America’s Road To Wealth

  Chapter 235 Be on guard against students who fail in art

   Buy one in Manhattan, or build your own office building.

  Abel had already thought about this matter.

   It's just that his attention in this area was later drawn by the Hudson Bay City Plaza.

  However, there are too many aspects involved in Hudson Bay City Square.

  It is impossible to get on the horse in a short time.

  That is to say, the super headquarters building that Abel wants to build will not appear in the short term.

  Every time Abel came to Smith Capital after the expansion, he felt that the company was a bit crowded.

   After much deliberation, he felt before getting on the horse in Hudson's Bay Town Square.

   You must first find a spacious enough office location for your company.

  The best way, of course, is to buy a building that is tall enough and big enough in Manhattan or New York.

  In this way, not only can Smith Capital be placed in it.

   It is also possible to place the headquarters of companies such as Elizabeth Back Garden, ab Smith Entertainment, ab Smith Newspaper, amc TV station, aircraft and yacht chartering, etc., whose headquarters are also in New York.

   Having said that, the number of companies under Abel's name in New York is really quite a bit.

  In addition, those companies in Los Angeles and other places also need to add branches in New York.

  If you add this part, it is only the company under Abel's own name, and there are more than a dozen companies in New York.

  A Smith building can barely fit a Smith Capital.

   Not to mention other companies.

  Abel no longer intends to continue waiting for the Hudson Bay City Square.

  He has no interest in rebuilding a new building.

  Final deliberation.

  Abel felt that directly buying a ready-made skyscraper would be the best solution at present.

   Anyway, as long as you don’t buy Gemini, or other buildings next to Gemini, it’s fine.

   Until that day, other places should be safe.

  When people go to hit Gemini, they don't do it blindly.

  Who said that before that, the twin brothers were the tallest and second tallest buildings in the United States respectively.

  This kind of landmark buildings are located in lower Manhattan. It is a bit unreasonable not to hit them.

  “.Buy a building.”

  In the lounge area of ​​Abel's office, barista David Mellon puts down the coffee.

   "It is indeed necessary." David Mellon looked at it from the perspective of Smith Capital.

  In David's opinion, Smith Capital, which has less than 600 people, still needs to continue to expand.

   Not to mention being like Goldman Sachs, there are more than 20,000 vice presidents, and the peak number of the company once exceeded 30,000.

   At least they must be like Wall Street giants such as Merrill Lynch and Lehman Brothers, with five or six thousand employees.

   With five or six thousand employees, the Smith Building, which was originally enough, could no longer hold it.

   Even if it is more crowded, the Smith Building can only accommodate about a thousand people to work at most.

   This is still under the condition that it may affect the work efficiency.

   If you want to make Smith Capital, there will be an office location that can be expanded in the future.

  In Manhattan or New York, owning your own mansion is already a rigid requirement.

  Abel put down the "Manhattan Property List" that Papa Ikana gave him.

  He said to David Mellon: "I want to buy the Woolworth Building."

  Woolworth Building is the former headquarters of Smith Capital.

   This is a historic building, which has been the tallest building in the world for 16 years.

   Built by Woolworth, the former American retail king.

   More importantly, Abel now holds about 20% of the equity in this building.

  This part of the shares cost Abel almost 300 million US dollars at that time.

  And most of the shares in this building are in the hands of those Wall Street investment bank giants.

  The proportion of shares is 12% owned by Merrill Lynch,

  28% is owned by Goldman Sachs,

  30% owned by Wells Fargo,

  About 10% is owned by minority shareholders.

  The remaining 20% ​​is in the hands of Abel himself.

  Compared with other buildings, it is not too difficult to put the Woolworth Building under the bag.

  For those investment banks, based on Abel's current relationship with them, basically they only need to give money.

  The 10% or so minority shareholders’ shares must be sold under the general trend.

   Since last year, real estate across the United States has been rising wildly.

  Last year, the Woolworth Building was worth about 1.5 billion US dollars.

  There is no 1.6 billion US dollars this year, and it is estimated that there is no way to win it.

   "Woolworth Building?" David Mellon thought for a while and said:

  “Although it is a bit old, the area is indeed sufficient. It also has enough history and landmarks.”

   Woolworth Building, a total of 57 floors.

   At the beginning, the builder Frank W. Woolworth only planned to build 42 stories high.

  Later he discovered that if it was a little taller, it could become the world's largest building.

  In order to become number one in the world, he temporarily asked the designer to increase the height.

  The original 42-story building has become 57 floors.

  Frank W. Woolworth is also famous for saving and calculating.

  The extra 15 floors, they are much smaller than the original 42 floors.

  They are based on the 42nd floor, and extend about one-third of the area.

  This makes the Woolworth Building look very beautiful from the front after it is completed, and it is a standard neo-Gothic tower.

   But from the back and side, it looks like an iron.

   The front is much higher, and the back is completely flat. The front is like the handle of an iron, and the back is a flat iron.

   "Then it must be Woolworth." Abel said simply:

   "I will ask Alan Baker to contact these shareholders later, and try to move in before October."

   It doesn't mean that if you buy the Woolworth Building, you can live in it directly.

  As one of the well-known buildings in Manhattan, Woolworth is located in the core locations of Barclay Street and Broadway Street.

   There are a lot of companies that lease here, and many of them are well-known companies.

  The leases of these companies are at least several years, and some may be more than ten years.

  If you want to rent out these companies, you need a certain amount of breach of contract costs and a certain amount of time.

  In addition, it will take a certain amount of time to move the companies under Abel's name, including Smith Capital, etc., into the Woolworth Building.

  The interior of the building may also undergo certain modifications and decorations.

  These times add up, and it is estimated that it will take about half a year.

   After half a year has passed, New York is also safe.

  After that happened, move all the companies here.

   In this way, people in the United States and Manhattan were panicked at the time.

   Can also be mixed with an achievement like "Strong Manhattan Supporter".

  After all, after that, many multinational giants and financial companies were really frightened and wanted to leave Manhattan.

  That is, the US and New York authorities later made great efforts to ensure that this kind of thing would not happen again.

   Only then did Manhattan not become a ghost town overnight due to panic.

   Having said that, Abel remembers like after that incident.

  House prices in Manhattan, and even the entire New York City area, have fallen for several months in a row.

   It was not until the second year that Americans saw the determination of the White House that they re-established their confidence in Manhattan and the New York City area.

  Thinking of this, Abel felt that it would be time to let the new starting point real estate. After that incident, Manhattan will sweep the property.

  Abel intends to purchase the Woolworth Building directly in his own name.

  In this way, although you have to pay a certain amount of land tax every year, you can spend 1.6 billion US dollars in one go.

  Such a large profit will be turned into investment. When it comes time to do the new tax return, it will be a little easier.

   While drinking their favorite coffee, the two chatted about Smith Capital.

  Smith Capital without Abel launching a big move.

  Its appeal to investors in the market is actually not very strong.

  Because investors originally came to Smith Capital because Abel could provide them with high profits.

   Without this relationship, Smith Capital does not have much advantage over other Wall Street giants.

  On the contrary, due to factors such as brand, channel, and transaction point, it is a huge disadvantage.

  Goldman Sachs' more than 20,000 vice presidents, not all of them stay in New York.

   Most of them are scattered all over the United States and even the world.

   Simply put, these established giants have a large number of branches.

  These branches have absorbed a huge number of customers.

  This is not the case with Smith Capital.

  The only investors it can attract at present are investors near New York.

   There are also some rich men who came in the name of Abel.

  This also makes Smith Capital, except for the few private equity where Abel is the fund manager.

  Other financial products and investment products are seriously insufficient in attracting customers.

   David Mellon has nothing to do with this situation.

   It can only be done step by step, after gaining a firm foothold in New York.

  Follow-up in other cities, we will continue to increase business points and branches.

   After thinking about it, Abel made a suggestion:

   "Perhaps we could add a money fund?"

  "Monetary Fund?" David Mellon said:

   "Forehead, among our financial products, there is already a monetary fund."

  When it comes to monetary funds, the rabbits in China probably think of "Ye Bao" first.

  But in fact, the monetary fund was not the first of the old horse.

  It has appeared in the 1970s and 1980s.

   From the early 1970s to the 1980s.

  The United States is in a "stagflation" environment with economic recession and high inflation.

   At that time, the Soviet Union was strong and the United States was weak, and the Soviet Union attacked and the United States defended.

  The strong and strong red bear scared the European and American world into shivering.

  At that time in the United States, even capitalist newspapers such as the "Wall Street Journal" were "fixing, discussing, and asking" and "please wait for your people in the United States." They all suspected that the line was wrong.

   Due to economic problems, the Federal Reserve at that time regulated bank deposit interest rates.

  This makes the deposit interest rate of residents even lower than the inflation rate, and the deposit has been in a state of depreciation.

  The inflation in the United States at that time was as high as 20% or more at the time

  At that time, in order to attract funds, banks launched large-value certificates of deposit with interest rates higher than the inflation rate.

  However, the starting amount of this kind of time deposit certificate is relatively large, and the minimum investment unit is often 100,000 or 1 million U.S. dollars.

   At that time, only a few institutional investors, or the rich, had enough cash to make such investments.

  For most Americans, the only financial investment products that could participate at that time were bank savings accounts, stocks and bonds with pitifully low interest rates.

   When times are tough, people naturally look for safe, liquid assets.

  However, many financial assets are either too risky, illiquid, or have too low returns. In short, they cannot meet the financial needs of investors.

   At that time, Ruth Bant, director of the cash management department and credit analyst of the world's largest pension fund "Teachers Annuity Insurance Company".

  He had a brilliant idea after doing thorough research on the financial services industry.

  He founded a mutual fund named "Savings Fund Company" in 1970, which was approved by the US Securities and Exchange Commission in 1971 to sell financial products to the public.

  In October 1972, Savings Fund Corporation purchased $300,000 in high-interest term savings.

   At the same time, it is sold to small investors with an investment unit of 1,000 US dollars.

  In this way, small investors enjoy the return on investment that can only be obtained by large companies, and at the same time have higher cash liquidity. The first money market mutual fund in history was born.

  Since then, similar money funds have emerged one after another, and they are nothing new in 2001.

  Even Smith Capital itself, the many financial products developed by David Mellon and company executives, also has a monetary fund.

   Fortunately, David has adapted to his boss.

  David knew that Abel was like a **** in a high-stakes transaction.

  But Abel’s knowledge in the general financial field is really average, maybe even worse than that of many financial students in universities

  So David didn't feel bad about Abel's proposal.

"No no no no."

  Abel shook his head, "The monetary fund I am referring to is different from traditional monetary funds."

   After thinking for a while, Abel added: "To be precise, the currency fund I'm talking about should be called "Virtual Currency Fund"."

   "Virtual currency fund?" David Mellon was a little puzzled.

  Monetary funds are monetary funds, can they be virtual?

  David didn’t know that there would be something called virtual currency in later generations.

   Cut all the leeks in the world to death.

   "Retail investors, family small and micro investors, these micro-investors, what channels do they usually invest in stocks and funds?" Abel asked.

   "Go to a bank or a local securities company to open an account. Then go through their securities manager to implement their investment requirements." David Mellon said.

  This is also the way investors in the United States or around the world have bought stocks and funds for almost two hundred years.

   "Then how do they contact their investment managers?" Abel asked persuasively.

  David Mellon thought about it:

  “It’s usually a phone call. In the past, there were faxes and telegrams. Or go directly to a securities company to find an investment manager. But now there is an Internet, and some securities companies have tried to contact customers on the Internet.”

   "It's not wrong." Abel put down his coffee and tapped on the table, "This is it, the Internet!"

   "The virtual currency fund I am referring to is a new currency fund transaction method that requires the use of the Internet."

  Abel said:

   "As far as I know, as early as 1995, online trading of stocks began to appear on the New York Stock Exchange. But the large-scale popularization will not be until 1998, that is, three years ago."

  “The real Internet account opening has not yet appeared. To open an account, customers also need to go to a securities company or a bank. Then the securities company or bank provides a port to conduct transactions on the Internet.”

   "But strictly speaking, so far. This kind of transaction is actually notifying the investment manager by phone, but it has changed to notifying the investment manager by using the Internet."

   "Then I think that Smith Capital can completely move all the financial products that allow small investment, such as currency funds, to the Internet. In the future, even account opening and transactions can be carried out directly on the Internet."

   "What Smith Capital has to do is to maintain our network. In those big cities with nodes, add some branches."

   "In this way, we don't need to open a large number of business outlets like Goldman Sachs. We can find a way to make our customers come from the Internet as much as possible."

  Abel didn’t know exactly what to do.

   But before he was reborn, he bought things like Yu'e Bao and Yu Libao.

  I also bought stock funds on some brokerage software.

  Abel told David Mellon the main points of Internet brokerages such as Yu'ebao, choosing what he could explain clearly.

   Gradually, David Mellon understood what Abel meant.

   "Oh boss, what do you mean, is to directly sell microfinance products such as monetary funds on the Internet?"

  David Mellon said: "Open an account for them directly on the Internet? Direct transactions on the Internet?"

  Abel nodded, "That's probably what it means. But the specific operation, and feasibility, etc., you need to measure it yourself to see if you can do it."

   To put it bluntly, what Abel said is the prototype of an Internet brokerage.

  In fact, at this time, some people on Wall Street are already exploring this model.

  Abe also met the founder of the company that was groping for this model.

   It was the Interactive Brokers of Thomas Peterffy that Robert introduced to Abel at the reception at Morgenthau's house last time.

   Interactive Brokers started off as trading tools, and even the computers and systems in the New York Stock Exchange were configured by Interactive Brokers.

  Interactive Brokers is a pioneer in the computerization and Internetization of the US financial market.

  Even the online stock trading realized in 1995 was the first to be started by Interactive Brokers.

   It's just that the limitations of the times are there, even if Interactive Brokers has a different vision.

   At this time, the Internet brokerage has not yet begun, and Thomas Peterffy is still groping.

   Abel, who came from 2022, is much more straightforward.

  Thomas Peterffy of Interactive Brokers is still groping for Internet brokerage 1.0.

   is the basic version built on the computer Internet.

  The method proposed by Abel is already the 2.0 of Internet brokerages.

   That is, the full version based on the mobile Internet and smart phones.

   With the current technical conditions and Internet conditions, version 2.0 is of course impossible to achieve.

  However, many trading concepts of version 2.0 are optimized on the basis of version 1.0 of Internet brokerages.

  Just slightly change those features that are not suitable for the current Internet, but only suitable for the mobile Internet.

  The set of things proposed by Abel is completely feasible during this time period.

   You must know that the population of the United States was only 285 million at this time.

  But the number of Internet users is already 110 million (another data is 90 million).

  Assume that among the nearly 100 million Internet users, one million people are willing to invest.

   Among the one million people who are willing to invest, 100,000 have chosen Smith Capital.

  That is also a huge customer base for Smith Capital.

  Already very smart, David Mellon, who is also a Wall Street genius, knows everything.

  After listening to the boss's thoughts, David Mellon became more and more excited as he thought about it.

   "Boss." David couldn't help looking at Abel: "Fortunately, you studied art in college. If you studied finance or business in college, I think I will lose my job."

  Abel understood what David meant, and he was beating around the bush.

   Fortunately, Abel also knew that it was not because of how smart he was.

   It's just that I have accumulated more than ten or twenty years, and said it more than ten years in advance.

   This is standing on the shoulders of the giants of the times, not how smart I am.

  So he just smiled reservedly at David and said:

   "Well, who told me that what I'm more interested in is actually art? If I failed the exam at that time, I might have studied finance or something."

  David Mellon complained:

   "Then fortunately, boss, you didn't fail the exam. You must know that the students who failed the exam at the Austrian Academy of Fine Arts started a world war."

   "If you fail, boss. Maybe it's Rice University's failure of art, which caused a world war on Wall Street."

  (end of this chapter)