“Feeling unsettled, aren’t you?”
Department Head Choi of the risk team asked as he reviewed the papers.
“...Pardon?”
“I mean the global market conditions, and the mood both inside and outside the company.”
“Ah, yes... But is the Division Head still refusing to back down?”
“I worked under him, on the same team, for twenty years. If you asked me to name the most stubborn person in our company, Park Seongcheol would win by a landslide.”
Director Oh gave a bitter smile.
The Division Head and Department Head Choi were close enough in private to call each other older brother and younger brother. If even Choi was saying it was hopeless, that meant the man had already made up his mind.
“He only took a step back this time because the returns were a mess. Once performance recovers, he’ll go right back to butting heads with the chairman.”
“Then the next Division Head will be...”
“Who knows? But won’t they pick someone who’s the complete opposite? Someone with good investment performance who also listens obediently.”
“I see.”
Department Head Choi closed the papers.
“I don’t know whether this is misfortune or fortune. Looks like we’ll recover faster than expected?”
“Yes. We’ve already made up this year’s losses with the rise in commodity prices, and if market conditions improve, we should enter profitable territory starting in the first half of next year.”
“How much cash-equivalent assets does the overseas team have right now? I heard you sold off a large portion of the foreign stocks right before the Ukraine-Russia war.”
“Roughly 100 trillion won.”
Department Head Choi smiled bitterly.
It had been an incredible stroke of luck that they had sold off big tech in bulk right before the Ukraine-Russia war. As soon as the war broke out, those stocks had plummeted helplessly.
But now, with even the Nasdaq—the one thing they had still trusted—staggering, there no longer seemed to be any suitable place to invest. China, Europe, and the United States had all collapsed like dominoes.
“What are you planning to do from here? Personally, I think U.S. Treasury bonds look the safest, at least.”
“We’re considering them. They’re safe and pay high interest besides, so there’s hardly a better investment. However...”
“However?”
“I’m thinking of aiming for low-price purchases on the Nasdaq. Buying back the big tech stocks we sold.”
Department Head Choi let out a sigh.
“That’s not your idea, is it? Is it that Lee Sejun again?”
“How did you know?”
“Because the Oh Taeseong I know is not the sort of man who would ever buy stocks in such an uncertain market. If you buy dollars, the safest money in the world, they even pay the highest interest. Aren’t you obviously the type to buy bonds?”
Director Oh smiled awkwardly and scratched his head.
In truth, before submitting the report to Department Head Choi, there had been another small tussle.
Bonds or stocks... He had engaged in a heated debate with that guy for about an hour, and this time he had conceded quickly. Last time, he himself had argued that the one with the higher rate of return was probably right, so now it was his turn to follow through.
“Even so, isn’t this too uncertain? The Europeans are holding out longer than expected. If the halt in natural gas imports continues, carbon reduction goes out the window too, and then the entire market becomes unpredictable as a result, doesn’t it?”
“He’s the only one who bought during the circuit breaker, when even foreigners and institutions were all dumping. That kid judges based only on objective indicators.”
“Then what objective indicators is he looking at to say we should buy the Nasdaq?”
“Manager Lee’s view is that, on the contrary, the uncertainty has been resolved. He predicts that the Ukraine-Russia war will turn into a war of attrition, but that it won’t have much effect on the global community’s carbon-reduction goals or the monopolistic positions of big tech.”
Department Head Choi could not accept it.
Because it had become “certain” that the Ukraine-Russia war would be prolonged, the “uncertainty had been resolved”... Was this really supposed to be an economic report?
But when he thought about the returns the guy was recording, he could hardly refute it.
The pension fund’s return, which had recorded -7% after the Ukraine-Russia war, had now surged to 6%, nearly recovering the principal. All of it came from returns in commodities, insurance, finance, and the like—areas that the guy had actively pushed for—amounting to a jackpot of at least tens of trillions of won.
But even that was only the tip of the iceberg. If they included the stocks he had insisted they sell—in other words, the money they had not lost when they otherwise would have—the figure would easily exceed 100 trillion won. It was no exaggeration to say that this year’s pension fund returns were being driven by that guy alone.
“I don’t understand it at all, but I suppose there’s no helping it. Director Oh, you’re the type who believes you must follow whatever the number-one performer says, aren’t you?”
“Please forget that. We were in a hurry then, weren’t we? Haha...”
“Let the overseas team decide on the Nasdaq purchases autonomously. No need to report every little thing.”
“Yes. We’ll aim for the 50 trillion won range and proceed with phased purchases over three months. Thank you.”
Just as he was about to leave, Department Head Choi asked casually.
“But Director Oh. Isn’t buying Asan Motors a bit much? I can accept everything else, but this one I truly can’t understand at all.”
*
“Okay, approval came down from above. Starting today, let’s proceed with phased buying.”
At the late-afternoon meeting, Director Oh returned from his meeting with the risk team bearing good news for once.
Recently, as the international situation had changed rapidly, uncertainty so thick that no one could see an inch ahead had descended over the market, but our overseas team had reached a conclusion.
We would buy into fear.
Of course, most people had cried out that U.S. Treasury bonds were the safest, but my insistence had brought us to this conclusion.
“Director, if we proceed, how should we do it?”
“The Nasdaq... no, more precisely, the S&P 200. Let’s sweep up the high-quality big tech stocks again. How far has the Nasdaq index fallen now?”
“It broke below the 11,000 line in yesterday’s session. It’s almost the same price as after the SB incident. But considering how the Nasdaq alone had skyrocketed recently, it still isn’t exactly cheap.”
Team Leader Choi, known as the most conservative member of the overseas team, still looked displeased. He continued to insist that U.S. bonds were the cheapest and safest.
In truth, if I had been a “normal” investor, I would have reached exactly the same conclusion as Team Leader Choi.
At present, all global market conditions had contracted due to the real estate crisis originating in China and instability in Europe. If the war of attrition dragged on, not only European stocks but, through a chain reaction, U.S. stocks as well would be affected. In such market conditions, U.S. bonds—with “the best safety and the best interest”—were an entirely natural place to invest.
But I did not do that.
With the 11,000 line as its bottom, the Nasdaq soared so frighteningly that it seemed like it might go all the way to Mars. If my memory was correct, that explosive upward trend continued until that man, Donald, appeared.
“Team Leader Choi, don’t worry too much. If you look at the technology big tech companies possess, this isn’t a baseless rise. Of course, there is the variable of war, but it’s a rise supported by the real economy, so let’s buy.”
“...Understood.”
“Now, each of you organize your assigned sectors and themes and buy in phases. That’s all.”
When the meeting ended, Director Oh called me aside.
“Judging by the atmosphere, everyone seems anxious. Well, I’m the same. Buying stocks in this age of uncertainty is something I never imagined.”
“Director...”
“But the truth is, if we hadn’t sold before the Ukraine-Russia war broke out, it would all have been money we would have lost. This time, I backed you without complaint. That should be enough to satisfy you, right?”
If I had my way, I would have invested all 100 trillion won of the overseas team’s cash assets into the stock market, but I only received permission for half.
Still, this was enough for me. From the pension fund’s perspective, they couldn’t completely disregard risk management.
“Yes, I’m satisfied! Thank you very much.”
“But listen, Manager Lee. I can understand the other things, but I absolutely cannot understand the plan to buy into Asan Motors’ capital increase. Department Head Choi is puzzled too.”
“...Pardon?”
“America has the technology, and China has the cost-effectiveness, doesn’t it? In the age of electric vehicles, will Asan Motors really be able to exert any strength?”
“...”
“Let’s say the 3 trillion won range for the capital increase purchase is one thing. But what is this 10 trillion won range in interest-free bonds? KEPCO bonds, which are practically Korea’s benchmark rate, are in the 4% range, so how can Asan Motors issue corporate bonds in the 3% range? Why do we have to buy those?”
I smiled bitterly.
In truth, there was no way to explain it. This was an unjustifiable corporate favor and, in itself, an illegal loan.
“Director... What do you think will happen if Asan Motors collapses?”
“What?”
“Not only will its subcontractors go bankrupt one after another, but Korean manufacturing will be shaken badly too... won’t it?”
“Are you the president? Why are you worrying about that? If anything, that’s all the more reason to buy Teslan.”
I had no choice but to bring out an utterly feeble excuse.
“...But then there’ll be fewer people to pay into the National Pension.”
“What?”
“The purchase of Asan Motors’ capital increase can’t end with just this one time. Once the chicken game begins in the electric vehicle market, we’ll have to fully support the automobile market too, just as Taiwan stakes its life on semiconductors.”
“You... You’re not thinking of ending the capital increase purchase with just this one time, are you?”
“No. After speaking with Chairman Choi of Asan Motors, I found that they’re also preparing for the chicken game with the company’s fate on the line in their own way. Their 100 trillion won in retained earnings is war funds, so it must not be touched. We should consider additional capital increase purchases as well.”
“What do we gain from helping Asan Motors in a war of attrition?”
“In return, once they finish dominating the market, it will come back to us as several times the profit. Teslan, too, ran deficits for years when it first entered the electric vehicle market.”
Director Oh sighed.
“Manager Lee. Do you remember how much I scolded you when you were going around buying defense stocks?”
“Yes. Honestly, I was a little hurt back then.”
“You bastard, don’t try to stir up my guilt for no reason.”
“...”
“Anyway, do you really want to reinvest the money you worked so hard to earn while being scolded like that into this? Whenever you talk about other things, you always present solid grounds, but when you talk about Asan Motors, you don’t seem to have much basis at all. Aren’t you unsure about this yourself?”
At his piercing question, I was momentarily at a loss for words.
How could he understand my feelings so well? No... Did that mean, by every indicator, he thought Asan Motors had no future?
“No. I believe that if there is support on a national scale, Asan Motors can sufficiently maintain its market share even in the age of electric vehicles.”
“For that, their EV market share is far too terrible... What’s your basis?”
“You know, don’t you? Chairman Choi of Asan Motors is an owner who has, unusually, been recognized for his management ability. Meeting him in person, he seemed extremely reliable.”
“...That’s your basis? Not that they’ve completed proprietary technology for batteries or autonomous driving, but just that the person seems reliable?”
“Not just that. When I asked why their retained earnings kept reaching new highs, he said they were preparing for the age of electric vehicles. In many ways, they were doing their best too.”
As Director Oh continued to be conservative, I had no choice but to say something underhanded.
“Director. I’m the guy who recognized the potential of defense stocks early. Number one in returns...”
“Don’t even start. I shouldn’t have praised you so much back then. Tsk, tsk.”
“...”
“Still, the money we’re investing now is all money you earned anyway, so this time I’ll accept it without prejudice. Buy into Asan Motors’ capital increase, and buy all the bonds in the 3% range too.”
“Yes, sir. Thank you.”
Just as I was about to leave the conference room, Director Oh asked.
“By the way, when exactly is Asan Motors planning to release its retained earnings? They’ve already exceeded 100 trillion. In terms of cash alone, they hold more than the pension fund. They really are preparing for an EV chicken game, right?”
I answered.
“The chicken game will likely begin soon.”