A Chinese money manager revealed that he has not changed anything about his trading strategies since the pandemic but reported that he made more money even through inaction. He shared a formula that served him well in money markets over the years.
Founder and chair of Shenzhen Saiya Capital Management Co. Luo Weidong made good money in China's volatile equity market without aggressively taking on the financial market. He claimed to have refrained from adding smaller-cap Chinese companies into his financial portfolio since 2016 and that he hasn't engaged in selling any of his stocks for years.
Luo claimed that the financial formula served him well over the years. His flagship fund's net asset value increased by 50 percent during the first quarter of 2020 putting the total of his financial portfolio since 2015 to a whopping 1,835 percent increase.
According to a Simuwang.com Chinese financial data provider, the figures involved the investment of 1,000 USD in the fund at inception that increased by the value of more than 19,000 USD by March 31, 2020. He also claimed that he only owns about five stocks at a time and started trading equities since 1995.
His plan included the investing of 13,000 yuan scholarship fund into the market. Two years later, his portfolio was worth 260,000 yuan that opted him to purchase a Shenzhen apartment without acquiring loans to effect his property investment.
Luo said that his mission was to hunt for stocks that had great potential for growth over ten times upon investment. He then warned that the strategy became harder to follow because of the slowing economic growth. However, he noted that business models in China have matured over the years at it considers deglobalization.
At present, China's major stock indexes are among the world's biggest markets to maintain a healthy growth rate and prevented 20 percent declines from recent highs into bear territory. The Shenzhen composite index, on the other hand, has smaller and fast-growing companies but enjoyed a growth rate of 1.3 percent this year.
Luo's company, Saiya Capital, manages about 1 billion yuan and Luo has been a long-term investor who seeks out firms that promote growth potentials in China's population. He then claimed that looking for stocks that could yield 10-fold price increases allowed him to significantly increase his investments over the years and that the reselling stocks could also help investors during the pandemic.
Luo claimed that cutting some of his positions during March's global market route was not considered and that he plans on staying the course on the firms. He also suggested that this strategy would help investors reach potential growths better as the market suffers from the pandemic.
