The ever-expanding Westeros system makes more and more people feel surrounded by its omnipresent influence. March 25th was no exception.
It was a Friday.
The aftermath of Monday's Oscars still lingered, the dispute between the Westeros system and the Hearst family continued to ferment, many media outlets and politicians still criticized Simon's enormous wealth, and the rebound in Cisco and AOL stock prices, driving the overall Nasdaq tech sector, caused significant losses for many short-selling hedge funds.
To be more precise, on this day, Daenerys Records officially launched the Backstreet Boys' self-titled album "Backstreet Boys" after four months of anticipation, following the release of three singles since the end of last year.
The three pre-released singles had already garnered substantial popularity for the group. On Friday morning, the album release event at Daenerys Studios' employee activity center was bustling, attracting fans from across North America, along with many stars, singers, actors, and supermodels from the entertainment industry.
Meanwhile, EA, the gaming subsidiary of Daenerys Entertainment based in San Francisco, and Egret's social network Facebook jointly launched the social casual game "Happy Farm" on the same day.
During its beta phase, "Happy Farm" had already attracted a large number of users. On its official launch day, it was prominently featured on the Egret portal's homepage. By 9 AM, the number of activated users was skyrocketing, far exceeding the expectations of both EA and Facebook's operations teams.
On the same day, across the Atlantic, Nokia, headquartered in Finland, released its 1993 financial report.
In 1993, Nokia's mobile products flourished in Europe, North America, and Asia, with a total global shipment of 7.23 million units, surpassing Motorola's 6.39 million units, making Nokia the world's largest mobile phone manufacturer. Nokia captured 38% of the global market share out of approximately 19 million mobile phones shipped last year.
Even with a strategic slowdown in expanding its telecom base station business to focus on mobile phones, Nokia's total revenue for 1993 still reached 16.9 billion Finnish marks, equivalent to $2.45 billion, a 65% increase year-on-year. Compared to a loss of over $60 million in 1992, Nokia reported a net profit of 1.925 billion Finnish marks, equivalent to $279 million, with a net profit margin of 11.3%.
With London eight hours ahead of Los Angeles, when Simon entered his office on Friday morning, the London Stock Exchange had already closed.
Following the impressive financial report, Nokia's stock price rose another 2.1% that day, closing with a market value of £10.1 billion, equivalent to $15.6 billion. From early March to now, in about three weeks, Nokia's stock had risen by 17%, with a price-earnings ratio of 56, reflecting the capital market's enthusiasm for this emerging mobile communications equipment manufacturer.
In recent days, however, some North American financial media had focused on another topic.
How much did Cersei Capital, now a formidable presence on Wall Street, earn in the past year?
In just the past week, Cersei Fund Management, a subsidiary of Cersei Capital, with its over $10 billion long positions in tech stocks, had turned significant paper losses from the previous few weeks into substantial profits amid the tech sector's rebound.
As a completely private hedge fund, Cersei Fund Management operated very discreetly. Except for a few "insiders" using somewhat questionable means to closely monitor Cersei Capital's operations, most institutions and media were unaware of its exact state. Even those who could gather fairly accurate information rarely disclosed it.
It's just certain that in the past week alone, Cersei Fund Management had at least $500 million in paper profits from its vast positions and the tech stock rebound. In other words, within a week, Cersei Capital's Cersei Fund Management had profits exceeding Nokia's total annual net income during its rapid growth.
The explosive growth of the American financial industry after the 1990s was not without reason.
It was extremely profitable.
For many newcomers who believed they could dominate the financial markets, the allure was irresistible.
Before Simon's breakthrough in the 1987 stock market crash, the total global hedge fund scale was about $30 billion. In the few months after the crash, this figure quickly doubled. Over six years later, now due to famous hedge funds like Cersei Capital and Quantum Fund repeatedly gaining massive profits during financial upheavals, the total global hedge fund scale had continued to balloon, now surpassing $300 billion. Simon was sure this number far exceeded the same period in his original timeline.
Moreover, the $300 billion scale of global hedge funds had not yet peaked.
In Simon's memory, before the 2008 financial crisis, the peak total value of global hedge funds reached $1.95 trillion, and this was just the measurable amount. Since most hedge funds operated offshore for confidentiality, the actual total might have exceeded $2 trillion.
Including the current global hedge fund scale of $300 billion, it was also a significantly underestimated figure.
The public could only speculate, but Simon knew the exact profitability of Cersei Fund Management in the past week.
As of Thursday's close, Cersei Fund Management's positions had accumulated paper profits of $540 million in the previous four trading days, closely matching outside predictions.
Moreover, from a maximum $610 million paper loss the previous Friday to $540 million paper profits yesterday, such drastic swings truly tested the trading team's nerves.
After an expansion earlier this year, Cersei Fund Management's total initial capital was only $5 billion. A $610 million paper loss equated to 12% of its capital.
If not for the unwavering support from Simon and Janet, the trading team might have liquidated to stop losses at around 10% loss, and there were suggestions to increase short positions for risk hedging. It's clear that if such actions had been taken, the tech stock turnaround this week would have left Cersei Fund Management's paper numbers in a dire state.
Frankly, hedge funds and gambling are quite similar, with only a few making profits, while most end in losses. Even those with stellar records can falter disastrously in a single operation, rarely emerging as perennial winners.
Therefore, Simon was actually very conservative in managing Cersei Fund Management.
Unlike the speculative operations during the 1987 stock market crash and the Gulf War, Cersei Fund Management's current trading model mirrored its approach in the recent phase of Japan's stock market bubble. While most were individual stock hedges, fundamentally, it still resembled macro hedging.
Simon ignored short-term fluctuations in the tech stock market, firmly betting on long-term growth, wagering on the Nasdaq's upward trend.
In the past, the Nasdaq index had surged past 5000 points at the peak of the dot-com bubble.
Now, although many believed there was a bubble in the tech market, the Nasdaq index was only at 1519 points as of yesterday's close.
Simon wasn't greedy; he planned to exit at around 3000 points in this long-term operation, and he wouldn't turn to short-selling afterward, preferring to secure his gains.
If the Nasdaq in this timeline could still surpass 5000 points, Simon wouldn't regret missing the last 2000 points of profit space. Many hedge fund managers fail due to greed, not knowing when to stop. Of course, if the Nasdaq index crashes before reaching 3000 points, Simon wouldn't regret it either. In business, as in war, there are no guaranteed victories, and one must bear the risk of unknown potential pitfalls.
With 3000 points as his target, the Nasdaq at around 1500 points currently wouldn't shake Simon's confidence, so he never considered liquidating at a 10% loss or establishing short positions for risk hedging.
Achieving $540 million in paper profits in just one week suggested Cersei Capital's 1993 profitability would indeed be staggering.
And so it was.
Not to mention Apollo Management and BlackRock Asset Management, Cersei Fund Management alone, following the exponential growth of several key North American tech stocks, earned $3.4 billion in total profits in 1993 through unwavering long bets on tech stocks, easily surpassing the enormous Daenerys Entertainment.
Of course, these profits belonged to all investors.
Cersei Fund Management's capital composition was constantly shifting, but with around $3 billion in hedge fund scale last year, the Westeros family held a $1 billion share, the Johnston family held $500 million, and the remaining $1.5 billion was subscribed by numerous Westeros system stakeholders.
Simon could turn Australia into the Westeros system's stronghold and establish deep political networks in North America in such a short time not just by attending a few parties or spending lavishly on lobbying.
Interest is the most solid bond in networking.
Not only the political 'base' of the Westeros family but even the White House secretly took a $300 million hedge fund subscription from Simon. Of course, this share wasn't personally invested by the Clintons; they didn't have that much money. Instead, Clinton used it to curry favor, which also indirectly expanded the Westeros family's network.
Without these vested interests, regardless of political resources and network returns, the jealousy over Cersei Fund Management's huge profits would definitely incite someone to urge federal regulators to launch various investigations into Cersei Capital.
However, Cersei Capital had enjoyed smooth development in recent years.
BlackRock Asset Management had quickly expanded to nearly $200 billion in assets. Such a massive asset would have already alarmed authorities in other countries, yet Cersei Capital coexisted peacefully with the US government.
Much of this was due to Cersei Fund Management.
Given Cersei Fund Management's capital composition and
its customary 20% fixed draw on capital gains, after year-end clearing, the profits belonging to the Westeros family, including principal gains and bonus dividends, totaled $1.46 billion, 42% of the $3.4 billion total profits. The Johnston family received $430 million, 12% of total profits, taking 54% of the profits just between the two families.
The remaining 46% was shared among various other investors.
Even so, a 100% pre-tax annual return rate was an unreachable dream for other investments.
Since most funds were held in offshore accounts, as long as investors didn't repatriate the funds, they didn't need to pay taxes. Whether they wished to declare and pay taxes wasn't Simon's concern.
Of course, Simon declared but didn't declare everything, only half.
Moreover, unless necessary, he didn't intend to repatriate overseas funds to the US.
As for the overall Cersei Capital, the other two subsidiaries, Apollo Management had a pre-tax net profit of $370 million, and BlackRock Asset Management had a pre-tax net profit of $590 million. Excluding overall fund gains, Cersei Fund Management's pre-tax net profit attributed to all partners was only $560 million, with a total of $1.52 billion from the three companies, equivalent to the annual profits of many multi-billion dollar enterprises.
The calculation of pre-tax profits mainly stems from these partnership-based financial companies, which typically share profits with partners, who then declare and pay taxes individually. Although the US is known as the land of a thousand taxes, it doesn't impose bottomless double taxation.
Since much of the business was domestic, these partner profits couldn't evade taxes.
Simon and Janet's control of Cersei Capital's parent company meant they held 70%, 63%, and 41% stakes in Cersei Fund Management, Apollo Management, and BlackRock Asset Management respectively, and even the smallest share in BlackRock Asset Management retained a veto.
With such shareholding ratios, the past year's earnings from the three companies meant Simon and Janet could take more than half. Excluding the $1.46 billion total profit share from Cersei Fund Management, the other two subsidiaries' profits attributable to Simon and Janet totaled $470 million.
After settling domestic profit tax portions, Cersei Capital brought the Westeros family $1.71 billion in net income for 1993, second only to the massive Daenerys Entertainment Group in profits.
Should Cersei Capital's financial data be made public, it would undoubtedly spark further outcry over Simon's enormous wealth. Unlike industries that generate large-scale employment and taxes, Wall Street often embodies a significantly negative image for most of the public.
With neither the woman nor the children around, Simon arrived at Daenerys Studios before 8 AM on Friday to start his workday.
Handling various affairs of the Westeros system as meticulously arranged by the A-lister, Simon hosted a luncheon at the studio's internal restaurant with Otis Chandler, head of the Chandler family behind the Los Angeles Times Group, to discuss cooperation.
Recent collaborations with the New York Times Group and the conflict with the Hearst Corporation had caught the attention of major traditional media groups in the US.
Particularly after the Wall Street Journal published the "Do You Want to Be a Friend or an Enemy?" article, more old-fashioned newspapers sought contact with the Westeros system.
Simon, however, did not intend to choose too many partners at once. The Egret portal's news department still needed to be maintained, so after careful selection, only four traditional media groups were planned for cooperation.
The New York Times Group, which had just confirmed cooperation on Monday.
News Corp, which had already had a cooperative relationship.
The Los Angeles Times Group controlled by the Chandler family, whom Simon hosted today.
Lastly, the parent company of the Wall Street Journal, Dow Jones & Company.
These four companies were meticulously selected based on the Westeros system's needs. The New York Times Group and the Los Angeles Times Group represented the traditional print media authority on the US East and West coasts, respectively. News Corp was connected to Simon's stronghold in Australia, and the cooperation with Dow Jones was due to its control over financial media like the Wall Street Journal and Barron's, which had a strong voice in the US economic landscape.
After a pleasant lunch, Simon sent off Otis Chandler and returned to his office to continue the afternoon's work.
After briefly inquiring about the status of the Backstreet Boys' album release event in the morning and the "Happy Farm" social game that went live in Silicon Valley, Simon was about to attend a 2 PM production meeting for "Jurassic Park 2" when his private phone rang.
The caller was Anthony Johnston.
It was no big deal.
However, Simon quickly showed a surprised expression upon answering the call.
Anthony stated that he and Raymond Johnston were almost at the Malibu Point estate and hoped Simon could come home.
After a brief surprise, Simon understood why the elder, who rarely left Melbourne, had personally come to Los Angeles. It was undoubtedly due to Janet relaying the 'Sword of Damocles Plan' for the Westeros family during her visit to Australia.
After a few words with Anthony, indicating he would return as soon as possible, Simon casually inquired and learned that Janet and her party hadn't returned with them. Without overthinking it, Simon had hoped they would stay longer in Australia when he sent Janet off on Monday.
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