To think that I, who once dreamed of working in finance, would be asked to advise on the operation of a sovereign wealth fund.
The Norwegian sovereign wealth fund invests in companies all over the world. However, since they can’t know the local situation in detail, they usually contract with asset management companies or establish subsidiaries. There are such asset management companies in Korea as well, and they are among the most coveted workplaces in the financial industry.
Director Carlsen continued to speak.
“As you know, the sovereign wealth fund is gradually increasing its stock holdings.”
All financial products have a risk and return that are directly proportional. Even if it seems otherwise, it’s only a temporary phenomenon, and market forces will eventually bring it back to the average.
Stocks have high returns, but the risk is also high. Therefore, funds that prioritize stability limit their stock holdings. However, the Norwegian sovereign wealth fund was planning to increase its stock holdings to 70 percent, in reverse.
This is because oil prices and stock prices often move in opposite directions, and there’s a belief that even if there are temporary losses, they will trend upward in the long run.
This is possible because the decision-making process is transparent and social trust is the foundation. Even if there are losses, if the decision was made rationally according to procedure, they won’t hold anyone responsible.
From this perspective, there is a big difference from the Korean National Pension Service, which rejoices and despairs over annual profits. In Korea’s case, even if there’s an unrealized loss right away, the media is the first to step forward and attack, saying that they’ve squandered the people’s retirement funds or whatever.
So, they have no choice but to operate as conservatively as possible. You might think that investing only in bonds and deposits, excluding stocks and real estate, would be fine, but even doing so doesn’t mean you can avoid losses.
Even if the principal remains the same, if it doesn’t keep up with inflation and market returns, it’s effectively the same as incurring a loss.
“Blood is thicker than water, and as long as I’m investing and doing business, I might end up advising in a way that benefits me.”
Lawyers have a duty to avoid conflicts of interest, which means they must avoid representing clients with conflicting interests. This is the same for investors.
That’s why, in the case of private equity funds or hedge funds, the manager puts in their own money first. It’s to show that they will endure losses together with investors.
“That’s alright. It’s up to us to judge what your intentions are when you advise us.”
If it’s really good information, I’d be the first to move. Even just watching that and following suit could bring in considerable profits.
I wonder how much they’ll give me as an advisory fee? It would be at least tens of millions of dollars, and they’d give me a success fee separately, right?
But that doesn’t really mean much to me. It’s not like I’ll become rich by collecting that money.
But adding a line to my business card saying “External Advisor to the Norwegian Sovereign Wealth Fund” wouldn’t be bad…
Director Carlsen spoke persuasively.
“If advising on investments is difficult, I would like to ask for your advice on oil prices at least.”
At those words, I was inwardly flustered.
“Do you think I have the ability to do that?”
“Didn’t you predict it accurately this time?”
Until Hurricane Red Kay swept through the North Sea, most experts predicted a drop in oil prices. However, Red Kay devastated the North Sea oil fields, and oil prices soared.
And while everyone else shed tears over huge losses, OTK Company made a fortune.
I said nonchalantly.
“It was just luck. How would I have known that the North Sea oil fields would be damaged and stop operating?”
“Even talented people need luck to survive.”
I shrugged.
“Don’t you have more than a few experts on your side?”
Since the Norwegian sovereign wealth fund was created with Brent crude oil export revenues, the oil price is naturally the most important economic indicator they pay attention to.
Even now, geniuses from all over Europe are gathered, diligently predicting oil prices using their own formulas and financial engineering.
However, the oil market is a place with so many variables that it’s not easy to predict. Facility operation, Middle East affairs, production cut agreements, climate, new oil fields, development of refining technology, investor sentiment, and so on.
Oil prices have a big impact on not only finance but also the real economy, so just accurately predicting future trends could lead to many opportunities.
“CEO Kang Jin-hoo’s intuition will be more accurate than the calculations of 100 of those experts.”
“They’d be upset if they heard that, wouldn’t they?”
Director Carlsen gave a wry smile.
“They would agree with me. And so would I.”
This is the beauty of investment.
Whether you analyze it with a supercomputer or just take a wild guess, all that matters is getting it right. Just like how stocks picked by a monkey have outperformed stocks picked by top-notch fund managers putting their heads together.
Come to think of it, this guy was a financial engineer himself, wasn’t he?
In any case, unless I have oracle, I also have no idea how oil prices will move in the future.
“I’ll think about it.”
“Understood.”
Perhaps he didn’t expect me to accept right away anyway, he didn’t seem particularly disappointed.
Director Carlsen ordered more coffee.
“The US moved its embassy to Jerusalem this time, I see.”
“Ah! I saw it on the news.”
Usually, embassies are located in the capital of the country. But the US embassy in Israel had been in Tel Aviv, not the capital Jerusalem, until now.
Now they are moving it to Jerusalem.
The influence of Jews in the United States is very large. Although they are only 2 percent of the population, they control and manipulate finance, politics, industry, media, and so on.
US presidential candidates have pledged to move the embassy to Jerusalem to gain the support of Jews, but no one had put it into practice.
As everyone knows, Jerusalem is a holy site for Judaism and Christianity, and also a holy site for Islam. Therefore, after Israel occupied the entire Jerusalem, Arab countries have strongly protested.
Ronald also made the same pledge and was elected, but it was widely expected that he wouldn’t be able to do it because moving the embassy was tantamount to recognizing Israel’s sovereignty over Jerusalem.
“I thought it would be dropped in the confusion of dealing with Big One, but they finally went ahead with it this time.”
Ronald boasted that unlike previous presidents, he kept his promise, but the situation is very different now from back then.
The most important goal of US Middle East strategy had been securing oil. However, due to shale oil, self-sufficiency became possible.
This meant that the United States no longer needed to be mindful of Arab countries. The shale revolution even changed the international situation.
Originally, economy and politics always move together.
“Isn’t there a high possibility of backlash from neighboring countries?”
“Hmm, I don’t think anything much will happen immediately.”
“Why do you think so?”
“Well…”
Although it temporarily rebounded due to the North Sea oil field damage, due to the continuous drop in oil prices since the financial crisis, internal strife, and power struggles, most Middle Eastern countries are in dire straits themselves. There will be backlash, but the possibility of it leading to direct armed conflict is extremely low.
“Hmm, I see.”
This is a fact that you can easily find out just by watching the news. It’s not like I’m some Middle East expert.
However, Director Carlsen nodded diligently as if he were hearing it for the first time, and asked questions. And then, he naturally brought up topics such as the EU and UK’s Brexit agreement and the Turkish economic crisis.
While we were talking, I realized something important.
“……”
This person seems to be under a big misunderstanding.
Director Carlsen thinks I have a thorough understanding of the global economic flow. So, he’s trying to figure out my thoughts through conversation.
Could this be the real purpose of him coming to see me?
Of course, it’s a huge misunderstanding.
It’s understandable, though. I’m only in my 20s, and it’s only been 4 years since I seriously set foot in the financial world. If I didn’t have oracle, I’d probably be working as a junior employee at a securities firm right now. (That’s assuming I even got a job.)
On the other hand, Director Carlsen has been in the financial industry for over 30 years. Who would know more? I might actually have more to learn from him.
Since I didn’t really have anything to hide, I answered as I thought, and he pretended not to, but carefully observed my expression and tone.
I also focused on his every word.
After several hours of conversation, we got up from our seats.
“It was a very good time. I hope we have another opportunity to meet again.”
“It was my pleasure as well.”
His expression looked very satisfied. What did he get from talking to me, I wonder?
Hmm, suddenly I’m starting to worry about the return rate of the Norwegian sovereign wealth fund.
***
Professor Kiran Mohan arrived first, and we greeted him in the hotel lobby. His assistant, Carrie Cotwright, was also with him.
She was delighted with the unexpected trip to Northern Europe.
“Please sign this later. My school friends asked me to.”
“Of course.”
We went through thick and thin together, how could I refuse such a small request?
Professor Mohan smiled and gave me a light hug.
“How have you been?”
“Great.”
He’s almost old enough to be my grandfather, but it feels like reuniting with an old friend.
“It’s even nicer to meet you here.”
“Me too.”
Since we came all the way to Norway, everyone has their own schedule.
Professor Mohan has to go to a book signing event hosted by his publisher and a university invitation lecture. Ronald has a summit meeting with the Prime Minister scheduled.
“Professor, your prediction that abnormal climate phenomena might occur due to changes in terrain and geothermal heat caused by Big One was correct.”
“Are you talking about Hurricane Red Kay?”
Professor Mohan’s books were selling like hotcakes even in Norway. And experts also agreed with his claims and worried about future abnormal climate phenomena.
“I heard you made a lot of money thanks to that.”
“Yes. So, I’ll buy you a meal. Let’s go together.”
Norway is such a well-off country, so the prices are also beyond imagination. Just eating at McDonald’s will easily cost you tens of thousands of won.
Professor Mohan readily nodded.
“Since I’m being treated by the richest man in the world, I won’t refuse.”
***
Ronald, who had been in Switzerland, arrived at the hotel late at night.
Professor Mohan said he was tired and went to bed early, and Taekgyu and I drank bourbon together in Ronald’s room and caught up on things.
“Don’t you dislike alcohol?”
He toasts with cola or grape juice instead of wine even at banquets.
Ronald chuckled and said.
“I don’t dislike it. It’s just that there’s no one I can comfortably drink with.”
This means we are people he can comfortably drink with, right? Being able to drink with the President of the United States is a privilege, if you can call it that.
Ronald looked very exhausted. Maybe his age is catching up to him, and his stamina is running out.
For reference, he never shows this side of himself in front of the media. He mainly shows himself getting angry or yelling.
“The position of president is not as easy as I thought.”
You might think that a president can move a country as they please, but in a democracy, there are various checks and balances in place. The separation of powers isn’t there for nothing.
After a few drinks, Ronald’s face quickly flushed red.
“What do you think moves the world?”
“Pardon?”
Suddenly, that’s a very grand question.
“Can that be explained in just one or two things?”
Ronald gave a bitter smile.
“I suppose not. But in the world, there’s something like a huge current, a mainstream, you could say. Going against that flow is extremely difficult. No matter how much you want to avoid it, what’s meant to happen will happen.”
“……”
What on earth is he talking about?
Taekgyu and I looked at each other’s faces. Ronald, who seemed to be about to say more, shook his head vigorously.
“I think I’m drunk. It’s best to get up now for tomorrow.”
“Understood.”
***
December 10th.
President Ronald Stamper of the United States, Professor Kiran Mohan, and Kang Jin-hoo jointly received the Nobel Peace Prize.
Thinking about it, it was a very unusual combination. One is the President of the United States, one is a professor at Caltech, and the other is the richest man in the world.
These three joined forces to save countless lives from a global disaster.
With the whole world watching, Ronald spoke solemnly and seriously.
“Big One is not over yet. We have all lost family and friends, and the recovery of remains is still ongoing. I believe this award is given not to me, but to all Americans. I hope the Nobel Peace Prize will be a little comfort to them.”
The people gathered in the hall all stood up and applauded.
Professor Kim Ho-min also received the Nobel Prize in Chemistry in Stockholm for his contribution to the development of OTK batteries.
With two Nobel Prizes awarded at the same time, Korea was swept up in a festive atmosphere. In particular, the sole award in the science field was a tremendous achievement for the Korean scientific community.
President Heo Chang-min sent a congratulatory message, and congratulatory greetings continued from political and business circles.
