After winning the lottery, the first thing Lin Mo did was not celebrate. Instead, he spent three days in the library working out the best tax-deferred investment plan.
He kept his old dorm room, but upgraded to top-of-the-line noise-canceling bedding and an ergonomic chair. Investing in his health was the highest-return project of all. He quickly split the 8 million in his account: 3 million went into reverse repos of government bonds and several money market funds, flexible like a savings account; 2 million was spread across five funds with stable long-term track records, to be held for the long run; the rest was his seed money for "opening a supermarket."
At 6:50 a.m., Lin Mo placed an order for a reverse repo of government bonds on his phone app. At seven, he showed up at the cafeteria right on time and ate a 3.5-yuan breakfast of soy milk and fried dough sticks. Beside him, his roommate was yelling excitedly about the gear he'd gotten in last night's game.
In class, they were studying financial engineering. When the white-haired professor brought up market efficiency, he suddenly asked, "Lin Mo, what do you think?"
Lin Mo pushed up his glasses and stood. "A perfectly efficient market doesn't exist in theory. For example, when a LOF fund's market price is lower than its net asset value, there's an arbitrage opportunity, even if each trade only yields a fraction of a percent…"
He cited a real case from the previous week, with figures accurate to three decimal places. The professor's eyes flashed with approval. His classmates, meanwhile, were completely lost, only thinking that this guy took really detailed notes.
With no classes that afternoon, he slipped into a corner of the library and opened his laptop. Several custom scripts ran quietly on the screen, monitoring the premiums and bond floors of several convertible bonds. Calmly, he placed a few buy orders, as if picking up a couple of discounted items at the supermarket.
