Extraordinary Genius - Chapter 273 – Getting a stake in Mining Enterprise
Early in February, He Zhaoji called Feng Yu. Feng Yu’s investments in London Gold and oil futures were all settled. Currently, Gold prices had fallen to 354 USD. Is it time to buy gold?
He Zhaoji and the other brokers at Wind and Rain Consulting company had analyzed the market and came to a conclusion which was gold prices will rise. The current price should be the lowest and would not fall below 350 USD.
Prices were always changing in the futures market, and Feng Yu decided to be more conservative. He told He Zhaoji to invest in small amounts and use low leverage. He can invest small sums to test the market, but the limit was 100 million USD.
He Zhaoji was sighing in his heart. Manager Feng still does not trust him completely. Manager Feng had made over 2 billion USD from his investments in London gold and oil futures. Now, Feng Yu had over 3 billion USD of funds, and he only allowed him to invest with 100 million.
But He Zhaoji believes that if he continues to perform well, Manager Feng will let him manage more funds. He was also confident that he could make profits in the gold market for Feng Yu and at the same time he could earn more commission.
3 days later, Hee Zhaoji settled his futures contract and had mad 10 million USD for Feng Yu. Feng Yu was happy and allow He Zhaoji to use 200 million to invest.
A few days later, He Zhaoji makes profits again. The gold prices were not 368 USD, and Feng Yu increase He Zhaoji’s limit to 500 million USD.
On the fourth time, He Zhaoji made money for Feng Yu, Feng Yu allowed him to manage 1 billion of funds. He Zhaoji was still making money, and the returns were still about slightly more than 10%. Feng Yu was satisfied.
Feng Yu was afraid that He Zhaoji was overconfident and used high leverage for his investment in gold. Even though there was a possibility of him getting high returns, he might also lose all his funds. Feng Yu does not have the time to monitor the market every day, and he only validly remembers the significant events that happened in the financial market. He could not remember the exact dates. If one day, gold prices fluctuate too volatile, he might lose everything he earned in the past.
He Zhaoji had used hedging to lower his risk. He knows that his boss was not short of money and wanted to be safe. Actually, he also wanted to invest safely. Even if he invest in gold conservatively, with 1 billion USD, he will get a least tens of million a week. His commission will still be a considerable amount.
If he had used high leverage and lose money, he might even lose his life. Many triads in Hong Kong was willing to kill people for money.
This period of time, the Fu Family was also investing in the gold market. But they were making short-term investments. Fu Rongqi and his brothers had only used high leverage once and doubled their investment. After that, he started to invest safely by using hedging.
The Fu family had made over 2 billion HKD on their first investment. This was enough, and Fu Rongqqi does not allow the rest of the Fu family to be greedy. He chooses to invest safely. Even if the returns were only 100 to 200 million HKD a month, it was okay since the Fu family’s other businesses were still making profits. The returns in the financial market had risks. Fu Rongqi had also decided to enter Hong Kong’s real estate industry. The property will be a safe investment.
Many investors shared a common trait. They would not invest large sums every time, and they would invest in some instruments that were safe and easily liquidated. Once the investors saw an opportunity, they would invest a large sum and made huge profits.
George Soros and his team operated this way. With over 10 billion USD of funds, their average annual returns were less than a billion USD. But on certain years or a specified period of time, he could make over 10 billion USD in profits. Even he had made failed investments, his losses will not be significant.
After hearing the good news from Hong Kong, Kirilenko also gave Feng Yu good news from his side.
Kirilenko had heard that during the last Soviet Union meeting, some allied countries’ leaders had opposed to Mikhail Gorbachev’s policies. Mikhail Gorbachev was losing his supporters. Based on the current situation, it was impossible for Mikhail Gorbachev to carry on another term.
Many people felt that Yeltsin would be the next Soviet Union President and Mikhail Gorbachev would be stepping down earlier. Of course, there were some who thinks that Yeltsin will not be the Soviet Union President as Yeltsin had announced that Russian would leave the Soviet Union. He wanted the disintegration of the Soviet Union.
Kirilenko’s father, Senchenko, had received orders to store up military supplies in Russia. This represents something big would be happening.
Now, most of the factories in the Soviet Union had stopped working. Not only the factories’ directors, even the government officials, were in a rush to sell the factories and enterprises to raise money. This way, it could ease the government’s financial issues and also helped the workers. Although this was a temporary measure, they do not have other choices.
The situation in the Soviet Union was messy. Many Soviets do not even put food on their tables.
There were many people in the Soviet Union finding ways to get money and with Kirilenko’s background and his money, 7 mining enterprises had signed contracts with him to sell their shares to another company. This company was a shareholding, but all the shareholders were Kirilenko’s men. Kirilenko was the real owner of all the shares.
Kirilenko had run into some problems. He did not have enough money. The few mining enterprises’ directors were chasing him for payments. The contract would be voided once it passes the time limit.
Kirilenko had made some money this period of time, but it was not enough. The last time Feng Yu had told Kirilenko that he wanted a stake in this company and Kirilenko went to prepare the paperwork. Now all the procedures were ready, and he called Feng Yu to ask him to sign the contract.
Feng Yu was overjoyed. He could finally own a stake in the Soviet Union mining enterprise. This was good news. Feng Yu had not allowed He Zhaoji to use all his funds was because he waiting to buy a stake in the Soviet Union Mining enterprise.
The last time Kirilenko had made it clear that Feng Yu would need to pay more than him, but he would be getting lesser shares. Feng Yu does not mind at all. Even if he owns lesser shares, it would still much cheaper than buying minerals from other countries. Furthermore, the Soviet Union was rich in minerals.
Also, it was because of this reason, Kirilenko had promised Feng Yu a condition, which was Feng Yu could decide on the quantity of the minerals mined and the pricing of the minerals.
After hanging up the phone call with Kirilenko, Feng Yu called his lawyer Wilson and HSBC bank. He wanted them to prepare. Kirilenko would fly to Hong Kong to sign the contract with Feng Yu. At the same time, Feng Yu would transfer the payments to Kirilenko’s overseas account. His lawyer and accountants would settle the rest of the minor details.
Feng Yu packed his luggage excitedly and bought a ticket to Hong Kong.