Chapter Forty-Four: The Market Pulls Back—Go All In!
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“It’s falling! It’s plunging!”
“The meeting fell short of market expectations. Banking, insurance, and financial stocks are all dropping together, and securities stocks are being dumped as well!”
“My God, has the market peaked?”
“Teacher Da Xiao, I hate you!”
At that very moment, countless retail investors across China were unleashing their fury.
For the past two days, the news media had been hyping the possibility of a new investment plan, drawing large numbers of retail investors into the related sectors.
And now?
The meeting was already halfway over, yet not a word had been said about it.
Cautious capital had already fled in advance. The only ones left were the “hold-the-line investors,” stubbornly resisting the plunge as they waited for a miracle.
He Jing, whose account had not suffered a single losing day in more than twenty consecutive trading sessions, was now showing an intraday floating loss of 0.3 percent.
She had not chased the rally over the past two days. She had been holding bank stocks all along.
As the female top student whose professional grades ranked just below Zhang Yang’s, her trading style was primarily conservative. She only made money she could see within her own understanding.
What did it mean to make money one could see?
Put simply, it meant making money within the bounds of one’s knowledge.
Take the Big Four banks, for example. Judging from the manufacturing PMI data released the previous night, China’s economy was gradually recovering. Once the economy recovered, credit funds would increase in tandem.
Why would an economic recovery lead to an increase in credit funds?
The reason was simple. An improving economic environment meant growing market demand. When demand exceeded supply, more people would start businesses. And as the number of entrepreneurs increased, so would the number of business owners applying for credit loans at banks.
Whether one was investing in the stock market or starting a business, it was best to do so during an upward economic cycle.
Many retail investors and novice entrepreneurs knew nothing about the macroeconomy yet acted recklessly, often ending up with enormous losses.
Lan Sisi watched the broad market turn downward and suddenly found herself unable to make up her mind. She asked He Jing, “Sister Jing, there’s a bearish divergence at the top. Could the market be entering a volatile downward trend?”
“It’s possible.”
He Jing nodded slightly and analyzed the situation. “The main issue is that the monetary policy meeting fell somewhat short of expectations. The banking and insurance sectors are leading the decline.”
“Securities stocks are being dumped too. The selling pressure above seems rather heavy,” Wei Yunshi added.
“Look at Changan Automobile!”
Xu Zhiruo suddenly cried out.
Everyone hurriedly searched for Changan Automobile. The stock had originally been locked at its upper limit, but at 10:19 a.m., its price plunged straight downward. By 10:20, it had been pressed to the lower limit.
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“A limit-up straight to a limit-down!”
“My God, what happened?”
“Will Lai Weijie be ruined?”
Lan Sisi and Wei Yunshi cried out in alarm.
For Changan Automobile alone, anyone who had bought at the upper limit stood to suffer a maximum loss of 18.18 percent. A loss of that magnitude was difficult for retail investors to bear.
At that moment, Lai Weijie once again became the focus of the class group chat.
[Yoo Zhigao]: Changan Automobile has announced a thirty-billion-yuan secondary offering and was instantly slammed to the lower limit. Lai Weijie, you must have gotten out, right?
[Chen Chuan]: If our second-ranked big brother Lai Weijie has fallen, then our top-ranked big sister He Jing is truly miles ahead!
[Yin Shichang]: @Lai Weijie, Brother Jie, did you get out?
[Dong Lulu]: Changan Automobile’s management is incredibly shrewd. They conducted a thirty-billion-yuan offering at the lofty price of 11.87 yuan, then tried to use the Central Bank’s First-Quarter Monetary Policy Regular Meeting as cover.
As messages continued flooding the professional group chat, along with repeated mentions of his name, Lai Weijie was sweating profusely. He hurriedly sent Zhang Yang a message to ask about the state of his simulated trading account.
Having already witnessed Zhang Yang’s technical skill, Lai Weijie had not logged into his securities account for several days, nor had he paid any attention to the changes in the capital markets. He had spent the entire time flirting with his girlfriend.
Upon seeing the message, Zhang Yang immediately pressed the Ctrl, Alt, and A keys, took a screenshot, and sent Lai Weijie an image of his holdings.
When Lai Weijie saw the actual positions, he breathed a sigh of relief. Zhang Yang had already sold Changan Automobile and bought shares in the Big Four banks.
Although the account was currently down 0.46 percent, this was precisely the outcome he wanted.
The top three positions attracted too much attention. What he wanted was to rank among the last three places in the top ten.
[Lai Weijie]: Awesome!
Lai Weijie replied to Zhang Yang, then began responding to the messages in the professional class group.
[Lai Weijie]: I sold Changan Automobile yesterday. I suppose you could call it a perfectly timed escape from the peak. I did chase the Big Four banks, though, so I’m down a little at the moment.
The moment the message was sent, the investment group for the Shanghai University of Finance and Economics exploded.
[Wang Liu]: Impressive, Brother Jie! You locked in a solid return on Changan Automobile. If this had been a real account, you’d be making a fortune!
[Bao Manxiang]: Brother Jie is amazing~
[Yin Shichang]: Nothing more to say. A dark horse is a dark horse. Absolutely incredible!
Once it was confirmed that Lai Weijie had successfully escaped at the peak, the other students essentially assumed that he would receive the internship position at Huaxin Securities.
Several female classmates were quite practical as well, and began taking the initiative to add Lai Weijie as a friend.
Lai Weijie did not refuse. He naturally knew what these girls were after. The chaos of the financial world was in no way inferior to that of the entertainment industry.
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…
Meanwhile.
Elsewhere.
On Baidu Tieba’s stock-trading forum, the retail investors who had previously mocked Zhang Yang for missing the rally flooded back into the thread. The replies, which had numbered just over three hundred, shot past four hundred in the blink of an eye.
[King Never Meets King]: Master Joker, save me! My entire position is trapped in Changan Automobile. Should I cut my losses and run?
[Little Dull Dull]: Joker is amazing! Brother Jump-Off-the-Building is amazing! The two of them said yesterday that the stock had peaked, and Changan Automobile immediately turned around and conducted a high-level financing operation. Could they have had inside information?
[Transparent Tape]: Don’t you people look at financial statements when you trade stocks? Changan Automobile is obviously expanding its production lines and desperately short of money. After five consecutive limit-ups, if I were them, I’d raise funds through a high-priced offering too.
This time, it was no longer only the retail investors howling. Even the speculative funds betting on a rise were weeping.
The million-level speculative funds known as Shadowless Kick of Chancheng, Southern Ocean Battle Song, and Trading Stocks to Support the Family had all shut themselves away in despair. They had painstakingly spent more than a month building positions and accumulating shares, only to end up not earning a single cent after deducting the cost of controlling the stock.
Just moments earlier, after Liao Guopei—Shadowless Kick of Chancheng—and several other speculative funds had pushed the stock to its upper limit, they had begun slowly unloading their positions. But as soon as the secondary-offering announcement was released, the “Ten-Thousand-Share Brother” began dumping shares directly.
Fortunately, they had reacted quickly and had access to the trading channels of professional speculative-fund seats, allowing them to liquidate their positions rapidly. Otherwise, each of them would have lost at least several hundred thousand yuan.
Seeing Changan Automobile locked at the lower limit, Chen Sanrong could not help feeling relieved that he had not given in to greed. If he had chased one more limit-up, he too would have been trapped at the lower limit.
…
Zhang Yang, who was still trading from the library, also saw the alert about Changan Automobile’s sudden movement. He did not click on it to gloat. Instead, he began sweeping up shares of the Big Four banks on the market.
With the remaining 120,000 yuan, he went all in on the four major state-owned banks.
As for the 20,000 yuan in China Textile Machinery, he bought that position as the broader market began to turn downward. Although a gap had appeared, the market-making funds quickly filled it, and the stock remained locked at the upper limit.
“Thirty thousand into China Construction Bank.”
“Thirty thousand into Industrial and Commercial Bank.”
“Thirty thousand into Agricultural Bank.”
“Thirty thousand into Bank of China.”
Zhang Yang once again used Xu Zhiruo’s simulated account to go all in on the Big Four banks. Lai Weijie’s simulated account was different: he chose to liquidate everything, because he needed to control his ranking. It could only fall, never rise.
Looking at the account positions, Zhang Yang—who had gained advance knowledge of the market’s direction—smiled calmly and murmured to himself, “Done. Now we wait for the market sentiment to ferment.”
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