Reborn in America, I am a legendary short seller on Wall Street.

Chapter 284 You Can't Show Off at Yale

Larry's group consisted of eight people: Matthew, Mr. Dunbar, a Belgian named Hart Berg, and four Italian lads.

There won't be any Pullman sleeper cars available this time on my return trip to Boston.

It wasn't that Larry couldn't afford it; the key issue was that Pullman trains required internal booking agents.

Larry's Matthew and Dunbar, despite being shrewd and highly skilled in tactics, capable of killing without batting an eye, are probably no match for Logan and Mr. K when it comes to dealing with "street" matters like the Pullman sleeper berth.

Larry sighed, thinking to himself that the real world is really different from games. You can't just look at a person's stats when it comes to hiring; you have to put the right person in the right job to maximize their effectiveness.

When faced with situations where one has to exploit loopholes in society, only scoundrels like Logan and Mr. K can solve the problem.

Even with Matthew and the others' exceptional abilities, it's no use now. So, he can only take a hard-seat train back to Boston.

The eight men boarded the train and took their seats in the first-class carriage. Larry and his three companions sat in two rows of seats, while the four Italian lads sat in two rows.

This train does not go directly to Boston; it must stop overnight in New Haven before departing for Boston the following morning.

The four young Italian men were all traveling in first class for the first time, and their faces were filled with barely suppressed excitement. After the train started moving, the Italian men looked at the large windows of the first-class carriage and the luxurious furnishings inside, exclaiming and marveling repeatedly, which drew frowns and sidelong glances from the other wealthy people in the first-class carriage.

At 6:40 p.m., the train stopped at New Haven Station. After getting off the train, the group first found a hotel in New Haven and booked four standard rooms before heading out to dinner.

Looking at New Haven, now shrouded in night, and listening to the rhythmic sound of the ocean waves, the Belgian man felt an indescribable excitement. "Mr. Livingston, is Yale University located here?"

“Yes, Yale University is New Haven’s most famous landmark, it’s just a pity it’s too late now.” Larry pointed to the back window of the hotel and continued, “Our hotel is on Church Street, and if it were daytime, you could see the spire of Yale University’s Harkness Clock Tower from here.”

The Belgian looked regretful and said softly, "What a pity! From our European perspective, Yale is the top university in the New World. It's a shame we can't visit it today."

Matthew chimed in, "You can come early tomorrow morning, or after you finish your business and return to New York, you can set aside a day to visit."

The Belgian nodded reluctantly.

Larry chuckled and suggested, “How about we have dinner near Yale University tonight? I heard from the locals last time. There are some of the best restaurants in New Haven near Yale, you know, those professors and students are all rich, they have very discerning palates.”

Larry's suggestion was met with enthusiastic agreement from the others.

So the group looked around and chatted, and soon arrived at Whitney Avenue, located on the east side of the campus, where there was an old restaurant called "Maurice's Restaurant".

The four entered the restaurant at 7:40 p.m., and there were very few people eating there.

The air was filled with the lingering aroma of food mixed with the smell of tobacco. The restaurant lobby was no longer noisy, with only two or three tables still occupied by customers.

The eight people found a long table and sat down.

Larry looked around and saw the oak wainscoting inside, worn smooth by time, and a group photo of the Yale rowing team hanging on one wall. At the table next to him, two bespectacled students were huddled in a booth, arguing about Greek conjugations.

Behind Larry, a bored young man was staring blankly at formulas in his notebook.

"Welcome, gentlemen! What would you like for dinner?" A polite waitress approached and handed the menu to Larry, who was in the lead.

"What are some good specialty dishes? Recommend them to us. We'd like something with Yale flair." Larry smiled at her.

The waitress glanced around the long table, saw that the eight people all had curious expressions like tourists, smiled, and said...

"If you're looking for Yale specialties, I can only recommend the Connecticut Clam Pizza. It's our specialty, with a thin, crispy crust topped with freshly caught clams from Long Island Bay, drizzled with garlic olive oil, and garnished with chopped parsley. It's considered the ultimate treat for Yale professors."

"Okay! This is it. And some side dishes too!"

Larry casually ordered a few dishes and a bottle of red wine to accompany the meal.

After taking their order, the waitress turned and went to the kitchen to serve the food. The Belgian stared at her retreating figure and kept remarking, "This is Yale! Even the waitresses in the restaurant have an air of culture."

Larry and Matthew exchanged a glance and smiled.

While waiting for the pizza to be served, Larry took out his small notebook from his suit pocket and began working on the cooperation plan with General Electric.

The equity partnership had been finalized, but Larry still felt uneasy about the financial implications. This partnership involved both patent grants and equity stakes, and he hadn't yet determined which option was more advantageous. This was especially true given the ongoing patent and production processes for the electric fan.

Larry was unsure how to proceed with the talks with General Electric, so he simply kept scribbling and drawing in his notebook.

Matthew sat next to Larry, noticing him scribbling "Manhattan Union Industries" and then "Patent licensing or direct equity investment?" in his notebook, followed by a large question mark. Knowing Larry was fretting over this, he interjected,
"I even think that we could just license the production of things like electric fans and cash registers to them directly. We can sit back and enjoy the benefits, so why do you need to invest yourself?"

Larry smiled; he knew Matthew meant well. Besides, Matthew didn't have the same foresight as him, so it wasn't surprising that he was making this suggestion.

“Oh, since the investment has already been decided, I won’t go into details. I just wanted to roughly calculate how to handle the electric fan patent. Perhaps directly collecting patent licensing fees would be a more prudent option?” Larry said with a smile.

The two of them started chatting casually about this topic, exchanging a few words.

Just then, a slender figure stopped at the table. The man arrived uninvited, a cynical smile on his face.
"Please forgive my interruption, but I think I understood your discussion, especially regarding the choice between patent fees and equity. As someone who studies economic mathematics, I would venture to suggest that this might not be a simple either-or question."

Larry was somewhat surprised and quickly turned to look at the man. Before he could even see him clearly, the uninvited guest had already pulled up a chair and sat down next to Larry, his eyes gleaming with the light of someone who had discovered an interesting mathematical model.

"Sir, the choice you face is essentially a trade-off between a small, certain return and an uncertain, excessive return. Why not introduce a variable to combine the two?"

The visitor continued talking to himself, casually picked up a napkin from the table, and then took out a pencil from his pocket, writing down the formula in clear handwriting.

Basic guarantee: Guaranteed patent fee = Annual estimated output × Patent fee per unit × (1 - Risk discount factor)
Excess incentive: Equity dividend = (Annual actual profit - Preset profit threshold) × Dividend ratio
“Look,” the man explained, his tone as if he were reciting a mathematical theorem.
"You could propose a hybrid plan to GE: a guaranteed patent fee plus a share of excess profits. For example, the joint venture could guarantee a basic patent licensing fee each year, which would be your stable, risk-free income, like bond interest..."

At the same time, you retain a certain percentage of equity, but the dividend rights of this equity are linked to the profit growth rate of the joint venture—you can only participate in huge dividends when the profits exceed a certain high threshold.

In this way, GE doesn't need to pay excessively high fixed patent fees in the early stages of operation, reducing their risk and making them more willing to accept the offer. And you, on the other hand, have secured your bottom line while reserving the right to share in the profits should a huge future success occur.

Mathematically, this is equivalent to exchanging a fixed portion of your 'equity' expectations for an 'option' with limited downside risk and unlimited upside potential...

Larry blinked, staring straight at the man, unwilling to admit he hadn't understood a thing, but this time he really, damn it, didn't understand...

Larry's strengths lie in arithmetic or memory. Even if he's adept at manipulating numbers, the other person is talking about mathematics—these are completely different things!
For Larry, who was semi-illiterate and hadn't even finished junior high school, he could barely understand what the man was saying.

“More importantly,” the man continued, looking at Larry, speaking quickly, “according to my research, the rise of true giants often doesn’t rely on the profits of a single product, but on a system or platform that can continuously generate cash flow.”

Simply collecting patent fees is a hunting model, where you reap what you sow. Building a community of shared interests through equity partnerships, on the other hand, is an agricultural model. The seeds you sow may one day grow into a forest. Of course, for you, it's all about maximizing your profits…”

"Excuse me, wait a minute!" Larry quickly stopped him. "Okay, I have to admit, my mind isn't quite keeping up with your train of thought..."

The man smiled. "It's alright, no rush. Take your time thinking about it. But it's an interesting question, and I'm quite interested in it too."

Larry thought for a moment, just as he was about to ask him for advice, the waiter began serving the pizza.

Besides pizza, there's roast chicken with roast potatoes, pan-fried steaks with a thick sauce, and a bowl of vegetable soup for each person.

Larry glanced at the dishes on the table, then pushed his plate and cutlery toward the uninvited guest, saying politely, "Sir, would you like to have some too?"

This was just a polite gesture, but the person was anything but polite!
He picked up a piece of steak with his fork and put it in his mouth, chewing as he did so, while also picking up a piece of pizza and holding it in his hand.

With his mouth still full of food, the man seemed to remember something again and continued to explain to Larry how to ensure the joint venture's maximum cash flow.

Everyone at the table was quite surprised by this unexpected stranger. He kept talking to Larry, and Larry kept nodding, as if the two had entered into a deep conversation.

The others couldn't understand what they were talking about, so they just ate their food.

Larry didn't actually know what he was talking about...

Larry has never been in such dire straits since his rebirth.

Thanks to good fortune and a grasp of knowledge from later generations, even encountering a president like Theodore Roosevelt or a legendary banker like Morgan, Larry, who usually boasts and lets others watch, couldn't even get a word in edgewise with the guy he met at Yale University today.

Twenty minutes later, the man finished explaining his thoughts and had finished eating.

He picked up the napkin he had just used to do the calculations, wiped his mouth, and smiled at Larry, saying, "...You all understand now, right? It's actually very simple. Just do as I say when we work together later."

Larry blinked repeatedly, thinking to himself, "Apart from a few words you said at the beginning, I didn't understand anything..."

You dare to list formulas? I understand them even less.

The man nodded and stood up. "Junior, if you still have any questions, come find me in the math department's classroom office. My name is Irving Fisher!"

(End of this chapter)