In the 1980 U.S. presidential election, the Republican candidate Ronald Reagan was elected as the 40th President of the United States, becoming the first president to have been an actor.
In the 1970s, a global economic crisis occurred, and the United States was not spared. The entire developed capitalist world fell into a decade-long period of stagflation.
Stagflation is an economic term that refers to the coexistence of economic stagnation and inflation. The emergence of this phenomenon led to the failure of Keynesian economics, which had been the mainstream economic theory for a long time.
Keynesian economics advocates active government intervention in the economy, expanding government investment to boost aggregate demand, thereby promoting economic growth.
This theory helped the United States through the Great Depression of the 1930s, and from then on, Keynesian economics became the dominant economic thought in Western countries, lasting until the 1970s.
After Reagan took office, he formulated economic policies based on supply-side economics. By cutting government spending and controlling the growth of the money supply, he reduced the inflation rate. Through tax cuts and accelerated depreciation, he promoted economic stability and development, successfully reviving the U.S. economy.
Against this backdrop, the stock market, often referred to as the "barometer of the economy," also began to surge. By the end of 1982, the Dow Jones Industrial Average once again surpassed 1,000 points and never fell below that level again. In 1982, the Dow Jones Industrial Average reached a new high and broke through 2,000 points.
With the increase in the rate of securitization, U.S. financial institutions also began to develop rapidly. Wall Street investment banks started to abandon the partnership system and sought to go public. In 1971, Merrill Lynch became the first investment bank to go public.
The fund industry, which sits at the top of the financial ecosystem, also sprang up like mushrooms after rain, experiencing explosive growth. A large amount of capital was invested in mutual funds, and in this context, hedge funds also began to attract some investors.
In 1980, Julian Robertson founded the Tiger Fund. In 1982, the Soros Fund and Renaissance Technologies were established. By this time, George Soros had already parted ways with Jim Rogers, but his Quantum Fund had already gained a reputation on Wall Street. John Paulson, who would later become a legendary figure in the hedge fund industry, was still working hard for others.
In 1984, due to the poor sales of the Mac project, which Steve Jobs had invested heavily in, Apple's performance declined, and the company's shareholders were very dissatisfied with Jobs, eventually ousting him from the company he had founded. In 1984, Microsoft's sales exceeded $100 million, becoming a prominent new star in the PC industry. It would go public two years later. Cisco was founded at the end of 1984, and Sun Microsystems, which had been founded two years earlier, was still a little-known company in Silicon Valley. Oracle, which had just changed its name two years earlier, was aggressively expanding into the global market.
Zhong Shi remembered so many IT giants because, in his previous life, these tech companies had created one miracle after another, shortening the accumulation of wealth from generations to just a few decades, or even a few years.
This perfectly aligned with Zhong Shi's plan to make money quickly.
The hedge fund industry was very profitable, and Zhong Shi was well-versed in the major financial events of the next few decades. However, he still lacked the capital to join this financial feast.
Thinking about this, Zhong Shi couldn't help but sigh. He carefully recalled the major events of 1984, hoping to find a way to rapidly increase his wealth.
His goal was still the U.S. capital market, and the most pressing task was to accumulate initial capital.
He didn't need to consider the Chinese capital market, not only because of the lack of various financial instruments but also because he had no interest in participating in the Feile Acoustics stock, which would be issued this year.
The first stock issued in China, Feile Acoustics, was publicly offered in November 1984 and was snapped up by tens of thousands of people. Zhong Shi even suspected that if he were there, he would be trampled to death in the chaos.
There was only one opportunity in the next two years, and that was in the foreign exchange market. The Japanese yen in 1985 would be an opportunity, but compared to the soaring price of "Cheung Kong Holdings," Zhong Shi needed to carefully calculate which would yield higher returns.
Without the powerful tool of stock index futures, making money was slow! Zhong Shi lamented, causing the small yellow dog in the yard to bark wildly.
In 1982, the United States introduced S&P 500 stock index futures. In 1986, Hong Kong introduced the Hang Seng Index futures, and in the same year, Singapore introduced the Nikkei 225 Index futures. However, these were still about two years away.
Zhong Shi could naturally invest in U.S. stock index futures, but he couldn't travel abroad at that time. Over-the-counter trading was not as easy as it would be in the future, and the price of a single S&P 500 contract was in the hundreds of thousands of dollars, which, despite leverage, was still beyond his means.
With these thoughts, Zhong Shi fell into a deep sleep.
...
Time flew by, and before he knew it, it was the end of 1984. On December 19, 1984, the then Premier of China, Zhaodongyang, and British Prime Minister Margaret Thatcher signed the Sino-British Joint Declaration in Beijing, clarifying Hong Kong's future.
In September, Thatcher arrived in Beijing to discuss Hong Kong's future with Chinese leaders. The news sparked a confidence crisis in Hong Kong, leading to a massive wave of emigration. Many countries extended olive branches to Hong Kong, hoping to attract its wealthy and professionals.
If people emigrated, they would inevitably take their wealth with them. Many had already made plans to transfer their wealth abroad and carry passports, ready to leave at the first sign of trouble.
Under this backdrop, the stock market also experienced volatility, with the Hang Seng Index continuously declining. By the end of 1984, the Hang Seng Index had fallen by more than 670 points.
More seriously, many large enterprises based in Hong Kong announced plans to relocate their headquarters. In March 1984, the 150-year-old Jardine Matheson Group announced that due to concerns about Hong Kong's future, it would move its headquarters from Hong Kong to Bermuda. The news caused a shock in the Hong Kong business community, and the Hang Seng Index plummeted by 62 points.
Following Jardine, a wave of relocations swept through Hong Kong, causing many large companies' stock prices to plummet. This was the perfect time for Zhong Shi to build his positions and buy stocks.
Thinking about this, Zhong Shi could no longer sit still. He walked to the phone and dialed an international call.
At that time, there were no digital phones, only rotary phones. Each time Zhong Shi saw this old-fashioned phone, he felt a sense of familiarity.
When he worked as a trader at Morgan Stanley, he used to make hundreds of calls every day on such phones, and the entire trading floor was filled with the sounds of ringing and dialing. Investment banks could afford new, advanced phones, but they preferred these because they were indestructible!
Traders faced millions, even billions, of dollars in transactions every day, and profits and losses could change in an instant. So, don't expect these emotionally volatile people to treat phones gently.
Making an international call was not easy at that time. One had to call the local telecommunications office, which would then connect the call to Huadong Nanjing, and from there to Beijing, and finally to Hong Kong. The whole process took at least half an hour and was very expensive, so it was usually Liao Chengde who called.
"Hello, Mr. Zhong?" After nearly an hour of waiting, Liao Chengde's Cantonese-accented Mandarin finally came through the phone.
"Hong Nong, how's Hong Kong these days?" Zhong Shi, who had been waiting impatiently, was not particularly polite.
Hearing Zhong Shi call him "Hong Nong," Liao Chengde sighed, feeling a sense of helplessness. In 1978, a TVB drama called "The Web" aired in Hong Kong, featuring a character named Ah Chan, a rural boy who had illegally immigrated to Hong Kong. Ah Chan became a household name. Later, "Ah Chan" became a derogatory term for farmers or the uneducated in the Chinese-speaking world.
However, since meeting Zhong Shi, Liao Chengde no longer dared to use this term lightly. This young man not only spoke fluent Cantonese but also understood various aspects of Hong Kong society. Most importantly, Liao Chengde himself had also illegally immigrated to Hong Kong from the mainland.
"Mr. Zhong, Hong Kong is in chaos. Many people are planning to emigrate, fearing that the Communist Party will take over and redistribute their wealth. I heard that Mr. Li Ka-shing is also planning to invest abroad. Should we still buy Cheung Kong Holdings' stock?" Liao Chengde suppressed his thoughts and told Zhong Shi everything he knew.
"Great opportunity! Buy now, invest all your money. Don't worry, Cheung Kong Holdings and Hutchison Whampoa won't leave Hong Kong. Mr. Li Ka-shing has very good relations with the Chinese leadership, far better than you can imagine. Families like the Ho, Pao, Li, and Tung are closely watched in Beijing, and even in 1997, their businesses will be fine." Zhong Shi sneered, speaking with a carefree tone.
"Really? How do you know? Actually, I have plans to emigrate to Australia. What do you think?" Liao Chengde was puzzled, wondering how this young man knew so much.
He didn't realize that Zhong Shi came from thirty years in the future, an era of information explosion where nothing was unknown. In 2010, a website called WikiLeaks revealed a large number of secret U.S. diplomatic documents, including many involving Hong Kong, which exposed the close ties between local tycoons and the Chinese leadership.
"What are you afraid of? The Chinese leadership has already introduced the 'One Country, Two Systems' policy. As long as you don't get involved in politics, there's no need to emigrate." Zhong Shi sneered, speaking dismissively.
"That's true. We businessmen are most afraid of getting involved with the government! You don't know how troublesome it is to do business on the mainland..." Liao Chengde had a lot of grievances when it came to politics. Although he was treated well on the mainland, he always felt someone was watching him.
"Alright, alright, international calls are expensive. Don't pour out your heart. My advice is to wrap up your investments on the mainland and put all your money into the stock market. I guarantee you'll make a fortune. One more thing, find out if you can trade foreign exchange futures in Hong Kong, especially Japanese yen futures, and let me know as soon as possible!" Zhong Shi quickly interrupted him, speaking in a commanding tone.
After Liao Chengde repeated the instructions, Zhong Shi hung up the phone with a loud "bang."
"What a bad habit!" Zhong Shi cursed to himself, then smiled bitterly.