The rise of heroes begins with Hong Kong movies

In 1987, on October 19 of that year, a global stock market crash would occur.

The global stock market crash started with the collapse of the Newyork stock market, and then quickly spread to the stock markets of major Western countries, causing them to plummet continuously.

So what are the details?

On October 19, 1987, at 9:30 a.m., as soon as the Newyork stock market opened, the Dow Jones Index suddenly fell without warning after a period of ups and downs!

Plummeting!

A panicked mood instantly enveloped the entire Newyork stock market, with investors selling their stocks one after another, too anxious to discuss the price.

This situation lasted until the market closed.

The final result was that on this day alone, the Dow Jones Index plummeted 508.32 points, a drop of 22.62%!

If the abstract index is converted into currency, then this decline directly caused the market to lose US$500 billion in market value.

This amount is almost equivalent to one-eighth of the GDP of the lighthouse country this year!

Subsequently.

The plummeting trend quickly spread around the world: the British Index fell 183.70 points, a drop of 10.8%, creating the largest daily decline in the British stock market!

On Hong Kong Island, the Hang Seng Index plummeted 420.81 points, a drop of 11.2%!

In the following two days, other major financial markets around the world, such as France, the Netherlands, Belgium, and Singapore, saw their stock markets fall by 9.7%, 11.8%, 10.5%, and 12.5% ​​respectively!

Throughout October 1987, the stock market crash caused huge losses to the world's major stock markets.

The lighthouse country lost 800 billion US dollars, the San country lost 600 billion US dollars, Britain lost 140 billion US dollars, the treasure island lost 32 billion US dollars, and Hong Kong Island lost 30 billion US dollars!

By the way, when all global stock markets fell into a big crash, there was only one place that survived.

That is -

Sangguo!

In real history, on October 14, 1987, Soros, the most famous short seller in history, published an article in the British"Financial Times" predicting the imminent collapse of the country's stock market.

Five days later, the global stock market crash came and the US stock market collapsed.

But this strange thing is Sangguo. After a short adjustment, the stock market quickly stabilized. Not only did it not collapse, but it attracted investors from all over the world and continued to rise.

When global stock markets were plummeting, the country's stock market ushered in a single-day rise of 9.3%, setting a record since 1949.

It’s truly a weirdo among weirdos!

The deeper Huo Wenyao understands the financial market, the more he understands it. He can't help but sigh in his heart: The bubble economy is so terrifying!

So, what happened to those famous investors in this sudden global stock market crash?

Except for a very few geniuses, most of them suffered unprecedented critical attacks!

Take financial giant Soros and stock god Buffett as examples.

1. Let’s talk about Soros first.

At present, the economy of the country of Sang is raging and flowers are blooming. He predicts that the stock market of the country of Sang is about to collapse. In fact, for a financial giant of his level, this is nothing at all.

Because everyone can see how unreliable Sang Country's current prosperity is.

The real difficulty is when this bubble will burst.

Even Soros couldn't tell the exact time. He predicted this year that the stock market and real estate in Sang would not collapse until February 1991, which is still early.

Likewise, he failed to predict the global stock market crash!

Just after the global stock market crash broke out, Soros broke his arm to survive and liquidated all 5,000 S&P 500 futures contracts held by Quantum Fund, with a total value of US$1 billion.

One week after the big crash, Quantum Fund’s net assets plummeted 26.2%!

At this time, how much did the U.S. stock market drop?

17%!

In other words, Soros’s desperate attempt to survive has resulted in greater losses than the decline in the U.S. stock market! at the same time.

This is also the first time that Soros has exceeded the 20% stop loss limit he set.

There is no doubt that Soros has become the biggest loser in this disaster.

However, shorting a huge amount is shorting a huge amount.

Shortly after the stock market crash, Soros seized an opportunity to short the U.S. dollar and eventually turned a loss into a profit. In 1997, the Quantum Fund's profit still reached a double-digit 14%.

2. Let’s talk about Buffett again.

On Black Monday, Salomon, a company that stock investor Warren Buffett had recently invested heavily in, suffered a loss of US$75 million.

Buffett’s personal wealth has evaporated by US$342 million!

Within a week, the stock price of his Berkshire Hathaway company plummeted 25%, and the asset losses increased!

As we all know, Buffett is different from speculative financial giants like Soros. The investment philosophy he believes in is value investing.

After the stock market crash broke out, he was extremely calm, neither asking for information nor selling stocks.

He acted calmly, as if the loss of up to 400 million US dollars had nothing to do with him, and he just continued to do his own thing calmly.

Perhaps many people are still immersed in the grief of huge losses, but he has already begun to do research.

What to study?

Research which companies have long-term and sustainable competitive advantages, then enter the market at the bottom after the stock market crash, and methodically purchase the stocks of highly competitive listed companies.

Just this year, Buffett set his sights on a company -

Coca-Cola!

Coca-Cola's total share capital was 4.297 billion. In 1987, this year's closing price was only US$3.21, and its total market value was only US$15 billion.

But through various reports and months of detailed investigation, Buffett finally calculated the company's actual intrinsic value to be US$38.163 billion.

In addition to these, there is more important.

That is, Coca-Cola Company is developing well and its performance is growing every year.

In other words, the actual value of Coca-Cola Company is far underestimated by the market!

When the actual intrinsic value of a company is far lower than the market value, it is an excellent time to enter the market. If you are very optimistic about this company, you can hold it for a long time!

This is what Buffett does!

Just in 1988, Buffett bought $593 million in Coca-Cola shares and nearly doubled his holdings in 1989, bringing the total investment to $1.024 billion!

How is the result?

By 1991, Coca-Cola's stock price soared, and his investment became 3.743 billion, an increase of 2.66 times in 2 years!

Such an exaggerated increase shocked even Buffett himself.

In the 1991 Berkshire Company annual report, Buffett said happily and proudly:"Three years ago we bought a large amount of Coca-Cola stock, and Berkshire's net assets were approximately US$3.4 billion, but now we hold only The market value of Coca-Cola’s stock has already greatly exceeded this figure!"