Chapter 154: Huge Profits, A Crazy 5.7 Billion Gain!
Inside the brokerage team's office, everyone was relatively relaxed.
This was because Lin Haoran's gold futures contracts had not yet begun to be closed.
At the New York Mercantile Exchange, it was clear that Citibank had their own people present.
Although gold futures prices fluctuated constantly, even at Citibank's headquarters several kilometers away, they could monitor real-time price changes.
At 9:30 AM, the opening price for gold futures was $632.96 per ounce.
As soon as trading opened, gold futures prices shot up.
By 4 PM, the final closing price had settled at $675.62 per ounce.
Besides monitoring the price fluctuations, Lin Haoran's team also tracked the capital inflows — information that would help inform the timing of his future sell-off.
The reason for such a dramatic rise today was entirely due to the Soviet Union's invasion of Afghanistan on the 27th.
After two days of global media coverage over the weekend, the event had become a worldwide sensation.
Historically, before wars or conflicts broke out, gold prices typically trended upward.
War triggered panic, and gold, as a safe-haven asset, naturally drew investors.
Coupled with last month's Iran hostage crisis, the Second Oil Crisis pushing inflation to new highs, and other factors, it culminated in a massive gold rally.
In just one day, the price surged by $42.66 per ounce!
Near the end of the trading session, even the brokerage team's leader wondered why Lin Haoran hadn't chosen to sell.
Sure, the price had soared thanks to massive buying pressure, but such a rapid spike also carried risks — prices might just as easily drop the next trading day.
Yet Lin Haoran remained extremely calm.
Drop? Not yet.
At just over $600 per ounce, it was still far from the eventual $850 peak he knew was coming.
In his view, he wouldn't even consider selling until the price climbed past $700, even $800.
After the market closed, Lin Haoran returned to his hotel.
He wasn't sure which exact day the peak would come; he only knew January would see gold skyrocket, topping out at $850 per ounce before declining.
Moreover, he had no intention of selling right at the peak — considering the size of his position, any miscalculation could crash the price and diminish his profits.
He knew he wouldn't perfectly time the $850 mark.
Thus, if he could sell around $800, he would be very satisfied.
December 31 quickly passed, ushering in January 1, 1980.
New Year's Day — all exchanges worldwide were closed.
Lin Haoran took advantage of the holiday, bringing Li Weidong and Li Weiguo to New York's Chinatown.
Everything there felt incredibly familiar, almost like walking down the streets of Hong Kong — a warm, nostalgic feeling.
That evening, after enjoying an authentic Cantonese dinner at a famous restaurant in Chinatown, Lin Haoran and his bodyguards returned to the luxurious Marriott Hotel next to Citibank's headquarters.
He had taken a three-bedroom presidential suite — temporary accommodation, but very comfortable.
After the holiday, on January 2, gold futures continued to climb, with prices reaching a high of $689.69 per ounce before settling slightly lower at a closing price of $686.77 per ounce.
Lin Haoran still showed no signs of rushing to close his position.
On January 3, gold prices continued rising and, crucially, broke through the $700 mark, closing at $703.36 per ounce.
On January 4, the closing price pulled back to $692.42 per ounce.
At this point, even John Reed grew anxious, urging Lin Haoran to "take the money and run."
A sudden pullback understandably rattled some nerves.
However, Lin Haoran, who knew history, remained utterly unshaken.
This was just a normal price correction — the next trading session would certainly see prices climb again.
After all, they were still far from the $850 peak he was waiting for.
As expected, on January 5, gold futures surged past the $700 mark again, reaching a high of $721.13 per ounce and closing at $719.98.
On January 6, prices continued to rise slightly, closing at $721.46 per ounce — holding steady.
On January 7, gold closed at $726.96 per ounce.
On January 8, the close was $731.63 per ounce.
On January 9, $733.44 per ounce.
...
By January 18, gold futures closed at a stunning $783.69 per ounce, with a breakthrough to $800 imminent.
At this point, even Citibank Chairman Walter Wriston was full of admiration for Lin Haoran.
They had all witnessed Lin Haoran's composure during this extraordinary period.
It was simply astonishing — calm, confident, unwavering.
This was a trade involving over a billion dollars, and even seasoned financiers would find it hard to remain so composed.
Yet Lin Haoran displayed the stability of a mountain, without a trace of panic.
Had Lin Haoran listened to their initial advice and sold when gold was at $600 per ounce, he would have missed out on at least $200 million in extra profits.
His refusal to panic sell, his firm patience — all of it was to his own credit.
In fact, Citibank had offered little truly valuable advice during this period.
By now, the market was feverish with speculation that gold would break through $1,000 per ounce.
Yet while others were dreaming of even higher prices, Lin Haoran was already planning his exit.
The current price was already very close to the peak he remembered.
Thus, he decided to instruct Citibank's futures team to start closing his positions on the next trading day.
The 19th and 20th were a weekend — the futures market would be closed.
Thus, January 21 would be the crucial day.
Lin Haoran spent the weekend in a state of tense anticipation.
He knew the moment of harvest was near.
How much would he ultimately gain?
Over the past twenty days, while staying in the U.S., Lin Haoran regularly called Hong Kong to stay updated and reassure his people.
Despite being overseas, he was fully informed about Qingzhou Cement Company and Wan'an Group's operations.
That weekend, the U.S. released several grim economic indicators:
The ISM Manufacturing PMI plunged from 51.3 to 29.4.Unemployment rose sharply from 5.7% to 7.5%.
These figures painted a bleak picture of the economy.
However, to those in the financial world, they also signaled massive opportunities.
Everyone knew that on January 21, gold prices would almost certainly explode upward again.
Even John Reed visited Lin Haoran at his hotel on the 20th, explaining just how profoundly these economic indicators would impact the gold market.
Everyone agreed — January 21 would witness another historic surge.
Everyone believed that with so many factors favoring gold, it wouldn't be long before gold prices broke through $1,000 per ounce. Even the experts at Citibank thought so.
However, Lin Haoran shared his real plan with John Reed.
"Mr. John, I think it's time for me to start closing my position. Over in Hong Kong, the company I have my eye on is currently being targeted by others.
Although I'd love to keep riding the gold futures up, for the sake of my broader business plans, I've decided to sell off my gold futures tomorrow.
As we say in China, 'One must not be greedy.' I'm already very satisfied.
At the beginning, while I was confident about gold's future, I took a huge risk — using 10x leverage to take down a $500 million gold futures contract.
But even I didn't expect it would rise so dramatically in the following six months.
This result has far exceeded my expectations.
At this point, it's not about whether I make a bit more or a bit less — the difference isn't significant," Lin Haoran said.
Of course, he didn't reveal his true thoughts to John Reed.
It was easy to come up with a convincing excuse, and this one made sense: no one would think he could truly predict the market top — they'd just think he was lucky.
Sure enough, John Reed didn't try to dissuade him.
After all, Citibank was just his broker; they could offer advice, but the decision was Lin Haoran's to make.
"Indeed, even if you sell at $800 per ounce, it's already incredible," John Reed said with admiration.
"Mr. Lin, your choice to close your position while news is still good shows you aren't blinded by your achievements.
You really don't seem like someone your age.
I've worked in finance for many years — I've seen countless geniuses who played stocks, futures, bonds, forex, only to end up bankrupt because of greed.
Every year, it's normal to see people jumping off buildings on Wall Street."
After a brief chat, John Reed left.
Time quickly moved to January 21, Monday.
At 9 AM, Lin Haoran arrived punctually at the brokerage team's office.
Before the New York Mercantile Exchange opened, Lin Haoran told the team his decision:
Today, close the position.
Once gold broke past $800 per ounce, they would sell.
He gave them advance notice so they could prepare — handling such a massive gold futures position required careful planning.
Hearing Lin Haoran's decision, the team quickly became serious and focused.
As 9:30 AM approached and the exchange was about to open, even John Reed arrived at the office.
Sure enough, as soon as trading began, the market went wild.
After the weekend, investors were frenzied.
Everyone believed gold would inevitably reach $1,000 per ounce — at a little over $700 now, there was still "plenty of room" to profit.
Gold futures prices skyrocketed immediately after the market opened.
Within just 10 minutes, the price surged past $800 per ounce.
Lin Haoran watched the price fluctuations closely.
As soon as it broke through $800, he decisively gave the order: start selling!
1.9763 million ounces of gold futures were immediately thrown into the market.
Despite the enormous volume, the market absorbed it incredibly fast — investors had gone mad.
The futures price continued to rise during the liquidation, though not as sharply as in the initial 10 minutes.
Clearly, buyers still vastly outnumbered sellers, so prices kept climbing.
Within just half an hour, Lin Haoran's entire 1.9763 million ounces of gold futures were completely sold — not a single ounce left.
Meanwhile, the price soared to a high of $842.76 per ounce.
However, the market's upward momentum was showing signs of exhaustion — it was beginning to falter.
With the selling completed, everyone in the room, including Lin Haoran, collectively breathed a sigh of relief.
Whether the market continued up or crashed down afterward didn't matter to them anymore.
Following the successful sale, Lin Haoran, John Reed, and the team all applauded each other in celebration.
The tension lifted from the room, replaced by a sense of triumph and relief.
This operation had gone even smoother than expected — no significant obstacles at all.
Lin Haoran had correctly anticipated everything.
While gold prices continued to rise toward $850, he could tell the rally was nearing its end.
And indeed, $850 per ounce would be the historical peak of gold's rally in early 1980.
From now on, prices would inevitably fall.
Thus, Lin Haoran's exit could be considered a complete and total victory.
Meanwhile, the brokerage team began calculating the results.
It would take one or two working days to settle the funds into Citibank's accounts, after which he could complete the final settlement according to the contract.
While they were running the numbers, Lin Haoran and John Reed continued observing the gold market.
Everyone wanted to know: how high could the price go today?
However, to their surprise, after peaking at $850, gold prices stalled — and then began to fall.
Not just a little — but significantly.
By the time the futures market closed, gold had fallen to $799.96 per ounce.
Not only was it $50 lower than the day's peak, but it had also fallen below $800.
Even John Reed was stunned.
They had all expected a historic surge — and yes, it had happened, but it had lasted less than a single day!
What about that supposed march toward $1,000?
At this moment, John Reed looked at Lin Haoran with entirely different eyes.
What incredible luck!
"Mr. Lin, I have to say, your luck is amazing," John Reed exclaimed sincerely.
"Mr. John, it was just a lucky coincidence.
Even though the price fell by the end of the day, maybe it'll rise again tomorrow.
These things are unpredictable.
But no matter what, I'm already very satisfied with today's result," Lin Haoran replied with a laugh.
Although the final earnings calculation wasn't complete yet, he already knew one thing:
All his gold was sold at over $800 per ounce.
Meaning the average selling price was above $800.
He had 1.9763 million ounces.
Even at a minimum of $800 per ounce, without deducting fees or other expenses, it totaled a staggering $1.581 billion!
Terrifying, right?
And he had only invested $50 million to start!
That meant, excluding the $450 million borrowed via leverage, he had multiplied his actual investment over 20 times!
And that was a conservative estimate — the real earnings would be even higher after the final calculation.
At that moment, Citibank Chairman Walter Wriston himself rushed down from his office to meet Lin Haoran in the brokerage team's room.
"Mr. Lin, congratulations!" Walter Wriston said solemnly.
"Mr. Walter, likewise, congratulations to us both!" Lin Haoran laughed heartily.
Just from the interest on the leveraged funds alone, Citibank had already earned a substantial amount through Lin Haoran's trade.
Aside from the interest on the leveraged capital, there were also the futures commissions — given the massive size of the trade, the commissions were naturally significant.
Lin Haoran, Walter Wriston, and John Reed sat together in the office, chatting while they waited for the final calculations.
Everyone wanted to know: just how much had been earned in total?
After more than half an hour of detailed work, the final numbers finally came in.
The 1.9763 million ounces of gold futures were ultimately sold at an average price of $826.88 per ounce.
In other words, the final transaction value was $1.634 billion!
At the New York Mercantile Exchange, each futures contract covers 100 ounces of gold, and the transaction fee per contract was $10.
Thus, the total transaction fee paid to the NYMEX was only about $200,000 — practically negligible compared to the $1.634 billion.
The biggest expense came from Citibank itself.
Since 90% of the capital used was leveraged — meaning Citibank had fronted the money — interest needed to be paid, and it wasn't a low rate, calculated based on a one-year term.
Additionally, the principal amount fronted needed to be repaid to Citibank.
After leveraging, Lin Haoran's position amounted to $500 million, meaning $450 million was borrowed from Citibank.
According to the initial contract, this $450 million carried a 6% interest rate.
Thus, when repaying the loan and interest together, about $477 million needed to be deducted.
There was another expense: the broker's commission.
According to their prior agreement, the commission was 0.5% of the total transaction amount.
0.5% of $1.634 billion equaled about $8.17 million.
Setting aside the negligible NYMEX transaction fee, after deducting the leverage repayment and commissions, professional accountants onsite finalized Lin Haoran's net profit.
Starting from the $1.634 billion total revenue:
Subtract the $450 million leveraged principalSubtract $27 million in loan interestSubtract $8.17 million in commission fees
After all deductions, Lin Haoran's net profit stood at about $1.1488 billion.
During this period, the exchange rate between the Hong Kong dollar and the U.S. dollar had risen slightly, now returning to a 5:1 ratio.
That meant if he converted the $1.1488 billion into Hong Kong dollars, he would have $5.744 billion HKD!
5.7 billion Hong Kong dollars!
Lin Haoran had truly struck gold this time.
An initial investment of $50 million — around HK$250 million — had now yielded over HK$5.7 billion.
This was an astronomical figure, even decades into the future.
Let alone now, in the early 1980s!
Meanwhile, Citibank had also earned handsomely from this transaction, raking in over $35 million in profits.
For both Lin Haoran and Citibank, this was a true win-win.
Even for a financial titan like Citibank, $35 million net profit from a single transaction was a rare and significant success.
Despite Citibank's immense scale — dwarfing Hong Kong's biggest banks — its annual net profit growth wasn't always astronomical.
This was because much of a bank's operational capital comes from depositor funds, which require paying interest.
Additionally, not all investments yield returns — losses were inevitable and sometimes outweighed gains.
While Citibank's main business was banking, over the years it had invested heavily in arms, oil, chemicals, and trade, ultimately controlling many major enterprises.
In good times, these investments paid off handsomely.
In bad times — like during the oil crisis — many sectors suffered losses, dragging down bank profits.
After deducting operational costs, banks' net profits were often relatively modest.
Thus, a transaction yielding $35 million in clear profit was a huge deal for Citibank.
"Mr. Lin, it's been a pleasure working with you. We'll transfer the funds to your Citibank account as soon as possible — by tomorrow afternoon at the earliest," Walter Wriston said with a hearty handshake.
"Mr. Walter, I'm extremely satisfied with our cooperation. Thank you, Citibank, for your tremendous support. I hope we can become long-term partners," Lin Haoran replied with a smile.
"Of course, Mr. Lin. We are already long-term partners, aren't we?" Walter Wriston laughed warmly.
The atmosphere was relaxed and cheerful — both sides had made a fortune.
That evening, perhaps to further strengthen ties, Citibank hosted a celebratory dinner for Lin Haoran at one of their high-end restaurants.
The event wasn't large — neither side wanted too much publicity.
Only those directly involved in the operation attended: the futures brokerage team, John Reed, Walter Wriston, Lin Haoran, his two bodyguards, and a few senior Citibank executives Lin Haoran met for the first time.
For Citibank, making $35 million from Lin Haoran absolutely justified throwing a lavish celebration.
"Mr. Lin, when do you plan to return to Hong Kong?" John Reed asked during the dinner.
"I'll stay a few more days after the funds arrive, then head back. I've already been in the U.S. for quite some time, and many matters await me in Hong Kong," Lin Haoran said with a smile.
He didn't give a specific departure date — there was no need to.
After the banquet, Lin Haoran returned to his suite at the Marriott Hotel.
The next morning, since he had already closed his gold futures positions, there was no need to visit Citibank's headquarters.
After lunch, however, Lin Haoran decided to visit the Citibank building again.
As he had expected, today's gold price did not return to yesterday's highs.
In fact, it didn't even breach $800 per ounce.
Instead, it slipped further, closing on January 22 at $781.86 per ounce.
Seeing this price, John Reed felt even greater admiration for Lin Haoran's incredible timing.
To exit so perfectly near the peak — his luck was simply unbelievable.
By around 4 PM, Lin Haoran received fantastic news:
The New York Mercantile Exchange had completed settlement, and the funds had been transferred to Citibank's futures brokerage department account.
Citibank completed the final internal settlement.
Finally, $1.1488 billion had been credited to Lin Haoran's Citibank account.
The massive windfall had officially arrived!
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