Chapter Nine: Getting Things Done with Money-Tornando-se um Capitalista a Partir de uma Posição Totalmente Alocada em Ações A-shares(Assassino Picante)

The next day, 8:30 AM.

The Nokia 3250 phone Zhang Yang had left charging on his desk vibrated twice; from his position on the upper bunk, he could feel it clearly. Already half-awake, he slid out of bed and reached for the device.

[Dear Customer, your Construction Bank account ending in 2389 received a transfer of 20,000.00 Yuan (Two Thousand Yuan only) on April 2, 2009, at 8:29 AM. Available balance: 20,294 Yuan. Remark: Labor fee for managing the Huaxin Securities Mock Trading Competition account.]

"Twenty thousand in the bag."

Zhang Yang felt excellent. It had to be said, taking shortcuts was the fastest way to make money. Of course, quick money came with risks. If their professor found out, or if a senior from Huaxin Securities caught wind of it, both he and Lai Weijie could be disqualified from the competition.

However, reward is proportional to risk, and Zhang Yang was willing to take it. Although they had violated the competition rules, as long as one could bear the consequences, one could choose to act regardless. This logic applied not just to competitions, but to society at large.

Take driving on a highway, for instance. Stopping is prohibited, but if your bladder is about to burst and it severely impacts your driving safety, and the next rest stop is dozens of kilometers away, you can choose to pull over on the emergency shoulder to relieve yourself—as long as you are prepared to accept the penalty points. The biggest difference between a student and a corporate cog is that the former tends to be rigidly obedient to rules, while the latter is relatively flexible.

...

After washing up, Zhang Yang took his laptop to the canteen, finished a quick meal, and headed to the library. By the time he walked in, many students preparing for the postgraduate entrance exams had already taken their seats. Besides them, there were those studying for civil service exams, those cramming for certifications, and some couples using the quiet space to whisper sweet nothings.

Zhang Yang walked straight to the sixth floor, the self-study area of the Financial Analysis Room. After plugging in his laptop and connecting to the library’s wired network, he logged into QQ. As expected, there was an unread message from Lai Weijie.

[Lai Weijie]: Did you get the money?

"Received," Zhang Yang typed back.

*Cough-cough—*

The sound of the QQ cough notification rang out.

[Lai Weijie]: Then go ahead and log into my securities account. I’ll log back in at 3:00 PM when the market closes.

[Zhang Yang]: Understood.

Last night, Lai Weijie had already sent the account number, password, and trading PIN, which Zhang Yang had saved. Opening the Huaxin Securities webpage, Zhang Yang logged out of his own account and, with practiced ease, entered Lai Weijie’s credentials.

*Click.*

He clicked confirm with his mouse. The page refreshed to the account dashboard.

Lai Weijie’s real-money account balance was zero, with no trading history; it was likely opened recently specifically for the competition. Zhang Yang switched to the mock trading interface. The total account capital was 1.0319 million Yuan, with a total return rate of 3.19%—a mediocre result at the Shanghai University of Finance and Economics. But one had to remember that the account had initially suffered a maximum drawdown of 26%; current profitability could be considered a turnaround.

Lai Weijie held Baosteel Group (400,000), Jianghuai Automobile (200,000), and Haide Shares (300,000). The capital utilization rate was 87.38%, essentially a "full-position shove." Zhang Yang guessed the remaining 130,000 was meant for intraday "T-trading."

What is intraday T-trading? As everyone knows, stock prices fluctuate in real-time. Suppose a stock opens 4% down; you choose to cut losses and sell everything. If it then hits the daily limit-down, you buy back the corresponding shares at -10%. This is a "reverse-T," allowing you to avoid a 6% drop. As for a "positive-T," you must hold the underlying stock first (since A-shares use a T+1 settlement model, meaning you can only sell the day after purchase). Of course, there are also T+0 ETF funds. If you want to perform a positive-T, you add to your position when a stock opens lower or oscillates downward during the day; once the price rises, you sell that additional portion, completing a positive-T. Regardless of whether it is a reverse or positive T, the essence is to lower the cost basis of the position.

...

As the 9:20 AM call auction began, Baosteel Group and Haide Shares both showed a high opening of 1.4% and 1.9% respectively.

Since the call auction only displays a single price, Zhang Yang decisively used the visual price to put up all of his Baosteel and Haide shares for sale. Because it was a mock account, it wouldn't enter the real market, and the chips would be traded by the system immediately.

His reason for selling was simple: their valuations had been corrected, the market good news had been digested, and after several days of rising and then falling, they were showing short-term signs of peaking. Zhang Yang admired Warren Buffett’s investment style; like a retail investor, he liked to build positions at the bottom and then use T-trading to lower costs. But unlike retail investors who refuse to give up until the very end, he was the first to clear his position when the market was at its hottest.

Every few years, someone would question Buffett’s trading, thinking he was old and missing out. But the result was that even if he missed out on 20% of the upside, he precisely avoided 50% or more of the downside, allowing him to stay unscathed through every economic crisis. Never earning the "last penny" was Buffett’s habit.

At 9:30 AM, the market officially opened.

The result was exactly as Zhang Yang had predicted. After Haide Shares surged to a 3% gain, it began to turn downward, wiping out all of its daily gains by 9:54 AM. Zhang Yang had covered this stock in his market research report. It was a real estate company from Hainan Province. Its 2008 annual report showed a net profit attributable to parent company shareholders of 29.08 million, a year-on-year increase of 17.22%, with earnings per share of 0.1923, up 17.78% year-on-year. However, its debt ratio was as high as 40.82%. Considering the impact of the subprime mortgage crisis, a high debt ratio was understandable.

But then again, Zhang Yang couldn't find a single highlight in the company; its data was entirely unremarkable. If he had to name one selling point, it was that as a real estate company, it directly benefited from the "Four Trillion Yuan Stimulus Plan." But that alone could not support an 81% surge within five months. Therefore, Zhang Yang classified this stock as market speculation.

As for Baosteel Group, it was also a direct beneficiary of the "Four Trillion Yuan Stimulus Plan." Unlike the real estate company, it had a broader scope of business as a supplier of infrastructure materials. Compared to its 2007 peak, it had been cut by nearly 77.8%; it was a perfect long-term hold. But long-term holds require time, and Zhang Yang only had 15 trading days left. This long-term stock had to be sold.

He had also noticed in recent days that the automotive sector was showing signs of life. The national "Automobiles to the Countryside" subsidy policy was yielding immediate results. Automakers like SAIC Motor and Great Wall Motor had already released their first-quarter reports, showing significant performance improvements, which raised expectations for the consumer goods market.

Zhang Yang opened his research report on the automotive sector to look for actionable targets. He had been studying the automotive market for some time and had categorized the information in detail.

After a quick search, he typed the six-digit stock code and muttered, "Changan Automobile's capital is diverging; it's already in a technical horizontal oscillation. There's significant room to maneuver."