from Nie Zhan.
Although he was curious, Nie Jingwen agreed. These antiques and paintings were worth 1.5 million dollars, and even if Lu Jiaxin made some risky investments behind Nie Zhan's back, the collateral ensured that she wouldn't lose money. In business, profit always came first; everything else could be figured out later.
The following day, Lu Jiaxin went to Wansheng Bank to complete the mortgage procedures. However, the antiques alone weren't enough, so a week later, she approached the manager of the Hong Kong and Shanghai Banking Corporation to discuss a loan of 500 million dollars for a term of three months.
For collateral, Lu Jiaxin offered Xin Xin Real Estate and Green Forest. With the real estate market booming and Xin Xin Real Estate boasting only prime assets worth over five billion in net value, coupled with the thriving Green Forest, the manager readily agreed.
Having mortgaged Xin Xin Real Estate, Green Forest, and her jewelry, the most valuable assets Lu Jiaxin now held were her shares in Qi Rui Garment Factory and the 17% stake in Wansheng Real Estate. As for her shares in Wansheng Bank, she had no intention of touching them.
After some consideration, Lu Jiaxin shared her plans with Nie Zhan: "I'm thinking of taking out a loan of 500 million dollars from Wansheng Bank, using the shares of Wansheng Real Estate as collateral."
Wansheng Real Estate was Nie Zhan's company, and a mishap with the 17% stake could cause significant upheaval. Hence, it was only right that she inform him. As for her own businesses, how she managed them was entirely up to her, and she didn't feel the need to disclose those details.
Nie Zhan immediately understood. "You intend to short the Hang Seng Index?" he asked.
With American stocks facing a significant downturn, Hong Kong, heavily reliant on foreign trade, wouldn't be able to escape the fallout. According to Lu Jiaxin's judgment, a crash in the American stock market would trigger a similar crash in Hong Kong's stock market.
"Yes," she confirmed.
Nie Zhan looked at her intently and asked, "Have you mortgaged Xin Xin Real Estate and Green Forest as well?"
Lu Jiaxin met his gaze calmly and nodded. "Yes, including the antiques and paintings."
Nie Zhan exhaled deeply. This was a massive gamble, and it wouldn't be an exaggeration to call it crazy. However, instead of chastising her, he made a request: "Jiaxin, please promise me that you won't mortgage Qi Rui again."
"Alright," she agreed.
(End of Chapter)
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