Chapter 240: The Third Woman

Melbourne.

These days, Anthony Johnston had set aside his work to assist Simon in managing operations targeting the Japanese financial market.

Over a span of two weeks, the cash-out of the tech stock market in North America was successfully completed, and funds from Australia had gradually arrived. The final capital reached $1.57 billion, with Simon personally contributing $500 million, the Johnston family $100 million, and other Australian capital forces a total of $970 million.

Notably, many in North America were also eager to invest this time, but Simon chose to decline.

An investment over $1.5 billion was already a significant target, and further increases would only dilute the profits.

Simon didn't intend to become a market manipulator influencing Japan's stock market direction. If he were to crash the Japanese stock market, his other companies would struggle to conduct business in the country.

Leading Australian capital into the market, Simon believed the Johnston family could turn this favor into tangible connections and benefits.

In North America, although Simon held American citizenship, his connections with local forces were minimal. It wasn't feasible to just bring someone along for a quick profit and expect to build deep friendships.

In fact, Simon was gradually nurturing the idea of shaping the Australian faction as his personal support. This Australian faction didn't refer to the Australian filmmakers in Hollywood but the capital forces within Australia.

The structure of American financial tycoon forces had been established for many years, and a new rich like Simon ultimately couldn't contend with the old wealth. Nor did he harbor any intentions of allying with any side.

Therefore, to ensure continuous expansion of his own assets, Simon needed more chips at his disposal.

In capital confrontations, chips are ultimately capital.

Australia's economy might be small, but it's still a country.

By intertwining interests, Simon could unite Australian capital into a force no less significant than any old wealth consortium in the U.S. With the right operations, he could even assume a leading position within this system.

Formalizing operations, Simon registered a hedge fund in the Cayman Islands.

Unlike onshore funds that must pay taxes annually, the biggest advantage of offshore hedge funds is the exemption from hefty capital gains taxes as long as funds aren't repatriated, allowing fundholders to reuse the money that would have gone to taxes.

Although not planning to operate long-term, the fund still needed a name.

Simon drew inspiration from "Game of Thrones" again, naming the hedge fund Cersei Capital, codenamed 'The Bad Woman,' and like Daenerys Entertainment and Melisandre Corporation, it was also controlled by Westeros Corporation.

The entire $1.57 billion couldn't be concentrated under one fund. Simon established five sub-funds under Cersei Capital, each with roughly $300 million capital.

Affected by the beginning-of-the-month "Wall Street Journal" article, Simon's stance, and other series of events, the Japanese financial market was very active in February. This allowed Simon to quickly finalize his initial setups.

By the last trading day of the week ending February 17, the five sub-funds controlled by Cersei Capital had collectively bought Nikkei 225 index futures contracts worth about $7 billion in Singapore and Osaka exchanges.

Simon knew his strengths. He could only accurately predict Japan's macroeconomic trend.

The average position of these stock index futures contracts was between 32,200 and 32,700 points.

If Cersei Capital maintains about $7 billion in long positions over the next few months and the Nikkei 225 index reaches Simon's planned exit point of 37,000, this investment alone could bring in a profit of $1 billion.

The $7 billion worth of long contracts required less than half of Cersei Capital's funds. Despite the absence of strict position limits in Singapore and Osaka exchanges, Simon couldn't infinitely increase his holdings due to a lack of buyers.

With the remaining funds, Simon started allowing the sub-fund teams to operate freely. Japanese stocks, government bond futures, stock index options, and other equally bustling capital markets in Asia were all targets for Cersei Capital.

Just this past week, Cersei Capital's trading team completed a successful operation in Japanese government bond futures.

Due to early February news stimulating a rapid rise in the Japanese stock market, speculation emerged that the Bank of Japan would have to introduce interest rate hikes to curb excessive market speculation.

Usually, interest rate hikes lead to a fall in government bond prices. Hedge funds short-selling at the right time could reap substantial returns.

However, Simon remembered that in the original timeline, the Bank of Japan only belatedly announced its first interest rate hike in several years in May. By then, the Japanese stock and real estate markets had already missed the best opportunity to prevent a market crash through tightening policies.

Even with history altered, Simon didn't believe the Japanese government would announce interest hikes three months early.

The mere rumors caused market fluctuations, and all sectors in Japan, still indulging in economic prosperity illusions, were reluctant to hastily introduce interest rate measures that would disrupt the current favorable situation.

Confirming this assessment, Cersei Capital's trading team started establishing a total of $6 billion in Japanese government bond futures positions last week, half long and half short.

The margin requirement for government bonds was only 3%, equating to about 33 times leverage.

As rumors of an impending Bank of Japan interest rate hike spread, Japanese government bond futures significantly dropped at the start of this week's trading, and the team timely closed all short positions by Wednesday.

Then, on Thursday morning, Japan's Ministry of Finance spokesperson publicly clarified that the Bank of Japan had no intention of introducing interest rate hikes in the near future.

Japanese government bond futures rebounded in response.

Simon didn't get greedy and instructed all sub-fund teams to close all long positions before Friday.

Government bond futures typically have low volatility, which is why investment leverage can exceed 30 times. Still, this week, Cersei Capital made a tidy profit of $36 million.

This operation actually leveraged some inside information; otherwise, Cersei Capital couldn't have timed the closing of its short positions so precisely before Thursday.

Japan's rapid economic rise in recent years, particularly in real estate, has led to a significant increase in its demand for various mining resources. Australia, being a resource-rich country, became a key supplier.

As a result, economic ties between Japan and Australia have become very close in recent years, as have their political and business connections. The Johnston family had a sizable subsidiary in Japan, managed by Janet's second brother, Norman Johnston.

The news that the Japanese Ministry of Finance would release clarification on Thursday was relayed by Norman Johnston, who was recently in Tokyo.

Simon felt no guilt or fear of being discovered regarding this insider trading.

Many well-known hedge funds in his memory invited numerous political figures to join their boards, such as the then-current British Prime Minister Margaret Thatcher, who joined the famous Tiger Fund in the 1990s as a board member.

Nobody would naively believe these hedge funds invited politicians merely for investment advice.

Meanwhile, affected by interest rate rumors, the Japanese stock market was also volatile this week, with a drop of 236 points on Monday's opening.

As of the close on February 17, the Nikkei 225 index had risen only 76 points over five days compared to the previous Friday's close of 38,821 points, reaching 38,897 points. Compared to the lucrative gains from Japanese government bond futures, Cersei Capital's long position in stock index futures only netted a profit of $13.71 million this week.

February 18, Saturday.

Due to most scenes in "Batman" happening at night, the previous day was another night shoot.

This schedule was expected to continue until mid-March, with the final few weeks being studio shoots, freeing Simon from his nocturnal schedule.

Melbourne lacked the professional studios like those in Los Angeles, so the film's prop team was busy building sets like the 'Batcave' in an abandoned factory in Melbourne's western suburbs.

Although it was the weekend, Simon, accustomed to a three-hour extended daily workload to focus on Cersei Capital, woke up after only five hours of sleep.

He had breakfast with Anthony Johnston.

Out of caution, they didn't dine at the Kendal Hotel restaurant but a nearby café offering breakfast.

Simon didn't expect absolute secrecy in Cersei Capital's operations. Being too secretive wasn't necessarily good. He just hoped to control the information to a certain extent.

However, due to Simon's remarkable success in '87, those watching him this time were extremely invasive.

Anthony Johnston's main task in temporarily setting aside other matters to assist Simon with Cersei Capital was to help fortify confidentiality measures. The team even hired a retired Australian national security officer as a consultant.

Simon's hotel suite phone lines were encrypted, and daily discussions with various sub-fund managers and analyst teams were not held at the hotel but in the highly secure Johnston Holdings headquarters in Melbourne's center.

Even to prevent leaking Cersei Capital's various investment positions, the sub-fund teams were largely unaware of each other.

Anthony privately told Simon he had arranged surveillance of all teams, ready to eliminate any insiders leaking information.

With operations involving over a billion dollars and significant expected returns, such stringent caution wasn't over the top. Simon was very satisfied with Anthony's arrangements, at least periodic anti-eavesdropping checks relieved him of worries about bugs in his room.

Every time Simon thought of the incident at the Manhattan Square Hotel, he felt a chill.

The café wasn't crowded on a weekend morning. Simon and Anthony sat in a corner by the window, with two bodyguards nearby to block outsiders.

After casual chitchat, Anthony brought up last week's 'modest' gains in the stock index futures market by Cersei Capital, feeling Simon was being overly cautious.

Simon, sipping his juice, set down his glass and explained, "Tony, you must have seen my operations in the S&P 500 index futures. Like last time, I'm betting on a macroeconomic trend. As long as Japan's stock market continues to rise, our positions in the Nikkei 225 index futures will yield stable, hefty returns. As for government bond futures and such, the variables are too great. We profited last week, but next week, we might lose it all. Many excellent hedge funds suffer losses in pursuit of more, thus lowering their profitability."

Anthony was already aware of Simon's general operational strategy.

Compared to the '87 operation, Simon's goals this time were modest. He only hoped Cersei Capital's funds could double before the Japanese market turned, not asking for more.

After riding the surge, he planned to earn some profits during the fall to pay taxes and team commissions, and he would be content.

If the Japanese stock market followed its original trajectory, Simon could shift focus to the crude oil futures market after wrapping up here.

Of course, Simon knew that due to his influence as a 'butterfly,' expecting such a scenario was becoming unrealistic. Still, he firmly set his peak for the Japanese market at 38,000 points, planning to exit starting at 37,000.

Perhaps it might crash earlier, or unexpectedly break 40,000 points.

But regardless, Simon planned to curb his fear of an early crash and greed for a higher peak, sticking to his set target.

Likewise, knowing his true strength, Simon wouldn't employ risky investment strategies. He planned to invest the surplus funds in the Japanese stock market.

Compared to the volatile financial derivatives market, direct stock speculation was low risk. The bull market cycle of at least half a year was enough to guarantee hefty returns for Cersei Capital.

Anthony Johnston was already warned by his father never to meddle with Simon's decisions. He only needed to ensure Simon could focus solely on this operation.

Hearing Simon's explanation, Anthony appropriately backed off, smiling and saying, "Alright, Simon. Also, your birthday is coming up. We should celebrate. Will you arrange it, or should I? Oh, and Jenny is probably returning in the next few days."

Simon didn't hesitate, "Tony, I'll leave it to you. I'll give the crew a day off on Wednesday. You can decide the guest list."

Anthony nodded, "Then let's have it at the mansion in the suburbs. I'll start preparing for the party tomorrow."

As they talked, finishing breakfast, Simon returned to the hotel.

Jennifer had prepared a stack of documents for Simon to review as usual.

Leaning back in the chair, Simon was genuinely surprised to see Nancy Brill's proposal for a Blockbuster data analysis team and movie database. He hadn't expected this woman to conceive the concept of 'big data' before the internet era.

A movie database, especially with Internet elements, was clearly IMDb (Internet Movie Database). Amazon's acquisition of IMDb for DVD and videotape online sales and Netflix's use of big data to secure its position in streaming media were notable examples.

Now, this petite woman had proposed both concepts simultaneously.

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