From April, an unverified rumor began circulating in Hong Kong's financial circles. The rumor was that someone had made 500 million Hong Kong dollars from the Japanese market's recent performance.
According to those who initially leaked the information, this person was a tycoon who had risen like a comet in recent years, over fifty years old, and whose family had suffered a major setback last year, which later involved Macau's casinos.
All signs pointed to the rumor's protagonist being Chengde Liao.
However, the protagonist, unaware of the rumors, was lamenting the missed opportunity to make more money. For the past few months, he had taken over from Zhong Shi, silently studying the market every day, trying to find patterns in the changes in the Japanese stock market, but how could such things have any pattern!
Moreover, as Liao Chengde grew older, his energy and ambition were far less than before. The reason he was still working so hard was entirely due to the enormous debt owed by his son, Xiaohua Liao.
In November, he had planned to withdraw the funds invested in the Japanese market and operate with Zhong Shi. However, after being persuaded by his broker and seeing the impressive trend lines, he ultimately did not withdraw from the Japanese market.
After all, his money had more than tripled, while the funds invested in the Hong Kong market during the same period had not yielded such high returns.
After the incident with Liao Xiaohua, most of his wealth had been depleted, leaving only a facade of prosperity. In fact, if it weren't for Zhong Shi's help, he would have gone bankrupt long ago.
"Master, the broker from the brokerage firm is on the phone!"
Butler Lin, covering the receiver with one hand, whispered to Liao Chengde, who was dozing on the sofa. He could clearly feel that Liao Chengde had been sighing a lot lately, and his white hair had noticeably increased.
"Oh?" Liao Chengde responded instinctively, then became a bit more alert. "Is it Andrew?"
"No, it's Mr. Lin!"
At the mention of Mr. Lin's name, Liao Chengde's anger flared up. He quickly got up from the sofa, grabbed the receiver, and said fiercely, "Lin, do you have the nerve to call me?"
There was a moment of silence on the phone, then a timid voice said, "Mr. Liao, please listen to me..."
Lin Jiahui was a broker at Hong Kong's local investment bank, Bao Lao Qin. A graduate of the University of Hong Kong, his first job was in the private wealth management department of the investment bank, which managed assets for billionaires, indicating his capabilities.
However, this time, he made a huge mistake in judging the trend of the Japanese market.
In January, when the market fell, Lin Jiahui promptly sold his clients' stocks, successfully avoiding the first downturn. However, in February, during the stalemate, he believed it was time to buy at the bottom and hesitated to reinvest most of the funds in the stock market, with predictable results.
After this turmoil, his clients' wealth had significantly shrunk, with some losing more than half of their initial value.
For Liao Chengde's funds, the situation was even worse. In recent years, the yen had stopped its upward trend and, after several fluctuations, had stabilized at 150 to 1 USD, which was a significant depreciation compared to when Liao Chengde's funds entered the market.
As a result, the wealth Liao Chengde could finally obtain had shrunk even further.
"The Japanese market has now stabilized and is likely to rise again in the next few months. After all, the foundation of the real economy is there. I believe it won't be long before the Japanese stock market hits 30,000 points again..."
Lin Jiahui continued to chatter, like Xiang Linshao. He knew the importance of these tycoons to his career and was doing his best to sell his theory over the phone.
In fact, his views were not wrong and were consistent with the subsequent trend of the Japanese stock market. Hong Kong's local financial groups had a lot to offer in their analysis of the world economy.
However, Liao Chengde had already made up his mind to replace him. After seeing Zhong Shi's ability to make money, he had long lost faith in these so-called elite financial experts.
"Hello... Hello... Mr. Liao, are you still listening?"
After talking for a long time, Lin Jiahui finally noticed something was wrong on the other end of the phone and asked tentatively.
"Process the transfer as soon as possible. I want to withdraw all my funds."
Liao Chengde, disturbed by this, suddenly snapped out of his daze and said bluntly into the receiver.
"..."
Lin Jiahui was taken aback. He had been talking for so long, and this was the result. He felt a bit dejected and wanted to make one last effort. "But, Mr. Liao..."
"There's no 'but.' Do it!"
Seeing that the situation was irreparable, Lin Jiahui was at a loss. He believed he had done a good job in handling the sudden situation in the Japanese market. Compared to some of his peers, his ability to stop losses was quite outstanding. However, investors didn't care about these things; they only cared about real profits.
"Mr. Liao, considering how long I've managed your funds, may I ask a question?"
"What rumor? About me?"
Liao Chengde realized his tone had been too harsh and softened it, adding a hint of apology.
"There's a rumor in the market that you made 500 million Hong Kong dollars in the Japanese market. How did you do it?"
At this moment, Lin Jiahui didn't realize it was a rumor. After all, the party involved hadn't denied it. He also didn't think it was through stock index futures, as he was used to dealing with the stock market and hadn't considered that aspect.
In fact, what he thought most was that Liao Chengde had shorted the market through margin trading, then bought back the stocks when the prices fell.
Here, it's worth explaining margin trading. Margin trading, as the name suggests, involves borrowing money, while short selling involves borrowing stocks (securities). When an investor is bullish on a particular stock, they can borrow money from a brokerage firm to buy the stock and then sell it when the price rises. The profit after repaying the loan would be significantly more than if they had used their own funds.
Short selling works similarly. When an investor is bearish on a particular stock, they borrow the stock from a brokerage firm, sell it at a high price, and buy it back at a low price to return to the firm.
This is essentially a financial leverage, but the leverage ratio is usually only 2, which is much less risky than futures, options, and other derivatives.
For example, if someone has 500 yuan in their own funds, they can borrow up to 500 yuan from a brokerage firm, then buy 1000 yuan worth of stocks. If these stocks fall to 500 yuan or a slightly higher number, the brokerage firm might forcibly sell the stocks to avoid risk.
Short selling works the same way.
Of course, the brokerage firm must be a market maker.
The reason Lin Jiahui asked this was to find out which stocks Liao Chengde had shorted during the Japanese market's downturn, and if necessary, to do some risk hedging.
"What? 500 million? Who told you that!"
Liao Chengde was immediately on edge. The number 500 million was the one he least wanted to mention, making his voice tremble.
Hearing Liao Chengde's voice change, Lin Jiahui was delighted, thinking the rumor was likely true. "That's what everyone is saying in the market. I don't know who started it..."
Growing up in Chinese culture, Liao Chengde deeply understood a principle that had almost cost him his life: people fear fame, and pigs fear fat. Although Hong Kong is known as a rule-of-law society, such places can be even more terrifying because they follow procedures and require evidence, which gives space for organized crime to exist.
In mainland China, even the largest criminal organizations could be wiped out overnight by a single word from a high-ranking official.
There was once a story about a powerful criminal organization in the north that had been entrenched for years, with its criminal network spanning several provinces and even involving officials at the department and vice-ministerial levels.
Despite this, the organization was completely dismantled when its leader recklessly collided with a leader's convoy on a highway, and a single word from the leader's entourage triggered an investigation. Soon after, police forces from Beijing arrived and quietly dismantled the entire gang.
In contrast, in Hong Kong, some major criminals, even those who committed armed robberies, could not be brought to justice because they could not be identified by witnesses, despite the entire society knowing who was responsible. The police's inability to act was truly weak.
Understanding the gravity of the situation, Liao Chengde quickly tried to dispel the rumor: "How is that possible? My money is all with you. How could there be other funds?"
"But..."
Bang!
Liao Chengde hung up the phone.
But his mind was not at ease. This was a serious matter. On a larger scale, it could attract the attention of dangerous individuals.
However, if he tried to clarify the situation, how many people would actually believe him?
After much thought, he couldn't come up with a good solution and decided to seek help from Zhong Shi, who was far away on the mainland.
Unconsciously, Zhong Shi had become his support. Perhaps Liao Chengde himself hadn't realized it, but that was the reality. Only now did he understand the careful planning behind Zhong Shi's actions.
First, most of Zhong Shi's actions were carried out under the name of Zhong Yi, while he himself remained behind the scenes. Any hint of trouble was immediately nipped in the bud.
For example, during the last incident of unauthorized photography, Zhong Shi immediately contacted the triad to destroy all the gossip magazines that might have been circulated. Later, Zhong Shi acquired the magazine through some channels, ensuring that no information would leak.
"Only the one who tied the bell can untie it!"
When Zhong Shi heard the news, he said calmly, not treating it as a big deal.
Zhong Shi had also considered this matter. He knew that his assets would soon be exposed, and rather than let the media reveal them, he would disclose them first.
He already had a comprehensive plan.
"Yes!" After thinking for a while, Liao Chengde finally understood. (Special thanks to the generous donations from readers Xin Qing_28 and Cang Sang Han!)
(A few words outside the main text: The transition from rule by man to rule by law in a country is a process. Hong Kong, with its small size and high average education level, can easily enter a clean and law-based state. In contrast, Taiwan, with a population several times that of Hong Kong and a larger area, has a strong traditional culture. Despite the long implementation of the rule of law, it still experienced the "Guanqing" incident involving Wang Jinping. As for mainland China, the time required to enter a rule-of-law society may be much longer.)