Could the market be saved?
It was hard to say.
On October 27th, Hong Kong banks cut interest rates again, from 7.5% to 6.5%.
At the same time, the Hong Kong government lifted restrictions, allowing listed companies to buy back their shares. Unfortunately, this still failed to stop the decline. Taking Lu Family Media as an example, the closing price on the 27th was 13.2 dollars, with the downward trend slightly easing, dropping only 1.3 dollars per share.
Xia Xiaolan still hadn’t closed her position. At this point, Lu Family Media alone had brought her around 93 million in paper profits.
Including stocks from four other listed companies, her total profit reached 208 million.
That day only added twenty million, leaving Xia Xiaolan unsatisfied.
But she still chose not to close her positions.
Today’s smaller stock decline was due to companies buying back shares, which somewhat stabilized prices. She would wait and see tomorrow.
On October 28th, newspapers reported that China’s Central Bank would support the Hong Kong government in rescuing the futures market, adding 1 billion Hong Kong dollars in rescue funds. The Hong Kong government naturally expressed immense gratitude – this was help in their hour of need!
In fact, from this incident in ’87, one could see that the nation had always intended to stabilize Hong Kong’s financial market, even though Hong Kong had not yet officially returned.
How laughable that in 1997, when Soros attacked Hong Kong’s financial market, some people thought the nation would stand idly by!
How naive!
Hong Kong was their child – how could they not protect it?
As a principled shrewd businesswoman, she never intended to go against the nation.
This was why after the stock market crash, she didn’t continue to ‘short’ the market. Her shorting before the crash was luck – the stock market was all about luck. One couldn’t be blamed just for having better luck than others, right?
But if after the 19th, knowing the Hong Kong stock market would crash, she had continued to add to her positions, that would truly deserve Lu Yunshi’s criticism of ‘malicious shorting.’
Xia Xiaolan was very careful about her reputation. Making a few hundred million in the ’87 crash was enough.
If she had really kept adding positions, using high leverage to turn over a hundred million into billions, who knows how many people would hate her?
She didn’t care if ordinary investors hated her. They could curse her hundreds of times daily; Shrewd Merchant Xia wouldn’t lose a piece of flesh.
Today she’d take money from retail investors, tomorrow she’d do more charity, let the newspapers praise her a bit, and she’d still be a conscientious entrepreneur.
But she couldn’t take too much money from the Chinese capital.
At least not too much.
Put it this way – the Central Bank actively supporting Hong Kong’s market rescue with an additional 1 billion Hong Kong dollars in funds wasn’t just about a mother taking care of her yet-to-return child. It was also because, in ’87, at least 10% of Hong Kong’s total market capital had mainland capital backgrounds.
That was over 8 billion in funds!
Like when Huo Chenzhou agreed to let Dongfeng Holdings invest in Qihang, taking 10% shares for 10 million – there were too many similar examples. Because of such precedents, Dongfeng Holdings had readily agreed to invest.
Too much mainland capital was involved, all suffering heavy losses in this crash.
China’s Central Bank rescuing Hong Kong’s futures market was helping in time of need, but also self-preservation… If Hong Kong’s finances collapsed, over 8 billion in mainland capital would evaporate too.
The composition of this capital was extremely complex.
Watching Xia Xiaolan alone make billions.
The money might be easy to make, but could she still do business well in mainland China afterward?
With a reputation for malicious shorting, she’d have indirectly offended people everywhere!
In the stock market, when you’re losing, you need to cut losses.
Cutting losses isn’t easy, some describe it as “cutting flesh” – very vivid, cutting flesh hurts.
When you’re making huge profits in the stock market… you need to control greed!
Controlling greed is harder than cutting losses, truly. Xia Xiaolan swore from personal experience that controlling greed was a hundred times harder than cutting losses! She could have made billions, yet had to settle for hundreds of millions – it was truly painful.
Zhang Bailun, Ji Jiangyuan, and others saw her calm composure, but who could understand her struggle?
Many times, she wanted to let loose and recklessly make those billions but ultimately held back.
Forget it, she really didn’t want to be a stock market god. She just wanted to trap Xia Ziyu, then use the ’87 crash to make a few hundred million – modest wealth was enough.
The first goal had been achieved, and the second was close.
Xia Xiaolan convinced herself.
If she couldn’t resist during this stock crash, how could she resist the Qiongdao real estate bubble?
Steady progress, know when to stop!
On October 28th, with China’s Central Bank joining the rescue effort, there was slight effectiveness.
On the 28th, Lu Family Media’s closing price was 12.3 dollars – good news for Lu Family Media. Dropping 0.9 dollars in one day was much better than dropping several dollars, right?
On the 28th, Xia Xiaolan’s paper profit on Lu Family Media reached 103 million, with total profits of 242 million.
That day, Xia Xiaolan received a call from Lu Yunshi’s father, inviting her to dinner. On the phone, he directly expressed wanting to discuss Lu Family stock matters. She hadn’t closed her position on the 11 million shares of Lu Family Media she had sold. If Xia Xiaolan chose to close her position, she would need to buy back 11 million shares from the market – such a large buy order would be positive for Lu Family Media’s stock price.
“Sorry, Mr. Lu, I estimate Hong Kong stocks will continue falling for some time. I have no intention of closing positions now.”
“Young lady, know when to stop. You still want to do business in Hong Kong in the future.”
“Thank you for your advice, Mr. Lu. When it’s time to stop, I will stop. I know which money I should make and which I shouldn’t!”
Xia Xiaolan politely but firmly hung up on Lu Yunshi’s father.
She wasn’t afraid of offending the Lu family.
She was afraid of offending countless Lu families.
Money earned through ability – what was there to fear?
Xia Xiaolan righteously asked Zheng Feng, “Do you have any more comrades sitting idle at home? Introduce a few more to me. The kind who can get to Hong Kong fastest!”
Boss Xia, if you’re so capable, why hesitate?
Zheng Feng dared not laugh at the boss. Xia had already made over 200 million, and Zheng Feng also feared problems arising.
After refusing Lu Yunshi’s father’s invitation, she simply stopped going to the exchange, just waiting for updates from the company.
Although the Hong Kong government tried various market rescue measures, the Hang Seng Index still couldn’t find stable footing at the end of October and continued falling. Besides the 10% mainland capital in Hong Kong’s financial market, most were overseas capital. These institutional funds were all selling to cash out, making small investors suffer tremendously.
On October 29th, Xia Xiaolan’s paper profit reached 286 million.
On October 30th, paper profit reached 327 million.
October 31st…
Days of counting money were happy and passed quickly. In the blink of an eye, it was November 20th, another Friday.
In Xia Xiaolan’s memory, this stock market crash lasted exactly two months. It would be safe until 1988, only then would the market start to stop falling and rise, slowly healing the wounds from this crash.
But this was enough.
Looking at Lu Family Media shares that had fallen to 5.3 dollars per share, Xia Xiaolan knew the remaining month would just be small drops. She had already made the bulk of the profits.
Never mind that she couldn’t remember exactly which day the market would stop falling – even if she remembered, she wouldn’t wait until the day before to close positions.
Control greed, control greed, this was enough!
Xia Xiaolan very firmly told Zhang Bailun and Ji Jiangyuan:
“We can close the positions now!”