A Wall Street Genius’s Final Investment Playbook

‘Everyone’s thinking the same thing again.’

I couldn’t help but chuckle.

A twist they couldn’t predict was coming.

In my past life, at this exact point, China had made an unexpected move.

They themselves initiated a yuan devaluation.

And that was without facing today’s short-selling pressure.

Why would they do that?

That—was the key.

The People’s Bank of China lowered the value of the yuan by 1.9% overnight, and after two more rounds of devaluation, a total of 3% of its value evaporated.

No one had seen it coming.

The ripple effect swiftly hit global stock markets.

The Dow Jones dropped by 1,000 points, and the Nikkei plunged 7%, resulting in a market disaster.

But the damage wasn’t limited to the rest of the world.

China itself suffered significant harm.

As concerns grew over the falling value of the yuan, the wealthy rushed to move their money overseas, leading to severe capital outflows.

To stem the bleeding, China had to burn through an enormous $1 trillion of its foreign exchange reserves.

The result?

Its international credibility plummeted, and its stock market—already jittery—collapsed completely in response.

To sum up?

It was a decision that benefited no one.

Neither the world, nor even China itself.

So why on earth did China make such a move?

At the time, most analysts pointed to one reason.

China’s economic situation was far worse than it appeared on the surface.

Was China’s domestic demand weaker than expected?

Had it lowered the exchange rate to boost exports as a solution?

It could have been more than just a slowdown—it may have indicated full-on domestic economic stagnation.

From the government’s perspective, exports were their only viable escape route, and they opted for the desperate measure of devaluing the yuan to revive them.

Yet that decision backfired, leaving China wounded as well.

That was the prevailing view.

But the hidden truth was something else entirely.

It wasn’t until 2021 that the real reason came to light.

It turned out that China had been sitting on an enormous time bomb.

A monstrous financial threat, larger than the German economy, was lurking in the shadows.

At this point, very few people had truly grasped the full nature of the beast.

But there were some who sensed that something was deeply wrong.

It’s no coincidence that many of Wall Street’s legends simultaneously began shorting the yuan.

They knew a problem existed.

They just didn’t yet understand the full scope or scale of it.

But.

The most important thing right now was something else.

‘I knew exactly what it was.’

China’s deadly weakness, which it was desperate to conceal.

And the fact that it would choose to devalue the yuan—no matter the cost—if that’s what it took to hide this weakness.

Therefore, our short-selling strategy was bound to succeed.

However, Crane, unaware of this hidden truth, looked visibly concerned.

“I don’t doubt you, Sean, but… I just don’t see why China would be willing to tolerate a decline in the yuan. They gain so little from it... and besides, there’s no way they’ll accept defeat against a young hedge fund like ours.”

Her concern was valid.

China is a country with a strong sense of pride.

It wouldn’t easily raise the white flag to a rookie like me.

“You’re right. There’s no way they’ll surrender that easily. Which is why I’m planning to personally negotiate.”

“Negotiate…?”

“Yes. I’m pretty confident in my ability to negotiate.”

But when I said the word “negotiate,” Crane’s face went pale.

“You don’t mean… like how you ‘negotiated’ with Mr. Pierce, do you? Are you seriously going to try that with China…?”

As COO, she knew quite a bit about what I had done to “persuade” Pierce.

And yet she was still reacting this way.

Why?

“Things worked out well with Pierce, didn’t they?”

They had.

During the John Lau crisis, while other banks were slammed for appearing to do anything rich clients demanded, one bank—Goldman—maintained its reputation, and Pierce was now even being considered as the next CEO of Goldman.

All because he had accepted my ‘persuasion.’

“I always seek win-win outcomes that benefit all parties.”

“…”

“As long as someone isn’t an outright enemy, I believe in sharing the gains fairly.”

“I… see. Then are you saying China isn’t an enemy? Even with things escalating this far?”

“Well. That depends on how the ‘negotiation’ goes. It’s entirely possible we won’t find common ground and end up turning away from each other.”

She swallowed hard.

In other words, if the negotiation failed, we would be turning China into a full-fledged enemy.

“But there’s no need to worry. I’m confident I can resolve this amicably. We’ll handle it through dialogue.”

“Dialogue… so, should we contact the Chinese embassy…?”

“No. Not yet.”

“What?”

Crane paused at my words.

I smiled and continued.

“I told you, didn’t I? Our goal is the debut of Delphi.”

“Yes, but… isn’t this enough of a debut already? The world is already in an uproar...”

She glanced down at the newspaper on the desk mid-sentence.

Headlines in huge letters screamed across the front page.

<U.S.-China Conflict Ignites... New Phase of Hegemony War>

<First Currency War in 30 Years Since Pound Crisis... Global Financial Markets Flash Red>

She was suggesting that this level of attention should be more than enough for our debut.

But I disagreed.

I spoke with certainty.

“The Oracle of Delphi is not just about making prophecies. There’s a deeper requirement.”

World leaders must come to her seeking advice.

Only then would she truly become a fully-fledged Oracle.

Until then, we had to be patient.

***

In fact, the U.S. government was currently in a tough spot.

Immediately after Ha Si-heon’s short-selling announcement, the Chinese government issued a hardline statement.

“Ha Si-heon’s actions constitute an organized act of financial terrorism that threatens China’s national security. If the U.S. government allows Ha Si-heon and his followers to proceed unchecked, it will inevitably be seen as tacit approval of efforts to destabilize the Chinese economy.”

But America’s official response had already been determined.

“The United States respects the principles of a free market economy. It would be inappropriate for the government to intervene in the decisions of individual investors or institutions…”

If they raised an issue every time Wall Street engaged in short selling, financial markets couldn’t function.

So that was their public stance...

“We can’t just let this go! We need to get the situation under control!”

But behind closed doors, government officials were practically shouting in panic. Thɪs chapter is updatᴇd by novel※fire.net

A state visit by the Chinese president was scheduled for September.

They had been trying hard to foster a friendly atmosphere ahead of the visit—yet now relations between the two countries had soured overnight.

It could trigger massive blowback.

“China holds a significant amount of U.S. treasuries. If they retaliate by dumping them all—”

“They could also impose various penalties on U.S. companies operating in China.”

“No, the most serious problem lies elsewhere. The most critical strategic resource right now is rare earth elements—resources that China essentially monopolizes. If they decide to restrict exports specifically to us…”

Government officials were fidgeting like people trapped in a burning building.

They desperately tried to get in touch with Ha Si-heon, but his secretary remained cold.

—Didn’t the government say it would adhere to the principle of non-intervention in financial markets? In that case, the CEO sees no reason to discuss his investment decisions.

“But the situation is dire!”

—At this point, even if Pareto backs off, it likely won’t make much of a difference.

That was true.

The small snowball Ha Si-heon had started had already grown into a massive short-selling avalanche.

Even if he were to call off the short now, neither retail investors nor the hedge funds would follow him in pulling out.

“We’re not trying to block investments. This is an issue closely tied to national security and international relations, so it requires discussion.”

Moved by the urgency in their voices, the secretary finally responded as though she understood.

—Oh, you must be asking about the future outlook of the global economy. In that case, you should contact the Delphi Institute, not Pareto. Pareto is an investment firm; policy matters are handled by Delphi.

Thus, the government reached out to the Delphi Institute and met with its director, Patricia.

“We need an outlook on where this situation is headed and measures to prevent it from escalating further!”

To the panicking government officials, Patricia offered a gentle smile.

“Please don’t worry. The problem will be resolved peacefully.”

“How…?”

Patricia paused for a moment, then gave a prepared answer.

“I’m sorry, but we can only provide the outcome. Anything beyond that is a service we offer only to our clients. If you want in-depth consultation, you’ll need to submit a formal request.”

In other words, they’d share the broad outlook for free, but charge for detailed analysis.

“In a crisis like this! Are you really trying to profit in the face of a national emergency?”

“You needn’t worry too much. Things aren’t as dangerous as they seem.”

An understanding smile spread across Patricia’s lips.

She then spoke in a voice full of deep insight.

“A black swan event may seem confusing in the moment, but once you understand its essence, it follows a logical path. This situation is no different.”

She radiated the calm of someone who appeared to see through everything.

“If we request a consultation, how soon will we get results?”

“It depends on the content. Also, to avoid missing subtle nuances, it would be best to meet directly with the top decision-maker.”

And just like that, the Delphi Institute became an official think tank for the U.S. government.

In addition, Patricia secured the right to meet with the President himself.

Thus, Ha Si-heon kept his promise.

He had promised Patricia that he would make her the head of an institution prestigious enough to meet with the President.

And yet.

Though the promise had been fulfilled, Patricia had mixed feelings.

‘Why do I feel like I’ve been tricked?’

In truth, she hadn’t been tricked.

It was simply that what she had thought was a metaphor had come true in the most literal sense.

She had become a modern-day reincarnation of an ancient oracle.

She was now destined to deliver cryptic revelations about the coming ‘calamities’ to world leaders.

As she sighed briefly, her secretary entered with a report.

“The IMF and World Bank presidents urgently request a meeting…”

“Understood.”

The IMF and World Bank.

They too had recently become clients of Delphi.

At this point, they were also in a bind.

China hadn’t just officially protested to the U.S.

However—

“What do you think we should do?”

“I’m sure you already know the answer.”

The IMF and World Bank knew what needed to be done.

They were simply seeking guidance, like clinging to a straw, out of desperation.

To them, she gave only one answer.

“You must remain faithful to your mission and the reason for your existence as international organizations.”

Thus, the international organizations that had received the oracle’s advice did their part.

—We respect the principles of a free market. However, we would like to emphasize that in this moment, cooperation among nations is necessary to maintain the stability of the global financial system.

In other words?

‘We don’t have a silver bullet either. We can’t punish countries or force them to act. But let’s at least talk this through.’

It was, in fact, the only response powerless international organizations could offer.

As a result, countries began raising their voices.

“The yuan’s collapse will be a disaster for all of Asia! Emerging market currencies will fall in a chain reaction…”

“This is clear currency manipulation and dumping! Our export markets will be devastated…”

“Why are you interfering so much with our domestic monetary policy?”

It was absolute chaos.

Exporting nations feared a flood of cheap Chinese goods.

Countries that had borrowed in yuan were practically in tears.

But most of all, they were paralyzed by uncertainty.

No one knew when or where China’s financial tsunami would strike next.

And in such a moment—what if one could see the future?

Or, at the very least, if someone could simply say, “It’s going to be okay”?

Conveniently enough, there was one place offering just such a service.

—Yes, this is the Delphi Policy Institute.

Delphi had quickly become a trusted advisor not only to the United States and international organizations, but also to a growing number of world leaders.

At this point, it seemed like the debut was about ready to wrap up.

But—

“It’s not time yet,” Ha Si-heon said. “We need to wait a little longer.”

“Wait longer? But the world’s top leaders are already coming to us…”

“No. There will be more visitors.”

They didn’t have to wait long.

Soon, new visitors began arriving at the Delphi Institute.

“We’d like advice on risk management…”

This time, the guests weren’t heads of state or political figures.

They were members of the financial world.

Specifically, massive institutional investors like pension funds and sovereign wealth funds were now flocking to Delphi.

“We’re not trying to profit. It’s just that a large portion of our assets are linked to the yuan, and we need to know whether hedging is necessary.”

Those managing vast pools of capital prioritized protecting their asset value over chasing returns.

The problem was that their holdings in yuan-denominated assets were substantial.

Meanwhile, the newspapers were filled daily with headlines about the Chinese yuan.

The Oracle reassured them with wise words.

“The situation will soon stabilize. But hedging exists precisely to manage risk until stability returns. Do what you feel is necessary.”

In reality, regardless of what the Oracle said, their course of action was already determined.

Hedging is a form of insurance.

And the more someone has to lose, the more likely they are to buy insurance—even if they’re told there’s no fire risk—just to ease their anxiety.

They sold yuan futures, shifted assets into dollars, or bought yuan-related put options—each finding peace of mind in their own way.

The result—

<Pension Funds’ Yuan Exposure Hedge Nears $2 Trillion…>

<China CDS Premium Surges 30bps... Yuan Depreciation Pressures Intensify>

The downward pressure on the yuan only grew stronger.

In truth, the pension funds weren’t predators.

They had no intention of attacking China.

In that sense, they were more like gentle herbivores.

But a large herbivore can sometimes be more dangerous than a predator.

China’s house was already shaking under the weight of ants, hyenas, lions, and tigers.

Now, elephants and hippos had climbed aboard as well.

Seeing the situation reach this point, Ha Si-heon finally nodded.

“I think this will be enough.”

“Could it be… it’s time?”

“Yes. I think the time is ripe for ‘negotiation.’ Please contact the Chinese embassy.”

Delphi’s debut had been a success.

In a short time, it had turned the world’s highest-level figures into loyal clients.

The goal had been achieved.

Now, it was time to start resolving the situation.