RR 29
[029] You Should Spend Some Money to Learn and Grow 2.
Lee Hak-jae became even more cautious.
“Yes. They say he gave him 4 billion won.”
“4 billion won? Good heavens!”
“There’s a widespread rumor in Chungmuro right now that Sunyang Group has entered the film industry. It’s a rather large initial investment.”
“Empty rumors end as empty words. You don’t need to worry about it.”
Chairman Jin began rubbing his throbbing forehead.
“Shall I intervene?”
“Can you?”
“A production company is like a developer in construction. Without a construction company, a film cannot be made. You need to gather many staff members for each part.”
“Cut off their hands and feet that work together…?”
“Yes.”
“Hmm…”
The hand rubbing his forehead stopped.
“Leave it.”
“Excuse me?”
“He’ll only learn by failing. That you shouldn’t spend money out of sentimentality.”
This was shocking to Lee Hak-jae. The chairman’s concern wasn’t for his son. He was thinking only of his grandson.
“Are you referring to Do-jun?”
“Yes. Even if it’s his own father, he’ll feel it deeply: that you don’t spend money on something without potential. If 4 billion won was spent to become ruthless without being swayed by sentimentality, then it’s a cheap tuition fee.”
“But, sir. What if the movie succeeds…?”
“He’s been unemployed his whole life. Can just anyone do business? If filmmaking were that easy, why would movies fail? Even top-notch producers and directors fail often, so how could he possibly succeed?”
Unlike Chairman Jin, who was confident of failure, Lee Hak-jae thought differently.
There were countless cases where unknown rookie directors succeeded at the box office.
What if it succeeded?
Instead of being angry that his unsatisfactory son was breaking free of his control, he would love and have even greater expectations for his grandson, Jin Do-jun, who recognized the worth of Jin Yun-gi, the son he had cast aside.
If the movie failed, it was a lesson; if it succeeded, it confirmed his ability to judge people.
Whatever the outcome, Chairman Jin seemed likely to burst into laughter.
“By the way, Hak-jae.”
“Yes, Chairman.”
“Yeong-jun graduates next year, doesn’t he?”
Lee Hak-jae hesitated when he was suddenly asked about his eldest grandson. How old was he again?
“When that fellow graduates, send him to Germany.”
“Germany? Things are quite unsettled there these days. Will that be alright?”
In September 1989, the Monday demonstrations, which began in Leipzig, ignited democracy protests across East Germany.
To appease the protestors, East Berlin General Secretary Günter Schabowski announced a travel liberalization policy at a press conference.
But something immense happened there.
An Italian journalist at the press conference asked, “When will the border opening be implemented?” The General Secretary, mistaking border opening for travel liberalization, made a fatal error by replying, “Immediately, without delay.”
The Italian journalist, whose German was poor, mistook the travel liberalization measure for the fall of the Berlin Wall immediately after the conference and sent an urgent dispatch to his home country.
This news crossed the Atlantic and spread to West German television that night, causing Germans to flock to the Berlin Wall in an instant.
Tools in hand, they began to tear down the Berlin Wall. Not just Berlin, but all of Germany was plunged into chaos.
“The fall of the Berlin Wall is a symbol of change in Eastern Europe. At times like these, he needs to see it firsthand and feel the change in his bones. Finding opportunity within that is his job.”
“Wouldn’t he be too inexperienced? Perhaps gaining some experience domestically…”
“It’s better to gain experience in Germany. Wouldn’t he gain more experience in a short time if he rolled around in a place where the world is changing so rapidly?”
Was that truly his intention?
Lee Hak-jae’s doubts lingered. He wondered if the purpose was to gain experience or to expose Jin Yeong-jun’s incompetence.
“Understood. I’ll arrange a position at the Frankfurt branch.”
Chairman Jin, who had shown a satisfied expression, then spoke with a little more deliberation.
“And… I’m thinking of building a home appliance factory in East Germany. What are your thoughts?”
Chairman Jin, confident that East Germany would collapse, showed swift action. If West German money flowed into East Germany, it would be no different from creating another massive market.
Lee Hak-jae knew what Chairman Jin wanted.
Building a home appliance factory was something that could be started with a mere flick of his finger. If it were that simple, he would have called the president of Sunyang Electronics and given the order, not himself.
There was another hidden meaning.
“I will meet with Assemblyman Park and discuss it.”
“Good. Give him what he wants and then extract what you need.”
He intended to build the home appliance factory in East Germany with state funds.
Any pretext could be used. Supporting underdeveloped East Germany was the most plausible, and the method of support was a production factory that could create employment.
Not all of it, but building the factory using state funds as much as possible and then absorbing it into Sunyang’s assets later. They had done this countless times.
Those in charge of national affairs should not spare state money to line their own pockets. Enriching their pockets was what chaebols like Sunyang Group, who left no trace of wrongdoing, did best.
.
.
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Investment Discussions
“Here’s the investment agreement. Take a look. Let’s see your English skills.”
Oh Se-hyun smiled faintly, his eyes full of curiosity, but I had no intention of playing along.
“I can’t read these professional details. Just explain it to me.”
A flicker of disappointment crossed his eyes, but I didn’t mind. In my past life, I, too, only reported the essentials. Receiving only the main points was the boss’s prerogative.
“Really? Is it a bit difficult?”
Oh Se-hyun picked up the agreement again.
“First, the total investment is nine million dollars. They absolutely cut us off there. This amount is the limit allowed by the investors who already invested first.”
“How much per share?”
“40 cents.”
I was a bit surprised. My estimated price was 60 cents. Knowing that it would go public on NASDAQ next year at a par value of 30 cents, I expected them to demand at least double.
“Is it a good price?”
Feigning ignorance, I asked for confirmation, and Oh Se-hyun transformed into the posture of someone accurately reporting.
“Dell Computer is scheduled to go public next year at a par value of 30 cents. The expected price at the time of listing is double, and it will fluctuate over time. But the average price is definitely over 40 cents.”
“Then it’s a good deal.”
Michael Dell must have had no choice but to offer good terms.
The shares I acquired would eventually fall into Michael Dell’s hands. The more shares he secured, the more solidified his management rights would become.
The only thing Michael Dell missed was the stock price, which would rise much steeper than he anticipated. Because of that, I would rake in an enormous amount of money.
“So the negotiation ended easily. The difficult part was this.”
Oh Se-hyun again pulled out a thick stack of English documents.
“I’ve selected some candidates for where to invest the remaining six million dollars.”
Oh Se-hyun briefly explained the candidate companies for investment, then stopped.
To explain the investment reasons, technical terms like PER, PBR, PSR, WACC, net asset valuation, expected future net cash flow, and discounted cash flow method would inevitably keep coming up, so he shook his head awkwardly.
“Hmm, I’ll explain it simply. Safe investments and slightly adventurous investments.”
“Where are the safe investments?”
“In the medical sector, like Pfizer, Johnson & Johnson, and Boston Scientific. They consistently generate profits, so their stock prices are stable, and dividends are good. Especially in healthcare, it’s hard for latecomer countries to catch up, so it can be considered very strong.”
In the fiercely competitive manufacturing sector, a single main product can cause stock prices to fluctuate wildly.
However, in the medical sector, stock prices jump with each new drug, but rarely fall, showing an ironclad fortress. It’s a field where latecomers find it difficult to catch up. If only stability is considered, it’s the best choice.
“A bit risky, but worth trying, is Microsoft.”
Microsoft is risky? Bill Gates, of all people?
Hadn’t he already partnered with IBM and made DOS a success?
He must have misunderstood my surprised expression.
“Unfamiliar, right? Honestly, I don’t know much about computers either.”
“What’s the risky reason?”
“They keep releasing new computer operating systems, but the market reaction hasn’t been very favorable, apparently. According to information, a third version is coming out next year, and it’s hard to judge what will happen if even that fails. Plus, there are rumors that IBM is developing its own operating system and breaking up with Microsoft.”
Was the Windows version coming out next year 3.0 or 3.1? It’s a bit hazy.
Well, it doesn’t matter. It’s only a year or two’s difference anyway.
Windows 3.0 significantly enhanced multitasking capabilities by fully introducing virtual memory and provided a more elegant and flashy interface due to improved graphics card performance.
Starting with 3.0, IBM PC compatible models, whose strengths were their relatively low price and expandability, would rapidly emerge as powerful competitors to the expensive Apple Macintosh, and Microsoft would be the company to dominate the global PC market. Enough to relegate the powerful Macintosh to the periphery.
For me, who lived in an era where Apple became the absolute powerhouse again with the iPod and iPhone, it’s truly fascinating. There’s no eternal winner.
“Uncle. Who recommended Microsoft?”
“Rachel. You saw her too, at the New York office?”
“Oh, that middle-aged lady?”
“What? Middle-aged lady? Haha. She’s barely thirty! Rachel would have bristled if she heard that.”
I’d have to wait and see, but Rachel seemed likely to be Miracle Investment’s top talent.
“So, what should we do?”
“What are your thoughts, Uncle?”
“I was drawn to Rachel’s opinion.”
Oh, unexpected. He clearly said it was a field he didn’t know well. Yet, he was considering investing.
“It might sound strange, but there’s a gut feeling. A feeling that Rachel’s conviction might be right. It kept pulling me.”
He chuckled softly when I kept staring at him as if he were something new.
“Heh heh. Of course, the backup data was good too. The numbers are worth taking a risk. And… your luck isn’t ordinary, so I thought, why not bet on it?”
“Then, let’s do it. I bring good luck, so it’ll work out. Hehe.”
We laughed together, but anticipation was visible in Oh Se-hyun’s eyes. I would give him hundreds of times that expected return. Didn’t this gentleman also have a 2% stake?
Now, I needed to start the next phase.
“Uncle. I have a favor to ask.”
“Yes, tell me.”
“I have land in Bundang, right? Still remaining…”
“Oh? That land? It’s still going up in price, isn’t it?”
“Is it? I don’t really know… Anyway, please sell it.”
He startled and waved his hand. This was because the land price was soaring day by day.
“Huh? Why sell it? Just hold onto it. You can sell it when it peaks.”
I wasn’t selling because I didn’t know. I shouldn’t miss out on something more important just to earn a few billion more.
“Then what will the company in New York do? Just sit idle?”
“What? Oh…!”
Oh Se-hyun clapped his knee.
The enormous sum of fifteen million dollars would be poured into only two companies. And there was no guarantee when it would be recovered. It would have to be held for at least several years.
Wouldn’t it be wrong for four talented employees of the company to just stare blankly at stock charts?
“So that money will be the funds Miracle operates?”
“Yes. But only use half of it, and keep the other half.”
Strictly speaking, I knew nothing. I was merely using fragmented knowledge of the future. If I hadn’t known the future, would I have invested in Dell Computer and Microsoft?
My current knowledge and skill didn’t even come close to that woman, Rachel.
Half of the money from selling the remaining land would become my tuition fee. Every action in their investment decision-making process would be my textbook, and Oh Se-hyun, a talented individual from the formidable company PowerShares, was my private tutor.
With them, I would experience and learn about the world-class real economy. At this rate, even if all that money were lost, it wouldn’t be a waste.
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