[People Met Through Books] "There's No Better Investment Than Stocks" The Alchemy of Stocks Told to a Daughter

'To You Who Are Investing in Stocks for the First Time' Author 'Yeongeumsulsa' (Pen Name)
'Jae-ya's Stock Master' Salaryman Dad
Don't Overlook Easy-to-Miss News, Think First of Companies That Will Benefit

The author of ‘To You Who Are Investing in Stocks for the First Time (Dodo Books)’ is a salaried father who enjoys stock investing as a hobby. While working at a large corporation, he started investing in stocks in 2005 and has continued for nearly 20 years. Although high returns are good, he prides himself on thoroughly analyzing investment stocks with the belief that not losing money is more important, boasting that his losses have only accumulated over three years. He especially cherishes the memory of holding steady with a 0% return during the 2008 US financial crisis when many people lost large sums. This aspect is also recognized by Seunghwan Yeom, director at Ebest Investment & Securities, who is known in the stock investment industry as ‘Yeomblee (Yeom Seunghwan + Lovely)’ and is gaining attention. Director Yeom said of the author, "When we first met in 2021, he explained the past story, current business status, future forecasts, and top industry analysis of the companies he intended to invest in. The moment I listened to him, I could see the past, present, and future of the company at a glance. Personally, I consider him one of the ‘real masters’ who are excellent investors."

The book was written to pass on stock investment experience to his middle school daughter. He carefully filled the content as if leaving an intellectual legacy to his child, maintaining a level understandable to a middle schooler. I asked the author, Alchemist, who included the best methods achievable without greed while maintaining his main job. Since it could affect his main job if it became known that he earns considerable profits from stock investing, the interview was conducted anonymously.

-You are regarded as a hidden master of stock investment. How large is your investment scale and profit?

▲I earn more than my monthly salary from the company every month. If I hadn’t withdrawn money in the middle, the principal would have increased, and the ‘compound interest effect’ would have greatly increased profits, but due to circumstances, I kept withdrawing money and couldn’t do ‘snowballing’ (the phenomenon where profits grow like a snowball). That is something I regret deeply. Even if the rate of return is the same, the larger the principal, the greater the income. This is why investment experts emphasize that not losing money is as important as earning money through stock investing.

-What made you start stock investing? Are there any memorable trial and error experiences?

▲About 20 years ago, when my situation was difficult, I started stock investing while thinking about ways to make money. The beginning was a series of trial and error. I could write several books just about my failures (laughs). In fact, such mistakes continue even recently. When the issue of Fukushima contaminated water discharge came up, many around me said that salt, not fish or seaweed, was the real problem. If I had paid attention then and bought stocks of ‘Insanga,’ which handles bamboo salt, I could have made a big profit, but unfortunately, I missed a good opportunity. Mistakes in stock investing are diverse. Some are mistakes made by doing something, but others are mistakes made by not doing something.

-Among various investments, why do you recommend stock investing as the best way to make money?

▲Stock investing can be started with relatively small amounts of money, and if studied properly, it is not difficult to make profits. Unlike real estate, money is not tied up. Especially if you invest in your own area of expertise, the probability of failure is low. If you like idols, investing in entertainment stocks is advantageous; if you like games, investing in game companies is beneficial. The most important thing in investing is the rate of return, and the returns at the right time of investment are beyond imagination. Unlike other investments, anyone can achieve such returns based on their own strengths.

-Many people who jump into stock investing suffer large losses. This sometimes causes negative perceptions about stocks.

▲It is true that stock investing is easy to start, but you shouldn’t take it too lightly. At least some preparation is necessary. Investing your hard-earned money without even researching what products the company sells and how much increases the chance of failure. The more you prepare, the more you can reduce the failure rate. Just like how thorough preview and review and focusing in class lead to good grades, only through thorough analysis and research can you make profits. There are countless cases of people jumping in without such effort and suffering losses.

-Then, what preparation is necessary for successful stock investing?

▲You need to study to the extent that you think, ‘I have to know even this.’ Suppose you invest in semiconductor-related stocks. Most people think it’s enough to know the stock name, the products the company makes, and its financial status. But to be sure, you need to know the semiconductor manufacturing process, which companies’ equipment, parts, and materials are used in each process, their prices, who the competitors are, and the technical difficulty level. The more you know, the higher the chance of success.

-You emphasized the ‘grip strength’ to hold stocks without being shaken by circumstances. Accurate value judgment is necessary. How do you assess the appropriate value?

▲It’s difficult to objectify the appropriate value, but after comparing and analyzing financial statements for a long time, you get a sense of ‘this much.’ You must constantly strive to develop such judgment ability. Once you acquire the ability to assess appropriate value, you gain the ‘grip strength’ to endure without being shaken whether the stock price rises or falls. If the price is lower than the value you assessed, you can hold on with confidence that it will rise someday.

-You advised not to be swept away by so-called ‘high-level information’ and to develop your own unique ‘observational skills.’ How should one make efforts?

▲If you can continuously acquire high-level information, you can invest accordingly, but realistically, it’s not easy. Ultimately, you have to discover investment ideas by observing directly. Observation is not something extraordinary. It’s about extracting meaning and impact from phenomena that are easy to overlook. It’s not difficult, but it takes effort to make it a habit. For example, when you hear news like the Fukushima contaminated water discharge, you need the habit of thinking about the impact of that event and which companies will benefit from it.

-You said to have a meticulous mindset of ‘I have to know even this’ for information acquisition for investment. But if the number of stocks increases, won’t the things to pay attention to increase and interfere with daily life?

▲Successful stock investing should not affect your main job or daily life. As the number of stocks increases, the things you need to check and manage increase, so it’s necessary to maintain an appropriate level. It’s good to set a standard of about 3 to 7 stocks depending on the person. Having too few stocks is also a problem. In that case, unexpected situations can cause fatal damage. In fact, in October 2021, a 221.5 billion KRW embezzlement incident occurred at Ostem Implant, the number one implant company, causing many investors to fear delisting.

-Actual investing involves complex environments beyond theory. You only suffered losses for three years in 20 years. What is the secret?

▲I studied hard and made efforts, and luck was on my side. Losses were sometimes influenced by situations like the US-China trade dispute when the whole market was bad, and there were personal judgment mistakes. However, I tried to minimize losses and think I achieved some results. In principle, I did not invest in companies I couldn’t analyze properly. Also, if I judged that the investment idea was compromised, I sold immediately even at a loss. For example, if I invested expecting sales to increase but sales decreased or stagnated, I disposed of the stock mercilessly to minimize losses.

-As a stock expert, how do you view the current stock market?

▲It’s not easy. There are too many negative external issues. However, the key is how long the semiconductor sector, which is turning around, will last. Anyway, I think semiconductor-related stocks must be included in the portfolio. Also, I recommend increasing the cash ratio by a certain percentage each time the stock price rises. When interest rates rise and money in circulation decreases, cash can be a good investment asset. Currently, it’s time to increase the cash ratio in line with the index rise. Later, it will be necessary to adjust the cash ratio between 20% and 80% depending on how much money flows into the market.

-What do you think about cryptocurrencies?

▲Value measurement is necessary for investment, but a method to measure the value of cryptocurrencies has not yet been developed. There is no way to know the appropriate price of one coin. The price fluctuates wildly because there is no value measurement method. It is still difficult to call it ‘investment.’ If you are confident in making money, you can do it, but I am not confident, so I don’t invest.

-What would you like to emphasize to those who start stock investing?

▲People often say to invest money you can afford to lose, but there is no such thing as money you can afford to lose. Since precious money is involved, you must be extremely cautious. There is no easy money in stock investing. However, you can earn as much as you put in effort.

-I understand your middle school daughter invests in stocks with her allowance. Are your expectations aligned?

▲Because of the entrance exam hurdle, it may not be desirable for a student to invest in stocks diligently. I was also worried that my child might have excessive interest in stock investing, but fortunately, she is not very enthusiastic (laughs). I hope she develops interest and knowledge in stock investing and someday makes proper investments.

This content was produced with the assistance of AI translation services.