Steal the enemy's base at the start and build a technological empire.

Chapter 196 Investor Meeting

Li Ziyu spoke up at the opportune moment: "During the Southeast Asian financial crisis, President Ling turned 100 million US dollars into 1.7 billion. I can testify to that."

The investors exchanged glances.

The middle-aged man in the jacket finally lit a cigarette—he'd been holding back for a long time. He took a drag, exhaled smoke, and asked, "You mean the Hang Seng Index part? How do we do that?"

"Trend tracking." Ling Yun pulled up another chart, showing the Hang Seng Index's performance over the past five years. "Hong Kong is now being targeted by international speculators, so volatility will be high. But in the long run, backed by the mainland economy, the index is bound to rise. We don't do short-term trading, we only do swing trading. Buy when it's down, sell when it's up."

How do you determine "more" and "less"?

"We'll use valuation and historical percentiles," Ling Yun said. "This part will be aided by quantitative models, and a brief introduction to the models is in the appendix of the materials."

The young man raised his hand again: "Mr. Ling, may I ask a question? What if... I mean, what if the internet bubble bursts prematurely? For example, next year?"

"Good question." Ling Yun turned off the projector and sat back down. "If the bubble bursts ahead of schedule, our stop-loss order will be triggered, securing most of our profits. At the same time, we will increase our position in the Hang Seng Index—because funds will flow out of the US and some will flow back to Asia. With this trade-off, the overall net asset value drawdown can be kept below 20%."

He paused, then added, "Moreover, I don't think the bubble will burst in 1998. It won't be until 2000 at the earliest."

Why?

"Because the Fed hasn't started raising interest rates consecutively yet," Ling Yun said. "Inflation data hasn't picked up yet, and the economy is still growing. Greenspan isn't concerned about the bubble right now; he's concerned about whether economic growth can be sustained. When he starts worrying about inflation and raises interest rates more than three times in a row, that will be a signal that the bubble is about to burst. That's at least a year and a half away."

The sound of pen scribbling on paper filled the conference room; someone was taking notes.

Old Chen put down the materials, picked up his teacup, and took a sip. The tea had gone cold, but he didn't mind.

"How much is the management fee?" he asked.

"Two percent annually. Twenty percent of the profits," Ling Yun said. "But if the net asset value doesn't double after three years, I'll only charge one percent management fee and ten percent of the profits."

"Oh?" The man with the gold-rimmed glasses raised an eyebrow. "So confident?"

"It's not about confidence," Ling Yun laughed. "It's about putting pressure on myself. If I can't make money, I'm ashamed to take more."

The atmosphere eased slightly. Some chuckled, some nodded.

The man in the jacket stubbed out his cigarette: "What's the minimum subscription amount?"

"One million RMB, or the equivalent in US dollars," Ling Yun said. "There's no upper limit, but the total amount will be controlled within one billion RMB."

Why set an upper limit?

"The scale is too large, which affects operations," Ling Yun said. "One billion is the limit of my capabilities. Beyond that number, the rate of return may decrease."

The young man closed his laptop: "I'll subscribe for five million."

Everyone looked at him. His name was Zhou Ming, his family was in the textile export business, he was twenty-six years old, and he had just returned from the United States after completing his MBA.

"My dad told me to try managing a sum of money myself," Zhou Ming shrugged. "I think President Ling's logic is quite clear. If I lose money, I'll consider it tuition."

Li Ziyu immediately wrote it down.

Old Chen pondered for a moment: "I'm getting old, so I'll be conservative. Let's accept ten million first, and then see what the semi-annual report says."

"Sure," Ling Yun said. "I'll send out briefings every quarter, and a detailed audit report every year."

The man with the gold-rimmed glasses adjusted his glasses: "I'll accept twenty million. But Mr. Ling, let me make this clear upfront: if we lose money..."

"You can yell at me anytime," Ling Yun replied. "My phone is on 24/7."

Laughter increased.

Over the next half hour, the others took turns to express their opinions. The man in the jacket pledged eight million, another real estate agent pledged fifteen million, and several others pledged three to five million each.

Li Ziyu quickly calculated in his notebook. Finally, he looked up and said, "The total so far is... 68 million RMB. There are still a few people I need to go back to discuss, so the estimated total will be around 120 million RMB."

"That's enough," Ling Yun said. "Let's do this for the first phase. If it goes well, we can expand for the second phase."

The meeting ended, and the investors left one after another. Before leaving, Old Chen patted Ling Yun on the shoulder: "Young man, keep up the good work. Our generation is getting old; the future belongs to you."

"Thank you, Mr. Chen."

Zhou Ming was the last to leave. He walked up to Ling Yun and extended his hand: "Mr. Ling, I studied finance at Berkeley. Can I intern at your company in the future? I don't care if I get paid."

"Welcome." Ling Yun shook hands with him. "However, I suggest you take some money with you first and operate a small account according to my method. You'll have a more direct experience of whether you win or lose."

"Great idea!" Zhou Ming's eyes lit up. "I'll start tomorrow!"

Everyone had left, leaving only Ling Yun and Li Ziyu in the conference room. A waiter came in to clear away the teacups and fruit plates.

Li Ziyu let out a long sigh and slumped into his chair: "I'm exhausted. These old men, they're all as cunning as monkeys."

"That's normal." Ling Yun tidied up the materials. "Their money didn't come from thin air."

"You said you could achieve 150% in three years, can you really do that?"

"That's a conservative estimate." Ling Yun put the materials back into his briefcase. "If things go well, it could double or even triple."

Li Ziyu sat up straight: "Then why didn't you say so just now?"

"If I say it's that high, they'll think I'm bragging." Ling Yun zipped up his jacket. "One hundred and fifty percent, which is right in their 'somewhat skeptical but willing to give it a try' range."

"A shrewd businessman," Li Ziyu said with a laugh.

"Same to you."

The two walked out of the conference room. The corridor was carpeted, and their footsteps were silent.

"I've made a reservation for dinner," Li Ziyu said, "just the two of us, wanna have some drinks?"

"Okay." Ling Yun glanced at his watch. "But I have to be back at the hotel before ten o'clock. I also have an overseas call to make."

"In Silicon Valley?"

"Hmm. id Software's voice plugin is launching tomorrow, I need to keep an eye on it."

The elevator arrived. Stepping inside, their faces were reflected in the mirrored wall.

"Sometimes I feel," Li Ziyu said, looking in the mirror, "that you seem to know what the future holds."

Lingyun pressed the floor button.

"I just see a little further than others," he said.

The elevator descends, and the numbers on it change.

December 10, 1997, evening.

A fund presentation has ended.

A subscription amount of 68 million RMB, and a promise to double it in three years.