"That's unlikely!" Humphrey said. "In this 'Brexit Black Swan' event, although Mr. Su bet correctly on the outcome and made tens of billions of US dollars in profit from the sterling exchange rate market, this doesn't indicate that Huayi Capital, or Mr. Su, has the ability to dominate market trends, let alone that this institution possesses forward-looking analytical capabilities in sudden, major core financial events."
"That's because you haven't met Mr. Su, and haven't truly understood the past of Huayi Capital," Frederick chuckled. "If you had met Mr. Su and truly understood Huayi Capital's history, you probably wouldn't say that."
"Is that so?" Humphrey remained noncommittal. "From past history, it seems that apart from this one time, Chinese-funded institutions have never gained any advantage in the international financial market. In the eyes of many institutions on Wall Street, and indeed in the global financial sector, in the eyes of numerous other capital institutions worldwide, Chinese-funded institutions are basically equivalent to fat sheep in the financial market.
Although you said that this time, in the 'Brexit Black Swan' event, the reason you dared to massively short the sterling exchange rate
was influenced by Mr. Su's analytical perspective from Huayi Capital.
He warned you that the sharpening internal conflicts among various parties in the UK and the current state of the EU system, fraught with problems, would inevitably lead to the 'referendum to leave the EU' event spiraling out of control.
However, I still think this was pure luck."
"This couldn't be luck," Frederick said. "Do you know Mr. Su's track record from Huayi Capital before this 'sterling exchange rate black swan' event?"
"I'd like to hear the details," Humphrey said.
Frederick smiled and replied, "Before this 'sterling exchange rate black swan' event, Mr. Su from Huayi Capital's main battlefield was originally the stock trading market within China. I had previously collected detailed personal information and trading history on Mr. Su. I found that this person had truly risen to prominence in China's financial circles for less than a year.
A year ago, precisely when the A-share market bull run collapsed within China, Mr. Su boldly used all his capital to short his own country's stock market, holding massive short positions in stock index futures, accumulating his first pot of gold. After that... in the bottom-fishing speculations after the stock market crash, he achieved over 10 times the investment return in half a year. Only after accumulating sufficient capital did he found Huayi Capital.
Considering Mr. Su's personal trading experience and investment track record, for him to have reached where he is today, to have accumulated such massive funds through speculative operations at critical moments repeatedly, becoming the youngest billionaire in the current global sphere, it absolutely cannot be explained simply by what you call good luck.
Moreover, before the 'Brexit' event occurred, that is, when the 'Brexit resolution' had just passed the British cabinet, I had already discussed these ideas with Mr. Su, as well as his views on the global economy and financial markets.
It is clear that this person's insights and knowledge reserves are quite rich. And he also has many unique insights regarding the future trends of the global economy and the grasp of industry cycles across various sectors.
I believe that every seemingly high-stakes speculative operation Mr. Su undertakes when major financial market events arrive is made only after careful analysis and thorough scrutiny by him and his Huayi Capital team, before making the final investment and speculative decisions.
After that period of understanding, I can confidently say that Mr. Su is completely different from the fund managers or speculative traders from Chinese-funded institutions that you and I have seen or known before.
And if you think that Mr. Su's current achievements and wealth are purely due to luck, then, if you encounter him in the financial market in the future, you will certainly suffer huge losses."
"If you put it that way…" Humphrey thought for a moment and replied, "This person's operating style, or rather his speculative approach, seems somewhat similar to Livermore, one of Wall Street's past legends."
Frederick pondered for a moment and replied, "Indeed, there is a resemblance, but this person's operating style and grasp of risk control are clearly more mature than Livermore's back then."
"Is that so?" Humphrey smiled and said, "It's rare to see you praise someone so much."
Frederick said, "It is indeed rare to encounter talent like Mr. Su. As you said… his acquisition of FXCM International this time is very likely in preparation for larger subsequent forex market trading operations. However, this person seems to be an event-driven trader; he appears very sensitive to major events that can influence the financial market and can easily capture such opportunities."
"Then in your opinion… which direction will the other party choose as their main battlefield for their next forex market trading operation?" Humphrey asked. "Japanese Yen, Euro? Or spot gold?"
Frederick smiled and said, "What do you think could significantly affect the global financial market in the future, cause violent fluctuations in the financial market, facilitate fierce long-short battles, and allow for very substantial excess return opportunities to be seized from the financial market in a short period?"
Humphrey saw the smile in Frederick's eyes and knew he already had the answer in his heart.
"You mean…" Noticing Frederick's change in expression, Humphrey paused for only a moment before thinking of the answer, replying, "Our country's general election in November?"
After thinking, the biggest core event he could think of in the coming months was this.
Frederick nodded slightly and said, "Your guess is the same as the answer in my heart."
"That is indeed a good game opportunity," Humphrey said. "Every election year, the financial market experiences huge fluctuations during the voting. However, I estimate that this year's general election will not have a very significant impact on the global financial market."
"Why do you say that?" Frederick asked.
Humphrey replied, "Currently, the various institutions on Wall Street are largely in agreement regarding the election expectations. The final election result should not hold any surprises. And without surprises, there is no expectation gap, and without an expectation gap, naturally, there won't be overly intense market fluctuations."
"There are still more than three months until the November election," Frederick said. "How do you know that the election result will definitely be without surprises? Do you remember the expectations of the vast majority of global institutions for the referendum result before this 'Brexit Black Swan' event occurred? I remember that on Wall Street, over 95% of institutions at that time all thought the 'Brexit referendum' was just a political show, and there was no other outcome but to remain in the EU, right?
But what was the final result? How many institutions were caught off guard by the final result? And how many long-position investment and speculative institutions suffered losses in that black swan event?
So, don't say things like 'the outcome is predetermined.' None of us have the ability to foresee the future. The future that hasn't happened is always just speculation; we cannot determine how events will ultimately unfold.
Moreover, hearing you say that… I actually think the November election is very likely to be another black swan event similar to the 'Brexit referendum.'"
"That's basically impossible," Humphrey said. "Polls show that among the candidates, Ms. Hillary of the Democratic Party already has a comprehensive lead."
"Having experienced the previous 'Brexit Black Swan' event, I won't believe the so-called polls until the very last moment," Frederick replied, then paused and added, "Alright, let's talk less about the election and get back to the main topic. I heard that your Blackstone Group has recently added a number of spot gold short positions. Are you firmly bearish that gold will continue to depreciate for some time?"
"It's no longer the era of the gold standard," Humphrey said. "In fact, although the global economy faces many problems, overall, the global economy this year and next year is still in a recovery trend. And although the Fed postponed its interest rate hike pace in the first half of the year, it will eventually proceed with rate hikes. Once the USD enters an interest rate hike cycle, and the global economy continues to recover, then gold's safe-haven attribute will naturally diminish."
"Global economic recovery?" Frederick said. "I don't think so. In the EU economy, after the 'Brexit Black Swan' event, there are clearly problems, and a host of debt issues need to be resolved. The entire EU economy shows no signs of recovery at all; instead, it seems to be sinking deeper into a quagmire of recession.
Furthermore, in our own country, manufacturing migration and the gradual hollowing out of industrial structure have led to considerable internal conflicts. And after being hit by the 2008 subprime mortgage crisis, both major Wall Street institutions and the domestic populace clearly lack confidence.
As for signs and potential for recovery… China, Japan and South Korea, and the Southeast Asian region are indeed becoming more dynamic. But the vitality of the East Asian economic circle alone cannot drive the entire global economic recovery, especially since current conflicts and disputes in Eastern Europe are becoming increasingly intense.
Overall… accompanied by the Fed's subsequent interest rate hikes, spot gold prices might be pressured, but one absolutely cannot be easily bearish on it.
Moreover, gold prices peaked in 2012 and have been adjusting for a full four years until now, already reaching a relatively low level. That is, from a technical perspective, one cannot easily short it!"
"Investment decisions regarding spot gold positions are not something I can make," Humphrey thought for a moment and said. "And the investment product focused on spot gold is not managed by the fund products I oversee. Of course… my view is still that the global economy is currently in a gradual recovery phase."
The two debated for a while, and seeing that neither could convince the other, they changed the subject.
And at the same time the two were debating,
Su Yi and his team, far away in the Cayman Islands, had packed their luggage and planned to return to Hong Kong the next day.
"Mr. Su, the group's crisis has been temporarily resolved," said Stuart, the current CEO of FXCM International, smiling as he asked Su Yi, upon hearing that Su Yi and all members of Huayi Capital's negotiation team planned to return to Hong Kong tomorrow, "Do you have any other work arrangements that you need us to execute?"
Su Yi thought for a moment and felt that there was nothing specific to arrange regarding the institution's forex trading. He replied, "There are no special work arrangements. Your next task is to continue executing according to the previous work plan. Of course… if there's anything special and important, just tell me over the phone, or via email or video. For other matters, Mr. Stuart can make his own decisions."
He currently did not have an in-depth understanding of FXCM International's specific operations.
Therefore, to ensure FXCM International's operations ran smoothly, he naturally wouldn't rush to interfere with specific operations or hastily arrange for Huayi Capital personnel to step in.
Stuart heard Su Yi's words and knew that Su Yi still fully trusted him.
At the same time, Su Yi continued to entrust him with the decision-making power over all matters, big and small, for the entire FXCM International group.
So, he was momentarily stunned, but still very grateful in his heart. He said, "Alright, all executive members of FXCM International will certainly live up to Mr. Su's great trust."
Now, although Huayi Capital had become the de facto controlling shareholder of FXCM International,
the core executives of FXCM International still held unsold shares.
In other words… they were still in the same boat as Huayi Capital and FXCM International, still part of the same community of interest.
If FXCM International developed smoothly, they would naturally gain more substantial benefits through their shares.
Moreover, FXCM International was originally founded by Stuart and other core shareholders who had invested over twenty years of effort into it.
Now that Huayi Capital, led by Mr. Su, had taken over and wanted to continue using them to manage the company, they naturally wouldn't slack off.
They naturally hoped the company could continue to create new glories.
"I believe in all of you," Su Yi said with a smile to the FXCM International shareholders seeing them off, before leaving. "And I also believe that by coming together, we can create a better tomorrow."
After speaking, Su Yi waved to the shareholders of FXCM International who were seeing them off.
He then boarded the return flight to Hong Kong with the Huayi Capital team members.
This acquisition of FXCM International took half a month, which was considerably smoother than they had initially expected.
July 22nd, Friday.
After returning to Hong Kong, Su Yi convened an internal meeting with all middle and senior management members of Huayi Capital Hong Kong Branch.
Subsequent work arrangements were decided.
At the same time, deployments were made for the future investments of Huayi Chengyuan No. 1, the main hedge fund product.
(End of Chapter)