5
### (5) It’s the Dot-Com Bubble—No, the Air Bubble Era
At that moment, GM founder William Durant chuckled.
“Well then. Let’s hear your thoughts. Freshman, where do you want to invest? Surely you’re not thinking of investing in RCA again?”
Suddenly, the tycoons sitting at the table all looked at me.
It seemed that word had already spread that I had made an enormous fortune by speculating on RCA.
Of course, at this point, I could still make a profit by holding RCA.
But there were growth stocks rising even faster.
“Well, as for radio, I’d like to take a look at some other companies as well. Other than that, automobiles, electric companies, or perhaps… movies?”
Companies that were revolutionizing the era and growing at incredible speeds in the early twentieth century.
In modern terms, they were unicorn startups.
In the terminology of this era, surprisingly, they were ventures.
“Puhahahaha!”
Rockefeller Junior, Durant, and even Chairman Mitchell burst into laughter.
Huh? Was that really something to laugh at?
Weren’t automobiles, electric companies, and movies all industries experiencing rapid growth at this point?
“You really are young. If my son invested like this, I’d try to stop him.”
“Adventure is a good thing. Well, I may be the founder of an automobile company, but even I wouldn’t buy automobile stocks. You never know when they might go bankrupt.”
“Do you know how many automobile companies there are?”
Mitchell, who wasn’t even an automobile founder himself, suddenly spoke to me as if admonishing me.
“There are more than five hundred. The automobile market is one where even Ford could go bankrupt at any time.”
Baruch added with a meaningful smile.
“Of course, speculation always moves first. Reality follows afterward, through the wreckage of those that have gone under. Here, waiter. I’ll have a clam chowder.”
Come to think of it, I hadn’t eaten a single meal today either.
“One clam chowder here, too!”
Around us, the gentlemen who had already finished eating were blowing out clouds of cigarette smoke.
The most popular cigarette in this era was undoubtedly the cigar.
Watching them cut it with a knife and light it with a match really made me feel how old-fashioned this era was.
Come to think of it, there was no Zippo lighter.
When did that come out again?
Hiss.
The gentlemen smoked old-fashioned tobacco, or rather, cigars that were considered modern in this era, while drinking coffee.
But from my perspective, these people belonged to the past.
Even when it came to investment.
They were trapped in the speed of the past.
I had lost in the twenty-first century because I was slow.
But compared to these people?
A chill suddenly ran down my spine.
I was incomparably faster than them.
“So, what’s the hottest stock these days?”
“RCA, perhaps? This fellow was the one who made it take off.”
“Yet he sold everything and left, didn’t he?”
As I listened to Mitchell, Baruch, and Durant chatting, I suddenly came to my senses.
“RCA is still going up.”
A strange silence settled over the table.
Then Mitchell, Baruch, and Durant spoke again.
“It’s risen too much. It’ll collapse someday.”
“Yes, someday. The other stocks will be the same, won’t they?”
“True. Nothing stays successful forever. Just like in 1907.”
For a moment, Durant patted me on the shoulder encouragingly and laughed.
“Not yet, though. Hahaha!”
Then the laughing Durant winked.
“Oh, looks like the owner of the bank you deal with is coming.”
At Durant’s words, I turned my gaze and was surprised.
Huh.
He’s young?
A very lively-looking young man stopped in front of me.
“Mr. Howard Gould Junior?”
“Yes, that’s me.”
“Pleased to meet you.”
The tall young man looked down at me and asked,
“I’m Henry Sturgis Morgan of JP Morgan. Which university do you attend?”
Henry Sturgis Morgan.
I had heard that name somewhere.
Ah, could it be?
The founder of Morgan Stanley?
Was the young man standing before me actually Henry Sturgis?
“I haven’t attended one yet.”
“Hm? How old are you?”
“I’m twenty years old now.”
The young man, Henry Sturgis, who was twenty-seven years old and born in 1900, spoke.
“You’re a little late. Make sure you go to college before it gets any later. Harvard would be good.”
“Pardon? Uh, well…”
“You can invest later. It won’t be too late.”
Henry Sturgis curled the corner of his mouth as though he still saw me as a youngster.
“With 17 million dollars, you’re still on the lower end of private banking, but you seem to have some talent.”
He turned around and casually walked away.
It seemed he had genuinely come just to take a look at me.
But wait. Was he basically rubbing it in my face that he was a Harvard graduate?
At that moment, I shouted.
“Mr. Morgan Junior!”
Everyone in the luncheon club turned toward me.
Of course, Henry Sturgis Morgan did too.
I glared at Henry Morgan and opened my mouth again.
“Let’s make a bet! Six months!”
“What are you suddenly talking about?”
“Within that time, you’ll be the one begging me.”
I said it very simply.
“You’ll beg me, the top VIP client of Morgan Bank, to please keep investing with you!”
Henry Morgan stared at me before turning around and laughing.
“Fine. If I lose, I’ll beg you like that. If I win, you’re going to Harvard.”
The grandson of America’s greatest financial family, Morgan.
Henry Morgan walked away.
After making a bet with me.
Just you wait!
That aside, why was he talking about going to Harvard as if it were like going to the house next door?
---
The people at the luncheon club were still enjoying themselves.
The Wall Street Exchange.
Two in the afternoon.
The place was already boiling with excitement.
Of course, there were no electronic boards yet.
There were only three things.
Blackboards, ticker tape, and quotation sheets.
People shouted noisily while constantly changing the prices written on the blackboards with chalk.
The quotation sheets were made and distributed informally through brokers’ offices.
Ticker tape?
What was that?
It was a long strip of paper on which signals transmitted by telegraph were printed.
Apparently, the device Edison had created in 1869 was still being used.
It wasn’t entirely wrong to think of it as a kind of printer.
Click, click, click!
Female messengers wearing hats ran around, checking the ticker tape and writing prices on the boards with chalk.
RCA, GM, DuPont, AT&T.
Aside from radio, there were quite a lot of companies here that I could still recognize from the twenty-first century.
Behind counters lined with rows of telephones, traders shouted as they executed one trade after another.
“GM, 100,000 shares! DuPont, 80,000 shares! RCA, 50,000 shares!”
Dozens, no, hundreds of people shouted at the same time.
They desperately held onto their telephone receivers and executed trades one after another.
If all of that were replaced by electronic monitors, it would look exactly like an investment firm from the twenty-first century.
I looked at the blackboard and lightly placed a sheet of paper on an empty table.
This was an era without tablets, laptops, or, of course, smartphones.
All records were written with pens in notebooks.
The Dow Jones index was drawing an endless upward curve.
“First of all, RCA, I suppose?”
It had already risen considerably.
But stocks where the public’s dreams gathered showed incredible strength all the way to the end.
Until the Great Depression arrived.
They were good for buying and taking profits in cash at an appropriate point.
“GM and Ford are here too.”
The age of automobiles. No one could go against this trend.
Besides, Ford was actually number one at the moment.
But that alone wouldn’t make me money.
I should examine things from a long-term perspective while realizing the profits through short-term trading.
Huh, there’s an interesting name too.
Duesenberg.
It was America’s first supercar company, wasn’t it?
I should buy it.
Why?
Because this was a boom period, so supercar companies would work!
“DuPont, AT&T, and Columbia Pictures… not here yet.”
DuPont was famous for nylon, but that was in the 1930s.
Right now, it was oddly famous for explosives.
In fact, its origins were in the munitions business, so there was nothing strange about that by the standards of this era.
AT&T had originally come from the Bell Company.
In other words, it was the company that dominated telephone communications.
It was growing rapidly during this era.
Was Columbia Pictures still privately held?
What major Hollywood film studios existed during this era?
I closed my eyes and searched through my memory palace.
What were the Big Five of the 1920s?
Paramount, Warner Bros., Fox, Metro-Goldwyn-Mayer, and RKO Radio Pictures.
The first three still existed in the twenty-first century, while the latter two disappeared through mergers and closures.
As expected, none of them were here.
I lightly nodded and wrote out my buy and sell orders.
The broker who received the order, an employee of Baruch Company, shouted.
“700,000 dollars, divided purchases! Buy all of DuPont and AT&T, 150,000 dollars each! Sell all RCA! Duesenberg? Use all remaining funds!”
Selby, who had been watching from beside me, suddenly asked anxiously.
“Mr. Gould. Are you sure this is all right? Investing like this?”
I shrugged.
“It doesn’t matter right now. Not yet.”
“Then what about the future?”
“Interest rates.”
In a very low voice so no one else could hear, I revealed the truth.
“The moment the government raises interest rates is the signal. From that point onward, things become dangerous. Of course, there will still be time to get out. Anyway…”
He still looked completely confused.
In other words, this was what it meant.
The reason this era was experiencing such an incredibly powerful rise wasn’t because America was doing well, because a miracle had occurred, or because capitalism was invincible.
Liquidity.
An enormous amount of money was circulating through the market, and all of that money was being swept into the stock market.
Naturally, that was a warning sign, and the authorities would have no choice but to raise interest rates because of inflation.
That would be the moment the bubble burst.
But that moment was still far away.
“If there were an electronic board here, everything would probably be red. This is enough to drive someone crazy.”
I whistled and chuckled at my own joke.
In America, blue originally meant a rise and red meant a fall.
In the twenty-first century, that is.
Now?
They were writing everything with chalk on blackboards. There was no way to show the colors.
That was when it happened.
“Extra! Extra!”
Suddenly, a newspaper boy entered.
Normally, they wouldn’t let newspaper boys into the stock exchange, would they?
Then the cry that erupted swept across the entire stock exchange.
“Lindbergh! Successfully crossed the Atlantic! An airplane has crossed the Atlantic for the first time! Buy a newspaper!”
For a moment, everything became quiet before cheers erupted.
“Waaah!”
Crossed the Atlantic?
Was that really such a big deal?
No, wait. It was 1927, wasn’t it?
That meant airplanes existed, and airlines existed too, but long-distance flights were still something people could hardly imagine.
Selby suddenly shouted with an excited expression.
“That’s truly incredible. Crossing the Atlantic. Uh, why are you like that?”
Something had come to mind.
It wasn’t simply that people had become able to travel by airplane.
This meant aviation stocks were going to take off.
But the technology still hadn’t reached that point yet.
“Lindbergh boom. A real wave of speculation is coming.”
A bubble!
“An opportunity!”
A chance to make a fortune, and furthermore—
“A chance to land a blow on Henry S. Morgan, on Morgan Stanley!”
On the eve of the Great Depression, through an American-style venture speculation frenzy!
---
So, what exactly was the Lindbergh aviation boom?
“Extra! Extra! Lindbergh has crossed the Atlantic solo!”
In other words, it was May 1927.
What did that mean for stocks?
The beginning of aviation speculation.
The air investment rush that began in May 1927.
The streets of New York, the floor of the Wall Street stock exchange, the entire city was suddenly swept up in a new fever.
“Yes, aviation. The future is in aviation now!”
“How does that airplane thing even fly? I don’t really understand it even when I hear about it. Isn’t crossing by ship much safer?”
“Don’t you know about the Titanic? Even an heir to the Guggenheim family drowned. You can have all the money in the world and still die on a ship! Nothing is safe anyway. It might actually be better to travel by airplane. In the future!”
Even the boarding house where I was staying was like this.
By May, New York was fully in the midst of spring.
The rent was 20 dollars a month, with meals provided communally.
Gentlemen and ladies gathered around the smell of morning coffee and freshly toasted bread on the first floor.
This was a famous brownstone-style house in New York.
What did that mean?
There was plenty of red sandstone throughout the eastern United States.
As a result, mansions made of sandstone with a reddish appearance lined the streets, and a hundred years later they would become elegant classics or old mansions.
But now?
They could be considered modern residences.
They were also sometimes used as relatively upscale boarding houses.
Swish!
A young man who had been smoking since early morning unfolded a newspaper beside me.
Hero Lindbergh Returns to America.
Curtiss-Wright Soars Again Today!
Ford May Enter Aircraft Market by Establishing Subsidiary Trimotor?
Everyone was making a huge fuss.
I leaned against the wall and drank my morning coffee.
But why was I staying in a boarding house instead of having my own home?
Because an upscale boarding house was more convenient than a house.
First of all, living in a mansion appropriate to the size of my assets was expensive.
It would tie up money in real estate.
On top of that, I would need servants.
But if I stayed at a boarding house, they cooked for me, did my laundry, and took care of the residence themselves.
Furthermore, I could learn more about New York.
For example, like the people chattering in front of me.
“Curtiss! You should buy it over the counter. Curtiss-Wright is too expensive!”
“The Wright brothers are old news too, aren’t they? I heard it at the newspaper printing office.”
“Ahem, I heard it at a party too! Apparently, these days there isn’t a single gentleman who isn’t buying aviation stocks!”
Mario, the Italian chef, Tommy, the newspaper delivery boy, and Miss Betty, the talkative flapper girl.
A diverse group of people were chatting away from early morning.
But what was a flapper?
She had a bobbed haircut, heavy makeup, a cigarette holder, and above all, exposed legs.
It was a term referring to the New Woman of the 1920s.
By modern American standards, she would actually look rather modest, but in this era, exposing one’s legs was almost equivalent to walking around naked.
She was a typist and aspiring actress, though in the morning she still came downstairs without makeup.
She actually looked rather innocent now.
But when she saw me, she winked.
“How about talking about aviation stocks instead of just standing there, Howard? A man needs ambition!”
I chuckled and simply nodded.
I did intend to buy aviation stocks.
Just then.
“They’re such young people, aren’t they? Hehe.”
A middle-aged woman suddenly approached me and smiled.
“I’m one of them too, Mrs. Pierce.”
“Mr. Gould Junior may look young, but judging by what he does, he seems like an adult. Even now, you’re not getting excited.”
“I’m an investor. Unlike those kids.”
In other words, she was the landlady.
The person who knew all about my circumstances.
There was a reason for that.
“Aren’t you going to college? It’s not too late yet.”
“I’ll establish myself as an investor first. If I don’t seize the opportunity now, there won’t be another chance.”
“Mr. Gould, there is a proper time for learning. If you miss this opportunity, it may actually become harder to attend college later. And someone from a family like the Goulds should graduate from a prestigious university.”
Good grief, Mrs. Pierce was certainly meddlesome.
Then again, to run a three-story boarding house in the brownstone row houses in the alley beside 62nd Street in Long Island, she probably needed that level of friendliness.
Of course, Mrs. Pierce had her own reason for constantly bringing up college with me.
She treated me almost like her own son.
But I had my own thoughts.
I couldn’t waste time going to college yet.
Two years until the Great Depression.
I had to run myself ragged during those two years.
“All right, Mrs. Pierce. By the way, please turn up the heating. I’m still a little cold.”
“Oh my, really? Goodness, what’s wrong with me? Is the heating system getting old?”
“When I turned on the shower, cold water came out. Hahaha!”
I lightly laughed and was about to stand up.
“Hey, Howard! Did you see?”
“See what?”
“This! Pan American Airways!”
Mario came running over to me.
“Don’t you think this is going to take off? You’ve been going to Wall Street lately, right? Haven’t you heard anything?”
Let’s see.
What is this?
I blinked and tilted my head.
“This isn’t in the format of a formally listed company.”
“Of course not! It’s curb! You buy and sell this on the over-the-counter market!”
“What do you trust enough to buy something like this? Good grief.”
Even in this era, there was a market for buying and selling unlisted stocks, an over-the-counter market.
Of course, it wasn’t an official exchange, there were no licensed brokers, and there was no concept specifically called OTC.
But it was called the curb, meaning that instead of directly trading listed companies, people conducted indirect transactions.
An unlisted stock was already priced at how much?
Twenty dollars?
That was the monthly rent for this boarding house.
What an insane price.
“If it were me, I’d buy gold instead.”
“No, gold is expensive!”
“Getting rich overnight is always dangerous, friend.”
I lightly tapped Mario on the cheek and headed outside.
“Gold never betrays you. Never.”
Yes, buying gold was the best.
Even during the Great Depression, it wouldn’t fall.
I nodded to Tommy and Flapper Betty as I passed them.
Just then, I saw a gentleman arriving outside in an old Cadillac.
At a glance, he was a lawyer, a man in his early thirties.
“A man who made his money through speculation is saying something ridiculous.”
“What? You heard all that? When did you get here?”
“Please remember that this is the townhouse my mother operates. I come by frequently. Especially when I have to work through the night and then come back to work again.”
Winslow Selby Pierce Junior.
The butler-lawyer of my family and my personal lawyer.
And the son of Mrs. Pierce, the owner of this townhouse.
So naturally, Mrs. Pierce worrying about me like I was her son made sense.
Apparently, she was one of the people who had looked after me since I was young, when I had been shut away at home.
And now I wasn’t even attending college and was constantly wandering around the stock market.
Of course she would worry.
Selby, who knew far too much about me to merely worry, handed me some documents first.
“As you can see, thanks to a certain employer, I’ve investigated every aviation company, both listed and unlisted.”
I took the documents and grinned.
“Excellent. Then shall we start the real speculation?”
Yes.
A boom that would last exactly three months.
It was time to enjoy the Lindbergh Air Boom with my whole body.
---
In the spring of 1927, Wall Street was truly intoxicated with the madness of flight.
Mass hysteria, short-term profits, and bubbles!
Lindbergh’s flying fever swept through the city like a tornado.
Though did tornadoes even come to New York?
“Aviation is the answer! Buy!”
Newspapers, radio, the streets.
Everyone was shouting.
Let’s fly into the sky!
In other words, it was the Air Bubble Era!