Transcription
[Music] Hello. This is Maekyung Giant's Hong Soon. Recently, with the KOSPI surpassing the 4,000 mark, the number of people interested in stock investment is increasing. Many people are starting to invest in large-cap stocks such as SK Hynix, Doosan Enerbility, and HD Hyundai Heavy Industries. Therefore, today, we have invited a remarkable individual who has grown their assets from 1.3 million won to 4 billion won through stocks. We have Trader Jeon here. Hello, Jeon-nim. >> Yes. Hello. Nice to meet you. I am Jeon Wang. Nice to meet you. Yes. You recently published a bestselling book on stock investment, "The Law of Trend Following Investment in Large-Cap Stocks." In the book, it says you grew your assets from 1.3 million won to 2 billion won, but you mentioned that it has recently increased to 4 billion won. >> Yes. The market has been good for the past six months, and as the operating assets increased, profits also followed, so I think I made about 2 billion won more in profit over the last six months. If we think about going from 10 million won to 20 million won and from 2 billion won to 4 billion won, it's a 100% return rate. Within the framework of compounding, it continues to grow, and the market is also better. >> It seems to have already risen to the early 4 billion won range. >> Jeon-nim, when did you start investing in stocks? After taking a university class in my first year and taking the exam, I realized that this kind of study wouldn't lead to the life I wanted. So, after I was discharged from the military, Lehman Brothers collapsed. That's when I started diving into stocks. During my four years of university, since I didn't know anything at first, I experienced many failures. After that, from around age 30, in my late twenties, my profits started to accumulate little by little. >> Yes. If your first investment amount was 1.3 million won, how did you invest that 1.3 million won initially? >> Ah, the initial investment amount wasn't 1.3 million won. After finishing university, I didn't prepare for employment. I went to work as a temporary worker and saved 10 million won in three months. From that 10 million won, I spent a few million won on personal living expenses. >> When I tried to invest the remaining 6 to 7 million won, I lost money again, so I was left with about 1.3 million won. It seems to have started to gradually increase from then on. >> Ah, so in a way, you had various experiences and started investing properly from 1.3 million won. Ah, there are many different techniques in stock trading, aren't there? Like day trading or scalping. Jeon Wang-nim, what kind of trading did you focus on? In university, I was full of youthful energy, and scalping seemed very cool back then. But after doing it for about four years, I had to admit that it didn't suit me well. I thought, "I shouldn't do this." Then, I started to grow by combining slower trading methods like day trading and swing trading. So, from 1.3 million won, you established basic principles and traded that way. What did you consider your basic principles? >> I still remember this. After I increased my 1.3 million won to 100 million won, one week before my wedding, two weeks before, President Trump was supposed to meet with North Korea's Kim Jong Un, but it was canceled. Then, all stocks started to hit the limit down. At that time, I lost about half of my investment capital in one go. After that, I couldn't even go on my honeymoon. So, my wife and I went on our honeymoon after returning, and the elders gave us money as a wedding gift, which we used to book our honeymoon. After that, my investment principles were greatly established. I realized that instead of focusing on these very hot theme stocks, it's better to focus on large-cap stocks with solid earnings. Even if it's slow now, if I continue to accumulate it through compounding, I might become a trader who makes 10 or 20 billion won in the end. Even though it will take a long time, I decided to take it step by step from then on. It's been about seven or eight years. >> Wow, so you set your principles seven or eight years ago and have been consistently adhering to them since then. >> Right. And as I did that, I gained a lot of experience. I accumulated regrets and things I should have done better. Meeting the market, I achieved tremendous growth. >> So, you continued to invest with these basic principles. In Korea, there are theme stocks, large-cap stocks, value stocks, and various other types of stocks. Why did you specifically focus on large-cap stocks? When we trade, I really dislike high volatility. My goal is to become someone who trades 10 to 20 billion won, and I set that goal about eight to ten years ago and have been working towards it. However, if I invest 10 billion won in something with high volatility, I would have to deal with losing 1 to 2 billion won in a single day, which would be very difficult mentally. So, I decided to trade stocks with low volatility, which led me to large-cap stocks. >> And among large-cap stocks, those with a clear upward trend and proven earnings, where future earnings are predictable, are logical. I thought I should trade with that kind of logic, and that's how it happened. There are various industries within large-cap stocks, aren't there? There are semiconductors, nuclear power, and many others. It seems like just following the trend of these industries wouldn't be enough. You probably chose them by looking at earnings or global trends. Do you have any special methods for selecting or analyzing them? >> Wouldn't trends ultimately be found in newspapers? >> Like the Maeil Business Newspaper, for example. Yes. But when I ask my acquaintances, they say you have to read newspapers. It might sound old-fashioned, but in today's world of algorithms, if you watch YouTube with a biased perspective, the algorithm will show you that biased perspective because you keep watching it. This creates a distorted view of the world. So, I thought that to truly see the world, we need to try to look at objective information from domestic and international newspapers. So, I try to see how much of something is in the newspapers. For example, if you see articles about the AI era dominating newspapers for about a month, you realize this is the trend of the times. Then, thinking back, two years ago, if you read the Maeil Business Newspaper every day, it was all about the electric vehicle era. At that time, electric vehicles were the trend of the times. So, there are trends like these in industries, and selecting individual stocks is not easy. >> Because if electric vehicles are booming, there are many electric vehicle manufacturers and component suppliers, and you have to choose from them. Do you have a method for selecting those stocks? When we look at people in Korea, based on my past analysis of others, they aim to get an "alpha" through small and mid-cap stocks because they rise much more. >> Yes. For me, I try not to do that and instead trade stocks that represent the industry. >> For example, in electric vehicles, it used to be LG Energy Solution, Samsung SDI, and then EcoPro, EcoPro BM, with market caps of 10 or 20 trillion won. My principle is to try to trade only stocks with a market cap of around 3 to 5 trillion won or more, and to try to trade the representative stocks of that industry. So, looking at the current stock market, which has been good lately, what are the representative stocks in each sector, and do you have any examples of your investments? The viewers already know. If I ask, "What is the representative stock of semiconductors?" >> Samsung Electronics, Hynix. >> They say it right away. What is the representative stock of nuclear power? >> Doosan Enerbility. >> Yes. What is the representative stock of shipbuilding? >> HD Hyundai Heavy Industries or recently Hanwha Ocean. >> Yes. I think this is common knowledge. Ultimately, what's important is how you trade within that known information with your own principles. >> Ah, what are those principles? Can you be more specific? I believe that in trading, what ultimately remains is simplicity. I've worked for 10 years and studied a lot, trying hard to learn new things, but in the end, all that remains is the simplicity that great investors talk about. I truly and simply use moving averages. When confirming a trend, I use the 60-day and 120-day moving averages, and when trading, I aim to trade using the 5-day and 20-day moving averages. >> Ah, so you look at charts and moving averages and use them to determine buy and sell timing. >> Yes. Even if it's a core sector or a core stock, if it breaks below the 60-day moving average, I consider the medium- to long-term trend to be broken, and I don't trade until it rises again. Then, after selecting a stock based on that, you fine-tune the details by looking at the 5-day and 20-day moving averages. The 60- or 120-day moving averages are indicators that can help gauge the bottom, and when it starts to rise and break through, you trade. >> Right. Right. I don't trade when it's below, but I look after it rises. Because you don't know when it will rise. So, I aim to trade after confirming that it has risen. There could be various reasons for it to rise. Turnarounds, etc. You've tried various trading methods. What about the breakout points? You probably need to study beforehand. Do you analyze earnings beforehand before trading? >> I don't really do that. After it rises, I look at reports. Reports also have trends. For example, if a report came out saying Hynix's target price is 600,000 won, the next report might say 700,000 won, and then another report might say 900,000 won, and at some point, it might even be 1 million won. But at some point, the target price starts to stagnate. >> When the target price keeps going up, and the chart also keeps making new highs, if the trend continues, I trade aggressively. >> So, how long do trends typically last, both the shortest and longest duration? If you look at the current widespread belief that "US stocks are invincible," the trends can continue for two to three years, or even ten years. Currently, Hyosung Corporation has risen about 9,000% from its bottom over three years. It has risen more than Nvidia. Trends are not just short-term phenomena; they seem to occur as industrial trends change. They can last from about six months to three to five years. Many people invest in both the Korean and US markets. Do you primarily invest in the Korean market? >> I invest in the Korean market, and I also invest indirectly in the US market. Because I don't want to disrupt my life patterns. Looking at the US market at night degrades my condition, so I invest in the US market for the long term. And >> I use brokerage accounts like Nevercount. Because it's too difficult to experience the US market directly without studying it. So, if I invest through a brokerage, I can see the stocks they invest in, and through that, I can study in reverse. Why did they invest in this? What will be the outcome? I observe it by investing my money. >> So, you probably trade faster and smaller in the Korean stock market. In that case, you might get caught at the peak at some point. You need to know the signals beforehand to avoid getting caught at the peak. What are those signals? That's actually almost impossible. What I do is I judge based on my account's return rate. In early November, I made a profit of about 300 million won. Then I told my acquaintances, "This month will at least end in the positive." It eventually went up to 1.2 billion won. In the end, I lost about 350 million won and ended November with a profit of 850 million won. I think accurately predicting the peak is very difficult. And when you're riding a trend, if you anticipate the peak, you tend to hesitate to bet due to fear of the trend. So, I believe the end of a trend cannot be predicted. I'm willing to give back about 1/3 of what I've earned to the market at any time and bet. After paying back that 1/3, I gradually build it up again. >> You've said something very important. You want to take all your profits, but you want to sell at the shoulder, right? It seems like that's what you mean. It's a similar idea. They say to take half. If you trade with that mindset, it creates a much more positive effect. When trading, even though the scale of your investments is large now, many individual investors invest 1 million won or 10 million won. It has been very difficult to grow capital in the Korean stock market. It's changing a bit now, but what are the ways to accumulate capital in the Korean market? Personally, I think the most important thing is not to invest in theme stocks or political theme stocks that are not logically understandable. The most important thing is to be able to protect what you've earned. That way, even if you earn, you can protect it next time, and it accumulates through compounding. So, you need to trade solidly. People usually only think about earning, not how to protect it. The reason I invest in large-cap stocks is simple. They don't fall as much as other nonsensical stocks. And since there's liquidity, you can exit whenever you want. In my opinion, protecting your capital is the first priority in stock investing. To do that, you need to invest in solid and logical stocks. And avoid stocks related to personal connections or political themes that have no basis. By continuously trading stocks with upward trends and earnings, you can accumulate through compounding. And I believe that stocks will account for 70-80% of your assets in the last one or two years before retirement. Warren Buffett also earned 70-80% of his wealth in the last 10 years. That's how powerful compounding is. If I continue to grow through compounding, at some point, I'll think, "That's enough." The profit I made in the last year alone is about 70% of my cumulative profit of 4 billion won. This year alone, I made about 3.2 billion won. So, what about the past? I made 5 million won in a year with 1.2 million won, and then it accumulated to 30 million won, and then to 100 million won. It continued to grow like that. So, don't be discouraged if your capital is small now. If you have the skill to accumulate cumulative compounding through that capital, your 1 million won could become 10 billion won in 10 years. >> But since you're on the broadcast, I have one more question. If you invested in specific stocks like Hynix or Doosan Enerbility, you would have made a lot of profit. I'd like to hear a specific case of investing in a large-cap stock. >> I think I'm in sync with the trend. In June, I made 800 million won in profit in a month for the first time. At that time, it was with Doosan Enerbility and Hynix. And in July and August, there was no trend. So, I didn't make much profit then. Then, Hynix started to rise in September. So, in October, out of 860 million won, I made about 650 million won profit from Hynix. >> Hmm. When did you invest in Hynix and Doosan Enerbility? >> When they started to rise and make new highs. I don't look at them when they are at the bottom. I only start trading when they have risen. >> Ah, so when they haven't risen yet, you mentioned that protecting your capital is important. Is that amount kept as cash? Or do you invest it in other stocks? >> It depends on the stock. If there's a stock with high conviction and it rises, I invest in it. Otherwise, I put it in a CMA account. Then, if the market starts to rise again, I take that money out and trade for profit. It seems like you frequently change your asset portfolio, moving money between CMA and stocks. So, I'm curious. You have to decide on a selling timing, right? Ultimately, if you don't sell, it's just a number. When do you set your selling point? Usually >> When you realize profits from stocks. >> That usually happens in two cases. If my profit goes up to, say, 1 billion won and then drops to 700 million won, I usually cut it there. I think the trend has broken, and I don't aim to take the last bit of profit. When my account profit drops by about 30%, I realize the profit. And for short-term trades like day trading, at some point, when the price rises rapidly, there's a short-term surge. That's when everyone thinks it's good and enters, and that's actually my selling timing. >> Let me ask you a bit more. As you said, when a trend strongly takes off, all investors enter. The demand increases significantly. At that time, some people even use leverage excessively. Have you ever used leverage? Have you had any successful or unsuccessful experiences using leverage? Basically, I use leverage. If I invest 100 million won, I usually buy stocks worth about 200 million won through margin or short-term loans. The reason we invest in stocks is that if we had a lot of money, real estate would be more advantageous than stocks. To increase the initial investment, it's very important to be able to control leverage wisely. So, when I teach stock trading to someone, I say, "If you have 10 million won, practice trading using leverage with 1 million won." The rest of the money will be lost anyway, so it's meaningless. If you can practice using leverage with 1 million won, you can make enormous profits when you encounter good timing and trends. If you encounter three really strong market trends with 1 million won, it could become tens of billions of won. >> You mentioned it's good to start practicing with 1 million won out of 10 million won. However, there seems to be some risk with leverage. >> Right. My father, I think, works about 360 days a year at a factory. After retiring, there's nothing to do. He feels isolated from society. So, seeing my father like that, I recommended stocks to him. But I couldn't tell him to use leverage, so I put about 40% in securities stocks and about 30-40% in shipbuilding stocks. I set up a swing portfolio for him with about 80 million won, and it grew to about 270-280 million won. This year was very good. >> Ah, right. >> Especially at my father's age, he should never use leverage. Now, for retirees, protecting that money is too important. Making a lot of profit is less important than protecting it. At that time, it's really important to protect it. Instead of leverage, it's better to invest about 30% in dividend stocks and operate the remaining 30% aggressively. You have to control it that way. >> So, it seems like it's better to use leverage when you're first practicing stocks and reduce it as you go along. >> Much better. Especially as you get older, the expected returns in your twenties are different from those in your fifties and sixties. So, you need to set it accordingly. I also used a lot of leverage in my thirties, but I'm 39 this year. So, from next year, I plan to reduce leverage. >> You started with 10 million won, but it was reduced to 1.3 million won due to living expenses. You must have set your own stop-loss criteria. >> Right? Yes. What is your stop-loss criterion? For a trader, it's impossible to accumulate consistent profits without stop-loss. My stop-loss criterion is a 10% loss on my total assets. If it drops by 10% from the peak, I usually close the position. I think, "I'm not a trader who can make profits in this market right now." So, I decide to take a break and close the position. For individual stocks, I set a stop-loss of about 5 to 10%. >> So, if you have a 5 to 10% loss, you cut it without hesitation? >> But what if it goes up later? What do you do then? >> I buy it again. I prefer to buy more at higher prices when it's stronger, not when it's cheaper. >> So, when you say large-cap stocks, you probably trade within the KOSPI 200 or KOSDAQ 100. The stock market has changed a lot recently. It's shifting towards large-cap stocks and companies with healthy earnings. With the end of the year approaching, how will large-cap stocks move next year? It's a simple question. Don't we already know what will move? What is the current trend of the times? >> AI. >> Right. So, I think next year will also be about AI. Stocks that align with the trends of the times are the ones that make a lot of money, and you need to be with those stocks. The reason the Korean stock market has been good is not just due to things like amendments to the Commercial Act, but I think the ripple effect of AI has been very significant. As the US develops AI, it requires various related industries like semiconductors, energy, and shipbuilding. So, related companies have moved. And I think it will be the same next year. >> So, this trend is likely to continue. >> At least until next year, I think it will continue smoothly. So, there's a lot of talk about the KOSPI reaching 5,000. If you have large-cap stocks in your portfolio, you can enjoy the effect of the KOSPI 5,000. Recently, there's also talk about the KOSDAQ reaching 1,000. >> Then, the KOSPI is about large-cap stocks, and the KOSDAQ is relatively small. >> I'm curious. Are the trading methods for KOSDAQ different? Or do you apply them all the same? I rarely trade small KOSDAQ stocks. I try to trade only those with a market cap of around 3 trillion won, or nowadays, around 5 trillion won or more. So, I rarely trade most KOSDAQ stocks. My memories are not very good. Trading highly volatile stocks made me lose my composure and fail to control my emotions, leading to many trading failures. So, I avoid exposing myself to that environment altogether. If a market comes where small stocks rise, I think, "I'll just cleanly give up this round." I step back, and then when my timing comes, I aggressively attack and secure my profits. That's my style of trading. >> How many stocks do you usually have in your portfolio? I usually compress it to about three stocks, two or three. >> Because many people put in various stocks, thinking, "This stock is good, that stock is good." But then, based on my experience, when I didn't know much and put in many stocks, it reached a point where I couldn't manage them. Even with small investments, if the number of stocks increases, it can become unmanageable. >> I'm also curious about the process of narrowing down to a few stocks. How do you do that? >> I think that's the key. Ultimately, buying 1 million won worth of Nvidia doesn't mean much. The key is how much of your assets are invested in good stocks. So, if I buy a stock, I need to be able to trust it. If I buy a company I don't even know the name of on the KOSDAQ, wouldn't I feel anxious? It's fine when it's positive, but when it goes negative, I become more anxious. Then my mind wavers, and I can't trust it. But if I think, "Next year is the AI era, so it's the semiconductor era," and I invest in Hynix, for example, wouldn't I feel more at ease? >> Hmm. Right. Right. >> So, having many stocks means holding them diversely without knowing much. And 90% of Koreans buy stocks based on what others say. If you have your own judgment and think, "The world will flow like this in the future," then even if you make less profit, compressing and investing in large-cap stocks is a better choice in terms of your skills and the compounding you will build in the future. Also, many office workers invest in stocks while working. The market is usually open from 9 AM to 6 PM, or until 3:30 PM. It's not easy to follow trends by reading newspapers, as you mentioned. Investing in stocks itself is difficult. For office workers or those who are busy with their main jobs, what investment advice would you give? From an office worker's perspective, when we read newspapers, there are only a few words that represent the year. If you ask, "What are the representative words of this year?" I think it would be defense, shipbuilding, semiconductors, and nuclear power. What were the representative words last year? It was bio, led by Alteogen's WISH. And before that? It was secondary batteries and electric vehicle stocks, represented by EcoPro and LG Energy Solution. Those trends don't change much. For example, has the trend of defense stocks that rose early ended? No. At the beginning of this year, Bangsan Hana was trading around 300,000 to 400,000 won, but recently it rose to 1.1 million won. The most important thing is to recognize what the current trend is. To do that, you need indicators that allow you to see objectively, not with a biased perspective. In that sense, newspapers are very helpful. Instead of the biased perspective from YouTube algorithms, newspapers reflect both sides and offer various perspectives. Once you grasp the trend, investing in the large-cap stocks that benefit the most from it would be the best for office workers. >> Listening to you, it's not that we're absolutely recommending subscribing to Maekyung, but rather that you're giving advice based on genuinely looking at such things. Lastly, I have one more question. The market has been a bit shaky and uncertain recently. For prospective stock investors who are about to start investing, or those who haven't started yet, what investment habits or knowledge should they learn right away? Investing is about thinking about your future self in 5 or 10 years. When I first started investing 10 years ago, I never had the impatience to think that my skills would suddenly improve and I would make a lot of money. When investing, the study I'm doing now is to prepare for investing to live a more prosperous life in 5 or 10 years. Such people should build from the basics by investing in stocks that consistently move upwards, rather than those that fluctuate wildly. For example, after identifying the trend by reading newspapers, you can look at the reports of the most representative companies related to that trend and think about how much that stock can rise. Then you will succeed and fail. But by accumulating experience within that process, after 5 years, that experience will be invaluable. After that, you will enter a phase where you gain more profit through your investments and accumulate experience. So, I think it's really important to start with the basics step by step. >> It will take some time, won't it? About 5 years or more. >> Right. People who fail in investing usually fail because they want results too quickly. And just by not buying stocks based on what others say, you can already be in the top 10% of stock investors. Most people, 90%, buy stocks based on hearsay or from YouTube, passively. >> Listening. But if you study, think, and invest, you are already in the top 10% in the stock investment world. Then, by learning from successes and failures through your own decisions, if that learning accumulates, after about 5 years, you will become someone who has reached a certain level. Yes. Today, we invited the famous trader Jeon Wang, who has grown his assets from 1.3 million won to 4 billion won through stock investment, and we heard various stories. I was also curious, so I asked many questions about how to trade stocks. He clearly emphasized setting one's own principles, not being too greedy in the stock market, and selling at the shoulder. He gave many good pieces of advice. Stock investing takes a long time. I hope you all watch this video and take it as a reference to achieve long-term investment and the benefits of compounding. This has been Maekyung Giant's Hong Soon and Trader Jeon Wang. Thank you.