Golden Spoon Investment Portfolio - Chapter 10

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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10. Keep holding.

Manhattan, New York, USA.
Salomon Brothers headquarters trading floor.
Across a sprawling expanse equivalent to ten tennis courts combined, well over a hundred traders moved frenetically at their stations.
A single click, a single phone call could mean losing or gaining hundreds of thousands of dollars, so everyone maintained a state of heightened tension.
Those who turned a profit would receive bonuses at year’s end that exceeded their annual salary, but a single careless mistake could cost them their position the very next day.
Thus the traders never allowed themselves to relax, their eyes fixed on monitors where graphs danced like choreography, constantly placing orders and tapping away at computer keyboards.
For traders fighting tooth and nail over a mere 0.01% profit margin, this place was like the Colosseum of ancient Rome, where gladiators risked their lives in combat.

“We’ve got a sell order at 430!”
“How much?”
“Buy 100 at the lowest price! Now!”
“Why is gold futures doing this today.”
“Damn it! The lira’s collapsed too.”

Amid the relentless shouting of traders clutching their receivers.
Cox sat at one desk, staring intently at the pound exchange rate fluctuations displayed on his Bloomberg terminal.
The pound, which had seemed to recover briefly, resumed its downward trend and had now fallen to 1.4300 dollars.

“At this rate, something’s really going to blow up.”

At first he’d dismissed it as unlikely, but as time passed, the atmosphere grew increasingly ominous.
Cox drummed his fingers on the desk in contemplation for a while, then printed out the pound’s price movement graph from the past week and stood up.
He walked to Paulson’s private office, separated by a glass partition at the back, and knocked lightly before opening the door.
As he entered, Paulson, seated at a spacious desk and on a phone call with someone, looked up and met his gaze while still holding the receiver to his ear.

“You’re certain about this? Hmm. Alright.”

Paulson gestured toward the sofa while continuing his conversation.
Cox settled onto the leather sofa and waited quietly for the call to end.
Shortly after, Paulson ended the call, rose from his chair, and walked over to the sofa.

“Sorry to keep you waiting.”
“Not at all.”

Paulson took the seat of honor, leaned back against the plush sofa cushions, and asked.

“Yes. What is it?”

Cox then laid the printed papers he’d brought down in front of Paulson.

“Would you take a look at this?”

Paulson picked up the paper and immediately recognized what graph it was.

“A pound exchange rate fluctuation chart.”
“Exactly.”

Cox leaned forward as he spoke.

“As you can see, the downward trend has continued from the beginning of the month until now.”

Paulson studied the graph intently with a soft hum, then lowered the paper in his hand.

“The exchange rate was 1.4800 dollars per pound on the first day of September.”
“That’s correct.”
“It’s fallen quite a bit since then.”
“The problem is that this trend doesn’t appear to be reversing.”

Paulson gazed at him steadily and asked in a subdued voice.

“Are you saying Britain will fail to defend the exchange rate and withdraw from the ERM?”

Cox answered carefully.

“I can’t say for certain, but given the current atmosphere, that possibility is quite high.”
“Even though the British Prime Minister was confident there are sufficient foreign reserves in the Bank of England’s coffers?”

At Paulson’s words, Cox shrugged.

“No matter how many foreign reserves are stored in the coffers, if the selling pressure is greater than that, it will inevitably collapse, won’t it?”
“That’s true enough.”

Paulson nodded in agreement and spoke.

“I was already keeping an eye on the pound’s unusual movements and monitoring what other investors were doing.”
“….”

Given Cox’s experience grinding through this industry and the intelligence flowing to him, there was no way Paulson wouldn’t know what Cox had seen.

“Sure enough, not just the hedge funds—JP Morgan and Goldman Sachs have started shorting the pound.”
“As expected….”

Confirming his prediction, Cox let out a low exclamation, his eyes gleaming with excitement.

“At first, everyone was uncertain, but once Hamilton raised the flag and the Bank of England actually showed signs of wavering, they all rushed in without hesitation, desperate to grab as much meat from the bone as possible before it was too late.”
“So….”
“I can’t say for certain yet, but the situation is definitely turning against the Bank of England.”

Hearing this, Cox spoke with urgency in his expression.

“Then we can’t afford to sit idle, can we?”

At that, Paulson’s lips curved into a smile.
A Wall Street trader who could witness such an opportunity to make serious money and not seize it would be unfit for the profession.

“I actually had a meeting with Dan this morning.”

Dan was the Chief Investment Officer of Salomon Brothers.

“Then….”

Paulson spoke, watching Cox’s expression fill with anticipation.

“A feast of this caliber—we can’t afford to miss it.”

That was exactly what Cox had been hoping for.
Beaming with delight, he clenched his fists tightly and nodded with barely contained excitement.

“Absolutely right, sir.”
“Management has approved 10 billion dollars in operating capital. Maximize our returns within that limit.”
“Leave it to me.”

Paulson spoke while holding up one finger, and Cox answered confidently.
Since the Bank of England was already showing signs of wavering, rather than worrying about failure, his mind was filled with thoughts of earning a high rate of return and receiving a substantial bonus at year’s end.
And Paulson harbored the same expectations for a generous bonus.
Then, struck by a sudden thought, Paulson spoke.

“By the way, now that I think about it, there was a client who made a pound short investment last time.”
“Are you referring to Mr. Park?”
“Yes, that’s right.”

Though I’d only met him once, he was quite an impressive young man.
Setting aside his handsome appearance, his piercing gaze that seemed to see through people and his composed demeanor were qualities rarely encountered.

“Has he sold the pound?”
“Yes. He’s already sold 600 million dollars worth of spot and futures contracts.”
“What’s his average entry price?”

Paulson asked with interest, and Cox answered immediately.

“1.4650 dollars.”

Paulson then expressed surprise and admiration.

“Wow! He’s already made over 2% in profits.”
“Since the downward trend continues, the profit margin will only grow larger as time passes.”
“Indeed it will.”

Not only the hedge funds led by Hamilton, but also major investment banks like JP Morgan, Goldman Sachs, and now Salomon Brothers had joined the attack on the Bank of England, so the pound’s price had no choice but to plummet further.

“I thought he was just some reckless fool who happened to win a lottery jackpot, but he’s remarkably fortunate. He’ll make an absolute fortune.”

However, Cox saw it somewhat differently.
Judging by the way he had timed his sales orders precisely and distributed them, it didn’t seem like mere luck.

“It’s not simply a matter of luck. Of course, he couldn’t have predicted that circumstances would unfold this way, but he must have invested based on a prediction that the pound would weaken.”

Then Paulson recalled the image of Seokwon, who had stubbornly negotiated for a 10x leverage.

“That may well be true. In any case, he’s no ordinary man.”

Cox nodded slightly, clearly sharing the same sentiment.

* * *

Four days later, in Cambridge, Massachusetts.
After my Monday morning lecture ended, I made my usual stop at the bookstore, picked up the Wall Street Journal from the stand, and headed to the counter.
After paying and receiving my change, I settled into an outdoor table outside and unfolded the newspaper.
Immediately, a headline on the front page caught my eye.

[Bank of England’s Massive Pound Purchase! The Beginning of a Counterattack?
At the opening of trading Monday morning, exactly as Treasury Secretary Henry had publicly declared before reporters on Friday, the Bank of England injected a staggering 700 million dollars at once to purchase pounds in bulk.
With Germany hinting at the possibility of interest rate cuts, the pound, which had been in decline, stopped its fall and showed a slight rebound.
Thereupon, Treasury Secretary Henry told reporters he encountered on his way to work that “there is still much money remaining in the Bank of England’s coffers,” and warned hedge funds including Hamilton: “If you wish to go bankrupt, feel free to keep attacking.” He displayed strong confidence in defending the pound.
In these circumstances….]

For me, who had bet on a short position, the pound’s halt in decline was unwelcome news.
However, my expression as I lowered the newspaper showed little concern.
I pulled out my phone from the backpack beside me and pressed a speed dial.
The line connected, and shortly after, Cox, my broker, answered immediately.

[Hello.]
“It’s me. What’s the current exchange rate?”

Cox answered immediately, apparently having been monitoring the exchange rate situation.

[1.4000 dollars per pound.]
“So it’s risen five cents from yesterday.”
[That’s correct.]

Through the phone, I could hear the constant noise of the trading floor, with voices shouting orders incessantly.

[You’ve heard about the Bank of England’s intervention, I presume.]
“Of course.”
[Your profits would be substantial even if we closed the position now. What would you like to do?]

Without a moment’s hesitation, I answered his question.

“I can’t be satisfied with this much. Keep holding.”
[Haha. I thought you’d say that.]

Cox chuckled, apparently amused that I was boldly pushing the position forward.

[You still have available balance. Would you like to place an additional order?]
“Let’s observe the market situation a bit longer.”
[Very well.]
“Contact me immediately if there’s any change in the market.”
[Of course.]

After ending the call, I gazed down at the Wall Street Journal spread across the table, arms folded across my chest.

“If the British government and the Bank of England directly intervened in the market yet only managed a five-cent rebound, this isn’t bad news—it’s good news.”

The fact that the Bank of England had poured massive amounts into the market yet the rally stalled at this level meant they had failed to completely suppress the selling pressure.

“This actually gives the attacking side more confidence to dump pounds.”

I sensed that the moment to pull the final trigger and cut off the Bank of England’s lifeline was drawing near.
After briefly considering when to deploy all remaining reserves, I gathered my bag and stood up.
Since I had no afternoon classes, I cycled directly back to the dormitory.
As I climbed the stairs and reached for the key in my pocket, I heard movement inside and simply grabbed the handle to open the door.

“Hey!”

Roy, who had been sitting on the floor playing Street Fighter, suddenly jumped up and spoke as if he’d been waiting for me.

“Class ended ages ago—why are you just getting back now!”
“What are you talking about? Since when have you been waiting for me?”

I regarded Roy with a half-exasperated expression.
With a headband wrapped around his head, dark circles under his eyes from gaming all night, and a controller in one hand, he was a true gaming addict.
I enjoyed games too, but not to this extent—I couldn’t fathom why he’d suddenly become like this.

“Don’t you have a lecture today?”
“Of course I do.”
“Then why are you doing this? Aren’t you going?”
“Just forget it!”

At such an audacious attitude, Seokwon found himself at a loss for words.
What in the world was this roommate of his doing, having gotten into Harvard University of all places?
Here was a lecture that others would pay good money to attend, yet he had the nerve to boldly declare it was garbage.

“Hey, hey. Forget that—we don’t have time, so let’s play a round.”
“Again?”

Seokwon felt a headache creeping in and made no effort to hide his exasperation.
Ever since he’d recklessly challenged someone he didn’t recognize as a master a few days ago and gotten thoroughly beaten, losing ten dollars in the process, Roy had been pestering him about playing games whenever they crossed paths, insisting he needed to settle the score.

“I told you—you’re not my match. Go practice more and come back.”
“This time is different!”
“You said the same thing this morning before getting crushed. You kept dragging me into it and I almost ended up late.”
“No, I’ve prepared a new finishing move—come on, let’s play again!”

Seokwon watched Roy thrashing about on the floor and whining, then simply turned away without a word.

“Hey! Where are you going!”

Roy shouted from behind, but he paid no attention and simply closed the door.

“…Can’t I change roommates right now?”

I don’t want to be with this guy.

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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