Chapter 83: What kind of teacher, what kind of student

The New York stock market closed at 4 pm. The military industry sector as a whole was affected by Operation Desert Shield, with an average increase of 6%. Martin Company, as the largest arms supplier to the Department of Defense, the world's largest arms company, and the notorious Skunk Works, is the developer of the F16 fighter. Its heavy transport aircraft and ballistic missiles are also essential, so its increase was the most significant among all military industry companies, reaching 12%.

Next to Martin is General Electric, which most people probably only know for its electrical products. However, it is also an important contractor for the Department of Defense. The Tomahawk cruise missile it developed is a product that the Department of Defense has favoured in recent years. Both the Secretary of Defense and General Norman Schwarzkopf have said that the Tomahawk cruise missile will rewrite the history of future wars. Therefore, General Electric's stock price has also risen by 9%.

In addition, there is Grumman, which builds and repairs aircraft carriers, which are essential for war against Iraq; Bell Aircraft and Phoenix, etc.

Although the rise in these companies' share prices was not as conspicuous as Martin's, they also performed very well, from 4% to 8%.

...

This is Brighton's financial news broadcast. In the conference room of Wharton, Zhou Minglin, Muqing, Tong Gang, Li Cheng, and Irbedov are all sitting in their respective seats, listening with bated breath. Chen Shu is listening while taking notes. It's already 5 o'clock in the afternoon, and the stock market has long since closed. They have been sitting here waiting until the stock market closed.

After listening to the news broadcast on the TV, Zhou Ming said, 'From the news, it seems that the impact of the Gulf on the securities market is still very obvious, especially after the Operation Desert Shield plan was officially signed and the US urgently sent more troops to the Gulf region. I believe that in the future, as the situation in the Gulf region deteriorates further, and the Department of Defense's war orders come out, the military market will become even more of a hotspot, which means that our choice is fine.'

'As for the specific analysis of the stock market and the correlation with our investment model,' Zhou Ming pointed at Chen Shu and said, 'let a professional introduce it.'

Facing Zhou Ming's sudden burden, Chen Shu was a little unprepared and stunned. He pointed at himself and asked Zhou Ming, 'Teacher, did you say that I should introduce it?'

Zhou Ming nodded as a matter of course: 'Of course. You are the monitor of the finance class, and you organised and built the investment model with your own hands. During the preparation of the investment model, you also knew the most about the stock market and those military enterprises, and you even had some information that I didn't even know yet. So if you don't introduce it, I'm afraid no one here is qualified to introduce it.'

'But... I'm afraid I won't be able to speak well,' Chen Shu said with some trepidation.

'Chen Shu, I remember that you were the vice president of the student union at your school, and I've seen you speak before, and you were very good,' Zhou Ming said.

'That was different from now...'

Chen Shu wanted to explain something, but Zhou Ming interrupted him directly: 'There is no difference. You are the monitor of the finance class. As long as you say everything you want to say, don't forget what your purpose is when you came to the United States!'

Chen Shu was originally a little hesitant, but as Zhou Ming's last sentence came out, it finally made Chen Shu calm down. He nodded and said, "I understand, teacher. I will try my best to introduce it well.'

'I don't want you to introduce it wonderfully. As long as you grasp the main points, that's fine," Zhou Ming said.

Chen Shu nodded, took a couple of deep breaths, then stood up. He greeted Zhou Ming, Lin Muqing, Tong Gang, Li Cheng and Yerbedov, then said, 'Today's military stock market was affected by Operation Desert Shield, with an overall increase of 6%. This increase was expected in the investment model. After all, the Ministry of Defence's official war budget has not yet been released. Right now, it's just an emergency troop increase. It can even be said that no arms company has received additional orders. At this time, the stock market fluctuation is just the market confidence brought by the news.'

After Chen Shu's first words, there was no response from the crowd. Faced with the dull atmosphere, Chen Shu glanced at his notes before continuing, 'According to the investment model's calculations, if war breaks out, General Motors and Phoenix will receive the most orders. This is because their products are missiles and optical electronic products, which are consumable products. Therefore, it can be seen that they will suffer huge losses in future wars, and the Department of Defense will definitely purchase abundant ammunition from these two companies.'

'Although Martin also has missile products, its missiles are more inclined towards tactical ballistic missiles and intercontinental missiles, and will not play a major role in regional wars. In addition, the California consortium to which Martin belongs is in a state of rivalry with the Brighton consortium, so the results of the investment model are pessimistic about Martin's gains in this war.'

After saying this, Chen Shu thought for a moment, and then continued, 'As for the rise in Martin's stock price today, I think it is due to Martin's position as the number one arms dealer, which has led the market to expect results from it. Although the initial rise was good, it will not last...'

Tong Gang interrupted Chen Shu with a raised hand and said, 'Chen Shu, we understand what you are saying, I just want to know how much money we have made today.'

Li Cheng and Yerbeidov also agreed with Tong Gang's words.

His words were suddenly interrupted, and Chen Shu obviously panicked a little. He subconsciously looked at Zhou Ming, but found that Zhou Ming was also looking at him.

'Don't look at me. Just tell them the truth no matter what they ask you. I personally calculated the investment model before I came here, so there is no problem. You must have confidence in yourself,' Zhou Ming told him.

Chen Shu nodded, then took a deep breath and said, 'Tong Gang, Li Cheng, and Mr. Yerbedov, I admit that although the investment model is based on the investment allocation of the three companies General, Bell, and Phoenix, it is now in its infancy. Considering the market's expectations for Martin, today's investment has also been adjusted, slightly tilted in favour of Martin.'

'Therefore, according to the results of my calculations just now, our investment return today is roughly between 6 and 7 percentage points, which is slightly higher than the average increase of the entire military industry sector...'

Chen Shu's words were interrupted again at this point, and Li Cheng asked him, 'Classmate Chen Shu, if I heard you correctly just now, you said that the investment has been adjusted, so does that mean that this investment model is not yet complete, which is why it needs to be manipulated artificially?'

Chen Shu glanced at Zhou Ming again, but this time he quickly responded, answering for himself with the conviction that he must not disappoint his teacher: 'Mr Li Cheng, this is the case. We considered this situation when analysing the risks he might encounter, and therefore set aside a certain amount of investment opportunities when constructing the model.'

After saying this, Chen Shu thought for a moment and added: 'Or put simply, in addition to designing an investment model dominated by General, Bell and Phoenix, we have also designed an investment model dominated by Martin and General, which are traditional major players in the military industry. Our goal is to maximise the return on our investments.'

'After all is said and done, no matter how cleverly designed the investment model is, and no matter how much risk is minimised through mathematical and logical calculations, there is no guarantee that risks can be completely avoided, nor can every market change be calculated perfectly. Just like now, although we all understand that Martin's rise will be short-lived, we can still choose to take advantage of it in order to ensure a return on our investment.'

Chen Shu's words were getting smoother and smoother, and he was becoming more and more confident: 'It is precisely in order to make the most of the funds to keep up with the market that we need one or even several alternative investment models.'

Tong Gang, Li Chenghe and Yerbedov were all shocked, because they originally thought that it would be amazing to design an investment model in three days, but they didn't expect them to also design a model for risk outside the record. They couldn't understand what kind of monsters these people were!

Although they are all just businessmen, they can understand that someone as outstanding as Chen Shu and the finance class would be invited to the financial laboratory or recruited by a large financial institution and become a national treasure, no matter where they are. But now they are all serving Zhou Ming so faithfully. What kind of magic does Zhou Ming have?

Of course, none of them thought that Zhou Ming was just lucky. After all, they had all witnessed what had just happened, and Chen Shu had only finished introducing himself under Zhou Ming's constant guidance.

In other words, Zhou Ming had completely conquered them, both in terms of charisma and talent. Therefore, it could be said that it really depends on the teacher to bring out the student.

So the future of such a collection of monsters is undoubtedly impossible to judge; but one thing is certain, following them is definitely a good choice!

With this in mind, Tong Gang, Li Cheng and Irbedov all gave Chen Shu a thumbs up.

'So, Chen Shu, according to your analysis, how long will the situation dominated by Martin Company last?' Tong Gang asked.

Chen Shu shook his head and replied, 'I'm sorry, Mr Tong Gang, I can't give an exact answer to this, but according to the calculations of the investment model, I don't think this situation will last long. Because Martin Company's stock price has already risen once due to the previous Ministry of Defence order, and the current stock price is already at a high level, there is not much room for growth.

'To be honest, today's 12% increase was completely beyond the calculations, and this is one of the reasons why the investment growth of the investment model is not particularly ideal. However, in a week at most, Martin Company's stock will return to stability, and when the Ministry of Defence order is released, Martin Company's stock will be far behind General Motors, Bell and Phoenix,' Chen Shu said.

After listening to Chen Shu's words, Tong Gang, Li Cheng, and Yilbedov all looked at each other and nodded in silence, and they all had the answer.

None of them asked why they should invest in models instead of directly investing, because the answer was obvious. First of all, their funds were too large, and every move would be monitored by the FBI. In order to maintain the stability of the securities market, they could not just buy and sell at will. At the same time, investing in models is actually an allocation of investment proportions. After rigorous mathematical calculations, it is the optimal proportion that can maximize profits while minimizing risks.

So since we have this thing, wouldn't it be stupid not to use it? Tong Gang, Li Chenghe and Yerbedov were all business tycoons in their respective territories, and obviously couldn't be stupid.

In the end, Tong Gang said, 'Zhou Ming, little brother, we're fine here.'

'But I have a bit of a problem here,' Zhou Ming said.

Zhou Ming's sudden words made the three of them, Tong Gang, Li Chenghe and Yerbedov, freeze for a moment. They never expected that in the end, Zhou Ming would actually cause some kind of problem.

Zhou Ming said with a smile, 'Chairman Tong, don't be nervous, there's not really a big problem here either.'

With these words, Tong Gang, Li Cheng, and Ildebaldov let their guards down. Zhou Ming said, 'I believe Chairman Tong, you all still remember the story of Robert from the Adams family. In fact, that is also what we need to worry about now. So my idea is that when we invest, although we all invest according to the investment model, we should not invest together, but instead spread it out and invest in each of our own company accounts.'

  Tong Gang, Li Chenghe and Yerbedov suddenly understood: 'Zhou Ming is really thoughtful!'