The Genius Investor Who Picks up The Conglomerates - Chapter 347



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Episode 347 If you just kick the crutches away, it will completely collapse.

Will the stock market open even when the country is devastated by disaster?

Surprisingly, unless the situation is really worst, the stock market is open.

How is this possible when the country is in ruins?

This was because several systems were in place to maintain ‘transaction continuity’ as long as the minimum social system was maintained.

Of course, as an exception, there was a precedent in which the New York Stock Exchange was closed during World War I, but each country’s exchanges are basically obligated to maintain ‘continuity of transactions’ and emergency response plans are in place to flexibly respond to localized hostilities. Step-by-step response plans for natural disasters, threats to the metropolitan area, etc. are prepared for each scenario.

Japan was no different.

Even though major cities were swept away by the tsunami and the entire city was polluted by volcanic ash, the stock market was still active.

And finally, the long-awaited option expiration date arrived.

As it was a day of great volatility, the stock market was running wild from the morning.

From the perspective of a market maker who had to sell options, he had to deal with the volatility of the expiration date and tried his best to protect against the falling index by raising available funds, but it was not enough.

Japan was hit twice in succession by the Hiroshima atomic bomb disaster, and virtually the entire economy was paralyzed, unable to overcome the fear that weighed down the entire market.

There were expectations that the index might rebound as it had fallen to the point of falling, but today it also plunged more than 4.7%, hitting the lowest point of the year.

Contrary to expectations, as the slump continued, the price of put options soared frighteningly, and the price of call options quickly turned into nothing more than a scrap of paper.

Trading volume also reached an all-time high, with a whopping 24.85 million contracts traded in one day, far surpassing the previous record of 21.68 million contracts.

***

“How many times?”

Stephanie got up from her seat and looked at me with her mouth open.

“It’s about 150 times more. Well, there’s a lot to take into account.”

A heavy silence fell in the conference room, which had always had a lively atmosphere.

Stephanie bit her quivering red lips, took a deep breath, and asked again.

“So… the profit from the Nikkei 225 put options I bought before… has now increased 150 times?”

“Honestly, I don’t really feel it yet… That’s right.”

“Ha… Oh my god. What is this…”

Stephanie, broken down like a paper doll, mumbled something like a crazy person.

“Was this… a real investment? What on earth am I working so hard for…? Now, wait a minute! Dylan invested 200 billion won, so if it’s a 150 times return…? Hehe.”

Stephanie’s head turned as she let out a strange scream.

“30 trillion…? This, 200 billion became 30 trillion?”

“Yes. I guess so. This is embarrassing for no reason.”

I looked embarrassed and scratched my right cheek.

I was warned not to show off my money anywhere, but they were trustworthy colleagues and they knew that I had bought Nikkei put options in the first place, so there was no reason to hide it.

Even Matthew, who was rarely emotionally shaken, could not hide his embarrassment and astonishment.

“There is a precedent that John Paulson, who predicted the Lehman Brothers crisis, made 15 billion won through a large bet… but this… I’m speechless. I couldn’t have known in advance that something like that would happen in Japan… “Oh, I’m sorry. I must have lost my mind for a moment.”

Seeing Matthew rambling for the first time felt quite refreshing.

Well, I have some idea of ​​how I will be viewed from their perspective.

The venture investment method I had been doing so far had made no sense, and the fact that I had achieved this result by investing in derivatives that made even more sense, especially options, which were said to be extremely risky, was a story that was hard to believe even when I was being criticized.

“I’m afraid that everyone will misunderstand, but it really was a combination of coincidences. You don’t think I knew in advance that a major earthquake would occur and Mt. Fuji would explode because I was a time traveler in some kind of time machine, right?”

“Keuhum…”

Looking at Kim Seon-gi and Stephanie’s shocked expressions, it seemed like they thought that way.

“How do I know that common sense won’t detect it even with the most advanced equipment? Don’t you?”

“That’s true, but… Didn’t your ancestors tell you something in your dream or something like that?”

When Stephanie, a staunch Christian, asked a question about my ancestors, I almost burst out laughing.

To that extent, it was proof that she was not thinking properly right now.

“I’m sorry, but I don’t know who my ancestors are.”

“Oh. I’m sorry. I didn’t mean it that way…”

Everyone knew about my family history, so Stephanie seemed sorry.

“No! I didn’t mean to offend you. I’ve never really had a dream. I was just chasing a cow and catching a mouse.”

“I have to say it right away. Let alone a mouse, this is like catching a dragon. Huh… If this fact is revealed, the whole world will be turned upside down. There has never been a case where some hedge funds made a large profit due to an unexpected disaster. “It’s not true, but there are only a handful of cases where people made bold investments like Dylan and reaped ridiculous profits.”

Matthew, who was as stiff as a statue, also lowered his head.

“Stephanie is right. In most cases, only a small amount of money was purchased for hedging purposes, so although the rate of return may be huge, the actual profit is not that large. But in Dylan’s case… it was not a hedging purpose, but a naked position. “It’s okay to say this, but if you saw Dylan’s investment portfolio on Wall Street, people would immediately call you crazy.”

Naked Position

It literally means being naked in front of market risks, and refers to a speculative position that only invests in direction without any safety measures.

To put it simply, it also meant a ‘nothing’ or ‘nothing’ strategy.

“Well… it may be a disaster for Japan, but Dylan has once again achieved enormous wealth. He is now overwhelmingly number one in Korea’s wealth rankings. Congratulations.”

“You’re truly amazing, CEO. Congratulations.”

“Thank you for the congratulations, but I’m not particularly happy. Even if we have to avoid material things, many people have died or been injured. Through this investment, I learned that songworms have to eat pine needles to survive. I have no intention of investing in anything other than venture investment in the future. “It’s not my style either.”

This was truly sincere.

The investment started because of the black light of the Japanese flag, and I expected something bad to happen, but I never expected that a natural disaster that would destroy the country would occur twice in a row.

As a result, I made huge profits that made my hands and feet tremble, but I was hardly happy.

“Even though it’s the same amount of money, it’s so different…”

In fact, this investment was money earned through the pain and suffering of a nation.

On the surface, it was the same amount of money, but its nature was very different from any investments I had made so far.

I’m not crazy about money, and I didn’t necessarily want to make money this way.

“How will the situation in Japan progress in the future? I heard that they are making every effort to normalize society…”

“It probably won’t be easy.”

Matthew, who had the most high-quality information, gave an unexpected answer.

“Why? Of course, huge economic losses are inevitable, but isn’t Japan a country that will collapse to this extent?”

“Of course, it will not collapse. No, to be precise, we will not allow neighboring countries to collapse. If Japan truly collapses, the impact on the world economy will be unprecedented.”

Kim Seon-gi took over the conversation as if helping.

“To date, the number of confirmed deaths is over 158,000, and the estimated amount of property damage is approximately 1,500 trillion won. Of course, it will not be ruined easily, but it cannot be denied that the current situation is the worst. Moreover, compared to Japan’s GDP, the government Japan’s debt ratio is about 250%, the highest in the world, and despite investing such a huge amount of public funds, it suffered an economic recession for several decades and finally suffered this great disaster. The impact is indescribable. The amount of money that Japan has to spend to recover from the damage is an astronomical amount. To make matters worse, Japan’s national bonds will soon expire. “The government is probably going crazy trying to figure out how to overcome this situation.”

“Hmm… Executive Director Kim, what do you think the Japanese government will do?”

“There are only two cards they can choose. The first is for Japanese citizens and financial institutions to move capital to overseas investments with high interest rates and refinance by issuing new government bonds. The second is for Japan, which is blocked from refinancing, to repay. “The second option is probably the most likely one: to sell off a large chunk of your net worth scattered around the world.”

“If they sell their net assets… the aftereffects will be enormous.”

“NASDAQ and the Eurozone will plummet, and large domestic companies will also suffer a fatal blow. No, the global economy will be shaken. In a way, the aftermath of the catastrophe originating from Japan will spread throughout the world. So even the United States and China will be affected in various ways. We will try to help. We are actually making that move, and it will take some time, but Japan will get back on its feet.”

The atmosphere seemed to be somewhat refreshed by the somewhat positive outlook.

“More than that, I’m curious to see what the future holds for Suyomi’s group, which lost its entire lower body.”

“Now that I think about it, the damage to Suyumi’s group will be severe as well.”

“It’s not that bad. Of all the companies in Japan, the one that has suffered the most damage is definitely the Suyomi Group.”

“Why?”

“The production infrastructure of Suyomi Motors and Heavy Industries, which can be said to be the backbone of the Suyomi Group, is concentrated in the Kochi, Wakayama, Toyohashi, and Shizuoka areas. This is also an area devastated by the West Japan Earthquake. The production facility itself was wiped out. Of course, not only has thousands of workers been lost, virtually all production has been halted, but the ultra-precision facilities of Susumici Electric have also been reduced to nothing but scraps due to fine volcanic ash. “The only thing holding on is Suyomi Financial, but even that is reeling from an unprecedented slump. Wouldn’t it be appropriate to say that this is a crisis?”

-Jeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee

I glanced down and blurted out a word without any expression.

“Then if someone just kicks those crutches away, it’ll completely collapse.”