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 Finance industry and China |
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techbull
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游客
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作者：游客 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
I guess we may have different interpretation when we refer to
"financial service industry", I am more or less talking about
doing large, risk-free deals as a middle-man for big insitutions.
Things like underwriting bonds, stocks, and other derisvative
products that can produce a relatively risk-free profit.
Being a middle man, a hub require less investment than makers
of orginal products, and you make profits as long as people
do deals. It may have its own entry barriers but is worth
all the hassles. Dealing with retail investors is probably at the
lower end of the food chain.
For example, in mortgage business, customer borrowe one million
collaterialized by his house, we give him interest at x%, bank
give us a commission of 0.5%, and then sold the loan to Fannie
or Freddie at a profit of 1%, who in turn sold the packaged
loan to investors at (x - 1.5)%, simple concept, right? Just lots
of operating dirty details, but it's all very simple. Same for
bond underwriting and investment banking, I would imagine. And
don't be intimidated by salesman's expensive suits and intelligent-sounding
industry jargons.
I used to work for a valley-based company doing business in China
in 97. They make wireless devices but it's too complicated, requiring
too much capital, and they are deceiving themselves by insisting
they can somehow carve out a niche against all the advances in the
cellular technology. They are still limping along with capital
raised in the bubble years. Those hi-tech things look/feel good on the surface,
but they are never profitable after 9 years. And even if they
succeed, most founder's equity are already diluted to worth much
less.
In the long run, it would more fun to be an operator,
using borrowed money to acquire control of a big company, impose
reform in the company's operation and build value.
Without large amount of capital, it's impossible to
do deals with your own connections in the U.S; Going back to
China is more like Mao going to the countryside to build his power
base in 1927; And once he has enough troops, he eventually take
over the cities too.
Soviet Union is like the VC in 1924 when
they put in money and management to build the Huan-pu military
academy, many peasant students dream to become part of the glory, much
like many who study CS and want to get rich. The dream was dashed
when Jiang Jie-shi launched a board-room coup and killed many communists.
And it sucks when you found out that you are just one of
those cannon fodders used by opposing forces.
Sorry for the digression, but I think the future is in doing something
new that require little capital, and satisfy an emerging and
immediate demand in China and can generate initial income. Those who
are already doing it are probably laughing in a corner plotting their
next move 
作者：游客 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
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 Finance industry and China -- techbull - (5740 Byte) 2003-7-15 周二, 10:04 (2415 reads)
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