CHAPTER:04
The Japanese Portfolio
September 1933 – March 1934
The Japanese market was easier to access than the American. Tanaka was based in Gyeongseong but maintained relationships with brokers in Osaka and Tokyo. Through him, Min-jae opened an account at Yoshida Securities, a small Osaka brokerage that handled orders for Korean clients without asking too many questions.
He began cautiously. Small positions at first—just enough to establish a relationship, to test the mechanics. Nippon Steel at ¥45 per share. Mitsubishi Heavy at ¥38. A company called Tokyo Tsushin Kogyo—later Sony—that barely anyone had heard of yet, at a price so low it barely registered.
By March 1934, his Japanese portfolio had grown to include positions in twelve companies, with a total value of approximately ¥65,000—a 140% return on his initial investment, most of which he had reinvested rather than taken as profit.
He was, by the standards of a nineteen-year-old Korean in colonial Gyeongseong, wealthy. Not conspicuously wealthy—he was careful never to show it—but wealthy enough that he could begin thinking about the next phase.
The family businesses. His father had given him freedom to operate within Sejin Trading, the small trading company the family partly owned. Min-jae had been quietly expanding its operations—using his foreknowledge to time commodity purchases, building relationships with suppliers, positioning the company to benefit from the economic changes he knew were coming.
In January 1934, he had persuaded his father to let him acquire a struggling flour mill in Daegu for 8,000 won. The mill was small, undercapitalized, and losing money. Min-jae knew that flour prices would rise as Japan's military buildup increased demand for processed foods. Within six months, the mill was profitable.
In March, he began buying timber. The Japanese colonial administration was planning infrastructure expansion across Korea—roads, railways, public buildings. Timber would be in demand. He locked in forward purchase agreements with producers in the mountains of North Gyeongsang at pre-construction prices.
In April, he made his first foray into metals trading, buying a consignment of copper scrap from a distressed Japanese factory and selling it at a 34% profit through his Osaka connection.
His father watched all of this without comment. The merchants talked. The young Kwon was different. He knew things. He moved early and he was right.
People began to pay attention.
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Part VIII: The Journal
March 15, 1934 — One Year
Min-jae sat in his room on the anniversary of his arrival, the cipher journal open before him. The first entry, written a year ago, seemed impossibly distant now.
He read through the year's entries. The first months of confusion and adaptation. The first investment. The expansion into Japan. The beginnings of the family business transformation. The careful cultivation of relationships. The growing pile of capital—still modest by the standards of what he planned, but growing.
He wrote:
March 15, 1934. One year in this world. I have survived. I have adapted. I have begun to build.
Assets as of today:
- US equity portfolio: $14,200 market value (68% return)
- Japanese equity portfolio: ¥82,000 (210% return)
- Swiss gold holdings (purchased through Hong Kong): $4,800 equivalent
- Hong Kong property (acquired October 1933): one commercial building in Central district, purchased for HK$85,000, now worth approximately HK$95,000
- Korean businesses: control of Sejin Trading (effectively, though ownership remains with the family), Minsung Flour Mills (Daegu), interests in timber and metals trading, plus the beginnings of what will become a transport business
- Cash reserves: approximately 35,000 won in various forms
Total net worth (estimated): $65,000 equivalent.
Not bad for a year's work. Not nearly enough for what I need.
The next decade will be critical. 1937: Japan invades China. 1939: war in Europe. 1941: Pearl Harbor. I need to be positioned for all of it—long on the things that will rise, short on the things that will fall, and above all, diversified enough that no single disaster can wipe me out.
The family is well. My father asks fewer questions now—he seems to have accepted that I am simply strange and that my strangeness produces results. So-jung has been promoted to head of household staff; I recommended her, and my father agreed. She is competent, discreet, and loyal—three qualities I value above almost anything else.
I miss my old life sometimes. Not the work—the work here is more interesting, more real—but the ease of it. The ability to walk into a coffee shop and order without thinking. The knowledge that the world would continue predictably. The small comforts of a life I didn't realize I had until it was gone.
But I am here now. This is my life. And I intend to make it matter.
He closed the journal, locked it in the chest beside the suit from another world, and blew out the lamp.
Outside, Gyeongseong slept. The pine tree in the courtyard stood still against the stars. A dog barked somewhere in the distance. The night was cold and clear and full of possibilities.
He had seventy years left. He intended to use every day of them.
Part II : The Compounding
Gyeongseong, Choseong-dong
April 1934 – December 1935
From the cipher journal of Kwon Min-jae:
April 17, 1934.
The US portfolio just crossed $20,000. Not because I did anything clever—because I did nothing at all. I bought, I held, I waited. The market does the rest.
This is the hardest lesson for most investors: the value of inaction. They feel they must do something, must trade, must prove their cleverness with activity. But the great fortunes are built by those who buy and hold through the noise.
I know this because I read it in a hundred books written by people who aren't born yet. But knowing it intellectually and feeling it are different. Every day I check the prices. Every day I resist the urge to adjust, to optimize, to improve. Every day I remind myself: the New Deal is working. The Depression is ending. The market will rise.
So far, I've been right.
But being right is easy when you know the future. The real test will come when I reach the edge of my knowledge—when the years I remember run out, and I have to navigate like everyone else, on instinct and judgment alone.
That day is decades away. I don't think about it.
I think about the next trade.
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The American market did rise. From the depths of 1932–33, through the uncertainty of 1934, into the recovery of 1935. By the end of 1935, Min-jae's initial $8,450 investment had grown to $58,000—a 586% return in two and a half years.
He had done nothing but hold.
Well—almost nothing. He had added positions when he could, reinvesting profits, gradually building a portfolio that now included:
· IBM: 1,200 shares purchased at an average of $34. He knew what IBM would become. He would hold these shares for decades.
· Standard Oil of New Jersey: 2,500 shares at $28. The 20th century runs on oil. He would never sell all of it.
· Coca-Cola: 800 shares at $41. His private indulgence. Every time he saw the stock price, he thought of the world he had left—the world where Coke was everywhere, where a cold bottle on a hot day was the most ordinary pleasure. It made him feel less alone.
· Pfizer: 1,500 shares at $12. A small chemical company making tartaric acid and citric acid. He knew what it would become. He held.
And dozens more: DuPont, General Motors, AT&T, Procter & Gamble, Sears Roebuck. A portfolio that looked, to anyone who saw it, like the work of a brilliant young investor with an extraordinary gift for identifying quality companies at reasonable prices.
No one saw it. The account was still in Maruichi's name. His ownership was invisible.
That was how he wanted it.
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The Japanese portfolio had grown even faster. The military expansion that Min-jae knew was coming had begun in earnest, and the stocks he had identified—steel, heavy machinery, precision instruments, chemicals—had soared.
Nippon Steel: up 340%.
Mitsubishi Heavy: up 290%.
The small precision instrument makers he had found through Yamamoto's network: up between 200% and 450%.
By the end of 1935, his Japanese holdings were worth approximately ¥480,000—roughly $140,000 at current exchange rates.
He had done something else with his Japanese profits: bought real estate. Three commercial properties in Tokyo's Nihonbashi district, purchased through a corporate structure Yamamoto had helped him establish. The price: ¥45,000 for all three. A fraction of what they would be worth in the decades to come—not in the immediate future, when war would devastate Tokyo, but eventually, when Japan rebuilt.
He was playing a very long game.