Breaking Up Is Better Than Divorce

Intern

What goes up always goes down.

The Chinese stock market, which recorded a composite index of 5,178, started a terrible decline from that day.

It dropped to 5050 that day, and hit 5000 the next day.

And the next day it went down to 4,800 again.

But that was only the beginning.

A week later, on the 19th, it fell below 4,500.

It’s been 10 days since Eugene hit the shot.

“It’s already 50% of the profit. No matter how high-risk, high-return it is, just watching it is dizzying.”

Joanna’s face brightened a little.

“A 50% profit is $2 billion, right?”

“If you go down to 4,000 points, you’re going to make four billion dollars. But the real thing is after that. If it gets down to the level where options and insurance contracts will trigger, it’s going to be astronomical. With 3,000 points, you can earn up to $10 billion in additional revenue.”

Options that become dormant if they do not reach a certain level bring high returns.

“How long are you going to keep?”

Joanna, now a little anxious, asked with an interesting face.

“Where do you think Joanna is?”

“Honestly, when the bubble bursts, is there any way to know where the bottom is? The high was 5,000, so it could be around 3,000 at the beginning of the year, or it could go down to below the low of 2,000 last year. Or, in the worst case, down to one-tenth.”

“I don’t think the market is that stable.”

“In particular, the Chinese stock market is more uncertain. Compared to other markets, the proportion of the general public is significantly higher. This is partly because the inflow of foreigners into the Shanghai stock market is blocked, and partly because the government has encouraged people to invest in stocks.”

It was a long statement, but in the end it was unpredictable.

“I think index futures and short stocks are also worth waiting for until the point of the contract the boss signed with the investment bank.”

After saying that, Joanna realized that her answer was just to follow Eugene’s decision, and she put on a confident expression on her face.

“What would you do if Joanna was directly investing?”

“If it were me… … At 3,000 points, I can get quite a bit of profit from options and insurance anyway, so I will wait for the rest until 2,400 points.”

It’s a more drastic decision than you think.

But it was a reasonable enough decision.

If you can make a lot of money from the profits you get from option contracts, it wouldn’t be bad to keep investing a little more aggressively.

If you don’t know the bottom.

Eugene remembers that the index will go down a little below 3,000 and then recover.

The Chinese government is concerned that if the Chinese government ignores the stock market decline any longer, it will damage the government.

So when it goes over 3,000, I plan to clean it up.

“What is the price of oil futures now?”

After watching the decline of the Chinese stock market for several days, he turned his attention elsewhere.

“When I checked yesterday, it was hovering around $60.”

The oil price, which earned Eugene a huge sum in the second half of last year, has been gradually recovering after Eugene’s resignation.

“Then let us divert 2 billion of the money we earn in the Chinese stock market to that.”

“Is it Long? Is it short?”

“What do you think of Joanna?”

“Well… … I think it will be affected by the Chinese stock market. If the Chinese stock market crashes further in the future, oil prices will also take a hit. So, if it’s an aggressive investment, go short. If you’re hedging, it’s going to be long. If the investment style of the boss is hedging, it would be to increase profits as much as possible.”

“You are quick-witted. Oil futures are also short. Grab as many put options as possible.”

From that afternoon on, Eugene’s investment portfolio also included oil futures and options.

“David wants to meet the boss when he has time. What should we do?”

One day at the end of June, when he started investing in oil futures, Joanna Barclay spoke.

“David Walker? You seem to be in frequent contact with me personally, don’t you?”

“Sometimes. When I was in Barclays, I would eat at least once a month.”

When I’m a princess of one country, I think it’s not a big deal to meet and have a meal with the head of a world-class investment bank on a regular basis.

“Don’t do that. Where would you like to see it? May I invite you here? Or shall we meet outside?”

“I do what the boss is comfortable with.”

“Then shall we eat outside after a long time? Make a reservation for Joanna and make an appointment within this week.”

Since the princess has volunteered to serve as a secretary, Eugene does not hesitate to let her do the job.

“Then what about Bernardine? David likes it there.”

“Don’t do that. But wouldn’t it be easy to make a reservation?”

“it’s okay. You can only be called a secretary if you can solve that much, right?”

Joanna answered casually.

That Wednesday evening, I met David Walker at a fancy restaurant in Manhattan.

“It’s nice to meet you in person like this.”

David Walker, an old man in his 70s, still shook Eugene’s hand with a strong grip.

“Nice to see you too. I never expected to see President Walker in person like this.”

David, who currently serves as chairman of Barclays, formerly served as chairman of Morgan Stanley and still serves as an adviser to Morgan Stanley, is undoubtedly a magnate of influence across the UK and US financial circles.

Even as Eugene, it was difficult to treat him lightly.

“Call me David. By the way, how about our Joanna?”

David Walker called the Dutch princess as friendly as a niece or granddaughter.

“He was a very smart person. He is a person with a lot to look forward to in the future. I don’t think I’ll ever be one of the most prominent investors on Wall Street.”

Compliments are free. And the value for money is very good.

“Yes? We don’t see each other often because we’re busy, but people’s reviews say they’re usually the same. He’s going to be one of Wall Street’s greatest investors.”

Even the Wall Street mogul was not stingy with the princess’ praise.

Hagi, who in the world would tarnish the reputation of the princess of a country in front of him?

“You don’t have to praise me that much. I know myself well that I am immature.”

While saying that, Joanna’s face was shining with a proud light.

“I heard you bet heavily on the decline of the Chinese stock market this time.”

While eating, David asked Eugene.

“yes. I heard there are quite a few funds that bet like that too.”

“It doesn’t seem like there are that many. I thought it would go down anytime, but I didn’t know it would break right away as soon as I crossed 5,000. Those who believed that the 6,000 ridge would climb had the upper hand.”

Even if everyone thinks it is a bubble, it is impossible to predict the vertex of the bubble.

Unless you have experienced the future yourself.

Even now, looking at 4,000, more than half of the analysts believe that it is only a temporary decline.

“Even so, it seems that the Chinese stock market issue has given us a headache.”

“Is that so? Well… … Did you ever sign a contract with Barclays?”

David’s words reminded Eugene of one thing.

Last year, when hedging insurance against falling oil prices, he had contracts with five investment banks worth $15 million each.

And when oil prices fell by half, they took $450 million from each bank.

Therefore, when investing in the Chinese stock market this time, when they again offered derivatives, including options and insurance, to several investment banks, most of the investment banks that had already suffered significant losses from trading with Eugene rejected the offer.

All in all, it looks like the managers were liable for the $450 million loss.

As a result, most of the contracts were signed mainly with Asian investment banks, and Barclays Bank also accepted contracts through its Hong Kong branch.

“How much was it?”

Eugene looked at Joanna and asked.

“We signed a $50 million hedging contract with Barclays Hong Kong. If you go below 3,000, you get 500 million dollars.”

“Do you want to terminate the contract mid-term? There must be more people who don’t think the Shanghai index will go down to 3,000, right?”

Eugene asked with a slightly puzzled thought.

“Is that possible? That contract was from the Hong Kong branch anyway, so I guess I’ll be in Barclays until this month anyway.”

“Are you quitting?”

It seems that Joanna didn’t even know about it.

“I think I will have to step down next month. A successor has been appointed.”

“I’m sorry. You’re still at the peak of your working age.”

“Well, don’t. Even if it doesn’t, I’m going to get an offer from the Winton group and go there.”

“Winton Group was a private equity fund in London, right?”

“It’s not that big, but it’s just the right size for the end of a career.”

“Oh yeah! Winton Group is planning to invest in Korea this time.”

David sneaks his luck. Perhaps that is why I asked to meet Eugene today.

“What kind of investment are you looking to make?”

“They said that the Samho card was on sale. Do you know anything about it?”

“It’s a Samho card… … .”

At David’s words, Eugene gives an interesting expression.

Samho Card is a company that ranks 5th or 6th in market share among Korean credit card companies, and is an affiliate of the Samho Group, a major distribution company.

What makes Eugene interesting is that he remembered that Samho Card was being acquired by Daeyang Card around this time.

Daeyang Card, a financial affiliate of the Daeyang Group, ranks 7th in market share and is not very prominent among credit card companies.

I can’t remember all the events of that time, but it seems that around this time, the Winton Group competed with the Samho Card acquisition competition and won.

But I wondered why I had to ask myself this.

If you are a private equity fund that conducts international investments, you will already have enough analysis on the property.

It is strange to ask Eugene just because he is Korean.

“It seems that there is a strong competitor before taking over Samho Card.”

Eugene could quickly guess David’s intentions.

If we had acquired information about Daeyang Group, a competitor, it would have been natural to know about Daeyang Group and Eugene, who has a chuckle.

And David, who is now leaving Barclays to become the head of a private equity fund, seems to think that he will be able to take the lead of the company from the beginning if he takes over as the CEO while recruiting a wealthy person to join the Daeyang Group, a strong competitor.

Although they are said to be the heads of large banks or private equity funds, unless they are founders, the presidents and CEOs of Wall Street are in fact more like free agents who are chosen by shareholders and easily change positions depending on conditions.

This David alone has already moved around a large investment bank several times.

But since he’s old, he seems to be thinking of showing some decent performance in the private equity fund he’s going to this time and having a blast.

“Right. They said it was the ocean card.”

David replied with a nod of his head as if he liked Eugene, who saw the topic he had just thrown up.

“It is not easy to compete with large companies such as Jeil and Daeyang in Korea.”

Eugene said with a relaxed expression as if he had no particular interest in David’s bait.

“There are always leading companies in any country, and it would be foolish to expect fair competition in that case.”

“It looks like the Samho card is a pretty attractive sale.”

“Sure. Samho Card is only a low-ranking card company, but its market share is nearly 8%. If you take over by another credit card company, your market share will rise significantly, so now is a good time to invest. If you buy it and stay there for a few years, you could make a billion dollars in profit.”

A billion dollars seemed like a no-brainer, but for Eugene, who made more than $10 billion a year, it’s a big business that requires a lot of effort to make a profit of $1 billion from a large private equity fund.

“But it must be difficult for Winton alone, isn’t it? There must be another company that has a license.”

“yes. This is Seosung Card, an affiliate of Seosung Bank.”

At David’s answer, Eugene began to be very attracted to him.