I, as the CEO, held a special shareholders' meeting at headquarters. The shareholders were Kang Jin-hu and Oh Taek-gyu.
In other words, we were sitting across from each other on the living room sofa.
Taek-gyu's expression was utterly grim. Mine probably wasn't much different.
"I underestimated this," I said.
The market was taking the current situation very seriously.
Buying large quantities of put options on certain stocks before an incident occurs is enough to raise suspicions. I had to admit that our actions weren't exactly smooth. At the very least, I should have diversified the order accounts.
I didn't expect things to escalate to this extent.
Taek-gyu, looking as though he couldn't understand, said, "We didn't do anything wrong, did we? The ones who created and sold those options are at fault, not us who bought them."
"Making money with long positions gets you praised, but making money with short positions gets you blamed," I replied.
"What do you mean?"
Buying expecting prices to rise is called a long position, while selling expecting prices to fall is called a short position.
Buying put options and engaging in short selling are classic short position strategies.
With long positions, you make money when other investors do, but with short positions, you make money when other investors suffer significant losses.
That's why no market participant looks at it kindly.
"Shouldn't we not worry too much?"
I shook my head.
"Even if we get away with it this time, what if we face similar suspicions in the future?"
It's not strange to win the lottery once by chance. But if you keep winning first prize, anyone would find it suspicious.
"So are you saying we should stop investing in put options?"
"I'm not saying stop entirely, but we need to think of other investment methods. There's a limit to short positions anyway."
"Why?"
If long positions align with the market trend, short positions go against it, making them suitable only for short-term investments.
"In the long run, the market inevitably grows."
Since its inception, the market has consistently grown, despite crises like the Great Depression, two world wars, various terror attacks, and financial crises.
Each time, people predicted the collapse of finance and the end of the market economy. However, while time could be momentarily turned back, no one could stop its progress.
Crises were overcome, and finance and industry continued to evolve, learning from failures.
"Unless there's a financial crisis, betting billions on short positions is impossible."
It would be sufficient to build long positions with most assets and respond with short positions when something happens.
I concluded, "Let's turn OTK Company into a holding company and acquire stakes in other companies."
Finance, since its inception, has been a battlefield for numerous investors, some of whom have become legendary.
Among those still active today, Warren Boat stands out as the most prominent investor.
Warren Boat was known as a financial prodigy since his youth. By his 30s, he was already managing his own investment firm.
After deliberating on his investment strategy, he decided to acquire Berkshire Casher, a struggling textile company. At the time, the textile industry was in decline, and Berkshire Casher was not generating significant profits.
Using the capital from Berkshire Casher, he acquired National Infinity, an insurance company, and turned it into a subsidiary. Insurance companies collect regular premiums from customers, so they have abundant cash assets. With those funds, he began acquiring shares in companies with high intrinsic value.
This strategy, now illegal due to tighter financial regulations, was unregulated back then. If things had gone wrong, Warren Boat might have been remembered as a scammer who squandered people's insurance funds. But he achieved tremendous success.
His average annual return was about 20%.
At first glance, that might seem unimpressive, but he maintained this rate for over 50 years—compounding the returns.
Roughly every 3–4 years, his assets doubled. The cumulative return he achieved was approximately 2 million percent.
The once-struggling Berkshire Casher became a holding company owning shares in many renowned firms and currently ranks 5th in global market capitalization.
Excluding IT giants like Npl and Gubl, it is the most valuable company in the world. Warren Boat, Berkshire Casher's largest shareholder, has a net worth of 90 trillion won.
"So, we should identify companies with growth potential, acquire their shares, and, for promising firms, secure a majority stake to turn them into subsidiaries," I concluded my briefing to the second-largest shareholder.
The second-largest shareholder asked, "What kind of returns can we expect?"
"Our goal is 100% within three years."
"Only that much?"
This guy thinks doubling our assets is insignificant.
"Doubling 670 billion won means surpassing 1 trillion won."
Even that would place us among Korea's wealthiest, though not in the top tier.
"So the plan is to aim for that, while setting aside a few hundred billion to hedge with futures or options based on predictions."
Taek-gyu finally nodded in agreement.
"That sounds reasonable. Options are the best, after all."
"…"
Options are the fastest route to financial ruin.
Late bloomers in gambling often lose track of time, and after tasting success with options, he's become obsessed.
"So what do we do first?"
"We start by identifying growth potential companies."
Once the investment strategy was decided, I got to work.
First, I analyzed the top companies in the KOSPI 200 by market capitalization.
Though it was called analysis, it mainly involved reviewing publicly available disclosures, company overviews, fundamentals, and consensus estimates.
If nothing promising showed up, I would just move on.
Even after reviewing all 200 companies, nothing caught my eye. I decided to expand my analysis to all KOSPI stocks.
Excluding ETFs, preferred shares, and SPACs, there were about 1,000 companies.
The top-tier firms were well-known, like Seoseong, Eunseong, SSK, Rite, and Shinsegye.
Further down the list were smaller, lesser-known firms. Some had been posting losses for years with little trading activity, seemingly on the brink of delisting. Some were penny stocks, priced below 1,000 won.
By midnight, even after reviewing all KOSPI stocks, I hadn't found anything worthwhile.
I shoved the stack of papers aside. Taek-gyu handed me another pile.
"This is the KOSDAQ."
"...Damn it."
The KOSDAQ had a similar number of companies.
Unlike the KOSPI, which has stricter listing requirements and mostly large corporations, the KOSDAQ has a lower entry barrier, making it home to many startups.
While there are more high-potential firms, there are also many without solid fundamentals, whose stock prices are inflated.
Separating the wheat from the chaff is even harder here.
"Let's call it a day and continue tomorrow. I'm tired."
"You go ahead. I'll keep at it for a bit. Just bring me a coffee."
"Alright."
Taek-gyu brought me a coffee and went to bed. I continued my review.
Morning came without me realizing it.
After going through both the KOSPI and KOSDAQ stocks, I finally set the papers aside. I picked up my coffee cup only to find it empty.
Should I make another cup?
I must've had about ten already.
While debating, Taek-gyu came down from the second floor.
"Did you sleep well?"
"What? You stayed up all night?"
"About to sleep now."
Taek-gyu glanced at the mountain of papers on the table.
"Did you find anything?"
I nodded.
"One thing's clear."
"What's that?"
"That we're completely off track."
Taek-gyu tilted his head.
"Did the Oracle Eye tell you that?"
"Do you really need to taste it to know if it's dung or bean paste?"
Since developing my foresight, I've gotten a sense of things. Even without a hologram, I could tell we were wrong.
"Are you saying the corporate acquisition plan is flawed?"
"I don't think so. The direction is right, but the method feels off."
It would be convenient if a hologram displayed something like "Top 20 Investment Picks," but based on past patterns, that wasn't going to happen.
"Even if we decide on a company to acquire, the method of acquiring its shares is another issue."
Buying major shareholder stakes or treasury shares through block deals is manageable. But buying shares on the open market creates problems.
For large companies with market caps in the tens of trillions, it's not a big deal. But for companies with market caps below 1 trillion, our purchases would cause their stock prices to skyrocket, and selling would make them plummet.
Like a rabbit diving into a lake with no impact, but when an elephant does, the water spills out, and the level drops.
After listening, Taek-gyu chuckled in disbelief.
"There's nothing easy about this."
"Tell me about it."
Managing larger amounts of capital isn't simple.
Suddenly, Taek-gyu had an idea.
"What about foreign stocks? Companies like Enple or Guble are great. Plus, there are emerging markets like Vietnam, India, and China."
It was surprising to hear something so sensible from him.
The Korean market can't compare to the global market. Looking globally would undoubtedly reveal more opportunities.
"That's worth considering. But it still requires connections."
"Can't we just hire a financial expert familiar with foreign markets?"
I had already thought that playing in the big leagues would require industry insiders. Even with good information, there's a limit to what we can analyze and strategize on our own.
"But finding someone trustworthy..." I trailed off.
Taek-gyu and I exchanged looks.
"Are you thinking what I'm thinking?"
"Probably."