I'm in the county town, and you say I'm a big shot?

Chapter 517 Don't just focus on Tokyo, take a look at Wall Street in the United States.

"Mr. Fang, do you mean there will be a black swan event in the international financial market recently?" Ouyang Shaoqiang immediately realized this problem.

"It's not quite true, but as you know, Mr. Ouyang, the direction of the Japanese stock market is largely determined by foreign investors. Of the 77% of total trading volume, domestic corporations, individuals, and securities companies account for only 32%, while foreign investors make up 68% of the transactions."

"Moreover, Japan's financial strategy is closely related to that of the United States across the Pacific Ocean. To put it another way: if the United States flaps its wings like a butterfly, the resulting impact across the Pacific Ocean could potentially cause a hurricane. Therefore, I suggest you pay more attention to the direction of US financial policy."

Fang Qingye's words were somewhat vague, but they were enough to point Ouyang Shaoqiang in the right direction: when investing in Japanese stocks or futures, don't just focus on Tokyo, but also take a look at Wall Street in the United States.

Ouyang Shaoqiang stayed in Nanxin for one night before leaving. Fang Qingye enthusiastically treated him to Nanxin's specialties, such as Longevity Eight Bowls, Dongrou (braised pork), and Crab Roe Fish Balls. She also specially asked Yue Kai to drive him to Baipu Ancient Town in the afternoon—which had just been listed as a famous historical and cultural town in Jiangsu Province.

Bluestone paths, ancient houses and courtyards, small bridges and flowing water.
Ouyang Shaoqiang originally wanted to talk to Fang Qingye about stocks and futures, but seeing that she only introduced the scenery of the ancient town, he put aside his thoughts.

Perhaps this is the biggest difference between top investors and professional managers like us?
The next morning, Ouyang Shaoqiang left Nanxin and returned to Shanghai. Fang Qingye asked Yue Kai to drive him back.

"Mr. Ouyang, continue your research on the Japanese stock market, following your line of thought," Fang Qingye said before leaving.

Still researching?!

Don't you have your own strategy?

Ouyang thought that all his efforts over the past two months had been wasted.

"We'll need it later."

Fang Qingye's words restored Ouyang Shaoqiang's confidence, and he left happily.

Although he was somewhat disappointed that the trip to Nanxin did not achieve his expected goals, he was more looking forward to seeing how Fang Qingye would proceed in the future.
Time passed by at a leisurely pace. On the afternoon of May 22nd, around 5 PM, major stock markets across Asia closed. Ouyang Shaoqiang, as an investment manager, enjoyed a short break, a rare moment of happiness after a long day.

I went out with my close colleagues to a restaurant called Dear Lilly near the Securities Building for afternoon tea. We ordered Pistachio & Clotted Cream Biscuits and a Rose Sparkling Tea, which is actually a refreshing and slightly sweet soda-like drink that doesn't contain alcohol and won't affect our work afterwards.

Although the company also offers similar afternoon tea, the taste is much worse than this.

Today, he was accompanied by a British white man named Armstrong, but he gave himself a Chinese name: Hang Silang.

Hang Silang graduated with a master's degree from London Business School—a top business school in Europe. He is also an elite figure in Guotai Junan Securities. Although he sometimes inadvertently reveals a hint of arrogance typical of white people, he is generally easy-going and talkative. The two got along well, so they had afternoon tea together.

They each had a Clotted Cream Biscuits and a Rose Sparkling Tea and started chatting. Both were single, and aside from talking about work, they mostly talked about girls.

Today, Hang Silang said again that he spent a wonderful night with a beautiful college student last night—this guy likes female college students and is never short of female companions.

There's no way around it; he works in the finance industry, is a typical high-earning professional, is white, and has British citizenship—the kind of man many female college students would want to date.

However, today we talked mostly about work.

"Ouyang, I heard some news: the Federal Reserve might reduce the scale of QE," Hang Silang said casually while sipping his Rose Sparkling Tea.

"Tighten QE?"

Ouyang Shaoqiang was a little surprised.

QE is an abbreviation for Quantitative Easing.

The Federal Reserve has been implementing quantitative easing since the end of the 2008 financial crisis, and has now gone through four rounds of quantitative easing, referred to as Q1 to Q4.

In particular, on December 12, 2012, the Federal Reserve announced the launch of the fourth round of quantitative easing (QE4), purchasing $45 billion in Treasury bonds per month to replace Operation Twist. Combined with the $40 billion monthly easing amount of QE3, the Fed's monthly asset purchases reached $85 billion. In addition to the powerful remedy of quantitative easing, the Federal Reserve maintained a zero-interest-rate policy, keeping interest rates at an extremely low level of 0 to 0.25%.

The abundance of market liquidity has also spurred a surge in stock markets in countries including the US, Japan, and South Korea. Is Q4 coming to an end?

"Hang Silang, is your information accurate?" Ouyang Shaoqiang quickly asked.

"This comes from a major investment bank on Wall Street; I won't name names," Hang Silang replied, then added, "But Ouyang, news in the financial markets is always a mix of truth and falsehood. If you want reliable information, you can ask someone else."

"Who?"

Bernanke.

"Damn it!" Ouyang Shaoqiang couldn't help but blurt out a vulgar curse.

Who is Bernanke?
The renowned current Chairman of the Federal Reserve!

I doubt even Obama could get a proper answer out of this guy. You want me to ask him?!

Seeing Ouyang Shaoqiang's expression, Hang Silang burst into laughter, as if he were about to play a very amusing prank.

Soon, Hang Silang's topic returned to the female college student from last night, but Ouyang Shaoqiang had no interest in listening.

He slowly sipped his soda, and suddenly remembered something Fang Qingye had said to him in that small county town called Nanxin when he went to the mainland some time ago.

"If the United States is like a butterfly flapping its small wings, the impact across the Pacific Ocean could potentially cause a hurricane—so I suggest you pay more attention to the direction of US financial policy."

Has there really been a major change in US financial policy?!

"Ouyang, what are you thinking about? Isn't my story interesting enough?!" Hang Silang's words interrupted Ouyang Shaoqiang's thoughts.

He immediately came to his senses and casually said something.

"Wonderful."

“Ouyang, you’re being very perfunctory.”

nonsense!

You're talking about the details of sleeping with a female college student in broad daylight? Do you think I'm watching a text-based pornographic film?!
You're still the main character?!

Ouyang Shaoqiang didn't want to dwell on the issue, and instead said, "I'm thinking about the message I just mentioned."

"Reduce the scale of QE?"

"Yes, this is a very important piece of news. If what you say is true, it will definitely affect the securities market."

"Oh, but Ouyang, you've been studying the Japanese stock market lately. I think even if this statement is true, it will have some impact on the US stock market, but it won't affect the Japanese stock market thousands of miles away, unless Bernanke announces a US interest rate hike!" Hang Silang said.

"No, one of my major clients doesn't think so. He once said: 'If the United States is like a butterfly flapping its small wings, the wind blowing across the Pacific Ocean could potentially cause a hurricane.'"

"This is the so-called butterfly effect. Who said that?"

"Fang Qingye."

(End of this chapter)