Chapter 22: A Daily Income of 4,000 Yuan

As Zhang Yang and Lai Weijie signed their wager, the market sentiment surrounding Changan Automobile underwent a stark reversal. A multitude of self-media outlets began championing the company’s Q1 2009 financial report.

One such outlet, "Wealthy Brother Quan," published a thousand-word piece detailing exactly why Changan Automobile’s net profit had plummeted. The reasons were twofold: first, production capacity upgrades; second, supply chain integration. In layman’s terms, capacity upgrades meant purchasing new machinery and expanding factories. Since such expansions involve massive capital investment, a dip in profit is entirely logical, given the exorbitant cost of automotive manufacturing equipment. As for supply chain integration, Changan Automobile had suspended trading for five months specifically for this purpose. If they were simply swapping in inferior parts to boost margins, there would be no need to make it public knowledge. By openly declaring a supply chain overhaul, they were clearly signaling a qualitative upgrade. Whether it was the buyback of B-shares, capacity expansion, or supply chain integration, everything pointed to the board’s bullish outlook on the company’s future.

As these "bullish" articles flooded the web, investors who had already cut their losses on Changan were left in tears.

[Big Matchstick]: I sold at a 10% loss, and now you’re telling me the Q1 report was actually good news???

[Crazy Egg]: These animals, the market makers are all animals! They pushed the price up 10% in less than 20 seconds. I was trying to day-trade the volatility!

[Stock Market Crouching Dragon]: I bottom-fished 200,000 at the low, and I’m already up 20,000. I can only say that 99% of retail investors are idiots. If you can’t even read a financial report, don't bother trading. Do you really think the stock market is a charity?

[Wind Sighs]: Damn those market makers, I curse you all!!!

The massive volume of shares shaken out by the volatility had left the professional speculators, or "hot money," well-fed. Chen Sanrong and his cohorts began a sustained push to drive the price higher.

...

Meanwhile, on the first floor of the Shanghai Finance Library, Zhang Yang tracked down Li Xiaochun, a junior student who worked part-time at the library. Having crossed paths before, he easily borrowed some A4 paper and an inkpad. He handwrote two copies of the wager, signed them, and pressed his thumbprint. Lai Weijie did not hesitate, signing and stamping his own copies as well. To prevent either party from welching on the deal, they held the documents and recorded a video of each other as evidence of the agreement.

"There, the wager is set. I hope you’ll keep a low profile and stop coming to find me every other minute. Let’s give each other some space, alright?" Zhang Yang said to Lai Weijie.

After verifying that the terms were correct, Lai Weijie stopped fretting and replied, "Fine. I’ll wait for the final results." Though he couldn't fathom where Zhang Yang’s confidence came from, he knew that starting from a 10% loss on a full-position investment made it impossible to reach the top ten in the professional rankings.

He no longer harbored hopes of an internship at Huaxin Securities; he only wanted Zhang Yang to cough up the money.

"If that’s all, I’m heading back to the Finance Analysis Room. Oh, and since you’re so free, be a dear and return the inkpad for me. Thanks." Zhang Yang gathered his things and headed straight back to the sixth floor.

After watching Zhang Yang leave, Lai Weijie returned the inkpad and retreated to the second-floor study hall. He opened his laptop to check the market movement of Changan Automobile.

"No way!" He gasped in shock. After rubbing his eyes vigorously, he stared at the screen again. Changan Automobile was up 7.64%.

"7.64%???" Lai Weijie couldn't hold it together. His breathing hitched, sending him into a coughing fit.

That was a 17-point swing! He never imagined the amplitude would reach 17%, enough to make the stock market’s "Dragon and Tiger" leaderboard. No—it wasn't 17% anymore; it was 18%. The stock was still rising, climbing rapidly. At 10:12 AM, Changan Automobile hit the daily limit, with a buy wall of one million shares. Retail investors were frantically cutting their losses, while others were chasing the rally.

Looking at the stock hitting its limit, Lai Weijie had an impulse to confront Zhang Yang. But halfway there, he shook his head and resigned himself to fate. "Damn it, I shouldn't have bet against that guy."

He regretted it, but what use was regret now? The bet was set. If Zhang Yang managed to secure a top-ten finish in the Investment major, he would have to pay an extra 20,000 yuan, totaling 60,000 yuan in trading fees. After three minutes of silence, Lai Weijie finally let it go. "He’s a top student, after all. Damn, I’ll just consider the 20,000 a tuition fee." He didn't have that much cash on hand, but his family did. If it meant getting into Huaxin Securities, 60,000 wasn't actually a bad deal. After all, anyone who had ever tried to grease the wheels knew that the hardest part wasn't the cost—it was having the money but no way to deliver it.

...

On the sixth floor, in the Finance Analysis Room, Zhang Yang returned to his desk and unlocked his laptop. The moment it opened, he saw that Changan Automobile had hit its daily limit. His total return on that single stock had reached 22.22%, a profit of 4,861.5 yuan.

This was because Zhang Yang had bought 3,300 shares at the 6.63 floor price. Now that it had hit the ceiling, the amplitude was 22.22%, and his total return reflected that. Aside from Changan, his holdings in Bank of China, Baosteel, and JAC Motors were all in the green, though their smaller volumes meant a profit of only 96 yuan. In short, as of 10:14 AM, his real-money account had a daily floating profit of 4,957.5 yuan.

Zhang Yang, contrary to his usual habits, didn't bother checking Lai Weijie’s simulated account. Once he confirmed that the hot money was in control, he knew the stock would likely rise for the next two days, so there was no need to rush. The fundamental reason retail investors lose money—aside from their obsession with bottom-fishing—is that they cannot hold onto a stock; they fail to capture the upside. Even when a stock clears the 10-day moving average, forms a golden cross, and sees volume expansion, they choose to reduce their positions, fearing they’ll get trapped again. Buying at the halfway point and selling at the foot of the trend is the standard portrait of 90% of retail investors. As a professional investment manager, Zhang Yang would never make such a amateur mistake.

Without selling a single share, he opened the "Stock Market Exchange" board on Baidu Tieba and posted his Changan Automobile gains, his entry time, and his insights on bottom-fishing.

Before long, a flurry of replies rolled in.

[Octopus Balls]: A 22.22% daily gain? I worship you, master! Please tell us if it’s still worth buying into Changan.

[Big Stupid Bull]: Damn, brother, that’s impressive! Perfect bottom-fishing. Your analysis is spot on—those who know how to read financial reports are truly masters!

[All-In]: I felt something was fishy when Changan hit the floor, but I didn't have the guts to buy. The OP is truly daring.

[Lightning Speed]: Master, please lead us!

After the post went live, his inbox was immediately flooded with over a dozen private messages from users asking for trading tips. He ignored them and closed the browser. He hadn't shared his account performance just to show off; he wanted to earn the trust of the retail investors on the board.

Once he had their trust? It was simple: he would sell them market research reports to maximize his own profits. As for why he wasn't replying yet, that was also simple—trust is built one step at a time. If he were too eager to sell reports now, they would only suspect he was a scammer. So, he was in no hurry. He would fire a few more shots and let the bullets fly for a while.