The Conglomerate Family Became A Villain [EN]: Chapter 11

Becoming a Villain in a Chaebol Family – Here is Wall Street 02 –

Peter Lynch.

A legendary investor who recorded an average annual return of 29.2% for 13 years, from 1977 to 1990.

More importantly than his rate of return, he didn’t invest in trendy stocks like tech stocks.

In some ways, he valued a company’s intrinsic value even more than Warren Buffett.

During his prime, he memorized the stock codes of 2,000 companies, held shares in 1,400 of them, and was an investment genius who profited by directly visiting or analyzing hundreds of companies every year.

He also popularized the term ‘ten bagger’ [an investment that increases tenfold], which anyone involved in the stock market has heard at least once.

As Peter Lynch approached, Jung Hyun-woo stood up without realizing it.

“Hello.”

Sarah gave an awkward smile at his greeting.

“Charlie, you should greet after I introduce you.”

“······.”

It had been a long time since Sarah had seen Jung Hyun-woo so nervous. She found his reaction quite endearing.

‘He looks just like a high school student at times like this.’

The young Peter Lynch was a vibrant and cheerful person.

“Sarah, it’s been a while.”

“Peter, it’s been a while. Is it alright for you to come out like this?”

“Of course. It’s a meeting with Sarah, after all.”

“Is it about work?”

Peter Lynch smiled gently and said,

“Because you are the daughter of a major shareholder.”

Sarah had repeatedly emphasized that she wasn’t the main figure in the Hilton Group, but her family was wealthy enough to be a major shareholder in the Magellan Fund.

“Don’t say things like that.”

Peter Lynch’s gaze turned to the young man who had been standing since he appeared.

Sarah naturally introduced Jung Hyun-woo.

“This is Charlie Jung. He’s the developer who created Activision’s latest software, Zero Space.”

As she introduced Jung Hyun-woo, Peter Lynch extended his right hand.

“Young developers are always welcome. I’m Peter Lynch.”

Jung Hyun-woo shook the hand of the legend and greeted him.

“I’m Charlie Jung. You can call me Charlie.”

After the introductions, the three of them sat down.

Before getting to the main topic, Peter Lynch joked,

“The meeting place is the Plaza Hotel. Is the Hilton family perhaps buying the Plaza Hotel again?”

The historic Plaza Hotel was once owned by the Hilton Hotel Group.

“No. There’s no way we would. What money do we have?”

“Oh, if Sarah doesn’t have money, who does?”

“Investors on Wall Street like Peter.”

Sarah elegantly deflected his joke.

“Is that so? But what brings you here today?”

Peter Lynch was a very busy man. So, he rarely showed up unless it was for something important.

Before answering his question, Sarah asked one of her own.

“How much time do you have today?”

Peter Lynch held up one finger.

“I have one hour.”

“Only one hour?”

Sarah let out a disappointed sigh, and Peter Lynch scratched his head.

“Unfortunately, I have a prior engagement.”

“I see.”

“Since we don’t have much time, I’d like to get to the point quickly.”

Peter Lynch wasn’t one for social pleasantries. He was a cold-blooded investor and a seasoned player on Wall Street.

“The reason I called Peter here today is to ask for advice on investing.”

“If it’s about investing, you mean you want to join the Magellan Fund.”

Sarah waved her right hand.

“Of course not. If that were the case, I would have gone directly to the Magellan Fund.”

Peter Lynch skillfully ordered a drink and then responded to her words.

“You mean… you want to invest directly?”

Sarah nodded in agreement.

“That’s right. Charlie and I have decided to start an investment company.”

Peter Lynch tilted his head at her words.

“An investment company? Didn’t you say this person is a developer? Surely Sarah isn’t trying to make profits through program trading [trading done by computers, not people]?”

Peter Lynch didn’t particularly like this kind of technical trading, especially not in the early 1980s.

“Of course not. Charlie’s main focus is game software development.”

“Then…”

“We’ve decided to invest the money he’s earned from that.”

Peter Lynch nodded.

“I see.”

He briefly explained his investment principles to the two of them. The most important thing he emphasized was to invest in what you know.

Investing in what you know.

People often misunderstood this statement.

For example, if I like Starbucks coffee, I will invest in Starbucks.

That’s not what he meant by investing in what you know.

Using Jung Hyun-woo as an example, he meant investing in companies in his industry, such as game development or distribution.

Of course, Peter Lynch himself, who said this, failed to follow his own advice.

He neglected the financial and investment companies he belonged to, missing out on dozens of ten-bagger opportunities.

After listening to his explanation, Jung Hyun-woo asked his first question.

“What if the companies I know have poor performance or a negative outlook?”

Peter Lynch replied in a high-pitched voice.

“In that case, it would be better to shift your focus elsewhere. There’s no reason to stick with a declining company. There are thousands of companies listed on Wall Street.”

Turn your eyes elsewhere.

It was a typical Peter Lynch answer.

He didn’t just stick to stocks. When the economy was in a recession, he turned his attention to bonds.

“What if the decline is steep? Can’t we make some profit from that?”

Peter Lynch’s expression darkened slightly.

“Short selling, you mean?”

He wasn’t an investor who liked short selling. He preferred the strategy of avoiding negative industries or companies rather than trying to profit from their downfall.

“Would it be difficult?”

“It’s not an investment method for beginners.”

“What if you know the company well?”

Sarah thought Jung Hyun-woo was digging too deep. But instead of stopping him, she offered her support.

“Peter, please consider it a hypothetical.”

Peter Lynch listened to Jung Hyun-woo and her words alternately, then let out a long sigh.

“Hoo… Finding companies with a poor outlook isn’t difficult. But you need to understand this. The market is different from what you think.”

He paused for a moment and then raised his right hand.

“Sarah, you’ve probably heard this before.”

“What is it?”

“The market can remain irrational longer than you can remain solvent.”

Sarah calmly accepted his words.

“Keynes’ saying, isn’t it?”

John Maynard Keynes.

A British economist famous for his macroeconomic theories, commonly known as Keynesian economics.

Sarah called him Lord Keynes because he held a baronial title.

“If you know it, we can move faster. Let’s say there’s a company called A. A isn’t a good company, and the field is also bleak. But A’s stock may not fall as quickly as you think. If that happens, the short sellers will suffer a great loss. Frankly, they will go bankrupt.”

Peter Lynch’s words weren’t meant to scare them. In fact, many investors who engaged in short selling met a terrible end, going bankrupt due to the market’s abnormal movements, as he said.

Jung Hyun-woo also knew the risks of short selling to some extent.

‘Michael Burry, famous for The Big Short, also said that he would have gone bankrupt if the real estate bubble had lasted just one more year.’

In fact, before Michael Burry, most of those who predicted the U.S. real estate bubble and shorted it faced the terrible ending of bankruptcy.

“We can predict that a company’s stock price will fall, but it’s likely to be a reckless investment, you mean.”

“That’s right.”

Jung Hyun-woo nodded as if he understood.

“I think I was briefly tempted by the investment methods in magazines.”

Peter Lynch’s expression softened at his words.

“Magazines deal with gossip. Actual investing is very different.”

Peter Lynch thought that Sarah was the one who would actually invest.

‘Sarah’s major is finance, after all.’

He repeatedly emphasized to her that she should be the one to hold the center of the investment.

As the conversation was coming to an end,

Jung Hyun-woo said to Peter Lynch.

“Peter, I have a favor to ask.”

Peter Lynch cheerfully accepted his words.

“Charlie, what is it?”

Jung Hyun-woo looked into his eyes and told him his request.

“I would like Peter to name the new company.”

The name of the new company.

Perhaps it wasn’t that important. But Jung Hyun-woo really wanted to get the name from Peter Lynch.

‘Maybe I can receive the energy of a Wall Street legend.’

Peter Lynch tilted his head at his request.

“Naming… I don’t have much sense in that area.”

Sarah said to him in a coquettish voice.

“It’s Charlie’s request. Please think of a good name.”

Peter Lynch lowered his head.

“Okay. I’ll think about it.”

Sarah removed the coquettishness from her voice and said,

“Peter, don’t say you’ll think about it when you get back. This is a test of your quick wit.”

Peter waved his hand at her urging.

“Okay. Give me five minutes.”

“Okay. I can wait as long as five minutes.”

Before five minutes had passed, Peter Lynch opened his mouth.

“How about Victoria Fund?”

Victoria (Goddess of Victory).

It was a boringly ordinary name.

Both Jung Hyun-woo and Sarah thought the same.

“Is that all you came up with after thinking so hard?”

Peter Lynch didn’t back down despite her criticism.

“It’s a name I put some thought into.”

“What’s the origin of the name Victoria? It’s not good if you just vaguely say it will be successful.”

Peter Lynch coughed lightly and then said,

“Sarah, Victoria is the name of the only ship in the Magellan fleet that successfully circumnavigated the world.”

He was saying that he got the inspiration from Magellan, the name of his fund.

Jung Hyun-woo nodded and accepted his words.

“If that’s the reason, I can accept it. It’s good.”

Sarah still didn’t seem to like it very much. But when Jung Hyun-woo smiled as if he liked it very much, she didn’t object.

‘If Charlie likes it, it must be good.’

Peter Lynch got up from his seat like a student who had finished his homework.

“It’s time.”

Jung Hyun-woo also got up from his seat.

“Thank you for your advice.”

“Charlie and Sarah. Contact me anytime if you have any difficulties.”

Sarah said in a clear voice.

“Yes, I’ll contact you right away.”

Peter Lynch laughed loudly at her words. And with that laughter, the first meeting with the legend ended.

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