Marvel: A Lazy-Ass Superman Chapter 645: High-Frequency Trading

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After listening to Henry's explanation, someone asked:

"But you also said that if Victor von Doom's space station project fails even once, he might never recover.

"Then why is he still worth investing in... Ah, I get it. That's why you said he's only suitable for medium-term investment, right?"

"Exactly."

Henry nodded.

"And the company directly responsible for the space station project isn't publicly traded yet.

"The companies I'm recommending are the other publicly listed businesses under Victor von Doom's control.

"All of them have solid profitability.

"And given their business models, they're likely to benefit from technology transfers generated by the space station program.

"But the most important factor is how the media currently views him.

"They've been calling him a business genius comparable to Howard Stark.

"That's not my opinion—that's the conclusion journalists reached after digging into his background."

Victor von Doom had graduated from Hegeman State University of New York.

While still in college, he had already published highly sophisticated papers in theoretical science.

Several professors had compared him to Albert Einstein.

Yet instead of remaining in academia, he entered the business world after graduation.

Every company he founded seemed to grow rapidly before going public.

Even after one company became successful, he would immediately establish another in a completely different industry—and succeed again.

After repeating the process several times, he had built the foundation of a corporate empire within just a few short years.

The last man who had accomplished something similar was Howard Stark.

And Howard had needed considerably more time to reach the same scale.

Compared to that, Tony Stark had simply inherited a functioning empire.

The difficulty wasn't remotely comparable.

As a result, Victor von Doom's reputation in the media was beginning to eclipse Tony's.

One major reason was that Victor had never rejected Wall Street.

He understood leverage.

He knew how to make money with investors rather than independently of them.

Compared to Howard Stark's old-fashioned approach of quietly building businesses from the ground up, Victor was much more popular.

---

Given how highly both the market and Henry seemed to regard him, someone couldn't help asking:

"Henry, if you think so highly of him, why only recommend him as a medium-term investment?"

Henry answered honestly.

"Because regardless of how capable he is, the risks associated with a space station project are enormous.

"That's why I think medium-term investment makes sense.

"For a truly long-term position, I'd want to see how things develop first.

"Compared to that, Apple's risks are much lower.

"At the end of the day, they're selling consumer products."

Of course, Henry wasn't about to mention that this future business genius would eventually be driven into catastrophe by Reed Richards.

No sane person in 1999 could possibly predict that.

Only a prophet—or a lunatic—would make such a claim.

---

At that point someone else asked:

"Henry, do you invest your own money?

"You've got quite a bit of wealth.

"You can't seriously be leaving it all in a bank account collecting interest.

"What do you buy?

"Stocks? Futures?"

Back when he first came into money, Henry had claimed he wanted nothing to do with Wall Street's financial games.

After all, the rules had largely been written by people far more experienced than he was.

But after Sony's settlement money arrived, the amount sitting in his Citibank accounts became impossible to ignore.

Financial advisors called him constantly.

Eventually, he got annoyed enough to start investing.

Leveraging his technological advantages certainly didn't hurt.

---

Looking around the room, Henry lowered his voice dramatically.

"You can all keep a secret, right?"

The group immediately perked up.

A secret investment strategy was exactly what they wanted to hear.

Everyone nodded eagerly.

Only then did Henry continue.

"Back in 1971, NASDAQ introduced electronic quotations.

"In 1977, the Toronto Stock Exchange pioneered electronic order matching.

"New York later adopted fully electronic markets as well.

"By 1980, the Cincinnati Stock Exchange became completely electronic.

"Investors could trade via telephone or network services.

"And recently, North America has essentially completed the transition to fully electronic markets."

Everyone listened attentively.

"The purpose of these systems was to synchronize pricing across exchanges.

"To prevent people from exploiting information delays between markets.

"But here's the question:

"Is that really foolproof?"

Someone with a bit of computer knowledge immediately asked:

"You found a bug?"

"No."

Henry shook his head.

"Not a bug.

"A limitation."

"Data transmission still takes time.

"For example, information traveling between New York and Chicago requires roughly sixteen to seventeen milliseconds.

"If you can obtain information faster than that, you can exploit the tiny differences in timing and pricing between exchanges."

---

He offered a simple example.

"Suppose a stock is currently trading at ten dollars.

"Someone in New York posts a buy order at eleven dollars.

"If I receive that information first in Chicago, I can purchase shares at ten-fifty and immediately sell them to the New York buyer at eleven.

"My profit is fifty cents per share."

The room began to stir.

"Of course," Henry added, "the actual process is much more complicated.

"Computer programs execute these trades automatically.

"The entire buy-and-sell sequence may be completed within fifteen to twenty milliseconds.

"The profit margin on each trade is tiny.

"You need enormous volume to generate meaningful returns.

"But the advantage is that you can make money regardless of whether the market rises or falls.

"Bull market. Bear market. Doesn't matter.

"Unless trading gets halted entirely."

---

What Henry was describing was what the twenty-first century would come to know as high-frequency trading.

In 1999, however, it remained a secret weapon known only to a handful of major firms.

As for how Henry achieved superior transmission speeds?

The answer was simple:

Alien technology combined with satellite communications.

He could synchronize information at the microsecond level.

The only real bottleneck was the processing speed of the exchanges themselves.

---

After the explanation, most listeners looked confused.

One finally asked:

"Wouldn't the exchanges notice something like that?"

"They have."

Henry shrugged.

"So what?"

The question itself provided the answer.

Every trade generated fees.

More trades meant more fees.

An exchange would have to be insane to ban a practice that increased revenue.

---

Still, everyone wanted to know the real question.

"What kind of returns does this strategy generate?"

"About 0.8% to 0.9%."

The room immediately deflated.

That sounded disappointing.

To put things into perspective:

The federal funds rate was currently around 5.5%.

A one-million-dollar certificate of deposit could earn roughly fifty-five thousand dollars annually.

Exact numbers varied by institution, but everyone understood the comparison.

Seeing their disappointment, Henry grinned.

"Per month."

The mood changed instantly.

Eyes lit up.

A monthly return of 0.8% translated into roughly 9.6% annually.

That was comparable to many moderate-risk investment funds.

Unlike those funds, however, his strategy wasn't dependent on market direction.

It also significantly outperformed ordinary bank deposits.

---

Henry continued.

"My initial capital was ten million dollars.

"At this point, I've made a little over one million in profit."

The truth was that making money wasn't even his primary reason for watching the stock market.

There was an old saying:

> Before the golden wind arrives, the cicada senses it first;

Death approaches silently while others remain unaware.

The stock market functioned in much the same way.

It often detected shifts long before the news media did.

Of course, very few people could actually interpret those signals.

Henry happened to be one of them.

The profits from high-frequency trading were really just a side benefit.

---

Immediately someone asked:

"Henry, could you help us do this kind of trading too?"

Henry had anticipated the question.

"Here's what we'll do.

"After the New Year, I'll look into the legal requirements for establishing a private investment fund.

"I'll also draft standardized contracts.

"If you're still interested then, take a look.

"Everything should be done through proper legal channels.

"Fully compliant.

"That way there won't be any disputes later."

Then he added:

"And don't go around talking about this.

"This type of trading isn't widely known yet."

Nobody objected.

After all, who complains when someone offers to help them make money?

"Sounds good."

"No problem."

"That's perfect."

The entire table nodded enthusiastically.

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