Investor That Can See The Future

Chapter 26

As CEO, I held an extraordinary general meeting of shareholders at the headquarters. The shareholders are Jin-hoo Kang and Taek-gyu Oh.

In other words, they are sitting on the sofa in the living room, facing each other.

Taek-gyu’s expression was dark. Maybe my face isn’t much different either.

“I thought it was too easy.”

The market was taking the situation seriously.

It’s enough to create suspicion that you’ve been buying a lot of put options on a particular stock before it happens. It must be acknowledged that the work process was not smooth. At least we’ll diversify our order accounts a bit.

I didn’t know at the time that things would get this big.

Taek-gyu said he didn’t understand.

“Are we not doing anything wrong? It’s the fault of the people who made and sold those options, what’s wrong with us who bought it?”

“Originally, if you make money on a long position, you get compliments, but if you make money on a short position, you start off with a curse.”

“What do you mean?”

Buying in anticipation of an increase in price is called a long position, and selling in anticipation of a decrease in price is called a short position.

Buying a put option and short selling it is a typical short position.

Long positions make money with other investors when they are making money, while short positions make money alone when other investors take huge losses.

Because of this, none of the market participants take a good look.

“Isn’t there much to worry about?”

I shook my head.

“Even if we just skip it this time, what if we get a similar suspicion next time?”

Even if the lottery you bought by chance wins the first prize in the lottery, it is not strange. However, if you continue to win 1st place, you can’t help but think it’s strange.

“Then you’re saying you don’t want to invest in put options in the future?”

“I’m not saying we shouldn’t, but it’s that we need to think about other ways of investing. There are limits to short positions anyway.”

“Why?”

While a long position follows the market trend, a short position goes against the market trend. Therefore, it is literally suitable for short-term investment.

“In the long run, the market is bound to grow.”

The market has continued to grow since its inception. Of course, there were many crises along the way. Great Depression, two world wars, terrorism, financial crisis, etc.

Each time, there were grim prospects of a financial collapse and the end of a market economy. But although you can turn back the hands for a moment, you can’t make anyone stop.

The crisis was overcome, and finance and industry continued to develop, using failure as a counter-teacher.

“It is impossible to bet hundreds of billions of dollars in short positions unless there is a shock like the financial crisis anyway.”

It will be sufficient to build long positions with most of the assets and respond with short positions whenever something goes wrong with the remaining assets.

I came to a conclusion.

“Let’s take over the stakes in other companies with OTK Company as the holding company.”

* * *

Numerous investors have fought in the market since the dawn of finance, and some have made a name for themselves as legendary investors.

Among them, Warren Boat is undoubtedly one of the most active investors to date.

Warren Boat was known as an investment genius from an early age. In his 30s, he was already running his own investment company.

After thinking about how to invest, he took over an entire textile company called Berkshire Cashier. Textiles were a dead industry at the time, and Berkshire cashiers were not making much money.

Then, with the funds of the Berkshire Cashier, the insurance company National Infinity was acquired and made into a subsidiary. Insurance companies have abundant cash assets because they regularly receive insurance payments from customers. He began to acquire stakes in companies with high intrinsic value as insurance proceeds.

This method is illegal now that financial regulations have been strengthened, but the related regulations were insufficient at the time. If things went wrong, Warren Boat would have become a rare con artist who has wiped out millions of people’s insurance money. However, he had great success.

His return was about 20% per year.

At first glance, you might think, ‘Is that all?’, but he has been consistently profitable for over 50 years. It’s also compound interest.

About every three or four years, assets doubled. He has achieved a return of about 2 million percent to date.

The doomed textile company Berkshire Cashier became a holding company with stakes in a number of well-known companies, and is now ranked fifth in the world by market capitalization.

Excluding IT companies such as NPL and Google, it has become the company with the highest value. And Warren Boat, the largest shareholder of the Berkshire Cashier, is worth 90 trillion won.

“So, we’re going to pick up companies that can grow and acquire shares. A good company takes a majority stake and makes it a subsidiary.”

I finished the briefing to the second major shareholder.

The second major shareholder then asked a question.

“What will be the rate of return?”

“The goal is 100% within three years.”

“Is that all?”

This bastard thinks doubly funny.

“Double of 670 billion is over 1 trillion.”

Even if that is enough, we will be able to put our name on the list of the richest in Korea. It won’t make it to the top, though.

“Once we take a position like that, let’s bet on futures or options depending on our foresight for a few tens of billions of dollars. As a kind of hedge concept.”

Taek-gyu nodded his head as if he liked it.

“I like that. It’s the best option.”

“·················ogue.”

Options are a shortcut to ruin.

I don’t know if I’m leaking due to the stealing I learned late, and after tasting the options once, I’m very confused.

“Then we decided to do that, so what should we do first?”

“We need to find companies that can grow.”

* * *

Once the investment policy was decided, I immediately took action.

First, we analyzed data from the top stocks in the KOSPI 200 by market capitalization.

It was called analysis, but in reality, it was just looking at the company status, overview, fundamentals, and consensus in publicly available data posted on the Internet.

This is a good thing if foreknowledge emerges, otherwise it’s bad.

I looked through all the top 200 stocks, but nothing caught my eye. Inevitably, we decided to analyze all KOSPI stocks.

Excluding ETFs, preferred stocks, and spec stocks, there were about 1,000.

Most of the top stocks by market cap are large corporations or famous companies that can be recognized just by giving their names. Seoseong, Eunseong, SSK, Lite, New Century, etc.

The further down we went, the more companies we had never heard of. Some companies have negative earnings for several years in a row and few transactions, so they are worried that they will be decommissioned soon, and there are even a number of coin shares (stocks that can be bought for less than 1,000 won).

Even though I looked at all KOSPI stocks until midnight, nothing came to mind.

I set aside the stack of papers I had read. Then Taek-gyu handed me another roll of paper.

“This time on the KOSDAQ.”

“······Damn it.”

The number of stocks on the KOSDAQ is similar to that of the KOSPI. There must be so many listed companies.

Unlike the KOSPI, where listing conditions are strict and large companies are concentrated, the KOSDAQ has low entry barriers, so start-up companies are mainly listed.

As such, there are many companies with excellent growth potential or potential, but on the other hand, there are also many companies whose stock prices are inflated without any substantiality.

The KOSDAQ is more suitable than the KOSPI to pick up gemstones.

“Let’s sleep today and continue tomorrow. Sleepy.”

“You go to bed first. I’ll take a look and sleep. One cup of coffee, please.”

“Okay.”

Taek-gyu drew coffee and brought it to him and went to bed.

I drank my coffee and continued to browse through the material.

* * *

Soon the day was bright.

After examining both the KOSPI and KOSDAQ stocks twice, I put down the data. Then he picked up the coffee cup, realized that it was empty, and put it down again.

Would you like one more drink?

I think I drank about ten glasses.

I was thinking about something useless, and Taek-gyu walked down from the second floor.

“Did you sleep well?”

“what? Did you stay up all night?”

“You should sleep now.”

Taek-gyu asked, looking at the piles of paper piled up like a mountain on the table.

“Did you find out anything?”

I nodded.

“I know one thing for sure.”

“What?”(Read more @ wuxiax.com)

“That you are completely fooling yourself.”

Taehyung tilted his head.

“Did the Oracle Eye say that?”

“Shouldn’t you be eating poop or miso?”

He could tell if his senses had developed after he had foresight, even if the hologram didn’t appear in front of him.

“You mean the takeover plan is wrong?”

“I don’t think it is. The direction is right, but it feels like the way is wrong.”

It would be convenient to float something like ‘20 investment stocks’ as a hologram, but looking at the pattern so far, it seems unlikely.

“Even if you decide which company to acquire, it is also a matter of how you acquire the stake.”

It is better to buy the majority shareholder’s shares or treasury stock in the form of a block deal. However, the following problems arise when buying stocks on the stock exchange.

A large company with a market capitalization of tens of trillions of dollars is no problem, but if the market capitalization is less than 1 trillion won, the stock price will rise as soon as we buy a stake, and if we sell it, the stock price will repeat itself.

Just like a rabbit has to go into a lake for nothing to happen, but when an elephant enters the water overflows, and when it comes out, the water level goes down.

Taek-gyu, who heard my story, had an exasperated expression on his face.

“Nothing is easy.”

“That’s it.”

The larger the fund, the more difficult it is to manage.

Taek-gyu said as if he had remembered something.

“Ah! How about foreign stocks? There are many good companies like Nplay and Guble. There are emerging markets like Vietnam, India and China.”

It’s an opinion so good that it’s hard to believe it came out of his mouth.

The Korean market is not comparable to the global market. If you look to the world, you will find more opportunities.

“It’s something to think about. But it must also have some route.”

“Why not hire a financial person who knows foreign affairs well?”

Still, I thought that I needed the help of industry officials to play in the big water. No matter how good information is, there is a limit to our ability to analyze that information and decide on an investment method.

“By the way, someone you can trust… huh?”

Taek-gyu and I looked at each other’s faces.

“Are you thinking the same as me now?”

“I think so.”