My Age of Investment

  Chapter 222 Technology Finance

   Liu Hai also finds it weird. The hedge fund is set up in Silicon Valley, and it always feels a bit unsuitable?

  He asked uncertainly: “Because it’s close to Facebook, it’s easy to manage?”

   "Wrong, this is only a small part of the reason!"

  Xia Jingxing looked at Liu Hai, smiled and said, "The more important reason, do you know what it is?"

   Liu Hai's head shook like a rattle, he couldn't guess.

  If you can guess, he succeeded in starting a business a long time ago, and he would still work somewhere.

  "Silicon Valley specialty, do you know what it is?"

   Liu Hai replied: "Internet? Computer?"

  "It's a programmer!"

  Xia Jingxing walked into the office, stood at the window, and looked at the entire Silicon Valley.

   Liu Hai didn't understand too much, and silently followed Xia Jingxing, without speaking.

   "I heard of excessive trading, right?"

  Xia Jingxing retracted her gaze from the distance and looked at the bangs standing next to her.

   Liu Hai smiled and said, “Of course I’ve heard of it. Now everyone thinks this is the mainstream direction. Renaissance and De Shao are among the best.”

  Xia Jingxing smiled and nodded, feeling a lot.

  The Renaissance and De Shao in Liu Haikou are among the top ten hedge funds in the world, with a management scale of tens of billions of dollars, and will exceed 100 billion dollars in the future.

Simmons, the founder of the Renaissance, received a doctorate in mathematics at the age of 23. After working in academia for a while, he felt bored and turned to the financial field.

  Mathematics professors stocks, natural methods are different from ordinary people, build models, and technology stocks.

  The mathematical model of the Renaissance Fund was compiled by a team of hundreds of people, including experts in string theory physics, astronomy, quantum mechanics, biology, mathematics and other fields.

  As a pure quantitative fund, all transactions of the fund are also automatically executed by more than 10 million lines of computer code, with very few human intervention.

  The Medal Fund is famous. Between 1998 and 2018, the compound annualized rate of return of the fund before deductions was 66%, which was close to 70%.

  After deducting management fees and performance sharing, the fund’s annualized rate of return still reaches 39%.

  The technology stock disaster in 2000 and the financial crisis in 2008 were all successfully escaped by this fund. In that year, they also achieved 98.5% and 82% returns.

David Xiao, the founder of   De Shao Fund, obtained a PhD in computer science from Stanford University at the age of 29. After a few years as a university teacher, he devoted himself to the financial industry and served as the vice president of Morgan Stanley's automated analysis trading technology department.

  Two years later, in 1988, this man started his own business again.

  Use complex mathematical models to find hidden market trends or pricing anomalies, and then combine high-precision computer technology to conduct transactions.

  This is the magic weapon of Deutsche Shao Fund. At its peak, the trading volume of this fund accounted for 5% of the entire NYSE.

  Of course, the trading model created by David Shaw has also become the company’s top secret, just as Coca-Cola has always guarded its beverage formulas.

  From the perspective of more than ten years later, the combination of technology and finance is a major trend.

  In the hedge fund industry, the level of technology content is a key factor in determining the quality of returns.

  Xia Jingxing feels that he cannot pin all the company's success factors on himself.

  Vision Capital wants to develop more brilliantly, it must build a powerful technology team.

  Techniques like machine learning and artificial intelligence can all be used in the financial field in the future.

   After sorting out the language, Xia Jingxing and Liu Hai had a deep talk.

  His meaning is very clear. You can't do finance with traditional thinking. Companies have to recruit computer, mathematics and even some interdisciplinary scientists to join.

   After more than a decade of previous life, Wall Street has also developed. Finance majors are not easy to find jobs. On the contrary, students majoring in computer and mathematics are more popular.

  Of course, except for people with related backgrounds.

   Liu Hai understood what Xia Jingxing meant, and asked: “It’s like the Facebook engineer team invented a set of software that specializes in marking the pictures on the website.

  The technical team of Vision Capital invented a set of software that collects historical information, development trends, etc. of the financial market? "

  Xia Jingxing added: “Not only that, but also to analyze this information, and provide investment reports, investment forecasts, and even automatically help us make investment decisions, or make adjustments to unreasonable decisions.”

   "It's a bit magical!"

   Liu Hai smiled and said, “Now those trading models are more of a supplementary role and provide some analysis reports for investment managers as reference.”

  "This is the reason why the development of computer technology is restricted."

  Xia Jingxing said, “If everything I said can be achieved now, then Renaissance and De Shao should have such advanced trading models.

  It is precisely because of the immature technology that this gives us the opportunity to overtake the corner. "

   Liu Hai never thought about surpassing two famous hedge funds. After all, Vision Capital has just been established and has not even made the first investment.

  "If we put all the profits we made into this work, you may not get the return from Vision Capital for several years or even longer."

   Liu Hai reminded, “Because as far as I know, scientific research investment has always been like this. It takes long and continuous investment to usher in the final harvest.”

  Xia Jingxing waved his hand, “You can do it without worry, I will not withdraw capital from the company in the next few years.

  On the contrary, if my other industries usher in gains, I may continue to invest in long-term capital. "

   Liu Hai smiled towards Xia Jingxing, “Then it’s okay. I’m mainly worried...you have other arrangements.”

   "If you have such familiar people, you don't have to talk outside. I am not the kind of short-sighted person. After investing money, I must see profitable output in one or two years."

  Xia Jingxing stared at Liu Hai, “On the contrary, as a fund manager, you have to have this kind of thinking and pay attention to long-term interests instead of the few pieces of silver in front of you.”

   Liu Hai said sternly, “I’m definitely not going to choose to resign from First Securities, enter an unfamiliar environment, unfamiliar industry, and start from scratch.

  For this, I have also made enough psychological preparations. I must calm down and learn and absorb new things with a beginner's mentality.

  You said that the company must pay attention to long-term interests, and I will strictly implement this code. "

   "Don't you be so serious!"

  Xia Jingxing smiled and said, “Relax, any great company is built from scratch and built step by step. Don’t put too much pressure on you.

  Our first step is to recruit people first. "

   Speaking of recruitment, Liu Hai frowned and said: "You gave me 200,000 yuan, registered offshore fund spent tens of thousands, and rented this office for another 100,000 yuan, with only tens of thousands of dollars on the account."

  Xia Jingxing nodded. At present, the fund has not yet started to formally operate, and the management fee has not been confiscated. There is indeed a lack of preliminary funds.

  He has no money in his account, so he can only sell another 10,000 shares of Amicco.

   After making up his mind, Xia Jingxing replied: “You don’t have to worry about money matters. After a few days, I will give you another 200,000 yuan.”

   Liu Hai nodded. In the early stage, Envision Capital only needs to recruit a small team of seven or eight people, and 200,000 US dollars will be paid for several months, which is more than enough.

  Continue.

Sitting in the empty office, the two chatted more details about the company's operations.

  The general direction is at the helm of Xia Jingxing, including stock selection and investment decision-making.

  But the daily work, communication and execution, you need bangs to complete.

  For the time being, the two of them divide the work in this way.

  　 Thanks to Mu Yutang and book friends 20201009194742567 for the reward!

  (End of this chapter)