The author published 16 new chapters the past couple of days after a month of inactivity https://ncode.syosetu.com/n0358dh/ Happy New Year
Past Life Returner 11
5/5 Sponsored by A
Past Life Returner 11
Even if I could be certain that stocks would fall by ten percent tomorrow, the stock market fluctuates randomly until reaching that point. The market may rise by one percent before falling by three and rise by two before falling by two. Then, in a second, the market collapses as investor fear reaches a tipping point. That’s why trading skills become more important than strategy as the leverage ratio becomes higher.
(EN: Leverage results from using borrowed capital as a funding source when investing to expand the firm’s asset base and generate returns on risk capital. Leverage is an investment strategy of using borrowed money—specifically, the use of various financial instruments or borrowed capital—to increase the potential return of an investment. Leverage can also refer to the amount of debt a firm uses to finance assets.)
If the leverage is fiftyfold, if the product value falls by only one percent, the loss becomes fifty percent. Regardless of the final closing price, even a two percent fall in value results in one hundred percent loss, which means the entire investment. It’s as simple and as cruel as that.
The reply I expected from Jonathan came back from America.
-You’re saying to put up the entire four hundred thousand dollars into fiftyfold leverage? Do you trust me? Or do you not care because it’s not your money?
Fiftyfold leverage means that we will be investing twenty million dollars. Our profit is fiftyfold, and our loss is also fiftyfold.
However! If the product’s temporary price falls below two percent, the game cannot be played any longer. It’s called margin call, and the stock exchange will forcibly sell the product after one ignores the warning. That was the biggest risk of the leverage effect. But Jonathan was a man who succeeded in having the greatest year of his life by his trading skills alone, when the hedge fund coalition had suffered in Hong Kong around October.
(EN: A margin call occurs when the value of an investor’s margin account falls below the broker’s required amount. An investor’s margin account contains securities bought with borrowed money (typically a combination of the investor’s own money and money borrowed from the investor’s broker). A margin call refers specifically to a broker’s demand that an investor deposit additional money or securities into the account so that it is brought up to the minimum value, known as the maintenance margin.)
(EN: So if the temporary price falls below $400,000, game over.)
That meant that Jonathan was a man who could survive in those rough waves if he believed in the trends that I had shown him. My answer had already been decided.
-Believe the trend, and from now, it’s up to you. I’ll be waiting for the good news.
Jonathan could not know that the chance to mobilize fiftyfold leverage for stock index futures was only now.
I met with Jonathan at Gimpo Airport on July fourteenth Saturday. He notified me that he had to meet me in person and came to Korea. A week had passed from the ninth to the thirteenth, and he had not contacted me once. Jonathan now came with a tired face, and he must have come as soon as he could after finishing trading. He would buy and sell, and do the same process again and again. I knew how hard he would have worked to maximize profit in a set timeframe. Jonathan must not have slept a wink, and he seemed tired as he looked for me at the gate.
Our eyes met. He came walking towards me with renewed strength and spoke a number first.
“Thank you for working so hard.”
“You’re not even asking me what that is? It’s not a percentage, but I’m talking seven hundred times. Seven hundred times, two hundred and eighty million dollars!”
Jonathan looked like he had charged a monster and won despite overwhelming odds, and he hugged me with all his strength. He kept screaming ‘Jackpot! We’re insane!’ and of course, we caught the attention of everyone around us. I bowed to the approaching airport police and separated myself from Jonathan. He had not been this excited when he had received a challenger-box level skill from a master box. He hugged me again with crazy eyes, and I again apologized to the airport police.
Jonathan was going through countless emotions that he had suppressed all week, and as I dragged him out of the airport, everyone kept staring at us.
“Have you taken care of the positions?”
“Of course! Be happy!”
Jonathan had earned more than I had expected.
“You finished exchanging the money for dollars, right?”
Of course, he would have done so, which means that we had taken out two hundred and eighty million dollars from Thailand’s foreign currency reserve, which was being emptied in the first place. Dollars have become more valuable than gold, and our funds were enough to affect the Thailand currency war. Thailand will surrender to the hedge fund coalition on coming July second, and the baht will fall on that day. This was the previous history. History could not change due to our intervention, which means that Thailand would not surrender earlier. However, two hundred and eighty million dollars…
“You did well, Jonathan.”
“You did better than I expected.”
It was made possible from knowing the trends and being able to bet one’s entire savings on a thirteen-year-old Asian kid.
“Better than expected? All right, you can say that to me. However!”
Jonathan scratched his head and raised his voice.
“70,000%. It’s an unprecedented earnings rate. We turned four hundred thousand dollars to two hundred and eighty million dollars. Me! Us! We became major players with this one shot! I can’t believe this. This…What have we done?”
“You should sleep, Jonathan.”
“The most inexplicable factor is you, Sun. You’re a mystery. My most plausible explanation that you are the winner of the Chinese Mathematics Olympiad.”
“You’re in Korea, Jonathan. How long had it been since you slept?”
He seemed to have been unable to sleep on the plane.
“I’m already dreaming.”
His red eyes did not move from my face.
“Let’s calm down first.”
I pressed down his shoulders as hard as I could. He did not complain of pain and looked up at me as he sat down.
“I can’t have a heart attack in front of two hundred and eighty million dollars!”
“Mother, I’ll be sleeping at Sungho’s house today. Father’s on a business trip, right? Lock up tight before going to sleep.”
Sungho was not a name I had made up, and he was one of my closest friends during my teenage years in my previous life. I would see his face in the same classroom when I go to school on Monday. I had been genuinely happy to see Sungho, at first, because he had disappeared since the Day of Reckoning. Like when I saw my relatives again.
However, I realized that we would never be close again when I met the young Sungho’s eyes. Actually, I simply couldn’t afford to become his friend, in my second life. I had come back with a goal, one more important than mere friendship. So, the Sungho I had spoken to my mother was someone who existed but was an imaginary friend to me.
I got out of the phone booth and went back to the room. Jonathan had only showered and had still not slept. Beer cans were everywhere in front of him in that brief interval.
“Oh, my Sun!”
Jonathan made me laugh by acting like he was greeting a goddess in his shower gown, which was no mean feat.
“Are you really not sleeping? There’s tomorrow, which is a weekend.”
“We belong to the hedge fund coalition, right?”
“We became a hedge fund when we made the exchange, with only us as the board! A hedge fund worth two hundred and eighty million dollars.”
Jonathan was basking in the fact that he had joined the major players in this currency war. As he had said, there was more meaning since we had succeeded by using only his capital rather than managing the hot money of big investors.
“We were merely two-bit speculators yesterday, and we’re millionaires today. It’s a great night.”
“Come here and sit if you’re not going to sleep.”
Jonathan did so gladly.
“Let’s suppose that Thailand brings in a floating exchange rate system.”
(EN: A floating exchange rate is a regime where the currency price of a nation is set by the forex market based on supply and demand relative to other currencies. This is in contrast to a fixed exchange rate, in which the government entirely or predominantly determines the rate.)
Jonathan breathed in, and his eyes changed. He knew that Thailand was basically surrendering.
“Let’s also suppose that on D-day, we bet all our funds to the highest leverage. There will be no rallies as the baht falls that day. There will be no stops as it free-falls into oblivion.”
Jonathan hiccupped and waved his arms.
“You’re betting over two hundred million dollars without a risk hedge? I have never heard anything more utterly insane until now.”
Jonathan was speaking the truth, as no one had done this ever before. One would prepare a hedge for the risk in accordance with the fund amount. As Jonathan had said, if one was not God, no one could estimate tomorrow’s market.
“How much do you think the two hundred million dollars would become?”
“…I have to do that? I can’t. Do you think that the hedge fund coalition would remain still when two hundred million dollars are bet at the highest leverage for the baht falling?”
“We have to leave something for them. As I told you before, the war is theirs.”
“If the D-day is wrong, we lose everything. Two hundred, actually no. Two hundred and eighty million dollars.”
I continued to speak.
“We have to confirm how much we had taken out of the Thailand foreign currency reserve in percentages.”
“You say it so easily, but it’s not easy to find that out. Impossible, really.”
“Why do you think I said two hundred million dollars? Where would the eighty million go?”
“…Are you really thirteen?”
“Do you think you can contact the president of the Thailand Central Bank?”
“You’re going to give them eighty million to take a look at their warehouses? Does that even work?”
It does, as I only need to compare it with the situation on July second that had been recorded in history.
“Jonathan, go to Thailand. It’s urgent.”
“We’re going to be shot, the president and me. And if they refuse?”
We would lower the leverage and set a date for July first. It would mean a much lower earnings rate.
“Eighty million dollars for letting us see a piece of paper in secret. Would you refuse? The eighty million dollars will not go to the president alone.”
“The president of the Thailand Central Bank is a member of the royal family.”
“That’s even more dangerous!”
“There would have been secret arrangements made, and the royal family must have guessed that they would lose. If they want to think about the future…they will need money. They will accept the eighty million dollars.”
Jonathan scratched his head.
“You’re saying that you would be able to estimate by seeing that?”
The hedge fund coalitions will hold the war, and I will reap the actual benefits. However, the history of the financial crisis across Asia will not differ all that much. Since the hedge funds had seen how enticing the spoils of the war had been as they were taken away in front of their eyes, they would charge all the harder to Malaysia, Indonesia, Hong Kong, and South Korea.
Jonathan shouted my name with an expression made from a dozen emotions I could not name.
“1997 will be the best year of our lives. Let’s bet two hundred million dollars on it.”
Edited by Userunfriendly