"Mr. Sun, our investment team believes that network technology stocks without performance support like Red Hat have lost their investment value."
On December 9, affected by the surge in VA Linux's stock price, Red Hat's stock price also surged sharply that day, finally closing at $286!
Wukong Angel Investment Fund holds 3 million shares, with a market value of 10,000 US dollars and a profit of 10,000 US dollars!
The shares held by Wukong Angel Investment Fund account for 4.62% of the total share capital of Red Hat and are not subject to the restrictions on shareholding reduction regulations.
In order to protect the interests of small and medium-sized investors, SEc has strict regulations on shareholding reduction for major shareholders holding 5% of the shares. In addition to submitting a written application for shareholding reduction to SEc in advance, listed companies need to submit a shareholding reduction application after receiving a report from a major shareholder. An announcement will be issued within the next two trading days, and major shareholders cannot reduce their holdings by more than 1% of the total share capital within 90 trading days.
In recent years, Wukong Angel Investment Fund has invested in Internet technology stocks with little investment value, with a maximum of no more than 5%, in order to avoid SEc's holding reduction regulations!
Sun Jian firmly believes in the karma of "those who come out to fool around will pay back sooner or later", and he will not touch anything illegal!
Lin Chang, general manager of Wukong Angel Investment Fund, watches Red Hat's stock price rise every day and feels panicked.
"Mr. Lin, your investment team is right. The surge in network technology stocks has become irrational and cannot be explained by conventional value investment theories. You should be ready to cash out at any time!"
Sun Jian will not tell anyone that Nasdaq still has a 41% increase!
"Okay, Mr. Sun!"
Lin Chang was very happy that the wKIF investment team received praise from Mr. Sun, but he did not expect that it took more than two months for him to realize that the wKIF investment team’s prediction was wrong!
On December 9, the Nasdaq index closed at 3594.71 points, an increase of 8.09 points.
The Nasdaq Index closed at 3102.29 points on the day of listing on November 5. In more than a month, the index rose by 492.42 points, an increase of 15.9%. The Nasdaq Index's increase showed an accelerating trend.
The Dow Jones Index closed at .64 points that day, rising 752.64 points, or 7.87%, in more than a month, far underperforming the Nasdaq Index.
The Nasdaq index will peak in early March next year, with nearly 3 months left, with an increase of more than 1,500 points, or 41%!
Sun Jian would not miss this historical opportunity to make big money. In early November, he had instructed Huang Weidong, manager of the AtIc Futures Investment Department, to invest US$500 million in the February Nasdaq stock index futures contract, increasing leverage by 10 times.
The U.S. economy was still growing strongly at the end of 1999. It had emerged from the recession in March 1991. As of December 1999, the U.S. economy had expanded for 105 months, breaking through the longest growth period of 106 months in postwar history. It’s a foregone conclusion.
According to recent statistics and forecasts from the U.S. Department of Commerce, the U.S. economic growth rate in 1999 can still exceed 4%. For the U.S., this is no longer the so-called "low-speed growth" and has maintained economic growth of over 4% for the fourth consecutive year. At the same time, the unemployment rate in the United States dropped to 4.1%, the inflation rate was below 2%, and the fiscal surplus doubled from the previous year.
The U.S. stock market is booming. Stock market wealth stimulates consumer demand and drives rapid economic growth, creating the so-called "wealth effect." However, there are also hidden worries in the U.S. economy. The U.S. stock market is "irrationally excited"; the U.S. trade deficit continues to rise; U.S. consumer loans increase sharply; the economy is experiencing some "fatigue" phenomena, including labor shortages, rising production costs, and some corporate profit trends. Drop and so on.
The Federal Reserve has raised interest rates three times in the past six months. Its goal is to cool down the overheated economy and inflated stock market and promote a "soft landing" of the economy. Secondly, the EU economy has turned from weak to strong, affected by the psychological impact of the EU's economic slowdown, and the Kosovo crisis. Due to the impact of the resignation of all members of the European Commission, the exchange rate of the euro against the US dollar has been depreciating since its inception, falling by about 15%. However, driven by the growth of domestic and external demand, corporate confidence has gradually strengthened since the second half of the year, corporate surpluses have increased, and the economy has transformed into a positive direction.
The "Economic Development Status of 1999" report released by the European Commission on November 24 estimated that the average economic growth rate of 15 countries was 2.1%, of which the 11 countries in the Eurozone were 2.7%. The EU's unemployment rate fell to 9.2% and the inflation rate was below 2%.
The price of the euro in the foreign exchange market will gradually rebound, but its increase will not be large enough to endanger euro zone exports. Once again, the Japanese economy has seen a "fetal movement of change" and the economic situation has improved slightly.
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"George, are we getting old?"
On December 9, Robertson, the founder of Tiger Fund, saw the stock price of VA Linux soaring and the stock price of Red Hat hitting a record high in his luxurious office in the center of Manhattan. He shook his head with a wry smile on his face. Tiger Fund had been shorting Red Hat. Waiting for Internet technology stocks to suffer heavy losses, I called my old friend Soros to seek comfort from each other.
The Tiger Fund founded by Robertson had a brilliant record. It received US$8 million in 1980. By the peak in 1998, this number became US$20 billion; during this period, the return on investment of the initial investors of Tiger Fund exceeded 85 times. The return rate of 25% easily exceeds the S&P 500 index. As long as it can obtain a return of 18% in the next two years, it can create a 100-fold fund in 20 years. Robertson's good luck came to an abrupt end in 1998.
In just one and a half years, everything Tiger Fund invested in fell. Only the Internet technology stocks that they firmly shorted continued to soar!
Robertson, known as the "old economy investor", continues to insist on value investing. The key to Tiger Fund's success over the years is to boldly buy the best stocks and short the worst stocks.
In a rational environment, this strategy works well, but in an irrational market, return and price considerations give way to flows and trends.
Speculators preach: avoid the old economy, invest in the new economy, and ignore prices.
While Robertson insisted on value investing, Tiger Fund holders finally lost patience. Starting in August 1998, investors withdrew their funds from Tiger Fund in waves, and the fund's asset management scale dropped from US$20 billion to US$90 billion. One hundred million U.S. dollars.
“Julian, it’s not that we are old, it’s that this market has become an irrational market!”
Seeing the stock prices of the 12 Internet technology stocks shorted by Quantum Fund rising every day, Soros was also distressed.
Soros appointed Druckenmiller to manage the Quantum Fund. As the world's top fund manager, he accurately predicted the collapse of the Japanese stock market in 1990, made a perfect bet on the depreciation of the pound in 1992, and invested US$200 million in late October this year to short VoL and Yahoo. , Netscape, Ebay, Amazon, webvan, Red Hat and other 12 seriously overvalued technology stocks, they lost US$600 million in less than a month.
