New York, Manhattan
– One New York Plaza Building
Seok-won, who had visited the Eldorado Fund office for the first time in a while, was sitting on a sofa in front of a large floor-to-ceiling window overlooking the vast East River. He was engaged in conversation with Landon and Andrew.
"On my way here, I noticed that the yen exchange rate closed 0.27 yen lower than the previous day. Are Japanese companies still delaying their option settlements?"
Landon, wearing a white dress shirt with branded suspenders, shrugged and replied,
"Once the rate showed signs of surpassing 103 yen, two companies hastily settled their positions, but the rest are still holding out."
"The deeper the yen depreciation, the greater our potential profits. I hope they hold out as long as possible."
At those words, Landon burst into laughter.
"Haha, exactly!"
Even the usually reserved Andrew smiled in agreement.
Seok-won took a sip from the teacup in front of him and then turned to Andrew, who was sitting on his left.
"There are still a few days left, but this month's returns are looking quite strong."
"Thanks to interest rate cuts and the internet boom, we were able to achieve good results. But honestly, compared to what you've accomplished in Japan with a single option trade, our performance feels insignificant."
Andrew responded humbly, prompting Seok-won to smile warmly.
"Even in a strong bull market, poor investments can still lead to losses. Exceeding your target returns is something worth praising."
"Thank you for saying so."
"The internet sector isn't just a passing trend—it will continue to lead the market for a long time. We should focus our investments on dot-com companies like Yahoo and Cisco."
"I agree. I've been structuring our portfolio with that in mind."
At that, Landon's eyes lit up as he joined the conversation.
"Stocks of internet companies, including Netscape, have already surged significantly. Do you think they will continue to rise?"
Without hesitation, Seok-won nodded.
"While it's true that prices have jumped, considering the explosive growth ahead for internet companies, we are merely at the very beginning of a major bull run."
In reality, many experts were already warning that internet stocks were overextended, and some were even short-selling them.
However, knowing that the dot-com bubble hadn't even fully inflated yet, Seok-won still saw the current stock prices as incredibly cheap.
"Nasdaq has been soaring this year, with Cisco alone doubling in value. Are you saying this is just the beginning?"
Landon asked in surprise.
"Yes."
"Hah…"
Hearing Seok-won's calm response, Landon let out a small, incredulous laugh, as if struggling to believe it.
Andrew, too, couldn't hide his complicated expression as he stared at Seok-won.
"Of course, over time, even among internet companies, there will be winners and losers based on growth potential and earnings. But one thing is certain—over the next few years, Nasdaq will see an unprecedented influx of money and speculative frenzy, driving an even bigger bull market."
Despite concerns that a bubble was already forming, the idea that stocks could rise even further made Landon and Andrew subconsciously swallow hard.
It wasn't easy to dismiss Seok-won's outlook as overly optimistic—after all, the internet boom was not just affecting the stock market but rapidly transforming society as a whole.
Moreover, the one making this prediction was Seok-won, a man who had never once failed in his investments and had consistently struck gold with every trade.
"If the internet boom is really going to continue, didn't we sell off Netscape too soon?"
Landon's face was filled with regret.
"As I just mentioned, even in a bull market, not all stocks rise together. Some companies will inevitably fall behind."
At that, Andrew adjusted his gold-rimmed glasses with one hand and asked,
"Are you saying Netscape will fall behind in the web browser competition?"
"It's too early to make definitive predictions, but with a formidable competitor like Microsoft in the game, its future won't be entirely rosy."
Although Microsoft had recently suffered a crushing defeat in the first round after rushing out its own web browser alongside the launch of Windows 95—receiving harsh criticism—it was still a company that could never be underestimated.
Both men nodded in understanding, fully aware of this fact.
Seok-won rested one arm on the sofa and continued speaking.
"You probably know that Microsoft recently announced plans to distribute its in-house web browser for free, bundled with Windows."
"Yes, it was an unexpected move and became a major topic in the market."
Andrew responded first, while Landon, sitting across from him, shook his head.
"That's practically the same as giving up on all browser development costs. It seems Microsoft is determined to crush Netscape."
"The problem is that even though Netscape currently dominates the market, this makes it difficult for them to charge for their browser."
"That's right. If they start charging, users will likely switch to Microsoft's free alternative, putting them in a tough spot."
"Even now, their stock price has surged, but the company remains in chronic deficit with almost no revenue. If they engage in a self-destructive price war with Microsoft, breaking out of their financial struggles will become even harder."
At that, Andrew smacked his knee with one hand.
"So you're saying Microsoft is deliberately instigating a game of chicken?"
Landon, who had caught on a beat late, opened his mouth slightly in astonishment.
"Unlike Netscape, which only has its web browser, Microsoft is making money from both DOS and Windows. They probably believe that as long as they can endure, they'll eventually win."
Netscape, despite having a vastly superior product, would ultimately be overtaken and destroyed by Microsoft's bundling strategy—a move that delivered the decisive blow in the browser wars.
"Right now, Netscape offers better stability and features, so even if Microsoft pre-installs its browser on Windows, users will still choose to download Netscape. But over time, as Microsoft improves its performance, many users will find downloading a separate browser too bothersome. If that happens, the current overwhelming market share gap will gradually narrow—like water seeping in—until, at some point, the tide completely turns."
"It's a dirty tactic, but an undeniably effective one."
At Landon's remark, Andrew fell into deep thought before speaking again.
"If Microsoft manages to monopolize not just the operating system but also the web browser market, it will be the biggest beneficiary of the growing personal computer industry fueled by the internet boom."
Seok-won nodded slightly, impressed that Andrew wasn't just grasping the current situation but also thinking ahead.
"Even if we set aside web browsers, which won't generate immediate profits, Microsoft's operating system is essential for all IBM-compatible PCs except Apple. So yes, they will dominate the market."
Andrew's eyes lit up as he leaned forward.
"In that case, wouldn't it be wise to start increasing our holdings of Microsoft stock now?"
"That's a good idea."
Seok-won turned his gaze toward Landon.
"Increase our fund's Microsoft holdings by an additional 3%."
"I'll take care of it."
Then, turning back to Andrew, Seok-won continued,
"In addition to the newly acquired shares, I'll increase the trading team's discretionary capital by $200 million. Use it to aggressively trade Microsoft and other internet stocks."
Hearing that their self-managed funds would be significantly increased, Andrew's eyes gleamed with excitement.
"I won't disappoint you."
"Bold bets are good, but don't push too hard just for the sake of profit."
"I'll keep that in mind."
After taking a sip of his coffee, Seok-won interlaced his fingers and spoke in a calm voice.
"Along with Cisco and Microsoft, I want to add one more stock to our long-term holdings."
Landon immediately perked up with interest.
"What is it?"
Andrew, though silent, was also pricking up his ears and watching him intently.
It was only natural for them to be curious—every stock he had picked so far had skyrocketed without a single failure, delivering massive returns.
Receiving their eager, expectant gazes, Seok-won calmly stated the company's name.
"Enron Energy."
"...?"
Landon and Andrew, having assumed it would be one of the internet companies currently setting the stock market on fire, couldn't hide their surprise at the unexpected choice.
"Did you just say Enron Energy?"
Landon, wondering if he had misheard, asked again, and Seok-won nodded immediately.
"That's right."
Andrew, wearing a puzzled expression, responded next.
"Isn't Enron the natural gas company headquartered in Texas?"
"Yes. You know it well."
Andrew slightly tilted his head before carefully continuing.
"I remember making some decent returns trading its stock when Enron Energy was formed through the merger of InterNorth and Houston Natural Gas."
With a slight frown, Andrew glanced at Seok-won's face and hesitantly spoke.
"It's a sizable company with overseas branches in 30 countries and total assets exceeding $15 billion. But it has low growth potential and unimpressive financial performance. I find it a bit puzzling that you're selecting it as a long-term holding."
Andrew had a point—at this time, Enron Energy was just another ordinary energy company, with nothing particularly remarkable about it.
Its stock had been moving sideways for a long time since the merger, with no significant fluctuations. On top of that, it wasn't even known for paying high dividends, making Seok-won's choice even more baffling.
Then, as if something had occurred to him, Andrew's face slightly stiffened as he asked,
"Did you spot signs of a sharp rise in energy prices?"
"No."
When Seok-won shook his head, Andrew's expression became even more unconvinced.
"Then why are you interested in Enron stock?"
"I'm curious as well. It doesn't seem like the kind of company you'd usually go for."
Since Seok-won had never shown any prior interest in the energy sector, their confusion only deepened.
"After looking into it, I found that the company has solid financials and good credit. More importantly, our fund's portfolio is currently too heavily weighted toward IT. I want to balance it out by adding an energy stock."
"In that case, wouldn't it make more sense to buy shares of a major oil company like Exxon or Mobil?"
Andrew adjusted his gold-rimmed glasses as he followed up.
"I agree. Those companies also pay much higher dividends."
Landon's reasoning was valid, but Seok-won had another plan—one he couldn't openly reveal.
"That's true. But while those blue-chip stocks offer stability, their price movements are slow, making it difficult to generate high returns. In contrast, Enron, being relatively smaller, has more growth potential. I believe this is the better choice."
He gave a plausible explanation while silently thinking to himself:
'Even if it's an illusion built on fraudulent accounting, this stock is about to skyrocket just like the dot-com companies. There's no way I'm letting this opportunity slip by.'
It was a somewhat shaky justification, but seeing how determined Seok-won was, both decided to suppress their lingering unease and no longer object.
"Then, how much of a stake should we acquire?"
Seok-won responded immediately, as if he had already thought this through.
"Take your time until next year and acquire 10% of the total shares."
Andrew quickly estimated Enron's stock price and market capitalization in his head before nodding.
"Understood. I'll proceed accordingly."
'Honestly, I'd love to buy up even more of Enron's stock since the jackpot is all but guaranteed. But if I do that, I might get caught in the fallout when the accounting scandal breaks.'
If a major shareholder dumped all their shares right before the fraud was exposed, people would naturally suspect that they had been involved in the executives' scheme from the start.
'And if I not only sell my stake but also short the stock, the backlash would be even worse.'
To avoid that, he had to settle for this level, as frustrating as it was.
'Instead, I'll make up for the lost profits—many times over—through short selling.'
It was little more than a smoke-and-mirrors trick, but as long as he shorted the stock and then released a sell-side report subtly hinting at concerns over accounting irregularities, he could deflect some of the market's suspicion and criticism.
Thinking about the immense profits he was about to rake in from Enron's stock, a deep smile spread across Seok-won's lips.