Chapter 18: Diversification
Getting back to the car dealership, I parked the car and put both of my hands on the wheel.
"I want to buy this beauty," I said.
Lynn chuckled. "Thank you, but I'm not for sale."
I looked at her, raising an eyebrow in mock seriousness.
She met my gaze and burst out laughing. "Alright, alright, let's get inside."
Once inside, I started bargaining. "The tires need to be switched, and the brakes are making noise. They'll need to be repaired."
I was enjoying the back-and-forth, delaying for the sheer pleasure of the negotiation. In the end, I managed to knock off only $100. But that was alright.
They didn't accept credit cards, so I needed to withdraw some cash next door before coming back to finish the paperwork.
"It would be nice if you wanted to buy another one at some point. It was nice driving with you." Lynn said as I was about to head out.
"I might actually consider buying a few more," I replied and walked out.
Some of the cars here were from the early 90s and late 80s, classic cars.
I might want to keep a collection of cars and take good care of them so they can keep on living.
I walked back to the black Ford Mustang, running my hand along the sleek front side of the car, feeling the smooth curves and sturdy build.
Opening the driver's side door, I slid into the driver's seat.
I revved the engine; the Mustang responded eagerly to my touch and it rumbled to life.
Gripping the steering wheel firmly, I adjusted the mirrors and I pulled out of the dealership.
'I will handle it like it's my girlfriend.' I thought.
I drove the car back home and noticed that it was past afternoon already. The paperwork took some time.
I parked neatly in our driveway, leaving space for my parents' cars.
Stepping out of the driver's seat, I stretched and glanced towards the front door.
Sydney dashed out, clearly amazed and excited. She must have seen me pull up through her window.
Britney was actually trailing behind her, but she stopped at the door.
Sydney ran up to me and went crazy, "What in the world is this car? How did you get it? Did you steal a car, Jack?!" Sydney exclaimed, her words tumbling out in rapid succession.
I smiled calmly. "No, Sydney. I bought it. I worked hard for it," I replied, watching as Sydney hopped into the driver's seat, inspecting every detail with wide-eyed wonder. "No way! This is sick!"
As I walked towards the front door, Sydney's voice echoed after me, still baffled. "Seriously, Jack. Where did you get the cash for it?!"
I paused on the entryway balcony, turning back to answer her. "I made some money on a bet with Grandpa," I called out.
I looked over at Britney. She leaned against the door frame, wearing red shorts and a white hoodie that was too big on her.
"Hey, Britney, did you guys eat something?" I asked.
She shook her head silently, serious as always.
I glanced back at Sydney, "I'll call Chloe's parents' pizzeria. I think they were doing delivery." I said and then I walked past Britney into the house.
"Just tell Sydney whatever you want, and I'll place the order." I told Britney.
I left Sydney to explore the Mustang with Britney in tow and walked into my father's office.
...
An hour later, with pizza in hand, I started browsing through margin account offers from different brokerages.
Ameritrade seemed to have a very decent offering, so I began filling out the information.
They asked about the amount of money I intended to trade with.
'...hard to tell. It could be millions,' I thought, but I checked the box for $50,000-500,000. Other options were $5,000-50,000 or higher, but anything less than that wasn't even a possibility.
The opening process was definitely more strict than it will be in the future.
They also asked about my experience.
Was this my first account?
I answered no.
The fact that I was barely 18 and I had no job that could support me would probably arouse suspicion, so I was expecting them to call me personally to verify my details.
On this account, I would be able to borrow up to 50% of the shares; that's equivalent to 2x leverage.
My buying power would effectively double.
There was not a lot of crazy high leverage back then, but that does not mean some people could not get it.
As long as someone was willing to lend that money, it was possible.
One issue that arose over time was the practice of borrowers concealing their true financial capabilities.
People would borrow money that didn't exist in the first place.
It was a recipe for disaster.
Not long after applying for the account, they called me.
"Good afternoon. This is Ameritrade. Do I have the pleasure to talk with Sir Jack Somnus?" A raspy male voice asked.
"Good afternoon. Yes, you have reached the correct person," I replied formally.
"We've noticed you applied for a margin account and we have a few questions."
"Please proceed."
"You indicated trading volumes between $50,000 and $500,000, but your initial deposit is $10,000. Are you planning to invest more over time?"
"I manage a cash account at another brokerage. I intend to transfer some funds here when I exercise the calls. That could amount to around $50,000, which is why I made that selection."
I was pretty sure that dad would agree to it once he knew that my investments were actually working and there was at least some money left for 'safe investment'
After learning about my management of another account, the representative proceeded to ask me a series of standard questions regarding trading and investing.
These were part of the formalities Ameritrade needed to complete.
After the account was created, I decided to invest my entire buying power of $20,000 in shares of NetEase, a gaming company.
My strategy was to accumulate shares of this stock ahead of an event that was going to happen in August.
...
Over the next few days, the shares of USANA Health Sciences surged from $8 to just under $11.
People were now interested in buying my calls at $11.61 each, as it seemed highly likely that the stock would surpass $12 before the end of July.
My father was quick to grasp the situation; a brief glance at the brokerage dashboard nearly brought him to his knees.
[ETRADING]
------------
[Account Name: Jason Somnus & My Dear Son]
------------
[Total Balance: $87,075.00]
[Available Balance: $0.00]
------------
[Market Value of Holdings: $87,075.00]
[Buying Power: $0.00]
------------
This development led to tense conversations within my family.
My mother was skeptical, even accusing me of engaging in illegal activities.
The gambling with my grandfather didn't help my cause.
"Rest assured, everything is completely legal." I told her.
'If this much money is causing such stress, I might need to get them some vitamins and supplements to prevent them from having a heart attack.' I thought.
Gifts
-- Gift
received Weekly Power Status
-- Power
Ranking 
-- Power
stone