The Overly Competent Junior Employee

“How’s your studying going these days?”

That night, Dokyung was having dinner at home after work. It was a privilege that came with moving to headquarters. For the first time in three years since entering the securities industry, he was experiencing a “life with evenings.”

At Dokyung’s question, his younger brother Yoon Dojin, sitting across from him eating, furrowed his brow.

“Why are you asking about that?”

Dokyung chuckled at the hostile question. It was as if his brother was saying, “Is there anyone who actually enjoys studying?”

“Come on, can’t I even ask about this? I’m just checking in, asking how you’re doing.”

At Dokyung’s words, his brother’s frown softened, and he spoke.

“It’s tough, but I think it’s better than you working outside or my college friends… I just have to keep at it.”

“That’s good.”

“What about you? What kind of company moves you to a different workplace every year?”

Dokyung laughed again at his brother’s question. He thought people who didn’t know his situation in detail might feel that way.

“I know, right? What can I do when your brother is so outstanding?”

Dokyung joked, but his brother didn’t rebut. Finding the lack of reaction disappointing, Dokyung sheepishly rubbed his nose and continued eating.

“Oh, right. Hyung, there’s something I want to ask you.”

“Me?”

At Dokyung’s question, his brother nodded and spoke.

“I’ve been studying case law, and there’s this securities fraud case.”

“And?”

Dokyung responded while eating.

“The plaintiff stated in the complaint that they suffered losses when bond yields rose. I don’t understand this. Rising bond yields means interest rates have gone up, right? So why is it a loss?”

“What kind of securities fraud case involves bond yields?”

“That’s why I can’t understand it at all. Can you explain it to me?”

At his brother’s request, Dokyung nodded and began to speak.

“To put it simply, think of bonds as fixed-rate savings accounts that can’t be terminated early.”

“Fixed-rate savings accounts that can’t be terminated early?”

“Yeah. Of course, we’re only talking about government bonds here. Government bonds are like the country borrowing money and promising to pay this much interest after a certain number of years. Bonds issued by the state.”

“Ah, then calling it a savings account makes sense. Since the country isn’t likely to go bankrupt.”

Of course, situations like a moratorium (postponement of debt repayment) or default weren’t entirely impossible, but for the sake of a simple explanation, Dokyung nodded at his brother’s words.

“That’s right. Let’s say a person named Yoon Dojin lends 10 million won to a country called Yoon Dokyung, agreeing to receive 8% interest after one year. So after a year, Yoon Dojin will receive 10.8 million won, right?”

“That’s right.”

“But the next day, the market interest rate in the country of Yoon Dokyung rises to 8%. They say it’ll go up to 9% next month. What do you think will happen to the bond price?”

“…Um, will it go down?”

“That’s right.”

“Why? After a year, you can still get 10.8 million won anyway.”

Dokyung had the same question when he first studied bonds.

“Of course it goes down. You can get 10.8 million won after a year, but didn’t I say the market rate will rise to 9% next month? Isn’t that a loss?”

“Is it a loss? Well, it’s still a fixed rate, isn’t it?”

Dokyung once thought like his brother, wondering why it mattered if you’d still get 10.8 million won after a year.

“Even if it’s not a loss, it would still sting.”

Dokyung nodded at his brother’s words, which seemed to show some understanding.

“That’s it! Now there are many 9% investment products in the market, and if market rates rise even more in the future, would you be satisfied with 10.8 million won when the 10 million won you lent could potentially return 15 million won?”

“But there’s nothing you can do about it. You said it can’t be terminated early, right?”

“However, you can transfer the bond.”

“Transfer? Like stocks?”

At his brother’s question, Dokyung snapped his fingers.

“Exactly. There’s a bond market, just like the stock market. You can sell it there. But if market rates are around 9%, wouldn’t the value of the 10 million won I lent naturally decrease?”

“So, you’d sell a 10 million won bond for 9.9 million won?”

“That’s right.”

“And people buy that?”

“There might be people who buy bonds intending to hold them until maturity. But most bond market participants buy from an investment perspective. If you’ve invested and the market rate rises above your bond’s rate, causing your bond’s value to fall, would you just sit and watch?”

This was the mechanism of how the bond market worked.

“If someone’s willing to buy it for 9.9 million won, you could take a 100,000 won loss to get out and invest elsewhere, potentially earning more than 10.8 million won.”

“Oh, I see. Because you don’t know how high market rates might go.”

Seeing that his brother seemed to understand, Dokyung nodded.

“So the face value of 8% doesn’t change. Then why do we say the bond yield has become 9%?”

“Hmm… because the bond price has fallen?”

Dokyung smiled brightly at his brother’s answer.

In other words, the 8% coupon rate of a 10 million won bond that pays 10.8 million won at maturity remains fixed and unchanged.

“That’s right. Someone who originally had a 10 million won bond sold it for 9.9 million won. So the person who bought it for 9.9 million won will still receive 10.8 million won at maturity, making their interest rate 9%.”

“I understand perfectly now. From an investment perspective, bond yields and returns are inversely proportional, right? Saying bond yields have risen means bond prices have fallen, which is essentially the same as a stock price decline for a purchased stock.”

As his brother showed perfect understanding, Dokyung smiled, seemingly pleased.

“Then why do bond yields rise?”

“You know how they thoroughly check your credit when you apply for a loan, right?”

“I know. The banks are so strict…”

“So, do people with good credit get lower or higher interest rates?”

“They give them lower rates, don’t they?”

“Apply that to the bond market.”

“Ah! If there’s a problem with the country, the yields rise! Because they’re not sure if they’ll be able to receive the money.”

Dokyung nodded with a satisfied expression.

“As we discussed earlier, if the country of Yoon Dokyung faces an economic crisis and wants to sell bonds, but no one’s buying. Then they’d have to sell cheap, right? If they sell a 10 million won bond for 9 million won, the bond yield rises.”

“That’s interesting. So this is why you’re so into this?”

“Stop talking nonsense and focus on your law studies.”

“Look at me. It was hard enough understanding bonds, do you think I’d be interested in stocks?”

His brother spoke to Dokyung as if to reassure him. Then he nodded as if organizing his thoughts.

“Do you understand it perfectly now?”

“For now. But I feel like I might forget it later. Still, I definitely learned that bond yields and returns move in opposite directions.”

“That’s good enough.”

Dokyung chuckled at his brother’s words. He had been the same when he first studied bonds.

“So that’s why they’re saying bond yields are rising globally these days… because the economy is struggling.”

As his brother continued eating while muttering to himself, Dokyung sighed at his last words.

It was no different from a major concern for him as well.

“Why are you sighing like that? The ground’s going to cave in.”

“You can say that again.”

“I don’t know what’s going on, but you’ll do well, hyung. You made someone like me, who doesn’t know anything, understand the bond market. Your clients must love you.”

At his brother’s words, Dokyung’s expression hardened. Seeing this, his brother became flustered and spoke to Dokyung.

“Why that expression… Did I say something wrong?”

Even as his brother asked, Dokyung seemed lost in thought.

‘Right, I should only think about what’s best for the clients who entrusted their money.’

The reason he had to prepare these materials was to decide how to manage the clients’ money.

Dokyung smiled at his brother, resolving to prioritize what would be best for the clients after a thorough examination.

“No, it was a good thing to say. Let’s eat.”

Dokyung continued eating with a smile, while his brother looked at him quizzically before shrugging and starting to eat.

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“Sir, I’ve sent you the draft via messenger.”

“Oh, you’re already done preparing?”

The next day, Dokyung handed over the macro data on the UK he had promised to prepare to his mentor, Hong Se-jun.

Hong Se-jun, who had just finished what he was doing, began to read through the draft Dokyung had sent.

As Hong Se-jun scrolled down, reading through the prepared materials, Dokyung nervously swallowed.

“Hmm…”

Hong Se-jun’s expression changed moment by moment as he read through the draft. After concentrating for a while, he looked at Dokyung and spoke.

“It’s good. Write it up as is.”

“Pardon?”

Dokyung asked back with a surprised expression, as if he hadn’t expected this.

“I’m saying to write it up as is. Is there anything wrong with the data?”

“Ah, no. There isn’t.”

“Then why are you surprised?”

Hong Se-jun asked as if he found Dokyung’s surprise strange.

“Well, I thought even if I wrote a draft, your opinion would…”

“Ah, I said that because I was worried you might not prepare properly.”

Hong Se-jun chuckled and spoke.

“But yesterday, I saw you practically living in front of the Bloomberg terminal.”

There was one Bloomberg terminal in the Wrap Account Team 1 office where Dokyung worked.

All team members could use it in turns, and although Dokyung could also view it through the app given as a reward by the Message, he mostly used the terminal at work.

“If you prepared that much, it couldn’t have been done carelessly. And I agree with much of the content.”

“Ah…”

“And one more thing. By me checking this, it means that if this data fails, it’s not just your responsibility alone, but mine as well.”

At Hong Se-jun’s words, Dokyung looked at him with surprise once again.

“That’s what being a team means. You’re an employee working with me, and your mistakes become my mistakes.”

“…”

“Even if there are errors in your materials, I won’t blame you. I promise that. Why? Because I’m the one who checked it last. This is a procedure that’s like a pledge to myself.”

Hong Se-jun spoke to Dokyung as if this was all a matter of course.

“In a securities firm, everyone takes responsibility for their own judgments. Why? Because our judgments affect either the company’s assets or the client’s assets.”

This was an inevitable structure not just in the securities industry, but in all professions that manage money.

Mistakes could lead to enormous accidents where money simply evaporates.

“The employees who give buy and sell signals while trading probably feel great pressure, but those of us who handle macro data feel an even greater sense of responsibility.”

“…”

“Why? If we were to compare it to a battlefield, we’re like agents gathering information in the heart of enemy territory. If we misinterpret information and pass it on, the allied forces who trust only our information would be annihilated.”

The work Dokyung did fit Hong Se-jun’s analogy perfectly.

“If we don’t filter it out at this first stage, the trading team might place wrong orders at the second stage, which could lead to capital losses.”

Dokyung silently focused on Hong Se-jun’s words.

“That’s why we’re prone to becoming intimidated. Wondering if we’ve misinterpreted the information. But if we’ve put the information we’ve grasped into this report, and if the trends we’ve read align with it, we need to push forward.”

Dokyung now seemed to understand why Hong Se-jun was speaking like this.

It meant not to make wrong judgments out of intimidation.

Even if all sorts of negative signals are coming in and you’ve concluded that you shouldn’t invest, you shouldn’t write a report saying it’s okay to invest just because you’re swept up in others’ atmosphere.

“If there’s a problem, it’s my mistake for not catching it in the final check, and it’s my responsibility. So have confidence in the data you’ve written. That’s what we need to do.”

“Yes, I understand.”

“Good. Don’t forget to prepare the presentation materials so you can present tomorrow morning.”

At Hong Se-jun’s words, Dokyung nodded with a smile.

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“Well then, let’s hold off on investing in the U.S. like that…”

The next morning.

Wrap Account Team 1 held daily meetings to manage their clients’ accounts.

Of course, as Part Leader Seo Yong-won had said, unless there was a big event, these meetings mainly consisted of checking the current situation without daily actions, but today, a slightly different topic was waiting.

“The trading team has proposed investing in UK bonds.”

As Part Leader Seo Yong-won began speaking, everyone’s gaze turned to the trading team manager sitting at the central table.

“It seems they’ve found UK bond prices attractive, probably because they’re on the front lines trading and looking at charts every day. I’d like us all to discuss this after hearing the macro data briefing.”

Everyone nodded at Seo Yong-won’s words.

An open approach where everyone could participate in the decision-making process, even if it wasn’t their direct responsibility.

This was a structure created after Seo Yong-won became the Part Leader.

“Well then, shall we hear the briefing?”

Seo Yong-won shifted his gaze to Dokyung and Hong Se-jun sitting side by side, and the team members’ eyes also turned to the two.

As Hong Se-jun nodded, Dokyung stood up, displayed the prepared materials on the main screen, and stood in front.

As Dokyung stood, the other team members murmured in surprise that Dokyung, not Hong Se-jun, was giving the presentation.

Although they acknowledged Dokyung’s abilities, they hadn’t expected a newly assigned team member to handle the investment information analysis that might lead to a new investment.

After all, this discussion was different from a regular macro briefing.

“Phew…”

Dokyung let out a short, deep breath and moved to the next slide.

As the first page of Dokyung’s prepared materials appeared, the murmuring gradually increased.

[Gradually, and then suddenly.]

“I’d like to start today’s briefing with a quote from Ernest Hemingway’s work ‘The Sun Also Rises.'”

At Dokyung’s words, everyone quieted down and began to focus on what he was saying.

“In the novel, one character describes his bankruptcy process like this: ‘How did you go bankrupt?’ ‘Two ways. Gradually, and then suddenly.'”

Dokyung saw this phrase as encapsulating the current global economic recession.

And then.

“I believe the current situation in the UK is exactly like this.”

At Dokyung’s confident words, everyone stared at him with wide eyes.