[머니콕] “A friend who can say no when everyone says yes.” This is an advertisement for a securities company that attracted attention 20 years ago as a movie star Yoo Oh-sung appeared as an advertisement model. In actual stock market, it is not easy to reveal one’s own color without being shaken by trends or majority opinions. In that respect, Ji-ho Yoon, director of the Research Center for Ebest Investment & Securities, is an unusual’friend’.
Center director Yoon warned of overheating in the stock market from late November last year, when the KOSPI exceeded the 2600 line, and recommended increasing the proportion of cash. In December of last year and January of this year, the KOSPI increased further, causing a lot of curse. He has been working as a research center leader for 10 years at EBEST Investment & Securities after serving as the head of the investment strategy team at Hanwha Investment & Securities. This is because of the judgment that the possibility is high.
“The current stock market is a volatility market caused by conflicting factors of concern and expectation, and it is difficult and easy to make mistakes. This year, the more you participate in the market, the more painful times can be.” “There is,” he warned again. His advice is that it is advantageous to invest in companies that increase their cash share, wait, and improve performance that exceeds market expectations. He cited contact-related stocks such as travel, airlines, hotels, and shopping that were undervalued for Corona 19 as the most promising stocks for investment this year.
The following is the full text of the interview.
In a volatility market, it’s easy to make investment mistakes
-It warned of overheating ahead of the KOSPI 3000 at the end of last year. There were a lot of bad comments.
▷ I talked about my concerns from last November. After that, the market was good in December, and from January to February this year. What we are seeing is sending a warning signal when it is judged that the index is a little expensive, rather than saying’it’s a high point, it’s a low point’. On the contrary, in the case of last year, we said that it is a burden at the level of November last year, because it is a house that bought a purchase (recommended to buy) from March to April. There were sunples, but there were quite a few people who were uncomfortable. It is not a hardship, but it is true that it was psychologically contracted.
-KOSPI declined for four consecutive days (shooting date March 9), but the adjustment was until where.
▷ If you ask why the stock price has fallen, go back to the first question. This is because the stock price rose sharply compared to earnings. In order for the market to go up, performance must exceed expectations. The market is full of expectations that corporate performance will improve this year. Looking at the recent adjustment pattern, the premise that earnings will improve is that as the dollar weakens, money flows into emerging countries and trade is also active. As the interest rate maintained the structurally low interest rate, I thought there would be no change in the discount rate, and the oil price was blocked at around $60 per barrel, so the burden on the cost was not likely to be large.
However, looking at the current situation, oil prices have exceeded 65 dollars per barrel, and interest rates have recently spread to countries with interest rate seizures. Above all, the dollar is not weak. At some point, the won per dollar is over 1,140 won. Even under these conditions, you will want to check whether the company’s performance will be good. Whether it’s 1Q or 2Q results, the stock price will move strongly if it is based on earnings that can outperform the current share price rise. But until then, investments that reduce mistakes are better. As always emphasized, stock investing can survive only when mistakes are reduced, and only when it survives can be fruitful. A good place to make mistakes is when something crashes. When it is clearly visible, you can buy or sell it. When concerns and expectations coexist, it is said to be a volatility market, and that is the current section. I think it is better to reduce market participation and focus on livelihood as much as possible.
-A foreigner sold for 5 consecutive trading days, but a simple exchange rate play?
▷ Everything is mixed. As I keep telling you, there will not be one foreigner. In order for foreigners to buy domestic stocks, it must be premised that the dollar will weaken and international trade will increase. That’s not the case now. If the value is greater than the stock price, it is highly likely to generate profits, so foreigners come in regardless of the exchange rate. Right now, the stock price may be more likely to lose more than its value. Of course, it may be different depending on the sport, so I think it will be selective. Although the stock price direction is surprisingly good, what foreigners sell these days is the growth factor. There are also those who buy stocks that are taking a break out of nowhere. This is the case with domestic orders and financial stocks. In conclusion, it is difficult to expect foreigners to aggressively buy from the perspective of comparing the exchange rate and stock price value.
Increase your cash share before confirming performance improvement
-The reason why the stock market has repeatedly fluctuated day after day.
▷ It is clear that the very long-term flow of funds has come to favor the stock market. However, as the funds came in, the stock price rose too quickly. Many people say that the rise in interest rates is due to the economic improvement, but it is a problem because interest rates have moved very quickly. All financial variables moved rapidly while experiencing a pandemic that was not experienced by Corona. The direction looks good, but because it is expensive, it is staggering. When there is a trend, good things are reflected and the stock price goes up. At that time, if you buy stocks and stay still, you can make a lot of profit. That was the case last year.
Conversely, when stocks plummet, people give up, so they’re not interested. A phase like this year can be a very painful market as the more you participate in the stock market. In simple terms, it will be pushed if you come in according to the thought of’it will be done now’, and if you think it will collapse, it will rebound if you hit a hand loss. In some ways, it can be difficult until the volatility market is resolved because it moves against human instincts. If you think that there will be an earnings market where corporate profits dominate everything and enter the market quickly, you can suffer from a volatility market. Since the point of time is unknown, even if there is a limit to buying expensive, it is said to watch and do it. It is good to keep distance from the market now.
What’s important is to have the right cash share. The moment cash becomes king, you have to invest to make money. Last year, everyone needed cash. Nowadays, the only thing that is worrisome is that everyone thinks,’I don’t need cash, I have to have stocks or real estate. If cash becomes king, it is very likely that any asset is cheap. There is a nice line in the movie’Wall Street’. “Investment is just money going back and forth. The important thing is that when some money is transferred, it has to be received in favorable terms.” This means that many people need to get money when they try to hand over what they have inexpensively.
-There are also concerns that it will be too late to buy after checking the results.
▷ Many people are so concerned, but in reality, they don’t even show a lot of performance. In the past, when information asymmetry was large, he said,’buy it on the rumors and sell it on the news’, but that’s not the case. When the stock price rises as corporate profit improves, the stock price explodes when the earnings momentum and price appeal overlap. Didn’t you experience it in the second half of last year? What was more meaningful than the precedence of performance was in 2017 and 2018. Even though the company’s performance was good in 2017, the share price rise was not so large that the stock price-to-earnings ratio (PER) fell. Everyone thought that corporate profits would improve in 2018. But the stock market in 2018 wasn’t good. This is because they did not meet the quarterly earnings expectations. The performance exceeded expectations in the fourth quarter of last year, and a response came out in January of this year. The first and second quarters of this year are expected to improve, but we need to exceed expectations. Wherever I go these days, I only talk about Samsung Electronics. People talk about the semiconductor big cycle and I agree. But why can’t Samsung Electronics go? This is due to concerns that earnings may fall short of the expected value this year. This year’s market is highly likely to be overwhelmed by good companies in good industries that show good corporate profits during the performance season. That is why I want to emphasize once again that there is no need to rush.
Department store, travel, airline, hotel contact promising
-The US Treasury yield rises and inflation concerns are high.
▷ The big cycle in the 2000s came out once. When interest rates are low, growth stocks will be good because growth is scarce. The core principle of the old-style investment strategy was that economic cycle stocks were good, as economic warmth spreads and interest rates rise, the overall industry improves. The industry itself has changed a lot since the financial crisis. Before the financial crisis, the US and China lived together. When China joined the World Trade Organization (WTO) in 2002, Biden was the chairman of the U.S. Congressional Senate. Because China produces hard and the United States consumes, they have balanced each other. It was also good in Korea. The trade between the two countries was good, so I was able to make and sell ships. I can’t do that now. This is because individual life has been intensifying since the financial crisis. The corona pandemic was an opportunity to accelerate such a trend and made the valuations of related stocks too expensive. So, growth stocks will suffer for the time being. This is because the discount rate changes when the interest rate rises, and the high valuation of growth stocks is difficult to justify. However, after a certain period of time, the future will be there again. Market concerns deepen because the stock prices of good companies in good industries are too burdensome. Stocks on the other side will come up, but ultimately they won’t be able to replace them.
-The impact of the local elections next month, the presidential elections in March next year, and the elections in the stock market
▷ Election is the evaluation of policy. The government’s most unsuccessful policy is real estate, and what it did well is the expansion of the stock investor population. After the split-off of Samsung Electronics, many individuals have become shareholders of Samsung Electronics. If the current government loses in local elections, the possibility of policy change will come out. The government is also already suggesting a possible policy change. It is going to focus on supply, and it seems that it is trying to release houses with a mortgage loan ratio (LTV) of 600 million won or less. Policy changes are expected depending on the results of local elections, especially asset-related changes. That doesn’t mean that real estate is good. Looking at recent real estate data, it is interesting to note that after the Corona, wealthy people living in Manhattan, USA, bought many rural houses in Long Island. I was curious about the price of an apartment in Manhattan, so I looked at it and found that the median price was $1.2 million (about 1.37 billion won). The median price of apartments in Seoul in Korea is 950 million won, and Gangnam 3 district is roughly estimated at over 1.1 billion won. There is no difference from Manhattan. It means that real estate is also not very cheap. Korea’s asset prices have risen sharply over the past year. From the perspective of asset allocation, the era is approaching when you need to have a certain amount of cash to seize the opportunity.
-The most promising domestic stock this year.
▷ You have to buy something cheap. Contact stocks are cheap. What is interesting recently is that department store stocks are moving and the apparel industry is moving. If there are many companies that are ruined because it is too recession, the industry itself will be integrated. Travel, airlines, and hotels have been restructured. These industries can create opportunities if tourists come back. Rather than increasing the pie, the industry in which the number of people to share pies has decreased will be promising from the present point of this year to the end of the year. Companies with competitiveness in Korea would also be good. Last year, it was a market that only led to IT and automobiles, but this year’s market will not. There will be opportunities when restructuring is carried out in companies that have strengthened their position within the industry or in turnaround industries. The Naver Kakao platform company is also surprising. K content is amazing. Movies like Buttercup and BTS’ music are spreading all over the world. Companies whose valuation is reevaluated are those that have gone beyond the domestic market. The only problem is that it is not cheap at this point. If the stock price becomes cheaper due to uncertainties such as interest rates and exchange rates, there will be an opportunity to become a good shareholder.
Avoid investment using loans
▲ In 2012, nine years ago, Ji-ho Yoon was managing director when he first served as the head of the Research Center of E-Trade Securities (currently E-Best Investment & Securities). /Photo provided by Jiho Yoon
-What is the outlook for bio stocks such as SK Bioscience?
▷ What I am not confident about is bioju. I am worried about how to valuate the original technology. SK Bioscience is a great company. Even in the bio industry, Korean companies are serving as global production bases. Focusing on these companies, I am looking good. However, one should be aware of this. Companies with burdensome behavior of major shareholders should be avoided. There is no problem if you go to companies that have already demonstrated their skills and have global competitiveness. Companies that have high valuations due to the development of new drugs are likely to do well, but I do not think there is a need to find a lotto there.
-Will the overseas stock Tesla and Arcinvest craze cool?
▷I think Elon Musk of the real economy and Cash Wood of finance are really good people. However, the company’s stock price does not go linearly just because it is excellent. For reference, there is a’Tech Index’ made by Goldman Sachs as a company with a deficit, which has increased 5 times in 10 months. A company that has grown during that period is Arc Investment. Bitcoin has risen a lot during the same period. Everything is connected. This has increased five times so far, but it is more likely to adjust the speed than the probability of going five times more in the future. At the dawn of today’s filming date (March 9), Kathy Wood appeared on CNBC. It should be noted that in the past, when Cash Wood said a word, the market usually turned around, but today the Nasdaq fell even further. It’s time to take a break because they’ve been running a lot, but I don’t think their future has disappeared.
-If you advise individual investors as a market analysis expert.
▷ There is a person who inherited Soros’ fund as Stanley DeRocken Miller. As I read the book, this man said,’Soros didn’t tell him the right or wrong of the choice.’ ‘I learned how much money I make when I made the right choice, and how little I lost when I made the wrong choice.’ What ordinary investors need to know is that they cannot keep making money just by thinking about how much they will make by investing. What is as important as earning is’how much less will I lose’ when my judgment is wrong. Long-term investment is the answer, but human instincts are hard to bear with losses. When deciding to invest, you should avoid investments that are too risky. And if you don’t want to rush over your assets, you shouldn’t be overly liable. You should use less leverage. Stocks are not a game of explosive returns. You can’t do that every year just because you made a 30% profit last year. Outstanding investment gurus are people who play games that avoid mistakes and make money consistently in the long run. You have to play a game that reduces mistakes to survive, and that person can hold the cash and eventually get a chance.
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