Chapter Three: Fierce Battles Between Bulls and Bears, Liu Suxin Seeks Knowledge

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Yan Fei stared at the price ceiling of 4.52 yuan and silently prayed for a large sell order to break the price down. Otherwise, if the transaction settled at this price during the call auction, today’s opening price would inevitably be locked at the limit-up level.

If it opened with a limit-up, ST Dongyuan wouldn’t just stay locked up all day—it would likely see consecutive limit-ups in the following days. That would mean all the effort Yan Fei put in yesterday would be wasted, forcing him to hunt for a suitable stock again, perhaps even switching to a different sector.

It seemed the heavens heard Yan Fei’s plea. Suddenly, a massive sell order of two thousand lots slammed the price down from 4.52 yuan to 4.45 yuan.

Seeing this, Yan Fei exhaled heavily, feeling a slight easing of his tense nerves. But before he could rejoice, a buy order of two thousand three hundred lots surged out, pushing the price back up to 4.5 yuan.

At 4.5 yuan, Yan Fei’s anxiety vanished. As long as it wasn’t the limit-up price, these fluctuations were merely minor disturbances. Since the bulls were making a move, the bears naturally wouldn’t give up easily.

Sure enough, just as Yan Fei expected, the bears immediately unleashed a large sell order of two thousand five hundred lots, driving the price sharply below water level to 4.28 yuan.

Seeing their position crushed, the bulls responded fiercely with a buy order of two thousand eight hundred lots, pulling ST Dongyuan back from underwater and pushing the price to 4.35 yuan.

Not to be outdone, the bears pressed down again. What followed was a fierce back-and-forth battle between bulls and bears. From 9:15 to 9:25 a.m., during this ten-minute window, they tested each other relentlessly. The final transaction price settled at 4.36 yuan, just above the lowest traded price.

Yan Fei quickly did the math. Compared to yesterday’s close at 4.3 yuan, this opening price represented a 1.4% rise—well within his expected range.

Fixating on the 4.36 yuan level, Yan Fei pondered deeply. If he placed an order at this price, he wouldn’t be able to cancel it before 9:30 a.m.

Once it hit 9:30, the continuous auction would begin—the so-called “open outcry.” If the main bullish forces launched a sudden, fierce attack and pushed the price straight to the limit-up within less than a second, there would be no way for Yan Fei’s order to get filled at his price. Trying to cancel and reorder at the limit-up would be a race against lightning-fast hands, leaving him only to watch others get on board while he shouted helplessly, “I’m not on the train yet!”

Yan Fei knew that compared to the main players, he lacked channel advantages and large-order power. He could only hope the bulls wouldn’t be too aggressive and the bears wouldn’t be too weak, leaving him enough room to accumulate shares.

After some thought, having no better option, Yan Fei placed a buy order at 4.4 yuan for 227 lots. This nearly exhausted his capital of 100,000 yuan, leaving just over 90 yuan in his account. The total commission and stamp tax cost him nearly 30 yuan. The 0.03% fee stung, prompting him to plan a visit to the broker the next day to seek a reduction.

Having submitted the order, Yan Fei glanced at the clock—9:26 a.m.—and muttered, “Do all you can; leave the rest to fate.” Leaning back in his chair, he patiently awaited the call auction results.

Time flew to 9:30 sharp. All orders instantly executed. Yan Fei pulled up the transaction info, showing 5,645 lots traded, amounting to 2,461,220 yuan. Unfilled orders stood at 150 lots, worth 65,400 yuan.

Quickly calculating, Yan Fei realized this transaction volume accounted for 0.492% of ST Dongyuan’s entire float. For a stock with less than 500 million shares available, that was a significant proportion.

Seeing this, Yan Fei exhaled deeply. This suggested the main players held ample chips. The prior intense bull-bear clashes were likely orchestrated by the main forces themselves to shake out indecisive retail investors before the real surge, ensuring that afterwards the market would rally with collective momentum.

As the continuous auction began, the main players acted exactly as Yan Fei expected. A massive sell order of three thousand lots at 4.3 yuan slammed the price down instantly to yesterday’s close.

Yan Fei saw his own buy order at 4.4 yuan for 227 lots fill entirely at 4.3 yuan. A wide smile spread across his face, his eyebrows raised in delight.

Seeing the large sell-off, countless timid retail investors panicked, flooding the market with dozens or even hundreds of small sell orders like snowflakes.

But the main players remained unperturbed, like seasoned hunters lying in wait. They calmly watched the mounting sell orders, waiting for the prey to step into the trap before delivering a fatal blow.

Minutes later, the market suddenly saw a huge buy order of ten thousand lots, instantly absorbing all the retail sell orders and pushing the price from around 4.34 yuan up to 4.5 yuan—close to the limit-up price.

Countless retail investors who had panicked and sold now slammed their thighs in frustration, some even fainting in despair. The ST Dongyuan stock forum instantly erupted with angry curses directed at the main players.

“Dirty manipulators, tricking me out of my chips—I hate this!” posted one user named Little Radish.

“My thighs are bruised from slapping them—didn’t expect the main players to be so sinister!” wrote Big Watermelon.

“No! I just placed a watch order—give me back my chips!” cried out I’m the Stock God Buffett.

Having navigated the stock market for sixteen years, Yan Fei had seen countless behaviors from fellow investors. He merely smiled at such posts and continued watching the market. He felt the tactics of ST Dongyuan’s main players closely resembled those of a trader he knew in his past life.

After the price reached 4.5 yuan, the main players paused again. The market oscillated slightly around this price. Many retail investors assumed this was a consolidation to shake out weak hands and began placing buy orders enthusiastically.

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Yan Fei watched hundreds, even thousands, of retail buy orders flood in and marveled at their luck. Though chasing higher, they were at least getting in.

As thousands of buy orders poured in, the main players immediately unleashed a huge sell order of two thousand lots, slamming the price below water once more. The stock forum roared with despair, and numerous retail investors rushed to place sell orders, fearing they’d be trapped by the main players.

A faint smile played across Yan Fei’s lips as he murmured, “Sideways for three minutes; at 9:40, the main force will hit the limit.”

Sure enough, just as Yan Fei predicted, the price lingered underwater, oscillating wildly, shaking out the weak hands. Seeing endless small sell orders, many retail investors grew increasingly panicked.

One user named “Run, the main force is dumping!” posted: “The main players are unloading. First they pulled the price up with a big order to lure people in, then they unload small lots below water. Brothers, run now or it’ll hit limit down soon.”

Many saw this post, and given ST Dongyuan had surged from 2.8 to 4.3—a 42.8% gain—some short-term traders and main players might indeed be taking profits.

Amidst the fear from both the information and the underwater price pressure, more and more retail investors chose to sell, yet the main players remained silent, watching the price slide.

Yan Fei immediately pulled up the order book. Counting the visible orders, there were roughly twenty thousand lots scattered across all price levels—from underwater to limit-up.

Glancing at the clock, it was 9:39:57. Yan Fei stared intently at the screen, whispering, “Three, two, one—lift off!”

At that moment, five massive buy orders of ten thousand lots each burst forth like tigers unleashed. With overwhelming force, they swept through all sell orders in under half a second, pulling ST Dongyuan from underwater directly onto the limit-up price.

The buy orders surged rapidly from just over ten thousand lots to more than a hundred thousand lots, firmly nailing ST Dongyuan to the limit-up.

Seeing this, Yan Fei clenched his fist in excitement and shouted out loud. Watching his unrealized profit of nearly five thousand yuan, a victorious smile spread across his face. From this trade, Yan Fei was certain that the financial landscape of Blue Star was much like Earth’s—and he looked to the future with confidence.

Relaxing, Yan Fei browsed the stock forum, where countless investors vented their grievances, cursing the main players for their sneak attacks and for not allowing others to get on board.

Some lucky retail investors who had stumbled into the stock were jubilant, posting celebrations and speculating how many consecutive limit-ups there might be. The forum buzzed with lively chatter.

Watching this scene, Yan Fei recalled his own early days in the market and smiled knowingly. Then he took a screenshot of his account and posted his profit update on the Tianya Forum.

After posting, he checked replies to yesterday’s thread and saw three comments. One user named “Ao Tu Bu Ao” wrote, “Wishing the original poster good luck!”

Yan Fei replied with a simple thanks and moved on to the next comment: “You’re clearly a newbie, haven’t endured the brutal bear market of the big A shares. The crash ended less than a year ago. The market’s still bearish; where’s the profit?”

As Yan Fei was about to reply, his phone rang. He picked it up and saw it was Liu Suxin calling.

Smiling, Yan Fei answered, “Junior Liu, what’s up?”

Liu Suxin’s gentle and serene voice came through: “Senior Yan, are you busy? I want to ask you some questions. Is this a good time?”

Yan Fei promptly replied, “I’m free. Where shall we meet, Junior Liu?”

Liu Suxin happily said, “Great! Let’s meet at the coffee shop by the university entrance. It’s mine. There’s a private room where I usually hang out with my girlfriends.”

“Okay!” Yan Fei agreed, hung up, and immediately left. After a half-hour bus ride, he arrived at the entrance of Shen’an University and found the coffee shop named “Long Time No See.”

Upon entering, Yan Fei heard the song by Eason Chan:

“Will you suddenly appear,
At the coffee shop on the corner?
I would bring a smiling face,
Wave hello, and sit with you for a chat.
How I long to meet you,
To see how you’ve changed lately.
No more talking about the past, just a casual greeting,
To say to you,
It’s been a long time!”

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Hearing Eason Chan’s song instantly reminded Yan Fei of his first love from his previous life: a classmate in ninth grade, the class beauty and school belle. They secretly liked each other but, for various reasons, never confessed until graduating middle school. They never met again after that.

Looking back, Yan Fei never imagined that their last encounter at graduation would be their final goodbye. That innocent, pure love was buried deep within his heart before it even began.

“Senior Yan!” a gentle and calm voice interrupted his thoughts. He looked up to see Liu Suxin’s breathtaking face. Yan Fei smiled and said, “Junior Liu!”

They entered the private room. Liu Suxin sat down and softly said, “Sorry to keep you waiting, Senior Yan.”

Yan Fei waved his hand and smiled, “No problem. What questions do you have?”

Liu Suxin opened her notebook and began, “The goal of risk management is to create value, not just to reduce losses or mitigate risks. I don’t quite understand this statement.”

Yan Fei glanced over and smiled, “That phrase goes against common sense. When I studied it, I didn’t fully understand it either. It mainly involves four layers of misconceptions.”

The first layer: Breaking misconceptions about risk management:

Misconception 1: Risk equals negative factors.

Traditional views equate risk with threats or losses, but modern risk management recognizes risk’s dual nature: threats and opportunities coexist. Building in an earthquake zone is a risk, but so is a new energy company investing in geothermal power.

Misconception 2: Zero risk equals the optimal solution.

Attempting to eliminate all risk leads to skyrocketing costs and stifles innovation. Walmart’s dynamic inventory management, which tolerates moderate stockouts, improved capital turnover by 23% compared to a full-stock strategy.

The second layer: Paths to value creation:

Capturing risk premiums: During the 2008 financial crisis, Goldman Sachs acquired cheap assets against the trend, essentially capturing excess returns through risk pricing. Here, risk management serves as a tool for value discovery.

Building strategic resilience: Huawei’s “spare tire plan” invests 5% of annual revenue in R&D for backup chips. Though it seems costly, it creates strategic deterrence. I estimate Huawei could negotiate over $20 billion in trade war premiums and significantly boost profits.

Opening opportunity windows: Pfizer simultaneously built production lines during vaccine R&D (a $480 million risk investment), compressing the usual 12-18 month production cycle to 3 months, seizing the market high ground.

The third layer: Value-oriented decision framework:

Reconstructing the risk-reward matrix: Treating risk budgets as strategic resources. Google allocates 70% to core business (low risk), 20% to adjacent fields (medium risk), 10% to disruptive innovation (high risk).

Dynamic risk management mechanisms: Mercedes uses OTA upgrades to preemptively fix brake system defects via software, avoiding costly recalls—saving about $1000 per vehicle.

Capitalizing risk: Disney uses weather derivatives to hedge theme park rainfall risk, converting uncertain visitor losses into calculable financial costs, unlocking $3.8 billion in credit for IP acquisitions.

The fourth layer: Organizational capability transformation:

When risk management evolves into a value creation engine, companies show greater agility: Amazon’s AWS tolerated 30% idle server risk initially to gain rapid market response.

Multiplier effect on resource leverage: Apple reduced inventory turnover to 9 days through supply chain finance, freeing cash flow equivalent to 148% of its annual R&D investment.

Enhanced ecosystem control: Tencent built a risk-sharing QQ developer ecosystem, where the platform bears only 5% of core risk but claims 85% of ecosystem value distribution.

After analyzing these four layers, Yan Fei continued solemnly, “The highest realm of risk management is transforming risk into a structural element shaping competitive advantage. Like a surfer harnessing the wave’s power to move forward, excellent entrepreneurs leverage risk potential to achieve value leaps. Essentially, this is a fundamental paradigm shift to recognizing ‘risk as a resource.’”