“Brother Ki, inform your men to get ready to dump your technology shares.” Feng Yu called Kirilenko.
“So early? Didn’t you say early next year?” Kirilenko asked in surprise.
“If we dump now, we can raise funds to speculate on US stock index futures. Although we will not make a lot of money, it will be more than what we will get from the shares.”
Selling off their shares will take place over some time, especially for shares from companies like Microsoft. If they dump the shares in large volumes, the share prices will crash.
Feng Yu’s plan is to sell off all his Yahoo, Microsoft, etc. shares over three to five months, and then short the US market.
This year, the US stock markets are still bullish, but it will crash next year, and in 2001, the tragic incident will happen, and the global stock markets will crash.
Even now, not everyone is bullish about internet and technology stocks. The ‘God of Investment’ Warren Buffett, insisted not to invest in tech stocks. Another economist, Robert Shiller, published a book, <Irrational Exuberance>, predicting the US stock market bubble will burst. The markets will crash like 1987.
But not a lot of people believe what Shiller said. Many people felt they will not be so unlucky and can exit the market before the bubble burst.
Although many people advocate rational investing, how many can do that? After the Asian Financial Crisis two years ago, more and more investors chose to invest in the US markets.
In 1997, there were only 3.7 million trades over the internet. But now, it had increased to over 9.5 million trades, and it is still increasing. It is estimated the trades will be over 10 million this year, and almost every family in the US had invested in some financial instruments.
The rise of the internet was one of the reasons for this boom.
Anyone with a PC that can go online can sit in their living room to check the share prices. They can trade whenever they want without affecting their work. Furthermore, the US stock markets had been doing very well in the past two years.
The US stock index is almost 10,000 points and might even reach 11,000 points this year.
After calling Kirilenko, Feng Yu called the Fu Family to inform them. The Fu Family had invested a significant amount in the US stock market.
When the Fu family knew Feng Yu is bringing forward his plans, they were shocked. But they also know that Feng Yu is targeting a US company worth almost 70 billion USD. Is Feng Yu selling off his shares to take over this company?
Feng Yu told the Fu Family that he will sell his shares, and don’t blame him if they are going to lose money.
After receiving Feng Yu’s call, Kirilenko immediately ordered his broker team to prepare.
Kirilenko’s brokers felt this is not a good idea, as the US stocks are still making money. If he wants to invest in something else, he should raise funds from another source.
But Kirilenko has the final say, and the brokers can only do as they were told. Behind Kirilenko’s back, they grumbled about Kirilenko seeking Feng Yu’s advice instead of them, for all these important decisions.
That’s right. Feng Yu is a genius in financial trading and had a proven track record. But who will not make a mistake? Since you hired us, you should hear us out first.
If the boss doesn’t ask them for advice, how are they going to prove themselves and get a raise?
But the brokers only dare to grumble behind Kirilenko’s back. Some of them had raised objections to this decision and were fired. After that, no one dares to oppose to Kirilenko.
When Feng Yu tells He Zhaoji to think of ways to dump Microsoft shares, he received Fu Rongqi’s call.
“Nephew Feng, is it too early to dump the shares, and is there really a need to dump everything?” Fu Rongqi felt Feng Yu was too extreme. Even if a bubble is formed and might burst anytime, but not all shares will crash.
“Uncle Fu, what shares do you want to keep? Blue chips? Don’t forget that Microsoft shares are also a blue-chip share. What if I tell you that blue chips will plunge the most in the next one to two years?”
“What? Plunge the most? You are saying blue chips will fall more than the average? Did you get any insider information from the US government about their new policies?”
Only the government’s policy changes can cost such incidents to happen.
Clinton had supported the Tech Firms, which was why tech stocks had been pushing the stock markets up. His terms will be up soon, and the new President will be introducing new policies, which might cause the market to crash.
In Feng Yu’s previous life, the US blue chips, like Microsoft, Intel, AT&T, General Motors, HP, Coca-Cola, IBM, etc. are all world-class companies.
But the share prices of these companies had fallen more than the market. Many people claim that it was these companies that caused the US market crash.
Buffett had said. “What the wise do in the beginning, fools do in the end.”
The ‘wise’ are the people that are standing on the top, and the fools are those investors and speculators, who only knows how to follow the trends. They are also the ones at the bottom of the food chain.
“Uncle Fu, I don’t know about the policy changes, but this is my analysis of the market. It was also the blue chips that were severely affected during the financial crisis in the late 80s. This time, it will be the same!”
Fu Rongqi thought for a while and nodded. That means once the market becomes bearish, the blue-chip shares will plunge. After all, the blue-chip shares are currently overvalued.
Blue chips companies can push the stock markets up, but when the market crashes, they will always be the first to get affected.
“Alright. I understand now. We will start to sell our shares from tomorrow onwards!”
