Chapter 64: A Bold Investment
Chapter 64: A Bold Investment
It felt like I knew the future of the stock market.
“Ellie. How much money did the Fed release last month?”
“1.6 trillion dollars.”
“About the same as South Korea's GDP.”
“Won’t they probably keep releasing that much money throughout the year?”
An amount of money beyond imagination was circulating in the market.
While the scale of the economy grows every year, this much money hadn't been pumped into the market even during the 9/11 attacks or the financial crisis.
‘What’s going to happen now?’
I wasn't a financial expert, but I had a feeling.
My own unique instinct.
I understood the hearts of those who wanted to make money better than anyone.
“Ellie. What do you think will happen if the coronavirus situation calms down?”
“Calms down?”
Ellie looked at me as if I’d said something absurd.
The reason the U.S. and European stock markets had crashed was the belief that the golden window to stop the coronavirus had passed.
Culturally and socially, they were failing to prevent the spread of the disease.
“The coronavirus will probably keep spreading like it is now. But what if a vaccine comes out, and the number of people getting severely ill or dying decreases?”
“When that happens… the market will enter a strong uptrend. Much more sharply than it fell.”
It was something anyone, not just a Wall Street financier, could figure out.
By combining basic economic sense, people's psychology, and the information only I knew, I determined that the stock market had a high probability of surging.
“Ellie. I think it's time to buy stocks now.”
“What?”
“I’ll have to think about the specific stocks. But I need to start buying aggressively.”
Less than two months after selling off all my stocks, I decided to switch to a buying position.
“Are you serious?”
“Yes. I need to build a portfolio to figure out which stocks are most suitable. And call options, too.”
Derivatives.
I had intended to never touch something like this.
But the $10.5 billion I had tasted from the put options last time was just too sweet.
I’d seen articles about various hedge funds making tens to a hundred times their investment with put options in the last month alone.
Wasn't there a stock market adage about not catching a falling knife?
I planned to do the exact opposite.
* * *
“Uwaaah.”
Oh Myeong-woo woke up early and queued up for a ranked game.
“When you play this game, you have to be prepared to gaze into the abyss.”
A game with five allies and five enemies.
The enemies weren't the only villains.
When a game went poorly, the insults your own teammates threw at your parents were always beyond imagination.
And in that abyss… Oh Myeong-woo was right there with them.
‘Isn’t there a more creative insult?’
What kind of comments were novel and could push the opponent's emotions to the absolute limit?
‘It's not that I'm a bad person. This game makes people this way.’
He reflected on his past self, who had scoffed at the idea that games incite violence.
Playing League of Legends made a person violent and filled them with wicked thoughts.
‘Everyone just die.’
- Killing Spree.
- Rampage.
- Unstoppable.
- Dominating!
- Legendary!
“Hmph…”
Having written his own history in a Gold-tier game, Oh Myeong-woo sent a link of the game results to his friend via text to show off.
- Oh Myeong-woo: Behold. This is my power.
The message was read about an hour later.
- Kim Shin: Nice. Sorry, I'm busy.
- Oh Myeong-woo: What are you so busy with? Wandering the streets?
- Kim Shin: No. I'm gathering investment information. I'm going to invest in the U.S. stock market.
- Oh Myeong-woo: You gonna make some money!
- Kim Shin: Probably.
- Oh Myeong-woo: Don't mind me, just work.
- Kim Shin: k
While his friend was busy making money through investments, Oh Myeong-woo queued up for another ranked game.
‘With investing, you don't know if you'll make money or not. But this game I’m about to play is a sure reward for myself.’
A short while later, another text came.
- Kim Shin: Myeong-woo. Because of COVID, how do you think people's interests or what they mainly use will change?
- Oh Myeong-woo: Huh?
- Oh Myeong-woo: I don't get it?
- Kim Shin: After the COVID outbreak, is there anything you've wanted to buy? Or wanted to do?
- Oh Myeong-woo: Since I can't go out, I just play more games. Upgrade my electronics and watch a lot of Netflix.
- Kim Shin: k, thanks!
* * *
Building a portfolio of investment stocks felt like fighting a battle of professional knowledge with a stone axe.
The tendencies of corporate executives, the state of factory facilities, product logistics, and even recent advertisements.
There were so many things to consider, but I thought about it from the opposite perspective.
‘Let’s keep it simple. The things I want to buy and do since COVID started. I should prioritize stocks related to those things.’
I told Ellie about my text conversation with Oh Myeong-woo.
“Are you going to increase your investment in contactless businesses?”
“Contactless?”
“Companies that sell products that don't require face-to-face contact.”
“Right. Investing in those would be a good idea.”
When I invested in coins, I read people's greed.
Now, based on the economic situation, I was investing in companies whose stock prices were likely to soar.
“After I finish my work, I’ll help you build your stock portfolio.”
“Really? Shouldn’t I pay you a fee or something?”
“I’ll do it for free.”
The stocks of IT companies had seen massive trading volume due to the New York stock market crash.
Next up were call options.
“The call option market has been booming since February. A lot of retail investors have jumped in.”
“They must have taken huge losses, then.”
“They didn't expect the market to get this bad.”
When the New York stock market fell, retail investors dreaming of a jackpot flocked in.
They might not have scraped together their very souls for call options, but most of them would have lost the money they invested.
“You know this, right? Call options have an expiration date, and if they're useless on that date, they become worth zero.”
“I don't know the details, but I have a general idea.”
A call option was the right to buy a stock.
In the U.S., besides options on stock indices, call options on individual stocks were also traded.
Let’s say you bought 1,000 call options giving you the right to buy Amazon stock at $10.
If the stock price on the expiration date is $9, the right to buy at $10 is worthless, so it becomes zero.
It was that risky, but the rate of return upon success was high.
Making money through business was fun, but investing came with a thrill.
“Options trading can be very risky. The possibility of losing your principal is so high that I personally don't recommend it. With the market in its worst state, most investors are losing money.”
Ellie said, looking me straight in the eye.
To her, I might look like someone dreaming of a windfall.
But was that a bad thing?
Everyone dreams of a windfall.
If you miss an opportunity to make a huge amount of money, it's hard to become rich.
I had already done some calculations.
I planned to invest over $12 billion in cash, focusing on contactless companies, primarily IT firms on the New York Stock Exchange.
Since I was buying stocks, there was a risk of loss, but these were companies with future growth potential, so long-term investment was possible.
And if my prediction was correct and the COVID situation calmed down, there was room for a sharp rise.
‘Let the money do the work.’
The market was screaming in fear of the downturn.
Therefore, the expected return when it reversed into an uptrend was difficult to estimate.
Couldn't I make at least a few billion dollars?
I was making a conservative projection, even for a scenario where COVID subsides.
I wasn't entertaining delusional thoughts of getting 100% or 200% returns.
That's why the actual return, when the trend reversed, could be much higher than expected.
People's greed always far exceeds expectations.
It doesn't stop even when it should.
It doesn't stop even when you think it's risen a lot.
Even when talk of a bubble emerges, and it seems like it can't possibly go any higher, it continues to rise without end.
Even cautious investors start to think they're losing out by staying put.
- You still haven't bought in? LOL
- Throwing away a once-in-a-lifetime chance to turn your life around.
- In 20 years, your kids will ask, 'Dad, what were you doing back then? Why didn't you buy?'
- The stupidest thing to do is just sit on your cash.
- Just sitting still! You won't gain anything!
The last chance to change your life.
I wait for the people who, thinking they absolutely cannot miss this opportunity, invest everything they have, scraping together their very souls.
And finally, everyone participates in the market.
Even diligent people who once considered reckless greed a sin join in on investing, pooling all the funds they have.
Boom!
The bubble vanishes like an illusion, and the market crashes.
The starting point of this whole process.
Perhaps I was making a preemptive investment, having caught the moment of change.
An investment at the most difficult and unpredictable moment.
This wasn't about following the market flow created by greed.
It was about seeing things from the very depths of greed.
All who wish to make money, come running.
A market for us is about to open.
‘I think now is that exact time.’
The thought was long, but the moment was brief.
I smiled at Ellie.
“I'm going to buy call options. And the amount is going to be quite large.”
“Don't tell me you're going to throw in another 200 million dollars?”
“No.”
“Then 100 million?”
Even $100 million was an astronomical sum.
Either make a fortune or lose it all and end up with zero.
Wall Street financiers prefer derivative trades that reduce the risk of their option investments.
Even if they bet on a stock price rising, their prediction could be wrong.
That's why in options trading, they take an opposing position to hedge their risk.
But I intended to bet everything solely on the rise of the stock market.
“Five hundred million dollars.”
“What? Really?”
“Yes. I'm planning to put all five hundred million dollars into call options.”
“...”
He was insane.
Although the derivatives market was growing, an investment of $500 million would make me a colossal whale.
Not even pension funds with hundreds of billions of dollars in assets or Middle Eastern royalty with immeasurable wealth make investments like this.
But when my conviction was this strong, I had to invest.
If I didn't, I might regret this moment for the rest of my life.
“You. If this is a joke, please stop. This is my job.”
“It's not a joke. I'm betting five hundred million dollars on my conviction.”
* * *
A $500 million bet.
It was an amount that far exceeded what Ellie could handle or assist with.
“Investing 500 million dollars in the market won't be easy. You'll need to structure it with good stocks, volume, and premiums.”
“I think it'll be possible if we ask a Wall Street financial institution to create a product for us.”
“It could be done. But do you really want to go that far to invest 500 million dollars? Even with the high probability of losing it?”
“Yes. I'm going to do it.”
Does probability even exist in investing?
I had never made an investment in my life with this much evidence and conviction.
You never know what might happen in the world, so a sudden accident or change could occur.
But if I considered even that kind of bad luck, I would never be able to make a bold investment.
“Alright. Then I’ll submit an official report to the company. I’ll ask my manager to have not just JP Morgan, but several Wall Street financial institutions create a product for us.”
“Yes. That’s what I want.”
“Since it's going through the company, there will be a minimum fee.”
“That’s fine. I consider it a necessary expense, of course.”
The stock market crash caused by the coronavirus.
I had some hesitation, as it felt like I was taking advantage of people's misfortune.
But in the opposite situation, I was investing when everyone was gripped by fear and despair.
I was the most curious of all to see what the result of this investment would be.