Chapter 82: Military Investment Model

At 1:30 pm on Tuesday, August 7th, Zhou Minglin Muqing and Chen Shu arrived at the Sky Ladder Building together. At this time, Tong Gang Li Cheng and Irbedov had already been waiting.

When they saw Zhou Ming coming, the three of them immediately got up to greet him. Irbedov said first, 'Mr. Zhou Ming, just this morning, US President Walsh officially signed the Desert Shield Action Plan, urgently sending additional troops to the Middle East. According to this presidential order, 2,300 members of the US 82nd Airborne Division have already boarded planes at Fort Bragg and are heading to the Gulf region. It seems that the Americans are really going to war.'

After Irbeldov, Li Cheng also said: 'After the US military forces were deployed, the market also changed accordingly. International oil prices have risen sharply and are approaching the 25 US dollar mark.'

'Due to the rise in oil prices, many related chemical industries have also been affected. Diesel and gasoline prices may fluctuate, and the impact on other industries such as pesticides, fertilizers and synthetic materials is also relatively direct. In the morning stock market trading, there was a large-scale decline, and other traditional energy industries have also been affected to varying degrees,' Li Cheng said.

The last one to speak was Tong Gang: 'Then there are the military enterprises. Affected by the war, the entire military sector is trending very well.'

After listening to Tong Gang, Li Cheng, and Irbekov, Zhou Ming did not rush to answer anything, but first led everyone into the conference room.

After everyone had taken their seats in the meeting room, Zhou Ming said, 'I watch the news every day, and I know about Operation Desert Shield. However, I don't think this operation will really sound the alarm for war. I think it is more of a warning to Iraq, or it can also be said to be a means used by large consortia to influence the market. That is why oil prices have risen again and are approaching the US$25 mark.'

'In fact, if everyone had paid close attention to the news, they would have known that Operation Desert Shield had actually been implemented four days earlier, as soon as Iraq ended the Gulf War, in order to prevent Iraq from continuing its southward advance and attacking Saudi Arabia.

After a moment of silence, Zhou Ming continued, 'Since the collapse of the Soviet Union, the United States has been the world's only superpower. Iraq cannot possibly be a match for the United States, whether in terms of overall national strength or military equipment. But the problem now is that the US military has less than 100,000 troops deployed in the Gulf region, while Iraq has nearly 300,000 troops on the front line. Of course, the number of troops in modern warfare does not mean much, but at least it shows that the Americans are not prepared for this war. What he is doing now is just a gesture.'

'Iraq and the United States have no chance of winning a head-to-head battle, but if it is just a small part of the United States, Iraq still has great hopes. At present, the United States is the world's dominant power. If it wants to prove that it has the strength to become the world's police, it must not only win this war, but also win cleanly. I believe that as a seasoned politician, Walsh cannot possibly not understand this.'

'Then since he understands this, he will definitely not start the war in such a hurry.'

Zhou Ming finished and leaned back in his chair: 'Since a formal war will not break out, it is difficult to judge the prospects in the market.

'So, little brother Zhou Ming, you still don't plan to return to the oil futures market?' Tong Gang asked.

'No, I should never have had such a plan, otherwise I would not have let Sun Wei pack up and come back from New York,' Zhou Ming said.

This answer was expected by Tong Gang, Li Cheng, and Yerbedov, and at the same time it relieved them all. Because they were all business tycoons in their respective fields, their biggest fear was indecision. Although they were a little anxious to see the wind and waves in the futures market, since Zhou Ming said he could make it back in the stock market, it didn't matter.

In contrast, if Zhou Ming became hesitant and wavered back and forth between the stock market and the futures market, that would be the most worrying thing. But it seems that their worries are unnecessary. Zhou Ming is the same Zhou Ming. He may be young, but he is still very reassuring when it comes to getting things done.

Tong Gang, Li Cheng and Yerbedov exchanged glances and nodded at each other without saying a word. Finally, Tong Gang said, 'Little brother Zhou Ming is indeed resolute. So, what do you think of Little brother Zhou Ming's arrangement for the stock market? The stock market is not like futures, because the US military's military deployment in the Gulf region is real, and the orders from the Department of Defense are also real. This is unlike oil, where the wind changes with just one piece of news.'

Zhou Ming of course understood what Tong Gang meant by this, and in fact was anxious because three days had passed since he had decided to withdraw from the oil futures market.

In the past three days, they have watched the rise and fall of oil prices, with hundreds of millions of dollars transferred every minute. This has made them unable to remain calm. Even though they all understand that even if they are still in the futures market, they may not be able to make this kind of money, they will still be itching to do so if they have the chance.

In fact, not to mention them, even Zhou Ming himself is very anxious. After all, every day, he sees so much money being transferred around in the futures market, a big casino. I believe that no matter who it is, they will be unable to hold back.

But no matter how anxious you are, you still need to prepare for certain things and you can't just go about it blindly.

So Zhou Ming said, 'Chairman Tong, I understand what you're saying, and that's the reason I came here today.'

Zhou Ming then introduced Chen Shu to Tong Gang, Li Cheng, and Yerbedov: "That's Chen Shu, the class president of my finance class. I believe I don't need to introduce this finance class any further. A few days ago, I asked the finance class to help us calculate the investment model.'

'Investment model?" Tong Gang, Li Cheng, and Yerbedov felt a little surprised.

Zhou Ming nodded and said, 'That's right. Although I know that the stocks of military-industrial enterprises will definitely rise in the future, how can we invest to maximise the returns we can get while also best avoiding the possible risks? Or when some of these stocks undergo unexpected changes, or when the information we get is not accurate enough, etc., in order to ensure that our investment returns are maximised, I think it is still necessary to spend a few days calculating an investment model.'

'I think you've misunderstood, little brother Zhou Ming,' Tong Gang said with a smile, 'I didn't say calculating an investment model was unnecessary, I just didn't expect it to be so soon.'

After Tong Gang, Li Cheng and Irbeldov also agreed.

They all said this from the bottom of their hearts because they all understood finance. Three years ago, when Zhou Ming launched the portfolio capital preservation fund product in Gangcheng, they had also looked into the investment model. It was precisely because of this understanding that they were all the more amazed.

The reason is simple: an investment model not only has to select a sufficient number of stocks from a large number of stocks to form a portfolio, but also calculate the investment proportion of these stocks. This is undoubtedly a huge computational task, because it involves calculating all the possibilities in the stock market, whether it goes up or down, whether the increase or decrease is large, or whether there are any unexpected events, etc.

Many people know that there are tens of millions of combinations of lottery numbers, but those are just simple combinations of numbers. An investment model, on the other hand, is an estimate of something, and it is millions of times more difficult than calculating the lottery.

Due to the huge amount of investment, even a one-in-ten-thousand error in the investment model could result in a loss of millions of dollars if put into the market.

It is precisely for this reason that many investment models have been calculated for several years and repeatedly demonstrated before being launched on the market. As for the world's first capital-preservation investment portfolio, it even took ten years of calculation. But now, just a few days later, Zhou Ming has brought them an investment model, so how can they not be surprised?

'That's why they are in the finance class,' Zhou Ming said confidently.

After Zhou Ming, Chen Shu also stood up and said, 'Mr. Tong Gang, Mr. Li Cheng and Mr. Irbedov, I can assure you that the investment model calculated by us is very accurate.'

Tong Gang smiled and waved his hand, saying, 'Classmate Chen Shu, you are mistaken. We don't mean to disbelieve you. I just feel that you are really fast and capable!'

Tong Gang's words were also what Li Cheng and Irbekov wanted to say. They both understood Zhou Ming and knew that since he dared to present this investment model, it must be something he had previously argued for. But it was precisely because of this that it made them feel even more emotional. There was no doubt that Zhou Ming was already a very remarkable businessman, and now with the support of a finance class behind him that was capable of quickly constructing an investment model, it was even more like adding wings to a tiger.

Zhou Ming just smiled at this, and then he nodded to Chen Shu, who walked to the front of the class with understanding. He said, 'Hello everyone, I'm Chen Shu, the monitor of the finance class. I'm here to introduce our investment model.'

While saying this, Chen Shu turned on the slide projector and said, 'According to the information given to us by the teacher, we have mainly set the investment direction in the military industry sector, accounting for 60% of the total investment. This is because we consider that the US government will issue more treasury bonds due to the war, and investment can also be tilted towards this area to a certain extent.'

'In the military industry sector, since the two major consortia of Brighton and Rockefeller are the planners of the Gulf Programme, it is conservatively estimated that the two major companies Bell and Phoenix, which are controlled by them, will receive considerable orders.'

Chen Shu then changed the subject and said, 'However, Martin and other arms companies are also traditional big spenders of the Department of Defense. Coupled with the fact that the Brighton consortium's previous move to monopolise arms triggered an assassination attempt on the president, and the current president, Walsh, is a member of the Morgan consortium, other military enterprises will definitely also receive a lot of orders. It's probably 60/40 between them.'

Finally, Chen Shu said, 'Of course, these are all plans for investment models. Due to the particularity of the Gulf, I think we need to keep between 30 million and 50 million US dollars on hand in case of special circumstances.'

After Chen Shu finished speaking, he took out his investment model file and handed it to Tong Gang, Li Cheng, and Yerbedov. After they took a look at it, Tong Gang said, 'Overall, there's nothing wrong with it. My opinion is to just go ahead and do it like this. If we find problems later, we can discuss it again.'

Tong Gang's suggestion was approved by Li Cheng and Yerbedov. Zhou Ming also nodded with a smile, saying, 'Since everyone agrees, it's settled. Let's try investing according to this investment model and see the results of the afternoon's trading.'

Tong Gang, Li Cheng and Irbedov agreed with Zhou Ming's proposal. At this time, Julie, the administrative supervisor of Wharton, walked into the meeting room and told Zhou Ming that Sun Wei had returned. Zhou Ming immediately told Tong Gang, Li Cheng and Irbedov the news and then took the lead in getting up to go outside to welcome him.

When he met Sun Wei outside, Zhou Ming said with a smile, 'Sun Wei, welcome back. You New York guy are our big hero!'

Zhou Ming was being polite, but it was also true. Although all the decisions were made by Zhou Ming here in Brighton, without Sun Wei's uncompromising implementation in New York, even the best ideas would be in vain. Therefore, after Zhou Ming, Tong Gang, Li Cheng, and Ilbedov also praised him one after the other.

Sun Wei felt a little overwhelmed by the praise, but with Ming Zhou there, he didn't dare to be as arrogant as he had been in New York. He was very self-aware and said, 'I'm nothing. Mr. Ming Zhou is the most important. I'm just following orders. Anyone can do it.'