Golden Spoon Investor

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Daeheung Group Acquires Taesan Securities!

On the 3rd, Daeheung Group officially announced the acquisition of 5.66 million shares (a 30.44% stake) of Taesan Securities for 114.2 billion won. With this acquisition, Daeheung Group becomes the largest shareholder of Taesan Securities and plans to incorporate it as a subsidiary. Through this acquisition, Daeheung Group aims to make a strong entry into the financial sector, expanding its business from department stores and textiles to securities, with ambitious plans to grow this new core business. Meanwhile, due to the booming stock market, many other large corporations besides Daeheung Group have been acquiring securities firms…]

After reading through the detailed article, Seok-won lowered the newspaper, a puzzled expression on his face.

"In my memory, Daeheung Group didn't have a securities company under its umbrella."

He tried to recall more, but he was certain that the group hadn't been involved in the financial sector.

"There is a venture capital company, but it's not very large."

It was surprising, then, to see that the group had suddenly decided to acquire a securities firm.

"And they invested over 100 billion won to do it? Maybe my father really is serious about growing a securities company, just like the article says."

Given that the government was pushing for the modernization of the financial markets and the stock market was booming, acquiring a securities firm wasn't a bad move.

Considering the upcoming dot-com bubble, which would arrive in a few years, the 100 billion won investment could potentially bring in substantial returns, making the securities firm a valuable asset rather than a money pit.

"It's definitely a better choice than holding onto subsidiaries that only drain money."

Despite this, Seok-won felt uneasy about the unexpected acquisition of a securities firm, something the group hadn't been involved in before.

"Could this be because of me?"

With no other major changes in the group, it was easy for him to believe that his actions might have influenced this decision. He clicked his tongue in frustration and muttered to himself.

"It's likely that my success with the pound sterling investment led my father to make this decision."

Even so, acquiring a substantial securities firm in just a few months seemed both impulsive and bold.

"Seems like, despite appearances, my father has a bit of a rhinoceros-like streak when he gets fixated on something."

Seok-won thought of his father, Chairman Park Tae-hong, with his imposing presence and serious demeanor.

With his robust physique and weighty presence, it was hard to imagine such swift decision-making from a man like him.

"Still, it's that kind of decisive action that elevated the group to the 30th rank in the business world."

Of course, the rapid expansion of the group, coupled with a lack of solid internal stability, eventually caused Chairman Park's aggressive management style to backfire, leading to the group's downfall.

"External attacks dealt the final blow, but if the group had been stronger internally, they wouldn't have dared to attack in the first place."

In the original timeline, Daeheung Group began to decline rapidly a few years later and ultimately failed to survive the IMF crisis, leading to its dissolution.

"But as long as I'm here, that's not going to happen."

Seok-won reassured himself with these thoughts, narrowing his eyes as he looked back at the article about the securities firm acquisition.

Acquiring a securities firm, which could potentially become a new cash cow for the group rather than a liability, might be the starting point of a significant change.

***

Daeheung Textile Factory, Ansan, Gyeonggi-do.

Inside the massive factory, which was larger than ten football fields combined, rows of textile machines whirred and clattered non-stop.

Young female workers with fresh, makeup-free faces in blue uniforms diligently worked at the machines, while a group of men in suits walked through the factory, observing the operations.

The middle-aged factory manager, dressed in work clothes, was visibly nervous as he glanced at the tall man in his early thirties walking beside him.

"To meet the increased orders, we are currently operating the line 24 hours a day with three shifts."

The man was none other than Park Jin-hyung, the eldest son of Chairman Park Tae-hong.

With his imposing height of over 180 cm and a solid build, he bore a striking resemblance to his father, exuding the aura of an impenetrable wall.

After graduating from a university in Korea, Park Jin-hyung joined the company early, following his father's wishes, and was steadily preparing to take over as the group's heir.

Although there was a younger son, Seok-won, everyone inside and outside the group assumed that the position of the next chairman would go to Park Jin-hyung.

This assumption naturally made the factory manager even more cautious in his dealings with the young executive.

"There's over 1,100 tons of yarn that needs to be shipped to China by the end of the year. There won't be any issues with meeting the shipment schedule, right?"

The factory manager promptly responded to Park Jin-hyung's question.

"The schedule is a bit tight, but we'll make sure to meet the deadline."

"It's only right that you do."

Though his voice wasn't loud, it carried a certain weight as Park Jin-hyung continued.

"Meeting deadlines is important, but so is ensuring that no defective products are produced. Make sure quality control is thorough."

"Yes, sir. I'll keep that in mind."

The factory manager bowed deeply as Park Jin-hyung and his entourage finished their tour of the vast factory, offering encouragement to the staff along the way.

As the backbone of the group and the main source of income alongside the department store business, Park Jin-hyung regularly visited the textile factories in Cheongju and Ansan to personally oversee operations.

After inspecting the production lines and giving his support to the management, Park Jin-hyung returned to the sedan that had brought him and headed back to Seoul.

As the luxury sedan exited the factory grounds and merged onto the main road, the man sitting in the passenger seat turned to speak to Park Jin-hyung, who was seated in the back.

"While you were touring the factory, I received word that the new president of the recently acquired securities firm has been decided."

The man, with a square jaw and broad forehead, was none other than Oh In-hwan, the chief secretary and right-hand man of Park Jin-hyung.

Leaning back against the plush leather seat, Park Jin-hyung showed interest in the news and asked, "Who is it?"

"Choi Jin-woo, the former Vice Minister of Finance."

The name seemed to surprise Park Jin-hyung, who raised his eyebrows slightly.

"Not Executive Director Cho Yoon-won?"

Meeting Park Jin-hyung's gaze, Chief Secretary Oh nodded slightly and explained in more detail.

"Yes, he's a former high-ranking official who retired from the Ministry of Finance last year. He's served in key positions, including the Financial Policy Bureau, and is considered a financial expert. I hear he's a close acquaintance of Chairman Cho, your maternal grandfather, from their university days."

Chairman Cho Seung-jae, the former Minister of the Interior and Park Jin-hyung's maternal grandfather, had retired from public service and was currently serving as the chairman of Daeheung Group's public foundation, Han-gyeol Foundation.

"It seems Chairman Cho's recommendation played a role in his appointment as the new president."

"I see."

After briefly organizing his thoughts, Park Jin-hyung spoke in a calm tone.

"It's a bit unexpected, but given that he's a financial expert and a former high-ranking official at the Ministry of Finance, I suppose it's not a bad choice."

"Indeed, I believe Chairman Park took those factors into consideration when making his decision."

"That sounds right."

Even with Chairman Cho's recommendation, Park Tae-hong was not the type of person to appoint just anyone to lead such an important subsidiary.

'Or perhaps my father asked if there were any suitable candidates among retired officials from the Ministry of Finance.'

Given that his grandfather, Chairman Cho, usually stayed out of the company's affairs and maintained a clear boundary, it seemed likely that his father had initiated the inquiry.

At that moment, Chief Secretary Oh hesitated before cautiously speaking up.

"And although it's not confirmed yet, there's talk that when your younger brother returns from studying in the United States, he'll be assigned to the securities firm."

"Where did you hear that?"

"That information came from the chairman's office, so it's not just a baseless rumor."

As silence filled the car, Chief Secretary Oh ventured his own speculation.

"Perhaps the chairman plans to eventually separate the securities firm and give it to your younger brother as his share."

It was a reasonable thought, considering that rather than assigning his younger brother to the group's mainstay businesses like department stores or textiles, he was being placed in the newly acquired securities firm.

"My father must have his reasons."

Park Jin-hyung gave a short reply, revealing little of his emotions, and turned his gaze out the window. It was a clear signal that he didn't want to discuss the matter further.

Chief Secretary Oh, sensing the mood, wisely closed his mouth and sat back in his seat.

From then on, only the sound of the engine filled the quiet car.

As the car continued down the road, Park Jin-hyung stared out the window, deep in thought.

'Is that why he appointed someone from outside instead of Executive Director Cho?'

Although Cho Yoon-won was one of Chairman Park Tae-hong's closest confidants, he was also a staunch supporter.

If Chairman Park truly intended to give the securities firm to his second son, having Cho Yoon-won stationed there could cause problems down the line, even if not immediately.

'A securities firm, huh…'

Park Jin-hyung lowered his gaze halfway, trying to gauge his father's intentions, and sank deeper into thought.

***

Cambridge, Massachusetts.

Seok-won, riding his bike across the wide campus, came to a stop in front of a stately red-brick building.

He dismounted and, with gloved hands, expertly locked the front wheel of his bike before straightening up, his cheeks flushed red from the cold wind.

"It's so cold now, I don't think I can ride my bike much longer."

Indeed, with the end of the year approaching, the temperature had plummeted below freezing, so cold that his breath came out in white puffs.

If the weather kept up like this, it wouldn't be long before he saw snowflakes falling from the sky.

"Just need to hold out until next week, then I'll be back in Korea."

Seok-won tightened his scarf around his neck and walked into the building. The warmth inside, thanks to the heating, immediately began to thaw his chilled body, making him feel alive again.

After walking down a long corridor, Seok-won stopped in front of a door with the name "Frank" on it.

Knock, knock.

He lightly knocked with one hand, and a response quickly came from inside.

"Come in."

When Seok-won opened the door and stepped inside, Professor Frank was sitting at his desk. He looked up and greeted him warmly.

"Ah, come in."

Professor Frank was dressed casually in chinos and a navy knit vest.

"You called for me, sir."

"Have a seat first; we'll talk."

Smiling, Professor Frank got up and asked from near a coffee pot on a shelf, "Would you like some coffee?"

"Yes, please."

As Seok-won unwound his scarf, he took a moment to survey the professor's neatly organized office. True to his meticulous nature, the books on the shelves were perfectly aligned, and not a single item seemed out of place.

Pouring hot water into a mug with instant coffee, Professor Frank set it down in front of Seok-won.

"Here you go."

"Thank you."

"It's not the best coffee, but it's drinkable."

Professor Frank joked lightly as he sat down on the sofa opposite Seok-won.

Taking a sip, Seok-won placed the mug back on the table and carefully asked, "May I ask why you called me here?"

"It's nothing too serious. I was just going through the exams, and your answer caught my eye. It was quite interesting, in a good way."

Professor Frank clasped his hands around his mug and crossed one leg over the other.

"You wrote that the primary cause of Black Monday in 1987 wasn't portfolio insurance or unstable computer program trading, but rather psychological fear among investors. That's an intriguing perspective."

Having heard about the event from Manager Oh, and having read numerous books by scholars who published works on the subject, Seok-won had developed his own thoughts. Confident in his understanding, he responded without hesitation.

"It's true that portfolio insurance and program trading, which were intended to hedge risks, became catalysts that exacerbated the crash when it occurred."

Professor Frank leaned back in his chair, listening intently.

"But even though portfolio insurance and program trading had grown in volume compared to the past, they alone couldn't have caused the Dow to plummet by 22.6% in a single day, especially considering the total trading volume on the New York Stock Exchange."

Professor Frank, with a glint of interest in his eyes, straightened up slightly and asked, "So you're saying that while portfolio insurance and program trading were factors, the core issue was that investors panic-sold their stocks?"

"Exactly. I'd add that the U.S. twin deficits, tax reform, and, most importantly, the psychological fear among investors, who were concerned about when the overinflated stock market would crash, triggered Black Monday."

Seeing that Professor Frank was deeply engaged, Seok-won continued.

"At the tipping point, when everyone was on edge, the market downturn triggered a wave of panic selling. This led to a cascade of sell-offs, with investors racing to jump ship. That wave of selling activated the risk-hedging mechanisms in portfolio insurance and program trading, creating a vicious cycle. That's my interpretation."

Professor Frank slapped his knee, nodding in agreement.

"A death spiral of selling, where one wave of selling begets another, huh?"

"Yes."

"Hmm, your theory makes a lot of sense. It's a very interesting take."

Rubbing his chin thoughtfully, Professor Frank suddenly looked at Seok-won with a curious expression.

"You're graduating this year, right?"

"Yes, I am."

Professor Frank's gaze grew even more intent.

"Have you considered pursuing a Ph.D. under my guidance?"

"...!"