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

Girls' dormitory building

"Have you heard? Lu Chenzhou said that the A-share market will take off within three months."

"I've heard about it, and he's already having people prepare to set up a private equity firm in mainland China."

"A mainland private equity firm? Didn't he already register Zhizhou Capital in Hong Kong?"

"Hong Kong private equity funds focus on Hong Kong stocks, while mainland private equity funds focus on A-shares. It's about expanding in both markets."

"Where did he get so much money? Doesn't he still have open positions in his Hong Kong account?"

"Once the short positions are closed, there will be cash. The floating profit of the short positions in Huaxin Pacific and China National Building Material is close to 2 million yuan. Adding the profits already taken, the cash on hand is at least 3 million yuan."

Part of this money may be used to acquire a public fund management company, and the other part may be used as seed capital for a private equity firm in mainland China.

"3 million, and he's only 20 years old."

"That's why he can run a private equity firm, while you can only browse this forum."

"How high can the A-share market rise from 1900 points in three months?"

"I don't know, but if Lu Chenzhou says it's taking off, it definitely won't just be an increase of one or two points."

Moreover, his decision to establish a private equity fund in mainland China indicates that he believes opportunities have arrived in the A-share market.

Department of Finance

Zhou Xingbang sat in his office, with the daily candlestick chart of the Shanghai Composite Index on his computer screen.

The market closed at 1895 points today, down another 62 points.

My phone vibrated; it was a message from Department Head Wang Jianguo:

"Old Zhou, did your student say the A-shares market is going to take off within three months?"

Zhou Xingbang was stunned for a moment; he hadn't seen the message yet.

He checked his phone; the news had already spread in the group chat.

Lu Chenzhou said, "There's no time left," and then added, "I'm preparing to establish a private equity firm in mainland China," which was interpreted as "A-shares will bottom out and rebound within three months, and he's about to enter the market."

He gave a wry smile and replied, "He didn't say it directly, but given his style, if he doesn't say it, he means it."

Wang Jianguo replied quickly: "What do you think?"

Zhou Xingbang leaned back in his chair and thought for a long time.

"I don't know, but Lu Chenzhou thinks it will rise."

Furthermore, he's already preparing to establish a private equity firm in mainland China, which shows he's not just talking the talk; he really intends to get involved.

He sent the message, then put down his phone and looked out at the night.

In Beijing, it gets dark earlier and earlier in autumn.

China World Trade Center, CICC Research Department

Lin Zhengmao sat at his desk with two documents spread out in front of him.

One document is Huaxin Taifu's trading record for today, and the other is a transcript of Lu Chenzhou's speech at the salon on September 17th.

Li Mingyang stood to the side, holding a mobile phone in his hand. The screen showed a message that had been forwarded from the Renmin University campus forum.

"Chief Lin, Lu Chenzhou said that A-shares will take off within three months, and he has asked Xia Yaozong to prepare to establish a private equity company in mainland China."

Lin Zhengmao raised his head and glanced at him.

"Mainland private equity?"

"Yes, he previously registered Zhizhou Capital in Hong Kong to run a Hong Kong stock private equity fund, and now he's going to set up a mainland private equity fund to run A-shares. This is a strategy of operating in both markets."

Lin Zhengmao was silent for a few seconds: "What do you think he'll buy?"

Li Mingyang hesitated and said, "He previously bought CITIC Securities in the A-share market. In the Hong Kong stock market, he bought BYD and BYD Electronics, and shorted China National Building Material and CEFC China Energy. His stock selection logic is very clear."

Look at the fundamentals, the valuation, and the policy direction.

Lin Zhengmao nodded: "Whatever he buys, we'll buy it too."

Goldman Sachs Asia Headquarters, Central, Hong Kong

Wei Zhexuan sat in his office, with a stock chart of China National Building Materials Group Co., Ltd. on the screen in front of him.

It took less than a month for it to drop from 9.65 to 2.96.

Cheng Jiajun stood at the door, holding a printed copy of the transaction record in his hand.

"Boss, Lu Chenzhou didn't make any trades today. Huaxin Pacific closed at 4.91, and China National Building Material closed at 2.96. His short positions have already made a floating profit of nearly 2 million. Adding the previous profits, his total net assets have exceeded 3 million Hong Kong dollars."

Wei Zhexuan didn't speak. He stared at the K-line that was trending downwards, remaining silent for a long time.

"He hasn't closed his position yet?" he finally asked.

"No, his roommate asked him if he would be fair tomorrow, and he said 'we'll see.' Also, he asked his roommate to prepare to set up a private equity company in mainland China."

Wei Zhexuan frowned slightly: "Mainland private equity?"

"Yes, he already has Zhizhou Capital in Hong Kong, and now he's setting up a private equity firm in mainland China. He's trying to establish a presence on both fronts simultaneously."

Wei Zhexuan gazed at the night view of Victoria Harbour.

"This indicates that he believes the bottom of the A-share market is closer than expected, and he is already preparing to enter the market."

Cheng Jiajun paused for a moment, then said, "Boss, you mean...?"

"What I mean is, he might be closing out his positions."

He walked back to his seat, sat down, and turned on his computer.

"Keep an eye on his account. Tell me immediately whenever he closes his positions."

"clear."

Cheng Jiajun turned around with a hint of hesitation. If Lu Chenzhou closed his position and stopped buying Hong Kong stocks, would he have to open another mainland account?

That same evening, the post about Lu Chenzhou on the Tsinghua University BBS had reached four million upvotes.

The title of the main post has been updated: Leverage Bro predicts: A-shares will take off within three months, and he is preparing to establish a private equity firm in mainland China.

"Within three months? The index is at 1900 points now, what makes him say that?"

"Every word he has said since September 18th has been correct."

"On September 17th, he said that 2000 points was the bottom and that the market would take off within six months. Today he said 'it's too late,' and that he's going to set up a private equity fund in mainland China, which means the market is about to rally ahead of schedule and he's going to enter the market."

"But the A-share market fell another 3% today, with a turnover of only over 300 billion yuan. Isn't it too optimistic to expect it to take off within three months?"

"Optimistic? When he leveraged 10 times to buy CITIC Securities on September 18th, did you think he was optimistic or crazy?"

"...He's gone mad."

"And the result?"

"He ended up making a profit."

"That settles it."

"He says 2000 points is the bottom, but he himself is shorting Hong Kong stocks. Isn't that contradictory?"

"It's not contradictory. He's bullish on the long-term bottom of A-shares and bearish on the short-term trend of Hong Kong stocks. Two markets, two directions, two sets of logic. He can handle both simultaneously, you can't, so he's Brother Lu, and you are you."

That hurts.

"Don't be so hurtful, I just want to ask one question: When did he start buying A-shares?"

"Within three months. It could be tomorrow, it could be next month. Anyway, he said it's too late, so don't wait."

"Stop waiting? I'll rush in and buy at the bottom right now!"

"Calm down, upstairs. He's talking about within three months, not tomorrow. If you rush in now, the price might drop for another three months."

"What should we do then?"

"Wait, wait for him to liquidate his Hong Kong stocks, wait for him to set up a private equity fund, wait for him to buy A-shares. If he makes a move, then you make a move. If he doesn't make a move, then you absolutely must not make a move."

"That's right. If he doesn't buy, I won't buy; if he buys, I'll follow suit."

"Another bandwagoner."

"If I don't follow the trend, what should I follow? My own judgment? If I had my own judgment, would I still be browsing this forum?"

"...reality."