The Greatest Conglomerate Ever With the American Lottery

25. Run!

Lisa Sue was handling AMD’s crisis with aplomb.

At one point, she told me that my $150 million investment was a big help.

“$150 million? That’s a pittance on this side of the pond, but it was a lot of money for us, Alex, and we really put it to good use.”

“Glad to hear it was helpful, Lisa.”

“Ho-ho-ho! Just wait a few years, Alex, and you’ll be a lot richer than you are now. Okay?”

“Hmph, I’ll be waiting, Lisa.”

After seeing each other occasionally and talking to each other often, we got to know each other on a first-name basis, and I gave her an expensive bottle of wine as a gesture of encouragement.

She told me that one of her favorite hobbies with her husband is wine collecting.

She said it was Chateau Petrus.

I’m more of a soju or whiskey drinker, so I didn’t know much about wine, so I asked Jeffrey and bought it for her.

AMD’s stock price, which had bottomed out below $1 due to the departure of major shareholder Mubadala and the rights offering, recovered to $1.50 by the end of October and began to rise rapidly in November.

It seemed that the massive restructuring and innovation that Lisa had been doing since she took over as CEO last year had given the market a green light.

Then, late December.

December 28th and 29th were back-to-back $3 days.

We had tripled our money in less than three months.

But I had to curse Lisa out.

“No, Alex, why are you scattering ashes!”

“No, it’s not that, it’s just for a little while. I’m going to buy it back, so don’t get too upset.”

“Oh, but still, what is this, I was on a roll?”

“Oh, come on, Lisa. What are you doing with it going up to $3? I’m looking at $30+.”

“Then why are you selling!”

“Well, I needed the money internally for a while, and I’ll buy it back and put it up again soon, don’t you think?”

This is how things started.

Now that I knew how to use the prayer beads, I periodically checked the direction of AMD and Nvidia’s stock prices and noticed that while Nvidia’s was rising steadily, AMD’s light would dim and then brighten again after a while.

If so, this was an opportunity.

An opportunity to increase our stake in AMD.

So I instructed John to sell some shares in the last week of December to take advantage of the uptick in the stock price.

Naturally, Lisa was pissed.

I couldn’t help it if she was pissed.

My interests come first.

So, over the next two weeks, until the first week of January, I sold a 7% stake in AMD, and I had $200 million again.

“What am I going to do with this money?”

“I’ll buy back AMD stock sooner or later, but for now, let John roll.”

“hahahahaha! Okay.”

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John did as requested and started rolling the cash in the call market, which was pretty cool.

The mechanics were so complicated that I had almost given up trying to figure it out, but it seemed to be yielding almost 5% on an annualized basis.

When I told Jeffrey about it, he rolled his eyes and said it was a great return considering the short term.

So, of the last $40 million I had, I gave him $10 million to roll, keeping the other $30 million just in case.

“I thought you said last time was the last time?”

“Can’t we just move on, do you really have to dig that deep?”

“Pooh-pooh, I’ll put it to good use!”

“Don’t spend it, roll it!”

How did I earn that money?

Sure enough, AMD stock went on a downward spiral, and by February, it was back under a dollar.

Time to buy back in.

“John, buy back in.”

“Okay, boss, I’ve been waiting for you to say that.”

So over the course of two weeks, the average price of AMD shares I bought back was $1.50.

And by the time we were done, Karma Investments’ stake in AMD had grown to 43%.

“I hate them so much!”

“hahahahaha! Lisa, I’m not going to do this again, at least not for a while.”

“How rich do you think you’re going to get? Alex?”

“World’s richest, that’s my goal.”

“Yeah, and I suddenly want to quit my job?”

“Ugh! What’s wrong? Lisa?”

“Well, I heard the 2006 Romanekonti was so good.”

“Awww! I’m going, I’m going, I’m going to buy some!”

“Ho-ho-ho!”

“…”

The Nvidia buyout went smoothly.

By the end of 2/24/16, we had thrown everything we had at it, and we ended up investing $760 million at an average price of $7 per share.

Originally, we were only going to invest $600 million, but I told them to go ahead and invest the money I had left, so the additional $130 million plus the $30 million in profits we’d made on the roll, all went into Nvidia stock.

I was going to go back and sell the stock to pay the taxes.

After such a busy February, AMD and Nvidia stock prices began a modest upward curve in March.

By April, AMD was back in the mid-$2s and Nvidia was above $9.

Unfortunately, I had to sell some of my Powerball winnings to pay the remaining 12% tax.

“Boss”

“Yes, John.”

“How much money do you need?”

“Two hundred million dollars.”

Technically, it was $180 million, but I had to have some cash on hand, so I just said $200 million.

“Well, boss, why don’t you just take out a loan against your stock?”

“A loan, with stock as collateral?”

“Yes, boss. AMD is a waste, but especially Nvidia is just on the upswing, and I don’t want to sell $200 million worth of stock right now.”

“Hmmm—.”

“AMD’s perception is starting to change with the release of their Q1 earnings and the news of AMD-based components in the PS4 and Xbox One. Not to mention Nvidia, which will no doubt hit $20/share by the end of the year. But selling $200 million because you need the money now, that’s a different story, and you’re throwing away over $300 million in profit by the end of the year.”

Honestly, I felt bad for him.

“What’s the interest rate?”

“Uh, the federal funds rate went up 0.25% last year, so it’s 0.5%. We can borrow at 2% with our stock as collateral.”

“Hmm? Really?”

I ask.

“And, while we’re at it, why don’t we take out a loan and invest some more while we’re at it?”

“You want me to take out a loan and invest more?”

“Yes, it’s a clearer picture. AMD is coming back, but it’s a stock that’s been through the wringer, and as long as it’s alive, it’s never going to go below its current price. Nvidia was also originally undervalued, and I’m not kicking the can down the road.”

“Then you seem to be kicking a lot of cans—.”

“No investment is without risk, boss.”

I’m tempted to say something.

I’m thinking the same thing as John, and best of all, the light of the beads hasn’t dimmed.

So why don’t you take a shot?

“How much can I get?”

“Our stock has a market capitalization of $2 billion, and we’re entitled to $1.5 billion. But just in case, I’ll take $1.2 billion. You can take that, spend $200 million of it, and reinvest $1 billion.”

“And I’m with Nvidia?”

“Yeah, 43% is enough for AMD. Why don’t you invest in Nvidia?”

What do I do?

I thought about it for a while, and then I decided.

If it all falls apart, I still have this house and $10 million.

At least I’ll have enough to live off of.

Even if I can’t eat, gouda!

“Okay, let’s do this. Let’s just borrow $1.2 billion!”

“hahahahaha! Okay!”

So we borrow $1.2 billion at 2%, and I get to keep $200 million and pay $180 million in taxes.

The other $1 billion went to John to start buying back Nvidia stock, which he didn’t finalize until early May.

The average purchase price was $9 per share.

Fortunately, this was only possible because Nvidia’s stock was trading sideways in the late $8s and early $9s while we were buying, but the funny thing is that as soon as we finished buying, Nvidia’s stock went crazy.

So did AMD’s stock price.

It was AMD that caught fire first.

It went from $2.62 per share on April 21 to $3.99 at the close on April 22, a whopping 52.29% increase.

Truly the kind of mindless gains you see in the US stock market.

Then, after trading sideways in the low-$3 range, it finally broke through the long-awaited $4 mark on May 23.

“Hooray! Hooray!”

“hahahahaha!”

“Ho ho ho!”

It was a wild party at my house that day.

And AMD’s stock price continued to climb, not fall.

On May 27, it broke through $4.5 and closed at $4.6.

Then, on June 17, it crossed the $5 mark, closing at $5.26, up 10.74% from $4.75 on June 16, the day before.

Nvidia went from $8.89 on May 12, the day we closed our buy, to $10.24 the next day, up 15.19%.

It continued to creep higher, crossing $12 when it closed at $12.12 on June 23, and then $13 on July 11.

At this point, I made one more gamble.

I borrowed an additional $1 billion, using the rising stock as collateral, and again, I smacked Nvidia in the face.

“Run, run, run!”

“hahahahaha!”

The average purchase price per share was $13.3.

I did run, but I was pretty beaten down, and fortunately, the stock kept going up.

AMD, which closed at $5.84 on Friday, July 22, started climbing as soon as the market opened on Monday, July 25, and closed at $6.7, up 14.73%.

Nvidia crossed the $14 mark on July 26, and finally hit $15 on August 12, closing at $15.76.

“Okay, you guys, you’ve done a great job, don’t think about work for two weeks, have fun, and then come back.”

It’s Friday, August 26th.

I call the reporting zone and the staff, which closes at $7.67 for AMD and $15.51 for Nvidia, and give them two weeks of vacation.

In the meantime, I’ll be traveling to Korea.

I said, “This is your vacation money. I’ve given you a generous amount, so go have fun.”

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Jennifer and Lois put in $100,000 and John put in $200,000.

After I opened the envelope and verified the amount on the check, Jennifer ran up to me and baptized me in kisses.

On the mouth, too.

Pfft! Pfft!

“Ugh! Ugh! Puh-ha! No, this is—.”

“Ho-ho-ho! Thumbs up, boss!”

As Jennifer walked out, eyes glazed over, I honestly didn’t feel bad.

No, it was actually good.

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Just a little more.

“Me too.”

“Roy! Get off me!”

“Hmph! Thank you, boss!”

They left, leaving John alone.

“Thanks, boss.”

“Eh, no thanks, you can look forward to that at the end of the year, hahahahaha!”

I was going to give him a proper treat at the end of the year.

“So, John, where are you going on vacation?”

“I’m thinking of going to New York.”

“New York? To see his daughter?”

“Yeah, and I’m also going to ask Amy, I mean, my ex-wife, for forgiveness again and make amends.”

“Get back together?”

“Yes, boss.”

“hahahahaha, I’ll be cheering you on from home. Go John! John!”

“Thanks.”

Now, let’s go to Korea, shall we?