Golden Spoon Investor

Chapter 564 564: CH565

[S&P 500: 1,264.74 ▼40.86 (▼3.13%)]

[DJIA: 10,584.37 ▼61.05 (▼0.57%)]

[NASDAQ: 2,511.71 ▼112.81 (▼4.30%)]

When the bell rang to signal the end of the trading day, the same traders who had been screaming themselves hoarse minutes earlier slumped back heavily into their chairs.

Rachman, his white dress shirt soaked through with sweat, collapsed into his seat with a hollow expression and stared at the monitors in front of him.

The three major indexes were painted in brutal red candlesticks, as if bleeding across the screen. He let out a sigh deep enough to crack the floor.

What stung most was Cisco. He had loaded up on it expecting a strong rebound because it had dropped so far—but it had plunged more than twelve percent.

He'd dumped all his positions the moment the rate decision hit, but even so, he'd lost over two hundred thousand dollars in just half a day.

"God… I thought I was finally going to make some money. This is insane."

The only consolation was that he had managed to contain the damage enough to stay afloat.

If not, he would've arrived this morning to find a termination slip on his desk reading, "Your employment has been terminated."

And many traders really had walked into that fate. The crash claimed job after job; those who took heavy losses packed up their desks and left.

What made it even more depressing was how quickly those empty seats were filled—with junior hires fresh out of college, often straight from prestigious schools, who had done nothing more than complete an internship.

Wall Street stockbrokers were glamorized as elite professionals with high salaries and fancy degrees, but the truth hit hard: to the firm, they were replaceable parts, swapped out without hesitation.

"Agh, damn it!"

Hearing the curse from beside him, Rachman turned. Charlie, looking like half his soul had drained away, grimaced.

"This is insane. SBC Communications just released earnings. Their EPS came in way below expectations. Total earnings shock."

As if the market atmosphere hadn't been terrible enough after the rate hold, now corporate earnings were falling apart too.

Piled-on bad news made Rachman let out a reflexive groan.

"Shit! Merrill Lynch just downgraded Cisco, IBM, and Hewlett-Packard. Sentiment is already in the gutter—why would they announce something like this now? Do they want everyone dead?!"

Charlie rubbed his head in frustration, then slowly turned to Rachman with a stiff expression.

"With things like this, there's no way the market rebounds tomorrow, right?"

"Yeah… I don't see how it could."

Rachman answered weakly.

Meanwhile, both he and Charlie stared at their monitors as the selling pressure refused to die down. The crash continued even in after-hours trading, fueled by SBC Communications' earnings shock and Merrill Lynch's downgrades.

They let out another deep, heavy sigh—as if the floor itself might cave in beneath them.

***

While all of Wall Street spiraled into panic as hope turned into disappointment, the only group cheering was the Eldorado Fund—who had taken profits at the very bottom and doubled down on their short positions.

"Hahaha! I never imagined the Fed would actually hold rates here."

Andrew, with his neatly combed hair and trademark suspenders, burst into laughter.

Sitting beside him, Senior Investment Chief Dan Baradan added with a grin,

"Everyone expected that even if the Fed didn't cut rates, they would at least shift their stance from tightening to neutral. But all they did was acknowledge concerns about an economic slowdown. No policy change at all. That's why the shock was even bigger."

Seok-won, seated in the center on the main sofa, crossed one leg over the other and replied,

"With the Fed holding rates contrary to expectations, plenty of investors will panic and dump their stocks out of fear that rate cuts might be delayed even longer."

"You're right. As soon as the announcement hit, there was a massive sell-off—not just from individuals, but from institutions as well."

From the right-side sofa, Landon looked at Seok-won with open admiration.

"Boss, the Fed's announcement and the market reaction match your prediction perfectly. It's incredible."

The other two, who had already heard from Landon that Seok-won anticipated the rate hold, were once again astonished by his foresight.

"As I told Landon, this crash will be steep and fast. The market will break the previous low and fall much further."

Seok-won glanced at the three men paying close attention and continued,

"But because the drop is so sharp, the crash won't last long."

Andrew's eyes lit up.

"You're expecting the incoming George administration to roll out a massive stimulus package to revive the market, right?"

"That's part of it. But the main point is that the bubble that overheated the market needs to disappear completely. Only then can we say the market has really hit bottom."

At the word bottom, Landon's eyes widened.

"If the entire bubble bursts, how far do you think the market will fall?"

Andrew and Dan also leaned slightly forward, waiting for his answer.

With all eyes on him, Seok-won answered calmly,

"For every last trace of the bubble to clear, the Nasdaq needs to drop at least another thousand points."

"—!"

The moment Seok-won finished speaking, everyone swallowed hard, unable to hide their shock.

If things unfolded the way he predicted, the stock market would fall nearly eighty percent from its peak.

Even after dropping such an explosive prediction, Seok-won calmly lifted his teacup and took a sip of coffee. Andrew, watching him, couldn't help but feel awed.

That kind of composure was something he could never imitate.

"When you think about how absurdly inflated price-to-earnings ratios were for dot-com companies, maybe this is just the market returning to normal," Andrew said seriously.

Dan nodded with a grim expression.

"In that case, even if the market rebounds, it won't be easy to recover last year's highs."

Seok-won replied in a cool, measured tone.

"When the Nasdaq hit 4,700 and the S&P 500 passed 1,500, the bubble was at its peak. To reach those numbers again, it'll take at least ten years."

"Hmm…"

"Ten years… that's rough."

"I knew it would be bad, but still…"

The three men let out simultaneous sighs.

It was only natural. It meant the market would remain stuck under the weight of the dot-com bubble's aftermath for a very long time.

"When the bubble was at its highest, it wasn't unusual for dot-com companies to have P/E ratios over a hundred. Looking back, it was insanity," Landon muttered, smacking his lips.

"With this crash, countless individual investors must have suffered huge losses. Just as you said, the market will have no choice but to remain sluggish for a while," Andrew added.

Dan, seated next to him, nodded again to show he agreed.

"If the market can't reclaim its high, then the money wiped out by this bubble collapse must be in the trillions of dollars."

A heavy silence filled the room.

The price people had to pay once the wild party ended was enormous and unforgiving.

And in contrast, their respect for Seok-won—who not only escaped this disaster but used the violent swings of the market to earn massive profits—rose to the sky.

"It might feel a bit early, but now that the bubble collapse is nearing its end, it's time to prepare for the next step."

The moment Seok-won said that, the three men's eyes sharpened.

"You already have your next investment target in mind?"

"The early bird gets the most worms, doesn't it?"

"Absolutely."

Landon nodded vigorously in agreement.

"So where are you planning to invest?"

Andrew leaned forward, and Dan stared at him with open curiosity.

"China."

The three men blinked, surprised by the unexpected answer.

At this time, China was still perceived as a backward developing country—huge land, massive population, tremendous potential, but far behind economically. Their confusion was understandable.

"China, sir?"

"The country indeed has a lot of potential, but fundamentally, its stock market isn't open. Even if you want to invest, it isn't easy."

"Most Chinese companies have opaque governance and questionable accounting practices. The risks are enormous."

One after another, the three voiced their objections. Seok-won responded calmly.

"There's no denying the risks. But when the risks are high, the payoff from success is even higher."

He paused briefly before continuing.

"You all know China is very close to joining the WTO."

The WTO, the World Trade Organization, was an international body created in 1995 to promote borderless free trade.

China, pushing forward with its reform-and-opening policies, had been eager to join. Even the United States—long resistant—had shifted to a positive stance. On Wall Street, everyone knew China's accession was likely coming soon.

"When that happens, tariffs will drop, exports of cheap Chinese goods will surge, and foreign companies looking to take advantage of low labor costs will invest heavily to manufacture their products there."

Andrew nodded slightly.

"If you build factories in China, where wages are low and regulations are loose, your margins could jump significantly."

"And once the economy grows, over 1.3 billion people will become consumers. That alone is a massive advantage."

Dan added a comment of his own.

For exactly these reasons, once China joined the WTO, countless companies rushed to relocate their manufacturing operations, and China eventually became known as the world's factory.

"But even if China has enormous growth potential, its stock market is still closed. Doesn't that make investing just as difficult as before?"

Landon's point prompted an immediate answer from Seok-won, as if he'd been waiting for the question.

"You're right. Which is why, for now, investments in Chinese stocks should focus on companies listed in Hong Kong and the United States. It'll need to be a long-term, gradual approach."

It was the most practical method, and all three nodded without objection.

"Instead, what we're going to focus on this time is commodities."

At that, Andrew pushed his gold-rimmed glasses up, as if something clicked.

"You're expecting commodity prices to surge once China opens up and its economy takes off, right?"

"Exactly. Once China—until now a sleeping giant—fully enters the global market and begins rapidly developing its economy, it will become a black hole that sucks in global capital and commodities."

Andrew's eyes brightened at Seok-won's explanation.

"And with the dot-com collapse pushing the economy toward recession, the Fed will likely cut rates aggressively. That will weaken the dollar and push commodity prices even higher. The profit potential looks huge."

Dan nodded in agreement.

"The commodity market is volatile, but with the upside you're describing, it's definitely worth betting on."

"Heh… I'm already excited thinking about how much we'll earn this time."

Landon rubbed his hands together, almost drooling, and Seok-won raised the corner of his mouth in a pleased smile.

"This will be a long-term investment, but the returns will be enormous. You can look forward to it."

"Hahaha. If you say the returns will be big, Boss, I can't help but wonder just how much money we're going to make."

Even among people who handled massive amounts of money, Seok-won was on an entirely different level.

In the competitive world of Wall Street, he consistently delivered results that others could only dream of.

So when he promised high returns, the anticipation swelling in the three men's chests grew even larger.