Chapter 448: The Great Collapse

On Friday, March 10, 2000, foreign investors often talked about the terrified "Black Friday of a certain stock market" prediction that seemed to be completely shattered in front of the Nasdaq Index. Although the ominous signs of the stock market are becoming more and more obvious, the fanatical market sentiment makes most of them believe that even if the stock market collapses, they can escape in time. They will never become the most unlucky one. Unfortunately, history always shows an amazing similar scene. When the collapse comes, no one can predict it and most people will not have the chance to escape.

The lucky mentality and uncontrollable gambling idea made the stock manager push the Nasdaq index to its historical highest level once the opening of the day. This is the 16th time it has hit a new high in a year. You should know that it just broke through 4,000 points in December last year! The market excitement was once again ignited, and many traders from investment companies outside the market applauded and celebrating excitedly, feeling that it was a good time to open today.

But the stock index soon encountered strong selling pressure outside the market, and the Nasdaq was suppressed back to around 5,000 points at the close. For many people who are optimistic about the new online economy, this is just a normal intraday pullback. It is common for US stocks to suffer a slight setback on Friday afternoon, because many traders will cash in profits before the weekend, and Monday will definitely be a bull market again.

It seems to confirm their judgment that the biggest gains on the day were still the technology stocks Dell Computer and Microsoft. At the same time, the Dow Jones Industrial Average, which represents the so-called "old economy", fell below 10,000 points. The "old economy" stocks with the largest declines include veteran pharmaceutical companies Merck and Johnson, as well as veteran banks J.P. Morgan and Citigroup.

Compared with the popularity of its boss in Nasdaq, the blue chip Dow Jones stock market, which is based on the traditional manufacturing industry, seems to be at a loss. At this time, the Dow Jones Industrial Average only includes three so-called "new economy" companies - Microsoft, Intel and HP. Among them, Microsoft and Intel were added last year. In contrast, the Nasdaq index hit new highs in a row, and the Dow Jones index was sluggish. The so-called "authoritative experts of economic comments" unanimously determined that this fully proves that the current hot spots of US economic growth have completely shifted to new economic fields such as the Internet and biotechnology. In less than ten years, the old economic companies in the Dow Jones Index stocks will give way to new companies with "mouse and keyboard", just like Buffett, who likes to invest in old economic companies, is outdated!

But no one would have thought that the speed of the collapse of the new economy was even Soros, who had always been keen and accurate in judgment, was also out of sight. On March 10, Yang Xing, who was staying in Hong Kong, was flipping through the overseas listing results report of his company's "Destroy All the Ten Countries", while polishing the last chapter of a series of reports published by Xingdou Research Institute in the "Star Economy" publication in the "Star Economy" period before, questioning the irrational prosperity of the Nasdaq stock index published in the "Star Economy" publication a while ago.

Since the last time he used the verbal war in Hong Kong newspapers to resolve doubts about his relationship with the country, he felt that controlling social public opinion can also bring many benefits to his business. Xingdou Research Institute now cooperates with media affiliated with Xingdou Entertainment, and has also set up an economic publication called "Star Economy". Because Xingdou Research Institute's excellent predictions in the Asian financial crisis, the Hong Kong economic community now attaches great importance to this publication.

Yang Xing also often used the pseudonym to throw out some of the economic trends and theories he knew in his previous life in "Star Economy", which can not only test the direction of the wind, but also make his economic actions well-founded, so as not to make people doubt his ability to "predict the future". He sighed with a sigh of relief. It seems that history did not deviate much from here. He asked Yu Ge, who was beside him to continue reviewing the manuscript, picked up a phone number for a confidential line on the table, and then dialed the number and said: "Please answer the Stewart President Richard of Lehman Brothers, thank you for your kindness, but I still insist on my judgment. I am still bearish on the Nasdaq, and I have to increase my price!"

He put down the phone and looked at the Wall Street Journal in his hand, thinking that the world is so wonderful. Who except him could guess that next Monday will be the day when the Nasdaq death knell rang. The reason was not because of the Internet, but because of a news about biotech that seemed to be incompatible in the newspaper.

In May 1985, the United States took the lead in proposing the "Human Genome Project", and in the following decade, the European Community, Russia, Denmark, South Korea, and China joined one after another, marking that this project has become a model of international cooperation. People also realized the great value of genes (DNA sequences). Therefore, various biotechnology companies that attempted to use genome maps to apply for DNA patents emerged like mushrooms after a rain in the 1990s, and many of them successfully listed on the Nasdaq with the help of this concept.

On May 11, 1998, the world's largest DNA sequencer manufacturer, Pe, the American company, established a biotechnology company with its newly developed 300 latest capillary automatic sequencers and $300 million in funds. It ambitiously proposed to adopt a new DNA sequencing method and complete the sequencing of human DNA in front of the International Joint Team of the "Human Genome Project" in three years. If successful, it can register patents for human genes and obtain amazing profits.

This approach clearly challenges the "Human Genome Project" of international cooperation, and attempts to patent the gene sequences owned by humans further challenge the bottom line of public awareness. The newspapers are published that President Clinton of the United States and Prime Minister Blair of the United Kingdom will jointly announce on Monday that in order to improve the efficiency of human gene sequencing research, biotech companies have the obligation to unconditionally publish the research results it has achieved in this field and allow public research institutions to use these results freely. This means that the dream of biotech companies has completely gone bankrupt, and not only has hundreds of millions of dollars of investment gone by, but the research results must also be made public. The news came out, and the stock prices of related biotech companies suddenly plummeted.

The Nasdaq market has long become the emperor's new clothes. What is missing is the child's revelation. As a Nasdaq biotech company with only ingredients, the collapse of a biotech enterprise will definitely form a chain reaction. Yang Xing can already see what the tragic scene will be after the market opens on Monday. He picked up another confidential phone call and said: "Is Qian Yiming? The party has begun."

As soon as the Nasdaq opened on March 13, although biotech companies that study gene sequencing only account for a small part of the biological companies listed on Nasdaq, it still caused the entire biological sector to fall continuously. Immediately afterwards, Wall Street, the leading investors who felt that the limelight were wrong, began to follow up quietly, and the market's main online stocks also began to plummet, and the market trend began to be filled with the sentiment of failure.

So a very strange scene appeared in the market. According to common sense, although biotech and Internet stocks are both called high-tech stocks, they are actually very small in correlation and there is no reason to rise or fall at the same time. However, the stock market never looks at the reasons, but only the results. The biotech stocks from March 13 to 15 became the first domino to trigger the entire Nasdaq collapse. In the past three days, the stock market plummeted by more than 100 points.

Only then did everyone realize that not only the biological stocks were problematic, but the once-popular Nasdaq high-tech companies seemed to have become sick overnight. Stardou Research Institute and Yahuang TV also quickly set up special camera teams, which were stationed under the Nasdaq building in Times Square, New York every day to broadcast the latest Nasdaq decline to the world. Bai Bing personally hosted it and invited many stock commentators to comment on it in fluent English. This program, which first revealed the Nasdaq crisis, quickly went out of the United States and spread throughout the world, almost winning the Pulitzer Breaking News Award that year.

Yang Xing's behavior of taking advantage of the situation has certainly caused dissatisfaction among many people. For a time, many people related to Nasdaq's stakeholders rose to defend themselves, and even the content of the short-selling Nasdaq futures contract signed by Yang Xing and Wall Street was dug out, pointing out that he was completely criticizing the Nasdaq stock market for his own interests. But at most, this can condemn Yang Xing morally. After all, American law does not prohibit shorting Nasdaq. He and the big guys on Wall Street have started to build positions last year, which only shows that he is as keen as Buffett, and now they are just fighting for their own interests.

The Nasdaq index will not recover because of accusing Yang Xing. In early April, the Nasdaq had already fallen from 5,000 points to 4,000 points, faster than when it rose from 4,000 points to 5,000 points. At this time, the majority of investors realized that the Wall Street investment experts who were regarded as the norm finally bet on the wrong treasure, and Yang Xing, who was criticized by thousands of people, was the prophet.

In fact, according to strict statistical data, Wall Street investment experts as a whole are not more skilled than the average investor, and have almost never made any valuable predictions. Data shows that according to Wall Street Investment Reports over the past few decades, the portfolio managed by Wall Street Investment Experts has never exceeded the S&P, Dow Jones or any major market index for most of the time. Wall Street analysts have far more prediction errors than correct judgments. Someone did an interesting experiment, asking an orangutan to throw a dart on a labeled stock target, and the price-to-earnings ratio of the selected stocks is also greater than the predictions of most Wall Street investment experts.

It is like this that Wall Street investment experts who are more unreliable than Humon have turned into pessimists in the face of the reality of the Nasdaq collapse. Last month, they advocated that the Nasdaq index would break 6,000 points. Now, afterwards, it is recommended that investors sell their Nasdaq technology stocks as soon as possible. According to their statement, selling technology stocks at low prices is just a cut of their losses. Although it is painful and bleeding, it is better than losing everything later. Now it is best to sell all stock funds, and only buying US Treasury bonds is the most insurable!
Chapter completed!