"In the final analysis, information asymmetry allows investors to make different choices, and even in the face of stocks that have fallen due to scandals, blind short selling will still face many uncertain factors, which also brings investment risks." Dong Qiangqiang concluded.
“Because some issues may be misunderstood by investors, some issues may be accepted by the SEC after explanations by listed companies, or some issues may still not be accepted by regulatory agencies after explanations, then stock prices will fluctuate. In fact, There have been many similar cases in the history of U.S. stocks.”
"Then what basis do you use to judge that Munich Re's stock price will not rebound?" Dong Qiangqiang asked, "Enron concealed huge losses due to fraud and fraud, and Munich Re's revenue dropped sharply because of the sky-high compensation caused by the terrorist attacks. Both. It’s all about reduced revenue, so why would you choose to buy a put option on Munich Re instead of just shorting it?”
"First of all, I have to confess that I have a gambler's mentality." Duanmu admitted generously. "Rebounding or not rebounding after the stock price falls is actually just a matter of probability. On the one hand, the psychological impact that terrorist attacks have brought to everyone in the short term is really It is too shocking. At the same time, as more and more people are injured, the impact it will have on Munich Re will ferment over time. On the other hand, because of the existence of short-selling institutions, its stock price will fluctuate. It is because of the uncertainty about the short-term stock price that I choose to buy 3-month put options. I believe that no matter how it rebounds, the stock price cannot return to the level before 911. This is your first question. Second point , Enron's fraud has been suspected for more than a year, and the serious impact has attracted the attention of the US Securities Regulatory Commission. It is difficult to say whether it will be forced to delist. Once it is really delisted or forced to suspend trading and lose its stock price, short selling orders will be involved. and the trouble of being unable to exercise put options. Another point is that as an individual, you cannot lend stocks from a third-party platform for short selling.”
It was the first time Dong Qiangqiang heard the knowledge about short selling. He felt like a lucky boy who accidentally picked up the martial arts secret book after falling off the cliff. He held the secret book but didn't understand it at all.
"Another thing you can think about is if the first person who came forward to suspect Enron's fraud had borrowed a large amount of Enron's stock through a stock lending platform before disclosing his suspicion to the market, and then publicized Enron's fraud. , what will happen?" Duanmu inspired.
"I remember that someone questioned Enron at the beginning of this year, but the current stock price is less than a quarter of what it was at the beginning of the year." Dong Qiangqiang said with a click of his tongue, "If he dared to short Enron at the beginning of the year, he would have made a fortune now. But he relied on his Who dares to doubt Enron? At that time, Enron was at its peak, and no one would doubt that the Fortune 500 companies in the United States would commit fraud."
"So I have been thinking about this matter. Through research, I think this person must do at least three things well. The first one is that he must have spent a long time studying all the information related to Enron that can be found in the market. Not only It involves on-site visits to listed companies, and communication with its upstream and downstream companies and major customers. The second thing is a bit more difficult. I highly suspect that he has communicated with insiders, maybe insiders of the audit company, or maybe Enron. An insider may also be a former employee of Enron. Only through research on these two aspects, coupled with his understanding of the company, can he make his own judgment. Both aspects are indispensable, and neither will be rigorous without either."
Dong Qiangqiang carefully read Duanmu's words several times and then engraved them in his mind. "But the driving force behind Enron's sharp fluctuations in its stock price today is its own third-quarter financial report. I know that listed companies must disclose quarterly financial reports on time, but if they do not disclose their quarterly financial reports on time, its plunge will probably be delayed for a while longer."
"On the surface, it seems that the last straw for Enron is its third-quarter financial report, but if it does not disclose it on time, the market will probably panic even more. Now it is truly riding a tiger. If it does not disclose it, it will be dead anyway, but sooner or later. "
"The executives of these listed companies have net worths of tens of millions or even more than 100 million US dollars, so why do they bother to do this? If you have a life to make money, you have to have a life to spend it." Dong Qiangqiang said with emotion.
"Some people believe in seeking wealth through risk, and they can't make money slowly through regular channels as quickly as through fraud?" Duanmu replied with a smile, "Besides, these people have probably transferred their wealth to Other tax havens or offshore financial centers, the U.S. judiciary can do nothing to them. They can declare legal bankruptcy, and they can be released on bail without even going to jail or for a short period of time, and then dodge to Java to enjoy themselves. All the wealth and happiness are gone."
"They have no worries about food and clothing, but what should the investors who bought their company's stocks do?" Dong Qiangqiang only felt that there was no end to one problem after another.
"No way, cold salad." Duanmu said bluntly, "If you buy the stocks of this kind of company, you can only accept bad luck. It is possible to become a poor person from the middle class in an instant. There are many movies and documentaries about this in the United States. But I heard There are many law firms in the United States that litigate for this type of investors, specializing in seeking justice for them. Of course, the lawyers are unable to make early gains, and they are all trying to get a share of the huge claims."
Dong Qiangqiang had already read part of what Duanmu said from the materials he gave him, but now that he heard Duanmu say it again, he still felt shocked. Especially when I heard that many investors fell into poverty directly because of stocks, I didn't know how to evaluate them.
Seeing that Dong Qiangqiang finally stopped asking questions, Duanmu changed the subject: "I have a plan that I want to talk to you about."
"What kind of plan?" Dong Qiangqiang thought he had discovered another stock worth investing in.
"I want to open an investment company," Duanmu said mysteriously, "one that can trade stocks, options, and turbines."
"Didn't you just become a regular employee?" Dong Qiangqiang asked in surprise, "Are you going to fly solo now?"
"No, I'm still in the current company, I'm just opening a company."
"But it seems not cheap to open this kind of investment company." Dong Qiangqiang recalled, "For example, when I opened a trading company, the registered capital only needed 50,000 marks, but different types of investment companies seemed to require different amounts of registered capital. And when opening a company in Germany, It is required that the registered capital must be paid in full, that is, the money for the registered capital must be placed in the designated company bank account.”
"You are right. I checked the official website of the German Federal Financial Supervisory Authority and also asked the agency that opened the company. They said the same thing. If you want to use client funds or own funds to do secondary market transactions, For an investment company, the registered capital must be at least 250,000 marks.”
Dong Qiangqiang misunderstood what he meant: "You want to borrow money?"
"No, I have the money. As long as my Munich Re put option expires, I can register immediately." Duanmu's tone sounded very relaxed.
Dong Qiangqiang thought to himself, it seems that this guy made a lot of money from Mu Zai's put options, and he immediately congratulated: "Okay, it seems that you are already a rich man, you must ask someone big."
"Listen to me." Duanmu suddenly became serious, "Although I am not short of money, I cannot open this investment company in my own name, and my name cannot appear among the shareholders of the company."
"Why is that?" Dong Qiangqiang was confused.
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