Chapter 13 Investing in Gold

After arranging for the funds to arrive and transferred, Andrew's six-year investment plan in Hong Kong was successfully completed. He is scheduled to return to London on March 6. A few days before his departure, Andrew and Mr. Henry analyzed and predicted the subsequent changes in the Hong Kong stock market, and set up several coping strategies and measures.

On March 6, Andrew said goodbye to his colleagues and friends in Hong Kong and returned to London full of victories.

In the evening, Andrew exited the secure passage at Heathrow Airport and took a taxi home. Because of this homecoming, Andrew wanted to surprise his parents, so he didn't tell the family. When Mother Ruth opened the door and saw Andrew, she couldn't help but be pleasantly surprised:

"Ah, Andrew, you're back".

"Yes, Mother," Andrew replied as he took a few steps forward and hugged Mother.

At this time, his father Alan heard the sound at the door of the house, and came to beckon the two mothers at the gate to come into the house and talk. When he came to the living room, he narrated to his parents that the investment in Hong Kong had been successfully completed, and handed over the list of bank accounts and stock account transactions of the family funds to his father Allen.

"Oh, £4 million!" his father, Allen, exclaimed after looking at the list of funds in his bank account.

"What's going on, Andrew, tell me about the situation," Ruth asked, her mother, when she saw her husband's strange appearance.

Hearing his mother's inquiry, Andrew said roughly: "In July last year, my father entrusted an investment of 1.2 million pounds in the Hong Kong stock market, and now the shares have been sold, with a net gain of 4 million pounds, and the funds have also returned to the bank account, and my father is now looking at the list."

"What, £4 million! net gain! Andrew, is this true?" said the mother in surprise after hearing Andrew's words.

"It's true, dear," said Alan, who had just finished reading the list and report. Excited, Alan stood up with the slip in his hand and made a weird fist swing in celebration.

It was rare to see his father's funny celebrations, and Andrew was amused. In the following story, Andrew was afraid that his parents would be frightened, so he kindly concealed his investment income of 30 million pounds, and only said the net income of 30 million pounds. But the net income of 30 million pounds still made the parents stunned for a while.

Father Alan muttered to himself a little sluggishly, "Our Smith family is now also a family with a fortune of tens of millions of pounds, and it is no longer an ordinary small family that does not enter the stream, hehe! ”

After being in a daze for a while, with tears in her eyes, the mother came over to hug Andrew, and said in a loud voice: "Good job, good job! My dear little Andrew, you are the hero of the family."

After a while, the parents' excitement calmed down, and they fully recognized Andrew's financial genius. Considering the reinvestment of the family's funds, father Allen asked Andrew what he thought.

"Invest in gold". Andrew told his father, Allen, why he invested in gold. For "investment gold", this kind of investment variety that can not only maintain its value, but also have the possibility of appreciation, his father Allen recognized it very much and decided to fully support and participate in Andrew's "investment gold" plan.

The London Gold Exchange is the world's largest gold market composed of over-the-counter transactions with market makers as the main body. Its gold trading is mainly done through market makers led by the five major gold merchants. Market makers play an important role in providing liquidity in the gold market, improving the efficiency of market transactions, transferring and sharing risks, and promoting market development.

Different from the exchange model represented by the U.S. gold market, the gold trading of the exchange is mainly through centralized matchmaking, while the market maker model is that each market maker quotes the bid price and ask price according to their respective strength and operating conditions, and the transaction is more flexible, and the purity, weight and delivery location of gold can be selected by customers.

In addition, market makers directly quote prices to institutional and individual investors, and build a financial investment gold market on the basis of the commodity gold market in the form of deferred delivery.

The so-called deferred delivery means that investors can buy and sell gold without cash settlement, obtain a position rollover by paying interest rates, etc., and cash out profits through reverse liquidation operations at the right time, and usually do not deliver physical gold.

This flexible trading model makes the London gold market an excellent choice for institutional and individual investors to invest in gold, and also makes the London gold market the largest gold investment market with market players all over the world.

On the morning of March 10, 1973, Andrew and his father Allen came to the London gold market and walked around the trading venues of various market dealers to familiarize themselves with gold trading methods and gold prices. Then I asked for a description of the rules of gold trading and the price list of various types of gold at the trading venues of the five major gold merchants, and prepared to go home to discuss before deciding how to buy gold.

Back at home, the father and son studied the gold trading materials they had brought back and discussed. In the end, it was agreed: "Andrew will contribute 30 million, and his father will contribute 5 million, a total of 35 million pounds, to buy gold."

Small gold bars and coins used for value preservation are relatively expensive and have a relatively small circulation, which is not suitable for large investments. The best option for a large investment is a 400-ounce gold ingot.

Anyway, the gold bought in cash is also stored in the warehouse of the market, and the value of the gold stored in the warehouse of the market is used as a margin to speculate on the gold price of the deferred delivery method. ”

In the afternoon, the father and son went to the London gold market again, chose a large market dealer, and bought 35 million pounds of 400 ounce pure gold ingots at the current price of $79 per ounce, which the market dealer kept. He opened a margin account with 35 million pounds of pure gold ingots held by the market merchant, and bought 165 million pounds of gold by deferred delivery.

The gold purchase transaction is completed, and the follow-up will be operated by Andrew. In the memory of the previous life, I don't know much about the specific price trend of gold in 73 years, but I remember that at the end of 73 years, the price of gold broke through 100 US dollars / ounce, and reached a maximum of 122 US dollars / ounce in the middle of the year.

It just so happened that Andrew was on a sabbatical period and had time to trade gold orders. Because of the reliance on the memories of his previous life, it is still very easy for Andrew to trade gold.

Considering that he will be entering in October, Andrew spent his spare time reviewing his university economics courses and browsing books on economics. When he read a book on tax avoidance and registering offshore companies one day, Andrew couldn't help but think about the private investment company he was planning to open.

Andrew's private investment company will be set up with a focus on investing in stock markets and exchange rates using memories of past lives. In the future, with the increase in the volume of funds, a single account, a large amount of funds in and out, it is easy to attract the attention of all parties, and it will lose the concealment of increasing and decreasing positions.

It is best to register an investment company in a tax haven, and then register some offshore shadow investment companies to hold shares with each other and diversify the funds in the account. In this case, in the name of those offshore shadow investment companies, diversifying funds to invest in the stock markets and exchange rates of various countries is unlikely to attract the attention of all parties, which is conducive to the concealment of increasing and decreasing positions.

Moreover, it is good to register an investment company in a tax haven and pay less income tax. Well, you have to open an investment company's account in Switzerland, a permanently neutral country, and the customer secrecy system of Swiss banks is quite good. Suited to Andrew's understated style.

As soon as he thought of acting, Andrew contacted a well-known law firm, negotiated the relevant matters related to the registration in the tax haven, and signed the entrustment contract. The operation is expected to be completed within two months.

In late March, after the Hong Kong stock index rose by 1,774.96 points, the news of a sharp retreat reached London. Mr. Henry, who was in Hong Kong before, had called to inform him of the situation in the Hong Kong stock market during this period.

At the end of March, the price of gold closed at $84 an ounce. This is a 5% increase relative to the position price at which Andrew bought.

In April, his eldest brother, William, graduated from the University with a bachelor's degree in law and will choose a career direction. The eldest brother, William, has no intention of joining the family hotel, and has discussed with his father Allen that he will first join the lawyer industry and join the Conservative Party, and will develop in the direction of politics in the future.

Andrew appreciated the career direction of his eldest brother William, and told him that he would strongly support him financially. The Smith family, under its influence, will certainly grow stronger in the future, and indeed needs to increase the support of political forces. Sponsoring politicians is indispensable, but it is also a good option to build up your own political power.

Gold prices were solid in April, with the upward trend unchanged, closing at $90 an ounce at the end of April.

In less than two months, the gold investment has a 12% income, with 35 million physical gold and 165 million of deferred trading margin operations, 200 million investments, 12% of the income, and now if you throw gold, there will be 20 million pounds of income.

Already very satisfied with this, his father Allen asked Andrew about the expected goals of this investment. Based on the current information collected and the information from his past life, Andrew analyzed the outlook for the gold price for his father Allen, and informed his father of his expected goal, 50% of the expected return target, and 100 million pounds of gain.

Andrew's expected earnings target of 100 million pounds still shocked his father Alan. After the shock, I couldn't help but think that if Andrew's expected earnings were realized, the Smith family would be a billionaire family. Even in London, where there are many rich people, it can be ranked.

Andrew's gold operation in London was smooth, but Hong Kong's stock market ushered in a heavy blow, and the stock market crashed, at the end of April, the Hang Seng Index closed at 816.39 points, down 55% from the March 9 high of 1774.96 points.

And the panic in the stock market is still spreading, and the outlook is not optimistic. Andrew has instructed Mr. Henry, who is in Hong Kong, to face the worst-case scenario planned in early March: keep a low profile, and the company's employees will take advantage of the shrinking business volume to strengthen the training of employees' business capabilities. Continue to cease the company's proprietary stock projects.

At the beginning of May, the relevant matters related to the registration of offshore investment companies in tax havens were completed ahead of schedule. After getting the registration information and paying all the fees, Andrew hired a simple management team through a headhunter to form a successful investment in the UK branch.

After transferring £22 million to the investment company's account, the investment company's first investment, under Andrew's guidance, started to invest in gold. In the London gold market, 20 million pounds of gold was bought at a price of $100 per ounce, and the market dealer kept it. With 20 million pounds of gold, a margin account was opened, and a margin ratio of 20% was used to buy 100 million pounds of gold in the form of deferred trading.

Gold continued to strengthen in May, breaking above $100 an ounce in the middle of the month. Investment income rose to 25% and there was already £50 million in investment income.

Father Allen's previous dream of becoming a billionaire family has seen the light of day. In this regard, his father Alan has considered the issue of increasing the influence of the family.

PS: Dear book friends, please collect, ask for recommendations!