An Investor Who Sees The Future

Once I woke up, I couldn’t fall asleep again.

We lay side by side and talked.

“So why do you like me, Ellie?”

Ellie simply replied, “Because you’re cool.”

I didn’t have any particular complaints about my appearance, but objectively, aren’t there many men in the world who are better looking than me?

Ellie reminisced, “The first time I learned about Jinhoo was because of the L6 incident. The Korean stock market crashed, causing chaos at the Asian branch. I became curious then about who made such an investment. Eventually, I followed Jessica to Korea and met you. At that point, I never thought I would end up liking a man I met in a foreign land.”

“So you liked me right from our first meeting?”

“Well, it seems that way. For some reason, Jinhoo looked stunning to me, like he had a sparkling aura.”

“Is that so?”

Hearing this made me think of someone. Seon-ah had said something similar before.As we continued talking while lying down, I slowly began to feel sleepy.

I turned slightly to switch off the light, and Ellie hugged me from behind. The tender and soft sensation sent a rush through my body, and her breath tickled my ear.

I couldn’t resist and turned to kiss Ellie.

“I have to go to work…”

“What’s wrong with being late?”

“I can’t. Jessica will scold me.”

Even as I said that, Ellie became more proactive than I was.

There was still plenty of time until the sun rose.

***

We ordered room service for breakfast.

Wearing our robes, we had a simple breakfast and enjoyed some coffee. Ellie took a shower and got dressed in a suit.

The hotel wasn’t far from the Golden Gate building.

After parking nearby, I checked to make sure there were no people around and kissed Ellie.

She playfully complained, “Ugh, I don’t want to go to work.”

“Can’t you skip it?”

“If I skip work without notice, Jessica will be mad.”

It is scary when she gets angry.

Ellie forced herself to muster some motivation.

“And if I want to support Jinhoo in the future, I need to work hard.”

“Just hearing that makes me feel reassured.”

After watching Ellie walk into the building, I started my car and headed home to change instead of going straight to work.

It didn’t take long to get home.

I parked in the underground garage and took the elevator up to the living room. As soon as the door opened, I saw Taek-gyu sitting on the couch with his arms crossed.

I was taken aback.

“Whoa! What are you doing here?”

Taek-gyu looked at me and reprimanded sternly,

“What were you doing all night that you didn’t come home or contact anyone after going on a date?”

I quickly tried to explain, “No, that’s not it…”

But why was I even explaining myself to him?

Taek-gyu tapped my shoulder and said.

“Congratulations, my friend.”

“What, what are you congratulating me for?”

“When are you getting married?”

“…Why are we talking about marriage already?”

I suppose I’ll do it when the time comes.

I dropped onto the sofa. I had only planned to change clothes and head to work, but now that I’m home, even moving a finger feels bothersome.

I think I might be a bit sleepy.

“Did you not sleep at all while doing something?”

“Figure it out yourself.”

Taek-gyu smiled meaningfully.

“Hehehe.”

“……”

What kind of dirty thoughts are you having?

“Let’s talk about work.”

We had three options.

First, we could ignore what Oracle saw and do nothing. In this case, our subsidiary and research labs based in Silicon Valley would suffer significant losses when the earthquake strikes.

And the United States, hit directly by the earthquake, would be thrown into chaos for a while, leaving openings for China, Russia, and India to expand their influence. Perhaps during this process, conflicts would arise, plunging the world into even greater chaos.

That would truly be the worst-case scenario.

The second option is to notify everyone of the risk and relocate our business first. This way, we could minimize the immediate damage we’d face. The problem is, who would believe and follow what I say?

Disasters can only be understood as threats once they occur.

What if someone had said the day before Pompeii’s destruction that Mount Vesuvius would erupt? What if someone had shouted the day before the Great East Japan Earthquake that a tsunami was coming, leading to a nuclear meltdown?

Did people believe the warning and evacuate, or did they treat the speaker as a madman?

If no warning had been given, that would be one thing, but if a clumsy warning is made, afterwards, when something happens, there would be criticisms of ‘only you ran away’ and ‘why didn’t you act more decisively?’

“It would mean becoming a bad Samaritan.”

“What’s the third option?”

“To risk everything, using any means necessary, to evacuate as many people as possible to minimize damage.”

“Didn’t we already decide to do that?”

“Yes.”

“We have to save lives.”

“That’s how we survive.”

The casualties from the 9/11 attacks were about 10,000.

Even that alone caused global stock markets to crash. South Korea was no exception, with both KOSPI and KOSDAQ hitting their lower limits, setting unprecedented records.

But what if the U.S. faced damages a hundred times that?

Of course, there’s a difference between a terror attack and a disaster, but it’s clear that both finance and industry would be paralyzed for a while. When the system stops, production and consumption cannot proceed properly.

The companies owned by OTK Company mostly sell consumer goods and services, not essentials.

Take CarOS, for example; they’re about to launch new cars in the second half of the year. But in such a situation, who will buy cars, watch porn, or order pizza?

In other words, preventing maximum damage is our only way to survive.

Yet the reason I continued to worry was…

“Before the earthquake happens, we’ll face overwhelming criticism and mockery. If by any chance the prediction is wrong, we could lose everything.”

If false rumors cause social chaos, we must bear the responsibility. The reputation built over time could crumble in an instant, leading to endless liabilities.

“But the earthquake is bound to happen.”

“That seems likely.”

Sometimes great courage is needed to do the right thing.

I realized this while talking to Ellie yesterday.

‘I’m not sure if this is something I have to do or can do… but it’s definitely something I want to do.’

Taek-gyu nodded.

‘I guess there’s no choice. If you want to do it, you should.’

‘What about you? Are you ready?’

‘What do I have to be ready for? You’re going to take all the criticism anyway.’

‘…’

That’s true.

***

As always, rumors spread faster than words.

The fact that I decided to support Professor Kiran Mohan’s research quickly became known here and there.

The situation was different from when it was with Professor Kim Ho-min. Batteries are directly related to our business, whereas earthquakes have little correlation.

Additionally, while Professor Kim Ho-min is recognized and respected as a skilled professional in both industry and academia, Professor Mohan is viewed as a maverick in academia for his far-fetched claims.

Would the government have cut off support for no reason?

Despite being considered eccentric, he is a professor at Caltech. His abilities shouldn’t be in doubt, though his claims are extreme and poorly supported.

There were various speculations and gossip about my actions. The seismology community reacted with disbelief.

I didn’t pay much attention to those reactions. Since I’m spending my own money, who can say anything?

Carrie organized the requested materials on behalf of the busy Professor Mohan and sent them over. It contained a clear summary of the earthquakes that occurred in the Pacific Ring of Fire over the last decade.

Surprisingly, there were over hundreds. This was just the direct damage caused by them. If we include offshore earthquakes or those that went unobserved, it would be countless.

Taek-gyu looked astonished.

“Is there really this many earthquakes happening?”

“There was one in Gyeongju last year.”

Japan is located entirely within the Pacific Ring of Fire, making earthquakes a daily occurrence. In contrast, Korea has been categorized as a relatively safe zone until now.

However, the Gyeongju earthquake confirmed that Korea is not safe, and for a time, disaster preparedness supplies sold like hotcakes.

In any case, while there are countless earthquakes, only one or two can be considered major earthquakes per year, and most of those occur within the Pacific Ring of Fire.

“Can this convince everyone?”

I shook my head.

“It will probably be difficult.”

***

Bonds are issued based on credit.

Government bonds are secured by the state’s credit, while corporate bonds are secured by a company’s credit.

Government bonds issued by a country may seem safe, but that’s not always the case.

During the Greek bailout in 2015, countries holding government bonds lost nearly half their principal due to debt relief, and in Russia’s 1998 moratorium, investors faced astronomical losses (the famous Long Term Capital incident happened then).

Even if the bonds are repaid on time, one variable remains: the exchange rate. If the value of the country’s currency crashes at maturity, foreign investors can incur foreign exchange losses despite earning returns from the bonds.

Currently, Brazil’s 10-year government bond yield is around 10%. This is four times that of most developed countries’ bond yields. Some investors were attracted by the high rate, but the recent collapse of the real has led to significant losses.

There’s no such thing as a free lunch; higher interest rates come with reasons.

Of course, if bonds were issued in dollars from the start, there would be no such worry.

The safest bond in the world is undoubtedly U.S. government bonds.

Berkshire Hathaway’s chairman Warren Buffett has invested most of its reserves in U.S. government bonds and always asserts that they are the safest assets.

This is understandable, as U.S. bonds remain safe unless the U.S. defaults on principal and interest. If that happens, one could assume the entire global financial system has collapsed.

Hyun-joo analyzed the bond market and immediately reported the results.

The issuance amount is $2 billion. The interest rate is 3.8%. Interest payments will be made annually.

Currently, the yield on U.S. 3-year government bonds is in the low to mid-2% range, while the AA+-rated bonds of NFL yield 3%.

“OTK Company bonds might manage mid-3% rates. However, the volume is quite significant.”

Typically, such volumes would select an underwriter through competitive bidding, but as always, we entrusted it to Golden Gate. The fee was set at 8 basis points (0.08%) of the sale price.

The sale underwriter, instead of charging a hefty fee, must take responsibility for the sale volume. It’s unreasonable to sell bonds that one does not want to purchase oneself.

Golden Gate decided to absorb up to 20% of the total issuance in case of insufficient demand, amounting to $400 million.

Golden Gate made the issuance conditions for OTK Company bonds public and gathered demand.

After the financial crisis, countries worldwide lowered interest rates and injected money to stimulate their economies. As a result, liquidity surged in the market.

With nowhere to go due to low interest rates, money sought out even slightly higher-yielding opportunities.

Unlike other companies, OTK Company has minimal debt. While some subsidiaries have loans, they are manageable.

In short, it’s a corporate bond unlikely to incur losses. The maturity is short, and the interest rates are reasonable. Furthermore, it has been clearly stated that there will be no more bond issuance within the next three years.

Demand surged, especially from institutions and pension funds.

Organizations like Singapore’s GIC, Dutch pension funds, and Norway’s sovereign wealth fund showed significant interest, along with oil-rich countries like Saudi Arabia and the UAE.

Despite concerns about excessive supply, the demand easily exceeded 100%.

This reflects a high evaluation of OTK Company’s stability while also demonstrating the abundant global liquidity.

The $20 billion corporate bond was sold out immediately upon issuance.

Essentially, OTK Company borrowed $20 billion globally at an interest rate of 3.8%. The total interest over three years amounts to 11.4%. They will need to pay $760 million annually, totaling $2.28 billion in interest over the three years.

While the money will need to be repaid in three years, how and where to use it remains entirely up to me.