dtnovels Chapter 195 Investor Meeting
Chapter 195 Investor Meeting
An oval table sat in the conference room, seating about ten people. The ashtrays, made of Jingdezhen white porcelain, were spotless; no one was smoking. The air was filled with the delicate aroma of Longjing tea and a hint of the sweetness of fruit.
Li Ziyu was sitting near the door. When he saw Ling Yun come in, he stood up and waved, "Over here."
Ling Yun walked over and placed his black briefcase on the table. He was wearing a dark gray suit today, but no tie. Everyone at the table looked at him, some with curiosity, some with scrutiny.
"Friends," Li Ziyu cleared his throat, "this is Ling Yun, the founder of Spark Technology, the developer of the Star System, and the main manager of the Nebula Fund this time."
A man in his fifties picked up his teacup and blew on the floating leaves: "You're quite young, lad."
"Mr. Chen, don't let his youth fool you," Li Ziyu laughed, "he's made Microsoft furious in Silicon Valley."
"I've heard about it," another middle-aged man wearing gold-rimmed glasses spoke up, his voice steady. "I'm just curious, how are you so confident in managing our money?"
Ling Yun didn't answer directly. He opened his briefcase and took out more than a dozen bound documents, which Li Ziyu helped distribute one by one.
材料封面很简单：星云资本三年期封闭基金投资说明书。日期：1998年1月1日-2001年1月1日。
"Before I begin," Ling Yun said, his voice low but immediately silencing the meeting room, "please turn to page three."
The sound of paper turning.
The third page is a table with two columns. The left side lists "Investment Targets," and the right side lists "Allocation Ratios."
"Part One: US Tech Stocks." Ling Yun walked to the whiteboard at the front of the conference room, picked up a marker, and wrote, "Cisco, Dell, Yahoo, AOL, Oracle, Microsoft, Intel, and IBM. Eight companies, accounting for 60% of the fund's total assets."
A middle-aged man in a jacket looked up: "Are they all American companies?"
"right."
"Why not invest entirely in domestic projects?"
"Because the US internet bubble will inflate the most in the next three years." Ling Yun turned around and wrote the word "bubble" on the whiteboard. "What we need to do is not to predict when the bubble will burst, but to rise along with it as it inflates."
Someone chuckled: "So you wait until it breaks down and then get trapped?"
"So there's a second part." Ling Yun pointed to the bottom of the table, "Hang Seng Index related products, accounting for 30%. This part mainly focuses on trend following, buying low and selling high, and not holding for the long term."
"What about the remaining ten percent?" The question came from a young man in his early thirties, with a laptop in front of him.
"Cash reserves," Ling Yun said, "are for opportunities to increase positions."
The sound of pages turning filled the air again. Page four contained a detailed investment strategy, and page five outlined risk control measures.
"The lock-up period is three years." Ling Yun walked back to the table, resting his hand on the edge. "During these three years, you can't withdraw the money. Why? Because investment takes time, and the market fluctuates. If it goes up today and down tomorrow, and you panic and want to run away, you might as well just put it in the bank."
Old Chen put down the materials and took off his reading glasses: "What is the expected annualized return?"
Ling Yun picked up his document and turned to page seven. There was a line graph there, with the vertical axis representing net worth and the horizontal axis representing time.
"Conservatively estimated, the cumulative net asset value growth over three years is...more than 150 percent," he said.
There was a two-second silence in the conference room.
Then a low murmur arose.
"150 percent? Over three years?" The man with the gold-rimmed glasses adjusted his glasses. "Mr. Ling, do you know what Buffett's annualized return is?"
"I know," Ling Yun nodded, "but Buffett missed the internet boom."
"That's speculation."
"No, this is trend-based investment." Ling Yun walked to the whiteboard, erased the "bubble," and wrote down the "1994-1997 Internet User Growth Curve." "In 1994, there were less than five million Internet users worldwide. Now, at the end of 1997, there are over one hundred million. That's a twenty-fold increase in three years. User growth drives demand, demand drives infrastructure investment, and infrastructure investment drives the performance growth of hardware, software, and service companies. This chain can run for at least another three years."
He paused for a moment and looked at the people present.
"We're not investing in concepts, but in the most profitable links in this chain. Cisco sells routers, Dell sells computers, Yahoo and AOL are the entry points, Oracle and Microsoft are enterprise software, and Intel and IBM are the underlying hardware. No matter how big the bubble gets, these companies are genuinely making money."
The young man was typing on his laptop again. After a while, he looked up: "Mr. Ling, your report mentioned the possibility of adding leverage?"
"Yes." Ling Yun walked back to his seat. "But there are two conditions. First, the fund itself must already be profitable, and the leverage can be increased using the profits. Second, leverage can only be increased during periods of clear upward trend, and the leverage cannot exceed one times."
"What should I do if I lose money?"
"There's a stop-loss line." Ling Yun turned to the risk control page. "If the fund's net asset value drops by more than 15%, the position will be automatically reduced. If the drop exceeds 20%, I will personally call each investor to explain the reasons and adjust the strategy."
Old Chen put his reading glasses back on and carefully examined the document. His fingers traced the words "stop-loss line".
"One hundred and fifty percent in three years," he said slowly, "an average of fifty percent per year. How are you going to achieve that?"
Ling Yun took a small projector out of his briefcase and connected it to his laptop. The screen lowered, and he opened a file.
Those are stock price charts for eight companies, from 1995 to the present.
"Look at Yahoo." The red dot on his laser pointer stopped on the graph. "It went public in 1996, with an issue price of $1.33. Now, it's $22. In a year and a half, it's sixteen times."
The red dot has been moved to Cisco.
"The low point in 1995 was $2, and now it's $10. In two years, it's five times."
"Dell, at its lowest point in 1996, was less than $1. Now it's $5. Five times in a year and a half."
He turned off the chart and replaced it with a summary table.
"The eight companies I selected have seen an average growth rate of 400% over the past two years. In the next three years, the number of internet users will increase several times over, and the growth rate may not be as high as in the past, but I think 300% is a high probability event."
Another point to explain is the outlet for funds. The Southeast Asian financial crisis made international short sellers a fortune. With so much money, where should they invest?
Futures? Commodities? The Southeast Asian financial crisis has dampened the global economy, and commodity prices are bound to fall.
The US market is the only place this hot money can go; the Federal Reserve will most likely cut interest rates in 1998.
The meeting room fell silent again, this time for even longer.