Chapter Two: Borrowing Money, Trading Phone Numbers with the Campus Beauty, and Stock Speculation
As Yan Fei explained, Liu Suxin’s face lit up with surprise. As a top student, she was amazed to see in Yan Fei the very essence of Professor Chen An’s teaching style.
Curiosity sparked within her, and she took out the questions she had prepared to ask Professor Chen An, eagerly awaiting Yan Fei’s explanation.
Hearing Liu Suxin’s questions, Yan Fei was also astonished, for none of them pertained to undergraduate studies—they were all topics typically explored at the graduate level. Had Yan Fei not completed his graduate and doctoral studies after feeling his undergraduate knowledge insufficient, while working and studying simultaneously, he would not have been able to answer her.
As their discussion deepened, Liu Suxin asked, “Senior, did you graduate with a doctorate? Your knowledge of finance is profound, and your insights on certain issues are uniquely perceptive yet entirely reasonable.”
Yan Fei smiled softly upon seeing the admiration in her eyes. “No, I graduated with a bachelor’s degree last year.”
“Ah!” Liu Suxin gasped, covering her mouth in shock. Looking at Yan Fei with puzzlement, she asked, “Senior, with your knowledge, you could have been admitted to graduate school without exams. Why didn’t you go?”
Yan Fei smiled faintly and remained silent. Seeing this, Liu Suxin did not press further. She looked at Yan Fei earnestly and said, “It’s a pleasure to meet you properly. I am Liu Suxin, a third-year economics student at Shen’an University.”
Noticing Liu Suxin’s delicate, fair hand, Yan Fei reached out to lightly grasp her fingertips and smiled. “Nice to meet you, junior. I’m Yan Fei, a graduate of East China Economic College.”
The two smiled as if old friends reunited, a comforting and natural atmosphere blossoming between them as they walked and talked.
Arriving at Professor Chen An’s office, Yan Fei quickened his pace and stopped about a meter before the professor, who was busy at work. Recalling the regrets of his past life, he called out with a trembling voice, “Professor!”
Chen An looked up at the voice, startled at first, then smiled warmly. “Yan Fei, you came to see your teacher! And Liu Suxin, you’re here too.”
Liu Suxin smiled in reply. “Professor, I met Senior Yan Fei on the way and discussed some topics. It turns out he has a deep understanding of finance.”
Hearing this praise, Chen An’s face brightened with joy as he looked at Yan Fei. “Yan Fei is my proud disciple, deeply versed in my teachings on finance. If he devotes himself to research, he will surely become a master in the field. Such a pity!”
Listening to Chen An’s commendation and his evident expectations, Yan Fei’s guilt deepened. In his previous life, this elderly scholar, devoted to academia, lamented never finding a worthy successor. Yet Yan Fei, once tainted by worldly affairs, had dared not meet his mentor.
Liu Suxin’s curiosity grew at Chen An’s high regard for Yan Fei, her bright eyes flickering as she looked at him.
After some casual conversation, Chen An turned to Liu Suxin and smiled. “Liu, did you come to ask me something?”
Liu Suxin smiled. “Yes, Professor, but I already asked Senior Yan Fei on the way and got my answers.”
Chen An’s interest piqued. “Oh? Let’s hear it then—I want to see how much knowledge Senior Yan Fei still holds.”
Yan Fei sensed the professor’s irritation beneath those words, aware that it stemmed from his refusal last year of Chen An’s recommendation for graduate school. Choosing work over academic research angered the professor.
Feeling Liu Suxin’s playful gaze, Yan Fei bowed his head shyly as she relayed his answers in detail to the professor.
After listening, Chen An turned to Yan Fei with growing admiration, patting his shoulder with satisfaction. “I misjudged you. I didn’t expect you not only to keep up academically after graduation but to reach such depth. Come be my graduate student. Once the doctoral slot is approved, I’ll transfer you directly and grant you dual degrees.”
Yan Fei wanted to agree immediately but, considering his situation, replied with guilt, “Professor, let me think about it.”
Chen An sighed softly before asking, “What brings you to see me today?”
Yan Fei glanced at Liu Suxin, who immediately stood and said, “Professor, I should get back to class now.”
Chen An smiled and nodded, then looked at Yan Fei with an expression of gentle disappointment, deepening Yan Fei’s guilt. Feeling embarrassed, Yan Fei confided about being framed, betrayed by his girlfriend, and losing his job.
After hearing the story, Chen An angrily slammed his desk. “How could Li Feng act so wrongfully without distinguishing right from wrong? I’ll go confront him and seek justice for you.”
Yan Fei was moved by the professor’s protective spirit and quickly pulled him back. “Professor, this isn’t your fault. I was naive and careless. The current outcome is the best possible.”
After calming down, Chen An pondered briefly. “I’ll write you a recommendation letter. Since you work at Chuanghua Securities, and an elder brother of yours is a deputy general manager there, though Chuanghua is small, the benefits are decent.”
Chuanghua Securities ranked twelfth in China—a dream workplace for many finance students.
Yan Fei was deeply touched that the professor neither blamed him nor doubted his words, and even arranged a job for him. His eyes welled with tears.
Chen An patted Yan Fei’s shoulder gently. “You’re so pure and innocent, child. Society is complex; you’re better suited for academia. If you suffer injustice, just cry it out.”
Wiping away a tear, Yan Fei steadied himself quickly with sixteen years of worldly hardship and said with ease, “Professor, I don’t want to work for now. I need to sort things out, but I’m short on money, so I was thinking...”
Having lived two lives, Yan Fei hesitated to speak aloud. Chen An chuckled, patted his shoulder, and said, “Will a hundred thousand be enough? I have three hundred thousand saved secretly. Take whatever you need.”
“Ah!” Yan Fei was stunned but quickly reassured him, “That’s more than enough, Professor. I’ll repay you within a month at most.”
Chen An laughed carelessly. “You don’t have to repay it, just come be my graduate student.”
“Again?” Yan Fei felt awkward and quickly said, “Professor, I must go now!”
Chen An watched Yan Fei’s retreating figure with a kind gaze. After he disappeared, the professor smiled wistfully, returned to his computer, and transferred one hundred thousand yuan via online banking.
Yan Fei left the office, exhaled deeply, and prepared to return to his rented room to continue studying Earth’s financial markets and seek opportunities to make money.
Not far ahead, he saw Liu Suxin standing under a small floral umbrella, waiting.
“Liu junior, what a coincidence, we meet again!”
“I waited for you on purpose!” she smiled. “I haven’t saved your phone number yet. I want to ask you questions sometimes. I hope you don’t mind.”
Waving her phone, Yan Fei chuckled. “Among three people, there’s always one who can teach me. Studying and discussing together will help me improve. Why not?”
After exchanging numbers, Yan Fei returned to his room to continue analyzing the A-share market, combining it with his experience of the Blue Star stock market from his previous life for a comprehensive study.
He stayed in all day, only leaving for quick meals. By nightfall, his eyes gleamed with a newfound confidence.
After a day’s research, Yan Fei discovered that China’s A-share market closely resembled the Dragon Bond market of Blue Star’s Long Kingdom. Nearly ninety percent of listed companies’ composition and industry distribution were similar; market scale was almost identical; even the trading habits of institutions and retail investors showed little difference.
“If I can make money on the Dragon Bond market, I can do the same on the A-share market,” Yan Fei said confidently, gazing at the Shanghai Composite Index.
To Yan Fei, the stock futures market was a battle of psychology in the short term but economic value investment in the long run. Since the people, economic development, and technology on Earth’s China and Blue Star’s Long Kingdom were comparable, insights from the Dragon Bond market should also be applicable to the A-share market.
A message alert sounded. Yan Fei checked his phone: the hundred thousand yuan borrowed from the professor had arrived. Without hesitation, he deposited the full amount into the stock account he opened during university.
After funding his account, Yan Fei logged onto the Tianya forum and registered an account named “A-Share Master of All Doubts, I Make A-Share Submit.” He planned to publish every real-time trade operation to attract followers and prepare for his future private equity fund.
Soon, he posted his first thread titled “First Real Trade: 100,000 Principal, Aiming for 150,000 in Ten Days,” including a screenshot of his recent deposit.
Posting complete, Yan Fei began selecting a stock for tomorrow’s trading from nearly 1,600 listed shares. He glanced at the Shanghai Composite Index.
He believed the A-share market in August 2009 was undergoing a phase adjustment. The index had fallen from a high of 3,478 points, and funds preferred short-term speculative theme stocks.
August was also the time for mid-year reports, meaning many companies would report disappointing earnings or even heavy losses. Such companies would face pressure to maintain their listing status and would undergo asset restructuring. Selecting one from the Special Treatment (ST) stocks most likely to restructure would guarantee a rise.
Filtering through over 130 ST stocks, Yan Fei removed those outside August’s hot sectors and those with poor trading activity over the past ten days, leaving ST Dongyuan, ST Jiufa, and ST Donghang.
Contemplating the three, Yan Fei crossed out ST Donghang due to its large market capitalization, which limited potential gains even after restructuring—at most a doubling in price.
Between ST Dongyuan and ST Jiufa, Yan Fei favored ST Jiufa, as it was in worse shape and had a smaller market cap.
Financially, ST Jiufa lost 470 million yuan in 2007 with revenues of only 170 million—a 72% drop from the previous year; in 2008, it lost 120 million with revenues of just 66 million—a 66% decline. Other metrics like earnings per share, net assets per share, and operating cash flow were abysmal.
Checking ST Jiufa’s order book, Yan Fei noticed main institutional investors had entered and pushed the stock up several limit-ups. The locked limit-up made it hard to buy in.
He finally discarded ST Jiufa and focused on ST Dongyuan. Financially, it was better—no losses, though net profit dropped from just over 20 million in 2007 to about 9 million in 2008.
However, upon reviewing net profit excluding non-recurring items, Yan Fei reconsidered. Dongyuan was just as poor as Jiufa, with losses of several million in 2007 and 2008. Worse, its revenue was only in the tens of thousands, a classic shell company capital game.
Seeing this, Yan Fei was not dismayed but rather pleased; such capital plays were ideal for short-term speculative surges, provided main funds had entered.
Reviewing volume indicators and buy-sell ratios over the past ten days, Yan Fei confirmed significant main force buying. After analyzing market depth, funds, and technical trends—KDJ, CCI, MACD, RSI—he found retail investors were in a rebound sell-off mood, believing the stock lacked upward momentum.
With a rough grasp, Yan Fei examined Dongyuan’s price range from its bottom at 2.8 yuan to 4.3 yuan, estimating the main funds’ buying amount and cost line.
Minutes later, Yan Fei calculated about 70 million yuan of purchase funds at an average price of 3.82 yuan, estimating the main force was gearing up to push the price higher.
Setting down his pen, Yan Fei said firmly, “Tomorrow’s open will surely be a high open with upward momentum. To buy in, orders will need to be placed above the 2% level. Luckily, my funds are small, so I don’t have to worry about missing out.”
Shutting his notebook, Yan Fei felt grateful to his professor. If not for the practice in his senior year and the professor unlocking the three-board and ST-board trades for him, he wouldn’t have been able to buy this ST stock.
After a good night’s sleep, Yan Fei had breakfast, opened his laptop, and checked the time: nine o’clock. Fifteen minutes until pre-market auction. With sixteen years of stock market experience, he knew he could confirm his analysis’s accuracy by watching the auction.
At 9:15 sharp, Yan Fei’s eyes fixed intensely on the screen as a buy order of 1,000 lots suddenly surged, instantly pushing the price to the daily limit-up.