Becoming the King of Bottom Fishing After Going All-In on A-Shares

That same evening, the post about Lu Chenzhou on the Tsinghua University BBS on Baidu Tieba reached three million upvotes.

The main post title has been updated to the latest version: Black Tuesday, Huaxin Taifu plunges 55%, Leverage Bro adds 1 million in floating profit in a single day, total net assets exceed 2.68 million!

The number of replies to the post is increasing every second:

"2.68 million? In a month? From 1?"

"I checked it three times to make sure I wasn't mistaken. Huaxin Taifu fell 55% today, and he made an additional 1 million yuan in unrealized profit in one day, bringing the total to 2.68 million yuan."

"The key point is that he didn't close a single order today, and the stock price dropped from 9 yuan to 6.5 yuan. He just sat there watching it all day."

"I was watching the market closely today. Huaxin Taifu opened at 9 yuan, and I thought it was the bottom, so I rushed in to buy at the bottom."

Then the stock price dropped to 8 yuan, 7 yuan, and 6 yuan, and I lost 30% in one day.

Lu Chenzhou sat there, motionless, having earned a hundred million in a single day. Same market, two different worlds.

"Stop talking, I bought at the bottom too, now I want to die."

"Upstairs, you're not alone. All the retail investors who bought Huaxin Taifu shares today have been wiped out."

"So Lu Chenzhou doesn't buy at the bottom, he shorts. He is fearful when everyone is greedy, and greedy when everyone is fearful."

"I watched the market all day. Huaxin Taifu's intraday chart plummeted from 9 yuan to 6.5 yuan with almost no decent rebound. Foreign investors were selling, retail investors were selling at a loss, and margin accounts were being liquidated. In that kind of market, would you dare to go long?"

"Oh! I was bewitched back then."

"You're all calculating how much money Lu Chenzhou made, but has anyone calculated how much money those retail investors who sold at Huaxin Taifu today lost?"

Some people invested their retirement savings, some invested their daughters' tuition fees, some mortgaged their houses, and today, it's all gone.

Lu Chenzhou earned his money from the market.

The money wasn't directly profited from retail investors, but the money lost by those retail investors did indeed go into the pockets of short sellers.

That's the market; for every winner, there's a loser.

Lu Chenzhou won because he was right.

Retail investors lost because they misjudged the situation.

It's cruel, but that's the truth.

"You're right, so I don't hate Lu Chenzhou for making money. I only hate myself for not understanding it."

"Me too, I hate myself."

"Stop hating it, just focus on the market tomorrow."

"Tomorrow? Will Huaxin Pacific's stock price continue to fall tomorrow?"

"Brother Lu said there was a high probability of a drop, but it wouldn't be as sharp as today."

When did he say that?

"It was said in room 608 after the market closed, and someone overheard it."

"Will he be even tomorrow?"

He said it depends on the situation.

"...It depends on the situation."

"It depends. He's already figured it out, but he doesn't want to talk about it."

"Why don't you want to talk about it?"

"Because if he says it, people will follow suit, and if people follow suit, it will affect his operations."

"So he's not telling anyone?"

"Yes, he won't tell anyone."

"This person is terrifying."

"Yes! CITIC Pacific's 55% single-day drop demonstrated the devastating power of derivatives risk to the market."

For Lu Chenzhou, who was at Renmin University, this day saw his short positions generate a profit of over HK$1.6 million, bringing his total net assets to HK$2.68 million.

In the same market, some people cut their losses and leave in fear, while others reap huge profits while remaining calm.

This is the capital market.

"The A-share market fell below 2000 points today. Lu Chenzhou said that below 2000 points is the ultimate bottom. Do you think I should enter the market to buy the dip?"

"Copy my ass! Lu Chenzhou is still shorting stocks in the Hong Kong market!"

You should wait until he comes back to buy A-shares before entering the market.

He currently has 2.68 million yuan in his account, and hasn't invested a single penny back in the A-share market. What's your rush?

"Yes, don't judge a person by what they say, but by what they do."

He said 2000 points is the bottom, but he himself is shorting Hong Kong stocks. What does that mean?

This suggests that he believes Hong Kong stocks offer greater opportunities than A-shares, or that the bottom he refers to is a long-term bottom, but the market will likely fall further in the short term.

Since he hasn't bought it yet, you shouldn't buy it either.

"Exactly. When he bought CITIC Securities on September 18th, he put in real money. When he shorted Huaxin Taifu on October 2nd, he also put in real money. Follow him only when he buys A-shares. If he doesn't buy, don't do anything."

"You can't say it like that, can you? He said 2000 points was a golden opportunity, and he was referring to A-shares. He later went to Hong Kong stocks because short selling is not allowed in A-shares. When he was bearish, he couldn't operate in A-shares, so there's no contradiction."

"Upstairs, you're defending him? Did he give you any money? He got 2.68 million, how much did you get?"

"I didn't get any money, but I was just stating the facts. His shorting of Hong Kong stocks and his bullish view on the long-term bottom of A-shares are not contradictory. One is shorting, and the other is going long; they are two separate markets."

"Alright, alright, stop arguing. Anyway, I'm not going to buy A-shares now. We'll talk about it when Brother Lu comes back from Hong Kong."

"Lu Chenzhou followed a group of international capital to short the Hong Kong stock market, shorting Huaxin Pacific and China National Building Material."

Who were those dumping stocks? Morgan Stanley, Goldman Sachs, Citigroup, Soros, Paulson. Who were they helping to make money?

He's helping foreign investors sabotage our own businesses, and you're all praising him here?

"Here it comes, conspiracy theories may be late, but they've arrived."

"??? Are you jealous? Starting to spout conspiracy theories again?"

"Wah Shun Pacific is a Hong Kong-listed company, a company owned by the Rong family, not one of our own. What does their shorting of Wah Shun Pacific have to do with shorting our own people?"

"Besides, if those foreign institutions were dumping shares, would they stop just because Lu Chenzhou didn't? Did Soros tell you about his plan?"

He started planning two months in advance. Lu Chenzhou only opened his position on October 2nd, even later than foreign investors. He was following the trend, not leading it.

"And did you notice that when Lu Chenzhou shorted China National Building Materials, Morgan Stanley's target price was 0? His shorting of China National Building Materials followed Morgan Stanley's logic."

He is not a spokesperson for foreign capital; he follows his own judgment.

"Exactly, when he bought BYD shares on September 26th, a day earlier than Buffett, why didn't anyone say he was helping foreign capital prop up the market then? Now that he's shorting it, they're starting to label him?"

"Those who say these things should go and look at what Lu Chenzhou said at the salon. He talked about valuation, policy, cycles, and human nature. You can't understand his actions, so you start to accuse him of conspiracy?"

"I just have one question: If Lu Chenzhou is a representative of foreign capital, why did he buy BYD a day earlier than Buffett? If he's a representative of foreign capital, then what is Buffett? Domestic capital?"

The comment was followed by a bunch of "hahahaha" and "logical genius".

"You guys said Lu Chenzhou's Zhizhou Capital company license has been issued. When will he start fundraising?"

"I heard it will start after this round is completed and all positions are closed. Judging from the current market conditions, I feel it should be soon."

"The investment threshold of HK$100 million is too much for me!"

"Don't worry, I heard we're going to buy a mainland mutual fund company with QDII channels. We can buy A-shares, Hong Kong stocks, and US stocks, and we can invest in those as well."

"What about those with large sums of money who want to invest in A-shares?"

"That's simple. Just set up another private equity firm. Private equity firms in mainland China don't need licenses, just registration."

"Are you guys trying to squeeze Lu Chenzhou dry? You'll probably have to start a mutual fund company in Hong Kong later!"

"Holy crap! Ruthless!"