Golden Spoon Investment Portfolio - Chapter 357

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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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357. You’ve timed this perfectly. Well done.

Quantum Fund Headquarters, 7th Avenue, Manhattan, New York.
In the spacious Executive Office, I sat in the center of the sofa with Rodney, my CIO, and Ian, my Chief Manager, flanking me on either side as we conversed.

“I thought they’d go all-in defending the exchange rate, but now they’re propping up the stock market too. It seems they underestimated us.”

Rodney glanced cautiously at my subdued tone before responding.

“Perhaps it’s the opposite, sir. They’re coming in strong from the start precisely because they’re afraid.”
“I agree with that assessment. Unlike the countries we’ve faced before, Hong Kong’s authorities are financially sophisticated and understand the nature of hedge funds well. They must have concluded that if they lose the initiative and begin to fall back, it will become unmanageable.”

Ian, my Chief Manager, also concurred with Rodney’s analysis.
I acknowledged Hong Kong’s formidable strength—a city long called the Pearl of the Orient, serving as Asia’s trade and financial hub—and nodded slightly before placing the Cuban cigar I’d been holding between my lips.
I flicked my Zippo lighter and ignited the cut end, then drew the cigar smoke deep into my lungs before exhaling it slowly.

“How much in dollars has Hong Kong spent so far?”

Ian, my Chief Manager, answered immediately.

“Over 5.1 billion dollars in exchange rate defense, and we estimate 1.6 billion dollars spent on stock purchases.”
“That’s just under 7 billion dollars combined.”

Rodney leaned forward in his seat as he spoke.

“With remaining foreign reserves around 80 billion dollars, if this rate of depletion continues, they won’t be able to hold out for three months.”

I tapped the armrest of the sofa rhythmically with the thick cigar between my fingers as I analyzed the situation.

“Hedge funds that have caught the scent of money will keep piling on with short selling. As they counter that while purchasing stocks to prop up the Hang Seng Index, their reserves will deplete far more rapidly.”
“The Hong Kong authorities understand that too. Rather than dragging this into a prolonged war, their strategy from the outset is to come in overwhelmingly strong and force us to withdraw early.”
“There’s no benefit in prolonging this, so that’s what they’ll do.”

I crossed one leg over the other and turned my head to look at Ian, my Chief Manager, with an inquiring gaze.

“What’s the atmosphere like in Beijing?”
“Like a turtle hiding its entire body within a hard shell, crouched low on the ground, they’re closely monitoring the foreign exchange crisis sweeping across Asia.”
“Is there any sign they’ll join this fight, as the Hong Kong Government hopes?”
“So far, there are no such movements. Rather, they’re drastically lowering the permitted amount of foreign currency outflow for both individuals and corporations, extremely vigilant about keeping dollars from leaving China.”

At that, Rodney interjected with an addition.

“It appears unlikely that China will intervene, as we anticipated.”

George Hamilton nodded slightly, as if in agreement.

“But if this fight drags on, we can’t predict what unexpected variables might emerge in the meantime.”

As I said this, my eyes gleamed sharply.

“Fortunately, the Hong Kong Government isn’t just raising its guard and playing defense—they’re mounting a strong counterattack. Let’s pour all our strength into this at once and finish it as a short-term battle.”
“Then we’ll increase the scale of Hong Kong Dollar sales in the spot market beyond current levels.”
“Do that.”

Having delegated the task, I placed a cigar between my lips.

“If, contrary to expectations, we see even stronger selling pressure instead of a retreat, and their foreign reserves melt away rapidly, those Hong Kong bastards will regret their hasty decision to strike back so aggressively.”

***

The next day.
Bruno Karl and David Iverson, founder and trader of Goliath, a mid-sized hedge fund, were sweeping through Asian nations alongside other Wall Street hedge funds like a swarm of ravenous locusts, raking in profits that far exceeded their annual targets.
Since transactions were primarily occurring across the Pacific in Asia, they’d been living with reversed day and night cycles for several months now, yet both men’s expressions remained remarkably bright.
Karl, who had let his beard grow thick and bushy by even skipping time to shave in his dedication, ambled over beside Iverson with a toothbrush still in his mouth.

“You checked the Hang Seng Index?”

Iverson, sitting at his desk in a short-sleeved shirt emblazoned with the Columbia University football team logo, made a disgusted face at the sight.

“Finish brushing your teeth and come back, will you?”
“I’m doing it right now.”
“Damn it. That’s gross.”

Then, worried the toothpaste foam might splatter, he pushed his chair back slightly and picked up a mug of coffee to respond.

“It broke through 15,000 in an instant and looked like it would reach the previous high, but it’s just floundering without pushing any higher.”
“With the exchange rate unstable and short-term interest rates up 1.5%, investors are selling risky assets like stocks and moving to deposits, or pulling out of Hong Kong entirely.”

David Iverson brought a mug to his lips and sipped the cold coffee, responding matter-of-factly.

“So investors are viewing the Hong Kong Government’s stock market intervention as a selling opportunity, contrary to their intentions.”

Bruno Karl half-heartedly moved his toothbrush a couple of times and shrugged.

“Since the risk hasn’t been completely eliminated, if I were in their position and someone wanted to buy, I’d sell first and then watch how things develop.”
“Yeah. That makes sense.”

David Iverson shared the same view, so he nodded in agreement.

“By the way, the Eldorado Fund still isn’t participating in the Hong Kong dollar attack, right?”
“Right. From the way they’re selling Hang Seng futures, it’s clear they’re betting on shorts. But the fact that they’re not touching the Hong Kong dollar is what bothers me.”

David Iverson’s expression grew troubled.
Though the exact returns were unknown, the Eldorado Fund was suspected to have made the most profit from this Asian currency crisis so far, having timed their moves with remarkable precision.
Especially since the two of them had followed the Eldorado Fund’s movements during the peso bet and made a tidy profit themselves, they paid even closer attention.

“Could they be keeping China’s potential involvement in mind?”

As Bruno Karl muttered this, David Iverson set his mug down on the desk and responded.

“If that were the case, they would have taken longs in the futures, not shorts.”
“That’s true.”

No matter how much they speculated, they couldn’t fathom the Eldorado Fund’s intentions, which left them frustrated.
Then a beeping alert sounded, and both men’s eyes instinctively snapped to the monitor.
Bruno Karl, witnessing a massive dump of 3 billion Hong Kong dollars all at once on the Tokyo Foreign Exchange Market that had just opened, widened his eyes and cried out.

“What is this!”

Meanwhile, David Iverson quickly leaned forward and began typing on the keyboard.

“The selling volume keeps increasing.”
“Let me see.”

I set down my toothbrush and leaned closer to the monitor, knife in hand.

“This looks like it’s all coming from one place. If someone has the volume to dump this much, it has to be either Eldorado Fund or Quantum Fund.”

I muttered with a grave expression.

“They’re clearly pushing hard. Shouldn’t we jump in as well?”

David Iverson paused briefly before asking.

“How much available balance do we have left?”
“About 50 million dollars.”
“Then let’s put in half of that for now.”
“Good.”

I nodded in agreement immediately.
David Iverson quickly typed on the keyboard and sold an additional 25 million dollars worth of Hong Kong dollars in the futures market.
As George Hamilton increased the volume and shorted Hong Kong dollars, other hedge funds including Goliath Fund followed suit, resulting in a staggering 3 billion Hong Kong dollars being sold short in just one day.

***

As the hedge funds led by Quantum Fund launched a massive wave of attacks, dumping enormous amounts of Hong Kong dollars against the Hong Kong Government’s declaration of direct confrontation, the Daeheung Venture Capital Fund Management Department Office was equally hectic.

Ring! Ring!

“Sell 350 units at 13,500! And put in an order to sell 200 units at 345.”
“Didn’t we just have buyers at 14,000? Ugh!”

While my team members held receivers to their ears and raised their voices, Manager Choi Ho-geun sat with arms crossed, staring intently at the Hong Kong and Tokyo futures market trading windows displayed on the monitors.
Despite the Hong Kong Government’s declaration of active response, China showed no significant movement, and as the hedge funds attacked Hong Kong dollars even more aggressively, the buying pressure was rapidly weakening.
I stroked my stubbled chin with one hand—I hadn’t shaved—and muttered quietly to myself.

“It looks like we need to shake things out one last time and solidify our position.”

Having made my decision, I stood up and shouted toward my team members who were frantically continuing their trades.

“Sell as much volume as possible at 12,000!”

For a moment, my team members looked at me with surprised expressions, but true professionals that they were, they quickly adjusted their quotes and reissued sell orders.

“Sell 250 units at 12,000!”
“400 units at 12,000. Yes. That’s right!”

As the order came in with a sharply lowered asking price, the buying pressure that had been hesitant surged back, and transactions began to execute.
Just as Manager Choi Ho-geun noticed his bold move was working and a faint smile crossed his lips, a voice came from behind.

“Are the trades going well?”

When Manager Choi Ho-geun turned around, Seok-won, dressed in summer business attire, had already entered the office with Han Ji-sung, his attendant secretary.

“Oh my. I didn’t even notice you’d arrived.”

Manager Choi Ho-geun hastily bowed in greeting to Seok-won.

“When you’re focused on trading, these things happen.”

Seok-won answered with a smile and glanced casually at the large market board installed on the opposite wall.

“The Hong Kong Government’s market intervention seems to have lost its effect. How does the sentiment look?”
“The buying pressure that had briefly revived on expectations is fading rapidly, so before trading dies completely, we’re selling as much volume as possible at 12,000 one last time.”

Seok-won thrust both hands into his trouser pockets and, still watching the large market board, offered praise.

“Since Quantum Fund has begun pressing the Hong Kong Government even harder to avoid prolonging the fight, there’s a high probability the Hang Seng Index will decline again. That’s good judgment.”
“Thank you.”

Manager Choi Ho-geun felt pleased at receiving recognition from Seok-won and bowed with a satisfied expression.
At that moment, Yu Seok-hyun, holding a telephone receiver in one hand, suddenly jumped up from his seat with a startled expression and looked toward the two men to deliver urgent news.

“The Hong Kong Government has raised the short-term interest rate to 10% again!”

In an instant, all activity in the office froze.
As everyone’s eyes widened and they stared at Yu Seok-hyun, Manager Choi Ho-geun asked in disbelief.

“Is that really true?”
“Yes. It just came through as breaking news on the Bloomberg terminal. And they’ve also abruptly raised futures trading margin requirements to 150%.”

Manager Ho-geun rushed to check the Bloomberg terminal installed on one side of his desk, and there it was—breaking news had just come through.
Shifting his gaze to the futures trading window displayed on the monitor, he saw that all the buy orders had vanished like a mirage in response to the news of short-term interest rate hikes and increased margin requirements.
Had he been even slightly delayed, he would have missed the final opportunity to sell off the futures positions.
As Manager Ho-geun unconsciously exhaled a sigh of relief, Seok-won lightly tapped his shoulder and spoke.

“You timed it perfectly. Well done.”

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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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