Roaring Twenties in Shanghai: the rise and fall of China’s youngest star investor

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Liu Zhengtai in an undated photograph taken from his Weibo account. Photo: SCMP Pictures

Published: 11:00am, 22 Oct 2016Updated: 5:17pm, 23 Oct 2016

Liu Zhengtai became a stock-buying god while still a student at Fudan University in Shanghai, boasting of 1,000 per cent returns as he debated on television with the country’s best-known market analysts about how to make quick cash.

Liu rode the investment boom that kicked off in late 2014, with people begging him for tips. When the market dived last summer, he disappeared from public only to re-emerge in September, and he continues to manage his investment fund.

Instead of becoming the Chinese answer to a young Warren Buffett, Liu has seen his fund lose nearly half its value in just a few months. And he could be at legal risk, according to one lawyer, due to his unusual arrangement for financing his share purchases. He pools client money into a personal trading account and uses it to buy units in his fund.

Liu Zhengtai frequently appeared on television as a stock picking guru before the market crash. Photo: SCMP Pictures

Underpinning his downfall is the lure and danger of a deeply volatile stock market defined by immaturity. As the United States did during the Roaring Twenties, China has undergone a rapid economic thrust upwards that can fulfil and destroy young people’s dreams practically overnight.

Examples abound: Ding Ning was just 35 years old when his Ponzi-style Ezubao scheme raised nearly US$10 billion from nearly a million investors; while Xu Xiang, once China’s top stock investment fund manager, was 38 when he was arrested last year.