Return to 1958 and build a century-old giant

Chapter 808: Profits and Opportunities of the Second Oil Crisis

“No problem, I’ll deliver it right away,” Wang Zhiqun replied.

Yang Wendong then asked, "How are the improvements Wozniak is making to our home game console?"

When Apple was raising funds, he specifically asked Wozniak to help optimize his technology. For the electronics industry in Hong Kong, developing a game engine independently is indeed very difficult, even if there are laboratories in the United States. After all, Atari's original headquarters were in the United States, and they only produced a defective product.

Wang Zhiqun said, "I have already arranged for someone to send the technical problems over, and Mr. Wozniak is working on solving them. Judging from the feedback, Mr. Wozniak's abilities are truly amazing; he easily solved a problem that we couldn't solve for months."

Yang Wendong nodded and said, "In English terms, this person is called a key person. Many national projects cannot function without such a person."

The talent between people is immense; many large, core projects still rely on a key figure.
In a past life, a mathematics professor with a PhD from Tsinghua University once said: If one's life's achievements can help a big shot save an afternoon, that would already be a great achievement.

This statement is by no means an exaggeration;

For example, in the field of physics, people like Einstein and Tesla are god-like figures. It is already remarkable that a mathematics professor's lifetime achievements could save them half a day.

For example, many large-scale scientific research projects in the early days of mainland China were basically led by Qian Xuesen, and countless students were trained and taught by him. Without him, the scientific and technological development of a country might have been delayed by 20 years.

In his previous life, Yang Wendong had also searched for Qian Xuesen's "On Engineering" on Douyin. Back then, he only recognized the three characters in the title; the rest was completely incomprehensible.
Such geniuses exist in the electronics industry and other technology industries, and even in traditional construction and machinery industries, such as the architect I.M. Pei, with whom he had a long-term collaboration.

Wang Zhiqun said, "Yes, but such people are usually only found in large populations. It's very difficult for Hong Kong to produce such geniuses."

"We don't have that in Hong Kong, but we do in the mainland. The mainland's population is three or four times that of the United States," Yang Wendong said with a smile.
Wang Zhiqun paused for a moment and said, "The mainland population is indeed large, but in terms of education, it is still far from sufficient."

Yang Wendong said, "Let's take it one step at a time. The college entrance examination has been reinstated in the mainland. Given their style, they will definitely invest heavily in education. There's no need to worry about that."

There is indeed no quality education policy in mainland China at present. This is also due to economic reasons. It is difficult to even have enough to eat. Even if we pay more attention to education, we must first solve the problem of food and clothing. After all, for many rural people, a seven or eight-year-old child is already half a labor force. Without enough hope, they will not send their children to school.

Wang Zhiqun said, "But in that case, we still can't rely on the mainland in the short term."

“Indeed, so in the next five to ten years, we still need to increase investment in laboratories and technology centers in Silicon Valley, and at the same time try to attract talents from the UK or Japan to Hong Kong.” Yang Wendong nodded and said, “I will go to the UK in a while, and we may also build a large research center in the UK to make good use of British talents.”

The British Empire has not completely declined yet, and its electronics industry has achieved some success. Although it cannot compare with the United States, it is certainly much stronger than Hong Kong.

And Thatcher is expected to come to power next year, at which time I can prepare to invest my capital in Britain.

The privatization movement during Thatcher's term made private capital incredibly wealthy. While the lion's share was swallowed up by domestic or Wall Street capital, these big players generally only preferred stable infrastructure investments and disliked risky ones. But for a visionary like himself, these risky industries were actually more profitable.
At the same time, his own investment will also bind him more closely to the Thatcher government, allowing him to reap very high profits in Britain for at least a decade or more.

Wang Zhiqun nodded and said, "That would be even better. There are many talented people in Britain, and even in France and Germany."
.
"Well, we'll focus on the UK research center then," Yang Wendong said with a smile. "As for France and Germany, well, I might also consider investing in some industries in those countries."

Promising companies are not limited to the United States and the United Kingdom; there are also many in other European countries, although they are not very well-known because many French and German industries are geared towards non-civilian end-users. Examples include Siemens, Bosch, and Continental.
There are also direct civilian products, the most famous of which are the top car brands, Volkswagen, etc. These giants are not yet within my reach. In a few years, when I can obtain more substantial funds by taking advantage of some international gold opportunities, I will be able to stand on equal footing with these giants.
Of course, cooperation is the only option; acquisition is unlikely. The automotive industry and top industrial companies are fundamental to a nation's future, and they cannot be acquired simply by having money. However, smaller automotive companies still have opportunities.

Time flew by and it was May;
Currently, industries in Hong Kong are on a path of healthy development, and a little less capital is not a problem. In particular, Wharf Holdings and Hutchison Whampoa still have a large amount of land, while Cheung Hing Properties has a large number of real estate properties and real estate business cooperation with Hutchison Whampoa, HK Electric, and CLP Power.

Hong Kong property prices did not stop rising until 1981, and remained at a high level until September 1982, when they experienced a sharp drop of more than half.

That day is still 3 years away, enough time to maximize the profits of the land in hand. Prime locations can be built and held long-term, while those in average locations can be sold to cash out. This cash can also be used to purchase more quality properties in the early stages.

Only after 81, when the real estate market is nearing its peak, will one consider partially cashing out. However, prime locations will be sold under no circumstances.

December 16th arrived quickly, and the world's attention was drawn to the Middle East. On that day, Iran announced a halt to oil exports, resulting in a decrease of 5 million barrels per day in global supply.

While 500 million barrels is a lot, it only accounts for 5.2% of global oil consumption. As long as it is controlled, the impact will not be significant.
However, after learning from the first oil crisis a few years ago, developed countries, large conglomerates, and corporations are all rushing to buy oil, fearing that they will run out of oil.
It's important to understand that high oil prices are one thing, but they can trigger inflation and raise prices. However, if there is no oil, logistics, electricity, and industry will all be paralyzed. The losses would be enormous, causing not only more severe inflation but also huge losses to the industrial supply chain, and even leading to business bankruptcies or relocations.

No one knew how long the oil shortage would last. If it lasted for several years, it would be a disaster; no country could withstand such damage. As a result, global oil prices began to soar, and so did the stock prices of companies holding oil fields, many of which were invested in by Yang Wendong.

On the 18th, Fang Xianming arrived at Yang Wendong's office with a big smile on his face. Yang Wendong greeted him with a smile and said, "Judging from your happy appearance, it seems that the oil stocks we invested in have risen quite a bit."

Similar to the first oil crisis, there were no oil futures in this era, so the only two ways to profit from the oil crisis were to hoard oil or to buy shares in oilfield companies.

In terms of stockpiling, stockpiling dangerous liquids like petroleum, diesel, and gasoline is impossible and requires huge investment. Without related industries, the investment would be a huge loss. Therefore, Yang Wendong chose to stockpile plastics, which he also needed.
The second aspect is to buy stocks of some listed oilfield companies in Europe, America, and Asia. Although these oilfields have not limited production, when problems arise in the Middle East, oil prices soar, and their exit prices naturally rise as well, and the same goes for their stocks.

Fang Xianming replied: "Yes, you would never guess how much we have profited. Starting a year and a half ago, I began to pool funds from Changxing Shipping, Changxing Real Estate, and the group itself to buy shares in some oilfield companies in the United States, France, and Norway."

The total investment was $4.4 million. This surge in oil prices netted us a profit of $2.1 million, and it may increase further in the future. However, all of this is pre-tax; if we cash out, we may need to pay additional taxes.

Of the profits Changxing Shipping earned in the past few years and the huge sums of money obtained from selling ships, only a small portion remained with the company itself; the rest was returned to headquarters, which then gave it to a financial company for investment.

“Yes, let’s cash out gradually. We’ve already made the bulk of the profit, so there’s no need to waste time on the rest,” Yang Wendong said without hesitation.

Regarding the oil crisis, he only knew that oil prices would surge, roughly from $10 to $30, but he was unclear about the specific process. He believed that it would not rise in a straight line, but rather fluctuate in many ways, which would be beyond anyone's control. This was because the oil issue was not only an economic issue, but also a political one, and even the movements of US aircraft carriers could affect oil price fluctuations.

At the same time, oil field stocks and oil prices are not the same, so it is impossible to predict future trends.
He might be able to make some money in the future, but he has already made a large profit from this first wave, so he doesn't plan to continue holding it for the long term. The risk is too high, and he doesn't know when it will end.
To ensure a company's long-term development, the first thing to control is its ability to exercise self-control; and
"Okay, I understand, but it's a bit of a pity." Fang Xianming then asked, "With such a large sum of money, are there any new investment opportunities?"

Yang Wendong nodded and said, "Of course, I plan to invest in gold."

He was uncertain about the future rise in oilfield company stocks, but he was absolutely certain about gold, and that the latter would inevitably rise even higher, so he naturally needed to transfer funds.

In 1979, the following year, the global gold market will experience the largest appreciation in human history, rising from over $200 per ounce to nearly $1000 in the early 1980s, an increase of more than four times.

The fundamental reason is that after the surge in oil prices, the United States' control over oil has significantly decreased. This has led to skepticism in the capital markets regarding the US strategy of pegging the dollar to oil, and a general lack of confidence in the dollar.
When the US dollar is no longer trusted and other foreign exchange markets are difficult to invest in due to the oil crisis, gold becomes the best safe haven for funds.
As more and more funds entered the gold market, gold prices soared, which in turn triggered a surge in even more funds, thus giving birth to the strongest and fastest gold price increase in human history.

"Investing in gold?" Fang Xianming pondered for a moment and said, "After the oil crisis breaks out, the US may indeed take military action. Once military action is taken, gold will indeed become the target of safe-haven funds."

“Yes, you should contact the major banks in Europe and America. We also need to invest in gold through futures trading. We don’t need too much from each bank, just tens of millions of US dollars each. Speculating in gold isn’t a huge amount.” Yang Wendong added, “With this first cooperation, we can continue to cooperate with them for our future investments in Europe and America.”

The surge in gold prices far exceeded that of Hong Kong real estate. What's most special is that the gold market is large enough to accommodate massive amounts of capital, and buying and selling are very convenient, which provides the best opportunity to double one's capital.

With so much money, it's inconvenient to keep it in one bank, or even several. It's best to have a dozen or more banks to avoid attracting the attention of the international financial market.
After this, his funds will become very substantial, even far exceeding the profits from the shipping and real estate markets of previous years. With so much money, it's impossible to just leave it in the bank to earn interest, so he will also invest in or acquire some large European and American companies, which will naturally require cooperation with local banks.

“Okay, I understand. There are still many large banks in Europe and America,” Fang Xianming said with a smile.

Yang Wendong said, "Okay, let's do it this way. Cash out the oilfield company's stock as soon as possible and then invest in gold."

Fang Xianming said, "Okay, Mr. Yang, but there's one thing: cashing out so much money will incur a considerable tax. I suggest we invest in some real estate or other local products in Europe and America to avoid taxes."

"This time, the oilfield stocks were mainly purchased from the US, weren't they?" Yang Wendong countered.
In many countries, you have to pay heavy taxes on the money you earn, but legally you can avoid taxes by purchasing investments or engaging in charitable donations.

Fang Xianming said, "Yes, about 8% are in the United States."

Yang Wendong thought for a moment and said, "Okay, let's negotiate with real estate agents in Los Angeles and New York City. I can buy high-quality properties in the most central locations of these cities, and I can live there regularly in the future."

PS: Ask for monthly ticket

(End of this chapter)