Thank you for giving me the chance of giving speech together with the world famous scientists, who are my deeply admired idols. I wanted to be a scientist when I was a kid, but now I became a bank president. I believe there will be nothing without science. I still remember when I was president of China Merchants Bank, there were only 5000 employees, but about 2000 employees majored in math and computer. Thus, in a sense, China Merchants Bank becomes the best retail bank with its advanced information technology. Before we made the decision for the credit card business at the beginning of this century, we also used data analysis, and then we found the youth invest if they are rich and overdraw if they are poor, which will bring profits to us, and then we decided to do the credit card business.
I believe besides me, there are also many other people who wanted to be a scientist in their childhood, and many young people want to be a financier and a banker. But I want to say no matter what you want to be in future, you shall start from the university. If you cannot make a good foundation in the university, you cannot easily realize your dream. There was a famous film named The Wolf of Wall Street, its leading role is Jordan who is the fund manager of Wall Street. He made a lot of money with the mathematic knowledge and trade models. In fact, there are many dealers for high frequency trades in Wall Street, and what they experienced is similar to that in the film.
I’ll show you two examples. The first one is James Simon, who is a math professor and the founder and Chairman of Wall Street Renaissance Company. He made a financial trade model, which had given him the annual average return of 35% from 1988 to last year, and it was higher than Buffett's. Another example is my friend, Ray Dario, who is the founder of Bridgewater Fund, the biggest macro hedge fund in the world. He has begun to invest in stock since he was 12 years old, and bought his first stock-- Northeast Airlines, which was less than USD 5 and he could buy at that time; when he was 18 years old, he learned how to short the bear market and learned commodities trading in college; and when he was 26, he founded the Bridgewater Fund. Led by him, Bridgewater get more considerable returns than any other hedge fund. Till 2011, the investment income of Bridgewater was about USD 50 billion. He got USD 3.9 billion in 2011 as well as No.1 on the global hedge fund manager income list of Forbes in 2012, and also he was assessed as the most successful fund manager in the hedge fund history by the industry. But maybe you don’t know that being a scientist is also Ray’s childhood dream; thus, it is very legendary. All legends start from teenagers and science.
Just because of this point, last month, Professor Qian, Dean of the School of Economics and Management of Tsinghua University, and I together unveiled the FDT laboratory, which is a public welfare organization. A group of young people developed an APP, and after mounting the APP on the mobile phone, all college students can carry out the simulated trading. FDT keeps on organizing competitions and encouraging the winners, and the final winner will get the chance of firm offer operation. The trading varieties are also rich, including stocks, bonds, derivatives, and hedge funds. It aims to train Chinese dealers. Now besides Chinese, there are more than 1.5 million people who also participate in the competition, and most of them are the young people studying math and computer and are from Oxford University, Columbia University and other top universities.
FDT hopes to find the rule of the financial market via the massive data and the data of logic trading. After reaching a certain stage, it can be taught to students in the college classes. We do it for training young students and letting them have a skill to support themselves after graduation; we want the Chinese capital market to develop better, and it is more important. The capital market is closely related to the social mass. Many people’s emotions are linked with it, particularly the Chinese stock market which is both peaceful and tempestuous unexpectedly.
I believe all of you still remember clearly what the stock market experienced last year. There are many reasons for this phenomenon, but one of the important reasons is that the Chinese capital market mainly comprises more than 90% of retail private investors. We shall know there are 100 million shareholders in China, i.e. there is one retail private investor in every 14 people. The retail private investors are characterized in following bull market and beating bear market, which will easily cause the big rise and fall of the stock market at last.
In the matured American markets, there are only 11% retail private investors, but more than 85% of institutional investors, and Chinese institutional investors are less than 10%. Why are there few institutional investors in China? I’ve made a market survey for it before. The reasons are a little funny but helpless: our retail private investors said you institutional investors even cannot judge as correct as me. Chinese institutional investors don’t have enough matured customer managers or matured dealers; thus, the retail private investors don’t believe in the institutional investors. Thus, we want to do the infrastructure work of the capital market and train outstanding dealers, who will be the brilliant customer managers in future, so as to get the trust of the retail private investors.
In fact, America also experienced this stage. It spent 70 years in removing the retail private investors. China doesn’t need such a long time. We will popularize in the whole world, including many Chinese universities. The universities support this public welfare project, and the students are totally voluntary to participate in the project in their spare time.
All talents grow up from youth. In future, science, particularly the essential knowledge for math, computer, etc., will be necessary for you to be a financier or banker. Now we are experiencing the great 4th Industrial Revolution of which the typical representatives are big data, cloud computing, new materials and artificial intelligence. These technologies both influence the social production and the human’s living, financial service and our thinking. I hope you who want to be a financier can study hard now for science, and actively participate in our FDT competition.
Ms. Kong is also the representative of the public welfare field. She grasps the future by grasping the young people and science, which is the best social value investment and influence power investment. Thank you!