Chapter 13
Lucas Perez spoke for the first time since starting dinner. “Get in line.”
“I need you to promise to keep this secret,” Colin said.
He knew he was not saying it as well as he had in his many mental practice runs.
Yet just taking this first step calmed him immensely.
The tension was still there, but it had shifted from clenching him tightly to serving as a shield.
Even if they said no, he was committed. “It’s very important. ”
Alexi asked, “If we agree not to tell anyone, will you explain what you mean?”
“We won’t say anything to anyone,” Mira promised.
“Roland is an attorney and I am an auditor,” Ethan said. “Confidentiality is the rule we live by.”
“All of us agree,” Regina said.
Roland asked, “Why do you need the money, Colin?”
“I want to take a long position on a stock.”
The table went so quiet Colin could hear the sputtering tiki torches used to keep away the night insects. Finally, Alexi said, “Can you decode that a little for us?”
“I’ve developed an algorithmic method for tracking stock trends in the entertainment industry. There’s a big opportunity coming. I want to invest before it happens.”
Roland said, “There are any number of funds based on market trends. What makes you think—”
“This isn’t about the market. I don’t think a single market actually exists. This is about one industry. Actually, a number of different segments within the one.”
Roland actually seemed pleased by his response. “Why entertainment?”
“Two reasons. There are more semihidden sources of advance news than any other industry. Most are unofficial websites.”
“You’re talking about the LA rumor mill,” Roland said.
“A lot of dirt,” Ethan said. “A lot of nonsense about stars who sell their souls for fame.”
Colin heard the negative, the refusal, in Ethan’s tone.
But Roland looked across the table at his friend.
A brief glance from those dark eyes. A silent communication that cleared the frown from Ethan’s features.
Roland said, “You’ve been tracking the online communication about the entertainment industry. ”
“Yes. And the major news sources.”
“Which ones?”
“Wall Street Journal. Fortune. Financial Times. LA Times. Variety. Hollywood Reporter. Deadline.”
They were all watching him now. All sharing the same open expression. Beyond curious. Fascinated. Regina asked, “How often do you read these papers and magazines?”
“Every day. And a lot of other online sites.”
“How long does all this take you?”
“Not long.” He shrugged. “Half an hour, maybe a little more. It takes longer to input the data into my system. Two hours altogether.”
“What about your schoolwork?”
“I lied to my teachers.”
“You …”
“I told them I was having trouble with things I finished studying months ago.” It felt better than good to reveal his secret world.
Colin felt the weight lift balloon-like from his mind.
“They don’t know. They can’t. I’m so far ahead they check my work and assign the next thing and leave me alone.
Half the time my math teacher can’t even explain what I claim I need help with. ”
“Let’s back up a second,” Roland said. “I want to know a little more about your sources. There must be a hundred analysts searching social media and news feeds for the latest opportunity.”
“If it hits the public sites, it’s too late for the first curve.”
Alexi asked, “Do you understand what he just said?”
“Not really. What do you mean, curve?”
“You ride it. That’s how it feels.” Colin made a swooping gesture with his hands. “My analysis shows there are almost always two rises and falls before the news becomes official. Sometimes three.”
“So the newspapers and journals …”
“They show trends. Patterns in each of the industry sectors. They form the foundation.”
“And the event?”
“That comes mostly from specialist chat rooms. Sometimes the online industry sources. Not often.”
“These chat rooms …”
“They are specific to the job. Professionals talking to professionals.”
Lucas asked, “Aren’t they like, super protected?”
“Most use the same firewall system.” He was about to reveal how he had created a fake persona, then decided it could wait.
Roland asked, “You’ve found rumors about a what, a merger?”
“Acquisition,” Colin said. “Yes. And no.”
“Explain that.”
“Entertainment stocks follow a set pattern. When the rumors grow to a certain point, the market buys in.”
“And you predict this point with your …”
“Algorithms. Right. Then the rumors fade, something else captures attention, or a trend suggests the initial rumors weren’t so great after all. The stock dips. Then the rumors start up again, this or next time including the real news sources. And the market rises a second time.”
“So you’re trying to get out in front of a new …”
“Product. It might lead to an acquisition. Whether or not that happens doesn’t matter in this first rise.”
“How many rumors, how many sources …”
“I only input the data once I’ve found the news in six different sites. At least a couple of these have to claim it came from different sources.”
Roland made a process of realigning his cup and saucer and dessert plate. He folded his napkin, pressed it flat, set his fork on top. Pressed again. “You said two factors.”
“There’s a growing merger wave in the media sector. It’s driven by deregulation and technological development. The E&M industry—”
Alexi asked, “E&M?”
“Entertainment and media,” Roland said, almost impatient. “What this young man is saying jibes with information we’re receiving through my firm’s clients.” To Colin, “You do know Wilmington has become one of the fastest growing offshoots of the LA entertainment groups.”
“Yes.”
He nodded. “Please proceed.”
“All the industry sectors are transitioning to mobile access. New content offerings are being designed for the new environment. The industry is changing in the biggest ways since sound was introduced. There’s a strategic shift to digital.
Plus the big companies have strong cash reserves.
And there’s a growing number of private equity firms looking to invest.”
Roland was nodding softly in time to Colin’s words. “Which means any new potential acquisition …”
“It’s not an acquisition,” Colin said. His heart was racing now. Almost like Roland’s quiet words were adding fuel to his own excitement. “Not yet.”
“It’s the rumors.”
“The potential.”
Roland picked up his fork. Drummed the table. Once. Twice. A third time, then, “How sure are you that this works?”
“I’ve been doing it. For three and a half months.”
“Using a sham account.”
“Right.”
“You started with a theoretical …”
“Ten thousand dollar investment.”
“And you’ve made …”
“Two hundred and nineteen thousand dollars.”
“In a hundred days.”
“After paying out standard stock commissions. Right.”
There were soft gasps from some of the others. But Colin couldn’t be bothered to see who. Nor, did it seem, could Roland. “You have records of all this?”
“I kept dated notations of every move.”
“How often did you lose money?”
“Twice,” Colin replied.
“Out of …”
“Eleven,” Colin replied. “Eleven investments.”
The night and the silence settled in comfortably around him. Colin felt exhausted from the telling. So drained he wasn’t even certain he could stand. He used both hands to lift his glass. His throat was so dry it was hard to swallow the water.
Alexi asked, “Why are you doing this, Colin?”
“Did you hear what he just said?” This from Mira. “Two hundred and nineteen thousand dollars in three months?”
Colin nodded agreement. “I’m through being poor.”