The Story of Yang Baiwan
Yang Baiwan (杨百万) was known as a model investor and the first in China who made a fortune trading in government bonds.
A Shanghainese whose education was disrupted by the Cultural Revolution, he ended up in the 1970s as a warehouse watchman earning 68 yuan a month. Initially he tried selling electrical wire in the countryside.
With the money earned, he began to buy government bonds which were then being offered with a guaranteed return of 15 per cent. Soon, he noticed that there was a difference in the prices at which the government sold state bonds, depending on the intended customer. Simply by buying and reselling such bonds, it was possible to make a profit.
Yang recalled: "I must have been the first Chinese to notice this. At the time, people who wanted to buy government bonds at all were rare. Most people bought them because the government forced us to. But for me, this situation proved an opportunity."
Yang borrowed as much money from relatives as he could and rode around town on a bicycle, buying bonds from one counter and reselling them at another.
He then discovered that bonds in the countryside were sold at a lower price than in the city so he began to go to the villages and buy up their allocations. Sometimes he bought bonds for 70 yuan and sold them for as much as 100 yuan.
After the Tiananmen crackdown in 1989, he became worried and decided to declare his wealth. Entering a tax office, he told an astonished clerk that he had earned a million yuan, an event said to mark the start of his fame.
Like millionaires elsewhere, Yang subsequently became a professor. He also toured the country and gave lectures to as many as 7,000 at a time.
In 1998, Xinhua News Agency (新华社) reported that Yang was living in self-imposed isolation, glued to a computer screen in his home in Shanghai.
"I haven't been downtown in ten years and I don't participate in recreational activities," he reportedly said. Instead, he worked at home trading on markets through the telephone and computer.
What has become of him now?
A Shanghainese whose education was disrupted by the Cultural Revolution, he ended up in the 1970s as a warehouse watchman earning 68 yuan a month. Initially he tried selling electrical wire in the countryside.
With the money earned, he began to buy government bonds which were then being offered with a guaranteed return of 15 per cent. Soon, he noticed that there was a difference in the prices at which the government sold state bonds, depending on the intended customer. Simply by buying and reselling such bonds, it was possible to make a profit.
Yang recalled: "I must have been the first Chinese to notice this. At the time, people who wanted to buy government bonds at all were rare. Most people bought them because the government forced us to. But for me, this situation proved an opportunity."
Yang borrowed as much money from relatives as he could and rode around town on a bicycle, buying bonds from one counter and reselling them at another.
He then discovered that bonds in the countryside were sold at a lower price than in the city so he began to go to the villages and buy up their allocations. Sometimes he bought bonds for 70 yuan and sold them for as much as 100 yuan.
After the Tiananmen crackdown in 1989, he became worried and decided to declare his wealth. Entering a tax office, he told an astonished clerk that he had earned a million yuan, an event said to mark the start of his fame.
Like millionaires elsewhere, Yang subsequently became a professor. He also toured the country and gave lectures to as many as 7,000 at a time.
In 1998, Xinhua News Agency (新华社) reported that Yang was living in self-imposed isolation, glued to a computer screen in his home in Shanghai.
"I haven't been downtown in ten years and I don't participate in recreational activities," he reportedly said. Instead, he worked at home trading on markets through the telephone and computer.
What has become of him now?
posted by Maria Siow @ 1:08 AM
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