New Delhi Flu spread far faster than anyone expected.
Entering March, the global infection curve is like a bowstring that has been tightened.
Each week is setting a new high from the previous week.
World Health Organization officially classified this influenza as a public health emergency of international concern.
Global shipping has been shut down on a large scale, and multinational Supply Chain are falling one after another like dominoes.
Financial markets reacted by collapsing earlier than the public health system --
US Stocks triggered multiple circuit breakers in two weeks, and the number of single-day plummeting points in the Dow Jones Index set new historical records one after another.
Traders watched in front of Bloomberg Terminal as the worst liquidity crisis since 2008 swept across the world like a tsunami.
Tesla's stock price has been cut in half from its February high.
It's not a slow fall, it's a vertical fall.
Every trading day brings new bad news -
California factory faces the risk of production suspension due to Supply Chain interruption.
Delivery expectations for the second quarter have been significantly lowered by many investment banks.
Fremont's production line working hours data was leaked to the trader group by an anonymous person.
Display weekly production capacity has dropped to less than 60% of the same period last year.
The Short Sellerss are back, but this time their firepower isn't entirely directed at Tesla--
The entire market is selling indiscriminately and liquidity is exhausted.
Even gold and Treasury Bonds are being sold for cash, not to mention an already highly volatile technology stock.
Zhao Chen sat in front of Bloomberg Terminal, looking at the time-sharing line of Tesla that kept refreshing its lows.
A few months ago when Tesla's stock price was still at a high level, he and Chen Xi discussed the most critical issue in the office -
If the liquidity crisis in my memory was deflected by butterfly wings, how would the fluctuation pattern of US Stocks change?
At that time, Chen Xi used the new variable Model to run the third gear scenario.
The most extreme one assumes that the global Supply Chain is shut down for more than two quarters.
Tesla's short-term fluctuation range will be wider than any crisis in history.
At this moment, the line on the screen is penetrating all the conservative intervals preset at that time.
Like an accelerated spring, the resistance at each support level is compressed into a flashing lower shadow line on Time-sharing Chart.
Chen Xi opened the door and came in, holding the newly updated third version of the stress test report in his hand.
Her expression is still the calmness unique to a data analyst,
But when he placed the report in front of Zhao Chen, his fingers paused for a moment on the edge of the page.
The stock price on the screen has fallen below all the previously preset bottom buying ranges.
She spent several days doing the valuation Model before she had time to discuss it with Investment Decision Committee.
He was left behind by the market with more extreme trends.
"Zhao Zong, our Model needs to adjust the parameters again.
Supply Chain The duration of the outage and the scale of global liquidity release are breaking historical extremes--
I added variables specific to this flu in Model:
Southeast Asia Semiconductors Supply Chain Second impact caused by the suspension of production of multiple chip packaging and testing bases,
The non-linear extension of the global shipping recovery cycle and the expected paradox that the market will accelerate the sell-off after Federal Reserve emergency interest rate cut.
The conclusion is that the long-term value of Tesla has not changed, but the short-term fluctuation range needs to be relaxed."
She turned to the last page of the report and added,
"I changed the bottom-buying range previously judged based on the memory framework from the valuation anchor point to the reference variable--
It is no longer used as a basis for decision-making, only as a historical comparison."
Zhao Chen After reading the report, he wrote another more conservative number in pencil next to the number in the bottom range.
He wrote harder than usual, but the nib didn't break.
"Don't rely on memory, rely on Model. Take this number back and run a Monte Carlo simulation again.
The sample range covers the extreme values of all liquidity crises in history, including this one."
Chen Xi took the report and his eyes paused on the number written by Zhao Chen.
This number is wider than the bottom range given by previous editions of Model.
If it was the previous Zhao Chen, he would directly draw the coordinates at a position accurate to the decimal point.
Because he knows that position is the bottom.
Now what he gives is not a point, but a band - a wide range that contains all extreme possibilities.
"You used to hate wide ranges, saying they were a shield used by analysts when they didn't dare to make judgments."
She closed the report and looked up at him.
"In the past, I dared to give accurate judgments because I knew the answer.
Now I need to re-verify my judgment.
Each purchase is entered in batches, the pace is slowed down, and there is more safety cushion."
He put down his pencil, picked up the stress test report just updated by Chen Xi from the table, and turned to the conclusion column.
There is a line written in the conclusion column--"
Based on all currently available data, it is recommended to buy in batches after the stock price enters a wide valuation range.
The size of a single purchase shall not exceed one-fifth of the available funds.
There should be at least two trading days between two batches of purchases to hedge against extreme volatility risks."
Zhao Chen picked up the pen and added a line of comments under the conclusion column:
"Don't rely on memory, rely on Model.
My intuition tells me that this position is cheap enough, but intuition cannot replace risk control.
If Model says you have to wait, I will wait."
He pushed the report back to Chen Xi.
She looked down at the line of comments he wrote--
From the first time I gave investment advice independently in Henglong Capital's office a few years ago to now,
She had seen him sign "continue to hold" countless times, and each time it was three words plus a period, clean and neat.
There are nearly fifty words in this line of comments today, and each word says the same thing:
He is re-verifying his judgment in the most primitive way.
It's not that I'm not confident, it's that I no longer regard the future as known.
"Zhao Zong, your intuitive judgment in this position is highly consistent with the conclusion of Mr. Buffett."
Zhao Chen raised his head and looked at her.
"Maybe we don't abandon our consciousness,
Instead, I broke down my intuition into verifiable independent variables and used data to confirm each one.
Your intuition tells you that you can take action, but you dare not use this conclusion directly.
You have to go around a lot to verify it with Model.
The verified results are consistent with your intuition, which means--
There is nothing wrong with your judgment itself, it just needs a new verification mechanism to match it."
Chen Xi put the report into the folder and paused when he walked to the door.
"Zhao Zong, you said there is an extra stone in the river.
But you have walked in the river for so long, and you have stepped on more stones than anyone else.
Now you ask Model to help you redraw the map, and the basis for your decision-making has indeed changed--
From relying on memory to relying on Model. But your judgment itself has not changed.
You're just confirming it in another way."
After saying that, she opened the door and went out.
Zhao Chen leaned on the back of the chair, picked up Zisha Pot and poured a cup of tea into the cup.
The global liquidity crisis is sweeping every corner of the financial market like a silent tsunami.
At this moment, he is sitting in Jiangbeizui's office re-verifying every judgment he has made.
He picked up his phone and flipped to the message Elon Musk had replied to him--
"Recalculation is not called failure, it is called iteration."
Then he turned to the folded and folded hand-drawn K-line Chart that Shen Zhiyi put on his desk.
Turn to the Henglong core team photo that Su Wantang sent him a long time ago.
Then he turned the phone over and put it on the table,
I opened the stress test report left by Chen Xi and wrote a line in the blank space of the title page.
"I used to use maps to navigate, but now I use Compass. The map will be old, but Compass will not."
He closed the report and turned off the light.