Xu Wangguan, a native of Lishui, Zhejiang, is a legendary figure in China's futures market and is known as the "King of Beans" and the "King of Rubber".
According to public information, Xu Wangguan's cumulative profit from soybean and rubber futures trading exceeded 7 billion. This figure not only demonstrates his outstanding talent in the futures market, but also sets an unattainable benchmark for subsequent investors.
After nearly 20 years of ups and downs, the Chinese futures industry has finally seen the emergence of a master investor along with the commodity bull market that began in 2002. Professor Chang Qing, the founder of the Chinese futures market, once predicted that a master investor in the Chinese futures market would emerge in the next 10 to 20 years. In fact, such a respectable investor has already appeared in the Chinese futures market. He is Professor Xu Wangguan from Hangzhou, Zhejiang.
The transformation from teacher to business tycoon
Xu Wangguan’s futures journey began with his strong interest in and unique insights into the grain market.
In 1981, he graduated from Zhejiang Grain School and subsequently became a Chinese teacher. In his teaching position, he not only edited teaching books, but also founded a school-run grain trading company. These experiences laid a solid foundation for his subsequent business transformation.
In 1995, he was transferred to the provincial grain system. Two years later, he made a major decision - to officially start a business and devote himself to personal investment.
During this period, Xu Wangguan began to get involved in finance and trade, especially in the futures market, where he began to trade plywood, mung beans, soybeans, rubber, stocks and other commodities. Although the market fluctuations brought him considerable challenges, he relied on his perseverance and deep understanding of the market to finally earn his first pot of gold and began to invest in industry.
Futures Market Rise
Xu Wangguan founded Zhejiang Shuangguan Investment Co., Ltd. in 2003, which was later renamed Zhejiang Shuangguan Holding Group Co., Ltd. He used the capital and experience he had accumulated in the futures market to carry out large-scale investment operations in different varieties and markets.
2007 was a relatively successful year for Xu Wangguan in his investment career. On the one hand, he pursued the bull market tirelessly for several years, and on the other hand, he pursued the long-term holding and continuous transfer of positions to achieve huge profits in the bull market. After several years of immersion in ambush, Xu Wangguan finally made an important breakthrough and made a profit of 2 billion yuan in a vigorous soybean bull market, which made him a futures investment expert.
In June 2008, Xu Wangguan intervened to go long on Shanghai rubber futures at a high price of around 26,000. This transaction caused him to suffer a considerable loss, but Xu Wangguan's vision was not limited to the current stage. By constantly shifting positions and changing months, he made considerable profits in the subsequent rubber bull market. It is said that he made more than 5 billion yuan in this rubber futures.
In the third quarter of 2010, it and the Shuangguan Holding Group under its control jointly bought 7.11 million shares of Jiangsu Wuzhong. After holding the shares for more than half a year, it successfully withdrew from the top ten at the end of the first quarter of 2011. During this period, Jiangsu Wuzhong was in the stage of explosive growth. The stock price had risen from a low of less than 5 yuan to a high of more than 13 yuan.
In the first quarter of 2011, Xu Wangguan turned his investment target to Huaxi Village, buying 5.4211 million shares in that quarter and increasing his holdings to 7.3673 million shares in the second quarter.
Afterwards, Xu Wangguan also invested heavily in two large-cap blue-chip stocks, China Coal Energy and China Everbright Bank, in the second quarter. Among them, he bought 12.002 million shares of China Coal Energy, ranking 8th among the shareholders of circulating shares; with 35.9978 million shares, he became the 9th largest circulating shareholder of China Everbright Bank, and Shuangguan Holding Group also bought 38.1607 million shares, ranking 8th.
Xu Wangguan held 35.9978 million shares of China Everbright Bank, 12.002 million shares of China Coal Energy, and 7.3673 million shares of Huaxi Village in the second quarter of 2011. With a shareholding value of 286.24 million yuan, he ranked 16th and became the highest ranked among the new big individual investors.
After that, everyone called him "the Oriental Jew".
After Xu Wangguan achieved great success in the futures market, he was not satisfied with it, but turned to the real economy. He invested in real estate, energy, industrial investment and other fields and developed many projects.
He developed the largest commercial complex, Shuangyin International Financial City, in Suzhou's Dushu Lake area, integrating physical and virtual financial investments and enhancing the regional economy and taste.
He also developed projects such as Guoxiangyuan and Nanmen Commercial Plaza in other areas, demonstrating his business vision and ability.
Investment Philosophy
When talking about the investment philosophy, Xu Wangguan said that it is to be "open to all rivers and seas".
In his investment history, there is no limit to knowledge or talent. Perhaps it is precisely because of this concept that Xu Wangguan, who has been active in the personal investment market, has personally held an astonishing number of futures and stocks, and is well-deserved to be called the "Oriental Jew" in the circle.
Xu Wangguan himself has not made public his investment philosophy and methods. However, based on some of the information I have searched, I try to summarize his investment style from the following aspects:
Long-term holding: Xu Wangguan is not a short-term trader. He likes to hold his positions for a long time when there is a big trend in the market and does not close his positions easily. He once said: "I am not a technical analyst. I only look at the fundamentals. I will not change my judgment because of price fluctuations. I will only adjust my positions when there are major changes in the market."
Dare to go against the market: Xu Wangguan has a keen insight and courage in the market. He dares to intervene in the market to go long at high levels or short at low levels, which is different from others. He once bought rubber futures at a high price of around 26,000 yuan/ton and made huge profits in the subsequent bull market. He also bought a large number of stocks during the 2008 financial crisis and became one of the top ten circulating shareholders of many listed companies.
Diversification: Xu Wangguan is not limited to one product or one market. He is involved in finance, securities and trade business, and has invested in plywood, mung beans, soybeans, rubber, stocks and other products. He is also engaged in the real economy and founded Shuangguan Holding Group, which involves real estate, energy, industrial investment and other fields.
Low-key and cautious: Xu Wangguan is a low-key person. He does not like to expose his investment achievements and experiences in the media, nor does he like to hype his reputation. He once said: "I don't want to be a public figure. I just want to do my own thing well." He is also a cautious person. He will not blindly pursue huge profits, nor will he believe market rumors.
He once said: "I won't change my mind because of what others say. I only trust my own judgment."
The four levels of trading
In this industry, there are not many people who deserve respect and admiration. In the past, there were almost no master investors who deserved our respect, whether in the stock market or the futures market. However, in the past two years, as the global commodity bull market continues in the futures market, this market, which is closer to a zero-sum game, has seen the emergence of master investors. In my eyes, Mr. Xu is the person closest to Buffett in the Chinese futures market. Before talking about this master, I will first summarize the investment behavior in the futures market into four main levels.
Futures investment has to go through three stages before it can gradually sublimate. It is like a pyramid. From the bottom to the top, the fundamental comparison is definitely not the size of the capital, but the investment philosophy and the achievements achieved as a measure.
First, 80% of the people in this market are still at the first level, without a fixed technical analysis method, without a full and deep understanding of the fundamentals, and only relying on the rise and fall of the market to make disorderly transactions. Futures investment at this level will eventually end in failure.
The second level of investment groups rely on technical analysis or fundamental analysis to trade in the market. Most of them have a long working experience or investment experience. They can rely on technical analysis or fundamental analysis to analyze and study the commodities they trade, and thus make investment with high accuracy. This group of investors or futures practitioners can obtain certain returns. The better ones can make stable profits all year round, while the average ones are less stable, but they can also often make profits from the market. This group accounts for about 20% of the market share.
The above two levels already occupy almost 100% of the entire futures market. Investors at the third and fourth levels can be described as rare and insignificant. They are the successful people who truly made their fortune by using futures.
Investors at the third level have strategic vision and trading capabilities. They rely on unique trading advantages, such as arbitrage and price difference arbitrage combined with spot. They operate a relatively large share of capital in the futures market all year round and regularly use their spot advantages to obtain investment returns.
This part occupies a very small market share, and there are only a handful of futures investors in China who can reach this level.
At the third level, Huang Wei, the boss of Xinhu Group, who has already withdrawn from the market, is a typical capital tycoon who obtained important development funds in the futures market. For example, the 327 Treasury bonds made Huang Wei's first pot of gold for capital development. The current Xinhu Group's success is closely related to its operations in the futures market. Of course, Liu Han, the head of Hongda Group, is also a representative figure among them.
Liu Han, who funded the establishment of the Hope Primary School during the Wenchuan earthquake, must have become an important recognition of the society, but the low-key Liu Han still maintains a rare silence. The arbitrage between the spot and futures price differences in metal futures once earned him a profit of 100 million yuan in one fell swoop, laying the foundation for Liu Han's later capital path in Sichuan and even the whole country.
However, the successful people in the futures market mentioned above are just successful people, and they can hardly be called master-level futures experts.
At the fourth level, we may have only seen the brilliant achievements of Xu Wangguan. This middle-aged man, who was a teacher, had been involved in the futures market with small capital many times in his early years, but he was always unable to achieve success. The abundant capital financing scope in Zhejiang, especially Hangzhou, and Mr. Xu's extensive network of contacts have enabled him to form a strategic alliance with Zhejiang brokerage companies in recent years.
In 2007, Dalian soybean futures market made more than 2 billion yuan in profit. On the one hand, it was due to his tireless pursuit of buying in the bull market in the past few years. At the same time, he pursued the long-term holding and continuous transfer of positions to achieve huge profits in the bull market. After several years of immersion in ambush, he finally made an important breakthrough. A round of vigorous soybean bull market made this futures investment master. The investment philosophy has completely surpassed the above levels.