Chapter 528: Just a Scoundrel

new York.

A few days ago, John Paulson saw the news that his assistant Rogers, who had jumped ship, had also received a sum of financing from Fan Wumian, and adopted a strategy similar to that of Paulson’s hedge fund, trying to publicize it publicly and attract clients to raise funds.

His favorable impression of Fan Wumian suddenly dropped, and he felt cheated.

However, after years of experience on Wall Street and having seen many businessmen who put money first, and considering the large market size, there was no need to worry too much about the new player, WM & Rogers Hedge Fund. John Paulson quickly digested the bad news.

Instead, they hope to use Fan Wumian’s influence to attract more people’s attention to the risks in the subprime mortgage market, which will help stimulate the market to enter a recession faster.

John Paulson did not call Fan Wumian specifically to question him, but instead made up a reason on his own, thinking that Fan Wumian wanted to diversify his portfolio to reduce risk and increase the possibility of success.

Compared to Fan Wumian, he actually hated Zowon Rogers more.

Because Rogers was unethical, he almost copied the investment philosophy of Paulson’s hedge fund, and also made some adjustments and upgrades to make the investment theory model more perfect.

This made John Paulson doubt Rogers, guessing that Rogers had long been thinking about starting his own business, so he deliberately kept it from him.

Rogers’ changes were simple. He modified the short-selling targets based on the strategy of Paulson Hedge Fund and only shorted the asset packages generated between 2005 and 2006.

The reason is that due to the sharp rise in US house prices in the past two years, banks have quietly relaxed their customer review efforts.

This has prompted many people with unstable jobs or whose income simply cannot cover their mortgage repayments to start leveraging their loans to buy homes.

Once there is any real disturbance in the US housing market, the homebuyers who are the first to be unable to repay their loans and may choose to default may be this group of people, and the risk is so high that short selling is more suitable.

This forced John Paulson to reciprocate and start learning how to adjust the WM & Rogers hedge fund, and on this basis began to short the “ABX Index”.

This is an index that specifically tracks credit defaults on subprime mortgage bonds. He mobilized $7000 million and increased leverage by 15 times. Since the fluctuations are not too large at ordinary times, the risks are within a controllable range and are far less exciting than futures and foreign exchange markets.

John Paulson thought he had the upper hand and was complacent at first.

Unexpectedly, Jowon Rogers began to sell new products specifically for shorting the ABX index to some potential big customers.

He also accepted an interview with reporters yesterday, and announced that he planned to raise a total of US$15 billion and had already found several potential investors.

It’s almost the same as when Fan Wumian’s album was copied by a fake counterfeit site called Baipiao.

After reading the article, John Paulson was so angry that his blood pressure soared. During a meeting in the office, he even shouted that Rogers was a rogue!

On Wall Street, only the rich care about their reputation and create an image of respectability and integrity.

Middle-class people like Rogers are only concerned with making money.

He clearly guessed that someone inside the company might have tipped off Zowon Rogers, but he had no way of investigating further because Rogers had had a good relationship with almost every colleague in the past, and everyone seemed to be a suspect.

After taking a blood pressure pill and guzzling coffee to calm down again, he had to accept the fact that some of his clients might be diverted to the WM & Rogers hedge fund.

At around 9 o’clock in the morning local time, several white men in suits came to the headquarters of Paulson Hedge Fund without an appointment.

The leader is called Reuven Jennings, who introduced himself as a financial advisor hired by Britney Spears, and now helps her manage nearly 4000 million US dollars in assets.

Upon hearing this, the account manager in charge of reception was so surprised that he couldn’t close his mouth.

He then invited Mr. Reuven Jennings to the conference room and hurried to find John Paulson to meet him personally to express his importance to Britney.

At this moment.

Sitting in the office downstairs where he could see the iconic golden bull, Reuven Jennings asked curiously: “What is the relationship between your Paulson Hedge Fund and the WM & Rogers Hedge Fund?”

After listening.

Mr. John Paulson smiled stiffly and explained patiently:
“It doesn’t matter much, but WM Fan is the second largest shareholder of our company and has also invested in WM & Rogers Hedge Fund. In the past, Zowon Rogers was just my assistant, and now his scale is far smaller than ours.”

Britney’s financial advisor, Reuven Jennings, nodded in sudden realization and said:
“I just arrived in New York last night and looked up a lot of information in the hotel. It seems that you only focus on shorting subprime mortgages? WM & Rogers Hedge Fund Company has launched three products, targeting shorting subprime mortgages, Nasdaq technology stocks and Silicon Valley venture capital. The selection seems to be richer, unlike a traditional hedge fund company.”

Taking a deep breath to calm down, John Paulson told:

“Our company is also very diversified, but recently the outside world has focused on the subprime sector, which has made me famous in this area, so I rarely mention other types of products.”

The account manager who was in charge of the reception was afraid that he would miss out on the huge commission, so he quickly added:

“As far as I know, Britney and Mr. Fan are friends, right? They recently opened a company together? Did Mr. Fan introduce you here?”

Reuven Jennings didn’t explain much:
“Even if it is true, my employer, Ms. Britney, called him and he introduced us to come here for a visit and consultation. But investment requires independent thinking. We will issue a professional evaluation report to Britney later. In fact, I hope she can invest in some low-risk financial products. Since the short selling stimulated the mortgage market, you have suffered serious losses and lost a large number of customers, right?”

It hit a painful point.

Honestly.

John Paulson doesn’t like dealing with professional financial advisors. After all, these people have no say in the matter and like to find fault with everything, which makes them too difficult to deal with.

On the contrary, some wealthy people who are not so smart, because they don’t know much about investment and financial management, are more willing to trust the judgment of professionals.

Fortunately, since Britney is Fan Wumian’s friend, it means that she is indeed willing to invest. John Paulson is worried that the size of the client assets he manages is too small, and he cannot let go and make a big move. If he can get another large sum of money, he can continue to increase his holdings and negotiate with representatives of investment banks and securities firms to reduce some unnecessary costs.

After learning the details of the situation, Reuven Jennings quickly led his men away.

Without John Paulson’s instructions, the account manager in charge of reception volunteered to follow Reuven Jennings and others for the sake of his own commission.

Just over ten minutes later, he came back to report that he had indeed gone to the WM Rogers hedge fund company.

John Paulson regretted even more that he agreed to let Fan Wumian become a partner, but unfortunately he had already received the money from the sale of shares and it was too late now.

When Britney’s representatives met with Zowon Rogers, they focused on consulting on the two products “Venture Capital Fund” and “Nasdaq Technology”.

Let’s not talk about venture capital funds for now, which are just a concept.

The private equity fund that invests in Nasdaq technology stocks initially plans to allocate 30% of its shares to Amazon, 30% to Apple, 10% to Google, 15% to Qualcomm, plus Broadcom, ASML and Microsoft shares to make up the number.

It only took Fan Wumian a few minutes to consider how this private equity fund should hold its positions. If nothing unexpected happens, he probably won’t have to touch it in the next few years.

That evening.

Reuven Jennings wrote a report, sent it to Britney’s email, and called her to report:
“My suggestion is to invest 35% of the funds in Penguin Group, which is listed on the Hong Kong Stock Exchange. It recently founded a new company in Silicon Valley, which seems to be very promising.”

“Another 35% of the funds will be handed over to WM & Rogers Hedge Fund Company for management, focusing on Nasdaq technology stocks, so it is not easy to make mistakes.”

“The remaining 30% will be used to short subprime mortgages and invest in venture capital in Silicon Valley. Although the risk is a bit high, there is a chance to get higher returns.”

What does it mean that fools have good fortune?
Britney Spears clearly knew nothing, but because she trusted Fan Wumian, she decided to hand over almost all the cash she had to him.

After listening to Reuven Jennings, Britney replied nonchalantly:
“Thank you very much. Please arrange it as soon as possible. I am putting on makeup and cannot talk. I have to attend Scarlett Johansson’s housewarming party tonight.”

(End of this chapter)