A Wall Street Genius's Final Investment Playbook-Chapter 51

Ha Si-heon’s prediction hit the mark once again. The side effects of OCA became a hot topic. It all began with an article in the Wall Street Times. An official from the U.S. National Institutes of Health (NIH) stated, “OCA users are showing a trend of increased ‘bad cholesterol (LDL)' levels and decreased ‘good cholesterol (HDL)' levels.”

The official continued, “Data collection is still ongoing, and we will soon be able to provide explanations within a broader context.”

The NIH, which co-led the clinical trials, had directly mentioned the side effects.

This article triggered a disaster. In less than an hour, the stock price collapsed from $430 to $299.

Angry investors directed their fury at Genesis:

-Why are we hearing about cholesterol for the first time?

-Isn’t this information suppression?

-How could co-investigators have known while we didn’t?

-There was no mention of this in official announcements or analyst calls.

As suspicions spread that Genesis had deliberately concealed the side effects, the CEO quickly stepped up to clarify:

“It’s been noted since the 2009 study that OCA can affect lipid metabolism. However, the data analysis is not yet complete, so it’s difficult to make any definitive conclusions. There’s also a possibility that later data will show an increase in HDL…”

The cholesterol side effect was a somewhat expected scenario.

Although it hadn’t been explicitly emphasized, those interested enough to search the data could have found relevant mentions.

Moreover, the current situation was akin to grading only half the test paper. In the second half, evidence of increased good cholesterol might still emerge.

But the market was not convinced.

The stock price plunged another 15%, threatening the $250 line. If trust continued to erode, the stock price would also plunge endlessly. At that moment, an unexpected savior appeared. Merrill Lynch released a new report:

<OCA’s target patients are those with severe liver diseases, such as cirrhosis. Considering the severity of the conditions, the impact of these side effects on marketability is expected to be limited…>

Merrill Lynch maintained its original target price of $872.

The logic was that people sick enough to require liver transplants wouldn’t stop using a treatment just because of slightly elevated cholesterol.

This time, the market was convinced. The stock rebounded 10%, rising to $276.

For the next two days, the market was in utter chaos.

-Market analysts say it will go up.

-Doctors say otherwise.

-What do doctors know about stock prices?

Every time experts from different fields presented their theories, the stock price swung up and down.

Eventually, the exhausted market reached one conclusion:

“Let’s wait until additional data is released.”

Quantitative data was necessary to determine the severity of the side effects. Meanwhile, Genesis’ CEO spoke up:

“We’ll soon be able to answer all your questions.”

Two days later, the JP Morgan Healthcare Conference was scheduled to take place. As the largest event in the bio industry, Genesis was also set to participate and deliver a presentation.

The CEO declared that he would resolve all doubts at the event. In the run-up to the conference, the CEO’s apparent confidence caused a temporary stock rebound.

But… The content of the unveiled presentation was disappointing, to say the least. There were no concrete figures, only repeated promises that data would be released soon. Investors, whose patience had run dry, began to flee en masse, sending the stock price plummeting.

$239.94

$232.99

By the afternoon, the decline finally showed signs of stabilizing. They managed to hold the $230 line, but considering it had been proudly sitting at $430 just three days ago, it was essentially cut in half.

What was even more horrifying was the complete uncertainty about the future. For Goldman’s associates, whose hands were tied due to trade restrictions, it was maddening.

“If this keeps up…”

“There are still 24 days left…”

Most of those who had jumped in mid-way had bought around the $200 mark.

If the price dropped any further, they would start losing their principal investment.

Desperate, they turned to their last hope: Ha Si-heon.

“Will there… be another drop a month from now?”

“I told you before. Investing based on hearsay alone is extremely risky.”

Ha Si-heon’s face was lined with fatigue as he answered.

The barrage of questions had clearly worn him down. Yet, despite his obvious exhaustion, Ha Si-heon continued to respond surprisingly kindly.

“My judgment hasn’t changed. Genesis’s intrinsic value is $400.”

As a value investor, Ha Si-heon couldn’t pinpoint the peak of the bubble. However, he willingly shared the fair value he had calculated. Since he had already exited this stock, sharing the information wouldn’t harm investors any further.

“Negative news may cause fluctuations, but if you wait, it will eventually return to its proper level. That’s when you should exit.”

“When do you think that will be?”

“I don’t know that.”

“Still… can you guess?”

Ha Si-heon looked at the associate, baffled. He had already shared information he didn’t need to, yet now they were asking him to predict an uncertain future.

It was shameless to say the least. As the associate blushed and looked down, Ha Si-heon smirked and stood up. He approached the printer, grabbed a freshly printed sheet of paper, and returned. Everyone’s gaze was fixed on the document. It was a familiar-looking form—Ha Si-heon’s list of investors.

1. Mosley ($10 million)

2. Mosley ($5 million)

3. Gonzalez ($5 million)

4. Ferguson ($5 million)

5.

The last spot was left blank. The previous fifth investor, Faber, had recently requested a redemption and exited.

“Could it be…”

Someone let out a small gasp. The room fell silent as everyone turned their eyes to Ha Si-heon.

Ha Si-heon nodded with a meaningful smile.

“Yes, a vacancy has opened up, and I’m accepting new investors. I plan to close applications this Friday at 6 PM.”

***

The response to Ha Si-heon’s second round of investor recruitment was explosive. And for good reason—Goldman was currently full of “free riders” who had jumped in solely based on Ha Si-heon’s stock tips and ended up burned.

Many had just barely preserved their principal or even suffered losses. In contrast, Faber, a paid member, had exited with a staggering return of over 750%.

The difference between the free and paid services was that stark. The associates wasted no time, writing checks for $100,000 each to compete. Without hesitation, they began upping their bets by $10,000 or $20,000 at a time.

Then, an unexpected twist occurred.

“Is this something only associates can participate in?”

A VP joined the auction, putting up a whopping $1 million.

$1 million was a price that most associates couldn’t hope to match. However, some of them quickly devised a clever solution.

“Is it possible for several of us to pool our money together and participate?”

If ten people teamed up and contributed $100,000 each, they could compete with the VP.

In no time, such alliances were formed, and the auction price skyrocketed.

The final highest bid reached a staggering $4 million.

‘Not bad.’

Ha Si-heon smiled inwardly.

This was because half of the profits generated from that money would go straight into his pocket.

This was the easy-money strategy of Wall Street. Instead of monopolizing information, the trick was to share it widely to draw in the masses.

Then, they could profit by piggybacking on the public’s financial power and collecting fees. Had Ha Si-heon acted alone in this situation, he would have barely earned around $7 million.

But now, what was happening? By recruiting outside investors, he had already secured an astounding $100 million in fees, and his openness with information brought in even more capital.

“Can’t you take on more people? Even if you expand to a hundred, they’d still line up to join…”

Requests to open more spots poured in, but Ha Si-heon was firm.

“Sorry, but five investors is my limit. Beyond that, I wouldn’t be able to manage them while balancing my other responsibilities.”

Of course, this wasn’t true. With his abilities, he could easily handle up to twenty investors, if not a hundred. However, Ha Si-heon deliberately limited the number of participants.

He aimed to leverage scarcity to increase perceived value. He planned to repeat this strategy in the future. He needed to continuously create buzz and capture the attention of everyone at Goldman.

Sometimes, by leaking investment information, and at other times, by opening new slots and holding auctions.

Ha Si-heon’s ultimate goal was simple. He wanted his fund to become the one place everyone at Goldman was desperate to get into.

He needed to maintain this aura until the day he officially launched the fund. The moment Ha Si-heon opened his hedge fund, he wanted every single employee at Goldman to scramble to join. And the psychology of Goldman’s clients watching that spectacle would be obvious.

‘Why is everyone so excited about this new fund?’

That’s when the Goldman employees would spread the legend of the 750% returns.

Of course, the clients would dismiss it as exaggeration at first. They might even ask other Goldman employees to confirm the story.

But then:

– It’s true. I saw it myself…

Every single Goldman employee they met would repeat the same story. It was inevitable. Because by then, that “ridiculous” legend would have become a verified truth. No matter how thick the wall of skepticism was, it would eventually crack.

Out of curiosity, many would start investing, even if only a small amount. This was trust.

‘Everything’s on track…?’

There were multiple reasons Ha Si-heon went all-in on this investment. Beyond the obvious rationale of betting the maximum amount on a stock with guaranteed high returns.

First, he had succeeded in capturing the attention of everyone at Goldman. Furthermore, he had proven the value of his paid service with differentiated results and demonstrated that his algorithm remained effective, even with increased capital.

On top of that, he had created a legendary story that would stick in people’s minds for years to come. This would serve as an invaluable foundation for promoting his future fund.

‘There’s nothing more to squeeze out of this.’

He had already harvested every possible result from Goldman’s associates. Now, all that remained was Mosley.

For now, the informant had been safely planted.

Ferguson, the MD of the Industrial Department, frequently visited Ha Si-heon, asking questions. It was clear that he was relaying all this information to Gerard. However, there was still no word from Gerard himself.

‘It should be about time for a response…?’

Ha Si-heon had expected Gerard to reach out after his exit, but contrary to expectations, only silence followed. At times like this, it was better not to rush.

But waiting patiently wasn’t an option for someone on a deadline. In the end, Ha Si-heon decided to give a little nudge.