Golden Spoon Investment Portfolio - Chapter 334

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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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334. I didn’t expect to take such a direct hit.

Seok-won sat in his chair with a satisfied expression as he watched Manager Choi Ho-geun and his team struggle through every moment on the monitors.

“For a first trade, they’re handling it well without panicking.”

What pleased me most was that rather than simply following my instruction to sell the KLCI futures at 650, they were actively adjusting prices and striving to maximize profits on their own initiative.
I reached for my coffee mug, but finding it empty, I set it back down and checked the Hong Kong and Tokyo futures trading windows displayed side by side on the monitors.

“If things continue like this, we’ll easily sell the target volume.”

Then I shifted my gaze to another monitor on the left.

[MYR : 3.06 (▲ 0.20)]

As Eldorado and other hedge funds unleashed a fierce bombardment, Negara Malaysia Bank mounted a desperate defense, and the ringgit exchange rate remained locked at 3 ringgit per dollar, locked in an intense battle.
Meanwhile, as the ringgit came under attack, foreign hot money fled en masse due to concerns over exchange losses, and the Malaysian stock market was literally collapsing.

[KLCI : 941.23 (
136.51)]

Watching the index approach a 150-point plunge, I stroked my cleanly shaven chin with one hand and furrowed my brow.

“The initial decline is much steeper than I anticipated.”

If this continued, fear would grip the market, and it could create problems in profiting from KLCI futures.
As I watched with growing concern, the market chart suddenly froze as if the computer had crashed.

“…!”

I stared at the Bloomberg terminal with a look of disbelief, and sure enough, a breaking news alert was scrolling across the bottom of the monitor.

[Circuit Breaker Triggered Due to Excessive Decline in Malaysian Stock Market!]

“This is troublesome. So it’s come to this after all.”

Seok-won smacked his lips and muttered regretfully.
A circuit breaker was a measure that temporarily halted trading in stock or futures markets when declines became excessively severe, meant to calm investor panic.

“But in a situation like this, simply stopping trading for a while won’t likely halt panic selling.”

Rather, the very fact that authorities had to trigger a circuit breaker—signaling how dire the market had become—could intensify selling pressure through fear and anxiety.
Seok-won tapped his fingers rhythmically against the wooden desk as he spoke.

“It seems we won’t be able to generate the profits we’re hoping for with KLCI futures alone.”

Just then, the telephone rang, and Seok-won picked up the receiver.

[Chairman, the circuit breaker just triggered on the Malaysian stock exchange. Trading has been halted.]
“I saw it already.”

Seok-won leaned back in his chair as he spoke.

[With the damned circuit breaker activated, buy orders have vanished and trades aren’t going through anymore.]

Manager Choi Ho-geun, who had been speaking in a measured tone, suddenly let slip a curse and hastily apologized.

[I got too worked up… My apologies.]
“It’s fine. More importantly, how many contracts have we executed so far?”

Manager Choi Ho-geun answered immediately.

[Combined between Hong Kong and Tokyo, just under three thousand.]
“Still, you’ve managed quite a few executions in that time.”
[But we’re still far short of our target.]
“For now, let’s continue selling KLCI futures as much as possible. Once it becomes too difficult, we’ll shift our target elsewhere.”

Uncertainty crept into the voice of the anxious Manager Choi Ho-geun.

[What other target are you referring to?]

Seok-won moved his mouse while holding the receiver to his ear, opening a new stock price window before continuing.

“Short-selling shares of Japan’s Big Four Securities Firms.”
[Pardon?]

Manager Choi Ho-geun started in surprise and asked back.

[You’re referring to Japan’s Big Four Securities Firms—Nomura, Daiwa, Nikko, and Yamaichi Securities?]
“That’s right. You know your stuff.”

As a working professional in the industry, there was no way I could be ignorant of securities firms that ranked among the top tier not just in Japan, but across all of Asia.

[But those are major stocks included in the Nikkei Index. Isn’t short-selling them carrying an enormous amount of risk?]

At that, Seok-won smiled broadly and spoke.

“It’s fine. Soon enough, all four of their stock prices will fluctuate significantly. If we strike then and pull out, we can make quite a tidy profit.”
[Is there some hidden bad news that I’m not aware of?]
“Exactly.”

Manager Choi Ho-geun fell silent for a moment at the confident reply, then carefully asked again.

[Would you be able to tell me what that bad news is?]
“Operating losses totaling 3 billion dollars will surface very soon.”
[Really? Is that true?]
“Yes. They haven’t disclosed it yet and are keeping it hidden, but all four securities firms have already confirmed losses of 1 billion dollars each.”

Manager Choi Ho-geun paused to absorb the meaning, then spoke urgently.

[So when you say they’ll suffer 3 billion dollars in losses, you don’t mean that’s the combined total—you mean each company will individually suffer that much loss?]
“That’s correct.”

Through the receiver, Manager Choi Ho-geun drew a sharp breath.
No matter how massive Japan’s Big Four Securities Firms were, operating losses of 3 billion dollars—not yen, but dollars—would inevitably deal a severe blow to their stock prices.

[If that truly happens, it would have a considerable negative impact on their stock prices.]
“If the Japanese market sentiment were favorable, they might weather it lightly. But in the current climate, where investment psychology is already dampened by the strong yen, the bad news will only loom larger.”
[With such anxiety inevitable, that makes sense.]

Manager Choi Ho-geun nodded in agreement, then a sudden thought gave him pause.

[This must be extremely confidential information known to only a select few. How on earth did you come to know something like this…?]

Seok-won then replied casually.

“I’m the one who made a profit by entering into option contracts with Japan’s Big Four Securities Firms.”
[…!]

Manager Choi Ho-geun couldn’t hide his bewilderment at this unexpected revelation.

[Y-you entered into option contracts with the chairman? What does that even….]
“Last year, I placed CDS option contracts worth approximately one billion dollars each against the stock markets of Thailand, Indonesia, and Korea.”

The sound of Manager Choi Ho-geun swallowing hard came through the receiver clearly.
Seok-won simply shrugged and continued speaking regardless.

“As you know, the Thai baht attack caused the SET index to plummet below 600. That triggered one of my option contracts.”
[D-does that mean you’ve made four billion dollars in profit from the option contract?]
“Exactly right. If the remaining two options are triggered, I’ll receive an additional eight billion dollars.”

Manager Choi Ho-geun was so stunned he could barely form words.
The sheer scale of the option contracts themselves was shocking enough, but the fact that I had predicted them correctly and secured such enormous profits left his jaw hanging open.
At the same time, a thought occurred to him—had I anticipated long ago that Thailand and other Southeast Asian nations would face a currency crisis and laid the groundwork in advance?
Otherwise, it would be incomprehensible to enter into such a gamble-like option contract based on any rational logic.

‘Even the Japanese securities firms must have thought it was impossible, which is why they agreed to the option contract.’

Now it became clear that the instruction to realize profits when the domestic market was strong last year and convert all operating funds to dollars was preparation for this very moment.
As his thoughts reached this point, a chill ran down his spine.
He couldn’t help but marvel at Seok-won’s brilliance and foresight in anticipating everything from the beginning and drawing up such a grand strategy.
Manager Choi Ho-geun immediately responded to my instructions with a far more proactive attitude than before.

[I’ll proceed with short-selling the stocks of Japan’s Big Four Securities Firms as you instructed.]
“With the help of the Eldorado Fund’s Japan branch, the betting should go smoothly.”
[Yes! I’ll handle it that way.]

After exchanging a few more words, Seok-won ended the call and gazed at the stock price charts for Japan’s Big Four Securities Firms displayed on the monitor, fingers interlaced.

“Since the Eldorado Fund is a party to the CDS option contract, if we short-sell directly, it could create troublesome issues later. So I’ve been keeping our hands off it. This actually works out better.”

After all, Daehung Venture Capital was also my own property, just like the Eldorado Fund, so it was essentially the same as covering one’s eyes and pretending ignorance.
But if I conducted the short-selling through a different foreign securities firm, profited, and then disappeared, even if the other party later discovered that Daehung Venture Capital was connected to me, there was little they could actually do about it.

“Still, just to be safe, I should instruct them to create a shell company in the Cayman Islands and conduct the investment through that intermediary.”

In the aftermath of the IMF crisis, both the Korean government and corporations found themselves—eyes wide open—knowingly falling victim to the schemes of foreign hedge funds exploiting tax havens and shell companies, unable to do anything but watch.
As I paused to gather my thoughts, the ringtone of my mobile phone echoed from the corner of my desk.
When Seok-won answered, the familiar voice of Porter, the Japan branch director, came through.

[It’s Porter, boss.]
“Actually, I was about to call you. Good timing.”
[Have you already heard the news?]

Porter’s branch director sounded startled and spoke urgently.
Sensing something amiss, Seok-won’s brow furrowed slightly.

“What news? What are you talking about?”
[The announcement that just came out from Indonesia’s central bank.]

Seok-won quickly adjusted his grip on the receiver.

“I haven’t heard anything about it. Has something happened in Indonesia?”

Porter’s branch director immediately relayed the urgent news.

[Indonesia’s central bank has just announced they’re expanding the exchange rate band from 8% to 12%.]

Caught off guard by this unexpected development, Seok-won straightened his posture and asked urgently.

“Really?”
[Yes. It’s coming through as breaking news on Bloomberg right now, so please check it.]

With the receiver still pressed to his ear, Seok-won turned his head to look at the Bloomberg terminal installed on one side of his desk.
Indeed, the news of Indonesia’s central bank expanding its exchange rate band was scrolling across the screen as breaking news.
Seeing this, Seok-won let out a low, wry chuckle.

“Huh. I didn’t see that one coming.”

Having watched neighboring countries like Thailand crumble helplessly under the assault of currency speculators, the Indonesian government had struck first before suffering the same fate.
The hedge funds had exploited the narrow exchange rate bands—which effectively pegged their currencies to the dollar—as a weakness and had been launching attacks based on that vulnerability.

‘But if they widen the exchange rate band first, attacking becomes far more difficult.’

With this move, even if the hedge funds aggressively targeted the Indonesian rupiah, the profits they could reap would inevitably shrink.

“It’s as if they’ve deliberately wounded themselves to prevent anyone else from touching them.”

Seok-won shook his head slowly as he spoke.

[If this continues, the Indonesian stock market might hold up better than expected rather than decline, wouldn’t it?]
“Hmm.”

Seok-won recalled the terms of the CDS option contracts he had concluded with Japan’s Big Four Securities Firms, and he furrowed his brow, letting out a low groan.

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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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