Golden Spoon Investment Portfolio - Chapter 195

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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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195. I’m looking to add one more stock to my long-term holdings.

Manhattan, New York — One New York Plaza Building.
Seok-won, visiting the Eldorado Fund Office after a long absence, sat on a sofa before the expansive floor-to-ceiling windows overlooking the East River, conversing with Landon Shore and Andrew.

“On my way here, I noticed the yen closed 0.27 yen lower than yesterday. Are Japanese companies still delaying their option liquidations?”

Landon Shore, dressed in a crisp white dress shirt with designer-branded suspenders, shrugged and replied.

“Once it looked like we’d breach 103 yen, two firms rushed to liquidate, but the rest are still holding their ground.”
“If the yen continues to weaken at this pace, our profits will only grow larger. I’d prefer they hold out as long as possible.”

Landon Shore burst into laughter at that.

“Ha ha ha. Couldn’t have said it better myself.”

Andrew, taciturn by nature, wore a knowing smile in agreement.
Seok-won lifted his teacup for a sip, then turned to Andrew, seated to his left.

“Though there are still a few days left, this month’s returns have been quite impressive.”
“We’ve been fortunate to deliver solid results thanks to the interest rate cuts and the internet boom. Of course, even so, it pales in comparison to what you’ve achieved with just a single options contract in Japan, sir.”

As Andrew answered with characteristic humility, Seok-won smiled warmly.

“No matter how strong a bull market is, poor investment decisions lead to losses. Exceeding our targets and generating profits is genuinely worthy of praise.”
“Thank you for seeing it that way.”
“This internet phenomenon won’t be fleeting—internet-related stocks will lead the market for years to come. Focus our investments on dot-com companies like Yahoo and Cisco.”
“I share that view and am structuring my investment portfolio accordingly.”

Landon Shore’s eyes gleamed as he interjected into the conversation.

“Internet companies like Netscape have already seen their stock prices surge considerably. You believe there’s still more room for growth?”

Seok-won nodded without hesitation and replied.

“While the stock prices have risen sharply, considering the explosive growth internet companies are about to experience, we’re really only at the very beginning of this bull market.”

In fact, many experts warned that internet company stock prices were in an overshooting state, and some even began short selling.
However, knowing that the dot-com bubble—a phenomenon that could hardly be called anything but madness—had yet to truly inflate, Seok-won’s eyes saw even the current stock prices as remarkably cheap.

“You’re saying this is just the beginning, when Cisco alone has more than doubled just this year and NASDAQ’s upward momentum has been tremendous?”

Landon Shore asked in surprise.

“That’s right.”
“Wow….”

Watching Seok-won answer so matter-of-factly, Landon Shore let out a hollow laugh, his expression betraying his disbelief.
Andrew too couldn’t hide his complicated expression as he looked at Seok-won.

“Of course, as time passes, even among internet companies, there will be distinctions based on growth potential and performance. But what’s certain is that over the next few years, enormous amounts of money and madness will flood into NASDAQ, creating a massive bull market that will make today’s gains look trivial.”

With concerns about a bubble already present, hearing that prices would rise further caused Landon Shore and Andrew to swallow hard involuntarily.
They couldn’t dismiss it as overly optimistic, because the internet craze was indeed burning hot not just in the stock market but throughout society as a whole.
Moreover, the person making this prediction was Seok-won, who had demonstrated remarkable ability and never experienced a single investment failure, consistently hitting jackpots—making it impossible to ignore his words.

“If the internet craze continues as you say, didn’t we liquidate Netscape too early?”

Landon Shore’s expression filled with regret.

“As I mentioned just now, even in a bull market, not all stocks rise together. Some companies will fall by the wayside.”

Then Andrew adjusted his gold-rimmed glasses with one hand and asked.

“Do you believe Netscape will fall behind in the web browser competition?”
“I can’t predict the outcome prematurely, but with Microsoft as such a formidable competitor, the future won’t be entirely rosy.”

Although Microsoft had hastily released its own proprietary web browser alongside the Windows 95 launch just recently and suffered a complete defeat in the first round amid harsh criticism, it was a company that couldn’t be underestimated.
Both men understood this well, so they nodded in agreement.
Seok-won continued, resting one arm on the sofa where he sat.

“You probably know that Microsoft recently announced it would bundle its own proprietary web browser for free with Windows as a standard feature.”
“Yes. It was such an unexpected declaration that it became a major topic of discussion in the market.”

Andrew answered first, and Landon Shore also shook his head from across the way.

“If we do that, it’s essentially abandoning all web browser development costs. It seems Microsoft is truly determined to crush Netscape.”
“The problem is that even if Netscape dominates most of the market, they won’t be able to charge users for their browser under these circumstances.”
“Exactly. If they ask users to pay when Microsoft’s version is free, users will naturally migrate to Microsoft’s side, creating a real dilemma.”
“Even now, their stock price has risen significantly, but they’re in a chronic deficit state with almost no revenue. If they enter into this race to the bottom with Microsoft, escaping that deficit will become even more difficult.”

At that, Andrew slapped his knee with one hand.

“So you’re saying Microsoft deliberately engineered this chicken game to force Netscape into it.”

Landon Shore, who grasped the situation a beat late, opened his mouth slightly in surprise.

“Unlike Netscape, which only has a web browser, Microsoft holds both DOS and Windows operating systems in both hands, generating revenue from them. They believe they can win simply by enduring.”

This bundling strategy would ultimately become the decisive blow that caused Netscape, despite its superior performance, to lose the browser war to Microsoft and eventually collapse.

“Right now, Netscape is superior in stability and features, so even if it’s automatically installed on Windows, users will still download Netscape instead. But as time passes and Microsoft improves its performance, users will become lazy about installing a separate browser. When that happens, the overwhelming market share difference will gradually narrow like water seeping through, and eventually the tables could completely turn in an instant.”
“It’s a despicable method, but it’s also a sure card to defeat the opponent.”

At Landon Shore’s words, Andrew paused, thinking deeply about something, then spoke.

“As you say, if Microsoft monopolizes not just the operating system but also the web browser, they would become the company that benefits most from the expansion of personal computer adoption that will grow alongside the internet boom.”

Seok-won nodded inwardly, impressed by Andrew’s foresight that extended beyond mere discussion.

“Even excluding the web browser that won’t generate revenue for now, Microsoft’s operating system is essential for all IBM-compatible computers except Apple, so that will be the case.”

Then Andrew’s eyes brightened with interest as he leaned forward.

“Then what do you think about accumulating additional Microsoft stock from now on?”
“That’s a good idea.”

Seok-won turned his head and looked at Landon Shore.

“Use the fund’s capital to increase our Microsoft stake by an additional 3 percent.”
“Understood.”

Then he looked back at Andrew and spoke.

“Separate from the new acquisition, I’ll increase the trading team’s autonomous operating capital by an additional 200 million dollars. Use that to aggressively trade in Microsoft and other internet companies.”

Andrew’s eyes lit up with delight at the news that he would be given significantly more capital to operate independently without separate instructions.

“I won’t disappoint you.”
“Bold bets are fine, but don’t overextend yourself just to chase profits.”
“I’ll keep that in mind.”

After taking a sip of the coffee before him, Seok-won interlaced his fingers and spoke in a measured tone.

“And I’m thinking of adding one more long-term holding alongside Cisco and Microsoft.”

Landon Shore immediately showed interest.

“What is it?”

Though Andrew said nothing, he too perked up his ears and looked toward him intently.
It was only natural to have high expectations—every stock he’d selected so far had been a perfect pick, each one recording tremendous gains without a single failure.
Receiving their curious gazes, Seok-won calmly uttered the company name.

“Enron Energy.”
“…?”

Landon Shore and Andrew, who had naturally assumed it would be one of the internet companies heating up the market, couldn’t hide their bewilderment at the unexpected name.

“Did you just say Enron Energy?”

Wondering if he’d misheard, Landon Shore asked again, and he nodded immediately.

“That’s right.”

Andrew spoke up with a puzzled expression.

“Enron—isn’t that the natural gas company headquartered in Texas?”
“Yes, you seem to know it well.”
“I remember making a decent profit trading stocks when Internos and Houston Natural Gas merged to form Enron Energy.”

Andrew tilted his head slightly, studied his expression carefully, and continued with caution.

“It’s certainly a company of considerable scale with overseas branches in thirty countries worldwide and total assets exceeding fifteen billion dollars, but given its low growth potential and mediocre operational performance, I find it a bit odd that you’d choose it as a long-term holding.”

According to Andrew’s account, until now Enron Energy was merely one of many unremarkable energy companies with nothing particularly distinctive about it.
Since the merger, the stock price had remained stagnant for a long time without significant fluctuations, and it didn’t even pay substantial dividends, which made Seok-won’s choice all the more puzzling.
Then, as if struck by a sudden thought, Andrew’s expression hardened slightly as he asked.

“Did you perhaps discover signs of a sharp surge in energy prices?”
“No, that’s not it.”

When Seok-won shook his head, Andrew’s expression grew even more bewildered.

“Then why are you interested in Enron stock?”
“I’m curious too. It doesn’t seem like the boss’s usual type of company.”

Since Seok-won had never shown interest in the energy sector before, the two men’s confusion deepened.

“I looked into the company and found it to be quite sound—solid financials and good credit. More importantly, our fund’s portfolio seems too heavily weighted toward IT right now, so I’m thinking of buying energy stocks as a counterbalance to achieve better diversification.”
“If that’s the case, wouldn’t it be better to acquire shares in major oil companies like Exxon or Mobil rather than Enron?”

Andrew adjusted his wire-rimmed glasses as he spoke.

“I agree. They’d offer much higher dividends too.”

Landon Shore’s opinion was sound, but Seok-won harbored a different plan he couldn’t reveal.

“That may be true, but large-cap stocks, while stable, move sluggishly and make it difficult to generate returns. Enron, being relatively smaller in scale, has growth potential, so I believe it’s the better choice.”

Seok-won offered a plausible explanation while muttering to himself inwardly.

‘Though it’s built on accounting fraud, it’s a stock that will soon skyrocket just like the dot-com companies. I can’t afford to miss this opportunity.’

Though there was something forced about his reasoning, his resolve seemed unshakeable, so the two men set aside their discomfort and offered no further objections.

“Then how much of the stake should we accumulate?”

As if he’d already considered this, Seok-won answered immediately.

“Let’s acquire 10% of the total shares over the course of next year.”

Andrew nodded after briefly estimating Enron’s stock price and market capitalization in his mind.

“Yes, I’ll do that.”

‘I’d love to buy more Enron shares while the jackpot is guaranteed, but if I do that, I might get caught in the backlash when the accounting fraud scandal breaks later.’

If a major shareholder sold off all their shares at the peak and an accounting fraud scandal erupted shortly after, it would be impossible to escape suspicion that they were involved in management’s fraudulent schemes from the beginning.

‘If I don’t just sell the shares but also short-sell them, the criticism will be even more intense.’

To avoid that, I had to settle for this much, as disappointing as it was.

‘Instead, I can make double the profits I’m missing from short-selling.’

It was a bit like covering one’s eyes and pretending not to see, but if I short-sold and then released a sell report expressing concerns about accounting manipulation at an appropriate time, I could evade some of the market’s suspicion and criticism.
Seok-won smiled darkly as he thought about the money he would make from Enron stock going forward.

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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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