Chapter 129 Gold Profits
This time when Liu Zhicheng came to the beautiful country, he was picked up at the airport in Lyon.

In the presidential suite of a hotel in New York, Lyon and Liu Zhicheng were chatting.

Leon smiled and said, "I have to thank you this time. I followed you to invest in gold futures, and now I have made several times the profit."

"Haha, this is because you have a good vision. I didn't give you any advice." Liu Zhicheng shrugged and said with a smile.

"But now that I've made a profit, I have to be grateful. However, isn't the price of gold too high now? Do you think it's time to sell it?" Lyon asked with a smile.

"In less than a year, you have made several times the profit. In fact, the most conservative method is to get your capital back first, and then it doesn't matter what you do with the rest. At most, you will make a little less money." Liu Zhicheng said lightly.

Liu Zhicheng would never tell others the specific time of selling gold, but it is one thing to make some money by following him.

But wanting to know one's own movements is another matter, even if it has no effect on oneself.

"That makes sense. I'll sell some when I go back." Lyon nodded.

Lyon also knew that he would not be able to get accurate information, but Liu Zhicheng's answer was already very straightforward. It all depended on how he judged.

Since you have already made a lot of money, there is no need to hesitate. The safest way is to sell part of it first to get your money back.

"Leon, last time you called me you said that Brothers Offshore Oil Exploration Company has struck oil in the North Sea?" Liu Zhicheng asked again.

"Yes, but the oil output rate is not very high right now, and we are drilling new oil wells now," Lyon introduced.

Last time, Brothers Exploration Company spent 100 million US dollars to purchase the oil exploration rights for an area in the British North Sea, and finally struck oil.

In the past, offshore oil fields were not worth much, but in the current oil crisis, oil fields are priceless.

This new oil crisis will not end this year because war has broken out in the oil-producing areas. This year and next year are critical years, and oil prices will continue to rise.

Since the beginning of the year, the Seven Sisters of Oil have collectively extended their business to the sea and are exploring offshore oil fields.

Now that the brother company has struck oil, it is a gold mine. In order to prevent American-style Iai, Liu Zhicheng has brought in a partner from the United States.

The two then talked about the promotion of arcade machines and alcoholic beverages. Since Orange Technology has already launched a home game console, Liu Zhicheng kindly reminded Leon.

"The future of gaming is on home consoles, Leon, you should be ready."

"Liu, do you mean to let me continue to be the agent for home game consoles?" Lyon asked with his eyes lighting up.

"Leon, Wal-Mart is definitely my first choice. It is impossible for you to be the only agent for the whole North America. I can give you the agency rights for North America at the same time, but you must go in the form of a specialty store."

The form of a specialty store is a capital-intensive industry, and Leon certainly needs to consider it, but he didn’t expect that he nodded immediately and said, “We can continue to cooperate.”

Because after working as an arcade game agent for several years, he saw the huge profits in the market.

In the following days, Liu Zhicheng arranged for people to meet with Goldman Sachs and Citibank to cash in on gold futures.

Although the gold price reached its peak in January 1981, Liu Zhicheng had a large amount of gold futures and it was impossible for him to wait until the last minute to sell them all.

Not making the last penny is one of the rules for success of Li Chaoren in his previous life. And Buffett also said in his previous life: try to avoid risks and keep the principal.

The gold trading market is very large, but it also needs to be cashed out separately to avoid triggering an avalanche in the gold market.

For such a major event, Liu Zhicheng naturally stayed in New York in person. Starting in late December, Goldman Sachs began to sell a small portion of the shares at the price of US$12 as required.

In January 1980, when the price of gold reached around 800, a large-scale sell-off began.

Because he knew that by late January, gold would reach a high of $850 per ounce, but would only last for a short time.

Then, after the U.S. government issued an executive order restricting gold trading, the market immediately collapsed.

By mid-January, Liu Zhicheng had cashed out all of his gold futures, with the average shipping price reaching US$790 per ounce.

More than a year ago, his entry price was around US$250 and his exit price was US$790, achieving a three-fold profit.

The original loan was 1 billion US dollars in cash and Walmart shares, and now it has become 10 billion US dollars. After deducting the 30 billion US dollars principal to be repaid, there are 10 billion US dollars left, which can be converted into 20 billion Hong Kong dollars.

However, investment banks are not doing charity. Borrowing such a large amount of money involves certain risks, and the interest rate is naturally very high.

In order to suppress inflation, the current benchmark interest rate in the United States is as high as 13.5%, which means that the interest rate for deposits in banks is as high as 14%, and normal commercial loans are around 18%-20%.

So, just like Liu Zhicheng did not dare to use the loan from Citibank at first, fortunately, Walmart’s stock price outperformed the loan interest.

Although leveraged funds in futures trading do not contain interest, they only become handling fees, and this handling fee is actually related to the benchmark interest rate.

In addition to various transaction fees, all in all, plus Liu Zhicheng's US$16 million principal, the total amount received was almost US$ billion.

It can be said that Goldman Sachs and Citigroup also made a lot of money this time. In less than two years, they each made about 3 million US dollars, and there was no risk at all. Fortunately, it is a capitalist society. After futures trading, there is no need to pay personal income tax, and there is no need to report this income specifically.

However, such a large amount of funds cannot be transferred out of the United States in a short period of time, and even legal income is fraught with difficulties.

If you continue to play like this, there will definitely be the possibility of being caught. It is better to put the funds in the United States first. Liu Zhicheng's operation is simpler, which is to set up an investment company in the United States and then invest globally.

Wait for these investments to generate profits every year, then keep them locally and transfer them back to Hong Kong in batches. This is legal and reasonable.

Therefore, an investment company called Pacific was born in New York, and its head was Bit recommended by Lyon.

Of course, Liu Zhicheng, a shareholder of Pacific Investment Company, has been isolated in multiple layers, and ordinary people cannot find out all the people behind him.

At the end of January 1980, Liu Zhicheng came to Goldman Sachs' mysterious VIP client reception building and once again met Jim, who had previously invested in gold for him.

Seeing Liu Zhicheng, Jim smiled happily and said, "Mr. Liu, I'm very happy to see you again."

"Same here, me too." Liu Zhicheng said with a smile.

"Please take a seat." Jim smiled and said, "I wonder if Mr. Liu came to me because he has some big investment?"

"Of course it's for investment. I want to acquire an investment project of the Beautiful Country Company." Liu Zhicheng said with a smile.

"Welcome Mr. Liu to continue to choose Goldman Sachs. I wonder what industry you are going to acquire?" Jim asked happily.

"The shares of Hong Kong Qingshan Power Generation Company held by Exxon Energy and the shares of China Power he holds." Liu Zhicheng said slowly.

Everyone knows who CLP is. As for Qingshan Power Generation Co., Ltd., it is a power plant that generates electricity for CLP. It is a joint venture between Exxon Energy and CLP.

Exxon Energy holds 6% of Qingshan Power's shares, and the remaining 4% is held by CLP. Exxon also holds 2% of CLP's shares.

These measures were the actions taken by CLP to deal with the Hong Kong government's investigation.

Jim was familiar with Exxon Energy, but was less familiar with its shares in Qingshan Power Generation Company.

After thinking about it, he nodded and said, "I can investigate first and try to quote a price. I will inform Mr. Liu as soon as I have any news."

"Okay, I believe in Goldman Sachs' ability." Liu Zhicheng said with a smile.

After leaving Goldman Sachs, Liu Zhicheng discussed with Bit and Lyon that in order to obtain shares of China Power and Tsingshan Power Generation, he was willing to give up his interests in the North Sea oil fields.

When Beat and Leon heard the news, they were shocked. It was such a huge sacrifice.

Liu Zhicheng had already made up his mind not to get involved in oil exploration. The oil field would be sold sooner or later, and now he was selling it to Exxon.

He can get what he considers the highest benefit with almost no sacrifice, and Exxon will definitely be tempted.

Leon tried to persuade him again: "Mr. Liu, now is the oil crisis. Oil fields are more expensive than gold. If you sell the North Sea oil fields, it is equivalent to shutting out the gold mountain."

“I always think that you should keep a stake in the oil fields, and even if you want to invest in the electricity market, you should wait until the oil crisis is over.”

When the oil crisis is over, the oil fields will be worthless. Only by selling them now can we maximize our profits.

Liu Zhicheng said: "Leon, don't persuade me anymore. I have decided to sell it. It is impossible to save it no matter what."

Lyon did not think that Liu Zhicheng's discovery of the North Sea oil fields was luck. Who could have predicted that a new round of oil crisis would break out?
But Liu Zhicheng had a keen vision and invested in the crude oil market in advance. He was convinced that Liu Zhicheng had extraordinary insight in this industry.

But Lyon still had some hope and hoped that Liu Zhicheng could continue to lead him to make money in this industry.

He continued to ask Liu Zhicheng: "Now that you have sold the oil field, you no longer hold any oil-related business. This is really a pity for your operational talent. Are you still planning to enter this industry in the future?"

Liu Zhicheng shook his head and said with a smile: "After I have completely acquired CLP in the future, I will reorganize it into an energy company, but the main business of this energy company will be the global electricity market, not oil."

"But in the future, I plan to let energy companies get involved in the infrastructure sector. Infrastructure business includes the construction of oil facilities, which will still be somewhat related to the oil industry."

Infrastructure and energy, the business direction of this company follows that of its previous life, Cheung Kong Infrastructure, which was acquired by Li Chaoren and then merged with Green Island Cement, and then developed into a multinational group in the global power market.

Although Qingzhou Yingni is gone now, Liu Zhicheng can still set up an energy company. Isn't it just investing in the electricity market?
We can still follow the original history of CLP and invest in the construction of power stations in the mainland, and nuclear power, hydropower and wind power can follow this path.

Now CLP has a very good relationship with the mainland. Last year (1979), it was connected to the mainland and supplied electricity to the mainland.

In a few years, the mainland will work with China Power to build nuclear energy and hydropower stations in Daya Bay.

After the matters in the United States were settled, the money remained here first, and the subsequent acquisition was handed over to Goldman Sachs and Bit, while I flew back to Hong Kong.

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(End of this chapter)