The stock market launched by 7 million Donghak ants, is the stock price the same as the house price?

A (55), who owns an apartment in Songpa-gu, Seoul, opened a stock account while thinking about how to roll the deposit of 150 million won received by renewing the charter contract two months ago. The valuation gain of Mr. A, who bought large, high-quality stocks that will not fail, such as Samsung Electronics and KEPCO, has already exceeded 10 million won. Mr. A said, “If you put 150 million won in the bank, the interest will be less than 200,000 won per month.” “I am studying stocks because I believe that real estate investment is no longer difficult due to government regulations.”

B (44), who works as a designer at a large company, starts her routine by checking the New York Stock Market as soon as she wakes up in the morning. In the spring of last year, when the stock market plunged due to a novel coronavirus infection (Corona 19), he pulled 50 million won from a negative bankbook to join the’Donghak Ant Movement’. Mr. B said, “I remember the V-shaped rebound of stock prices that plunged during the 1997 financial crisis and 2008 financial crisis,” he said. “I made a decision because I thought that this opportunity would be difficult to come again for a lifetime.”

C (35), an office worker who has been buying stocks as if pouring a savings of 1 million won every month since six months ago, watches YouTube stock content whenever he has time. If you look at the fluctuations of stock prices all day without your knowledge and work hard, your mind will be devastated, but you will be wary of greed and fear while listening to the advice of experts. Mr. C emphasized, “Isn’t it almost impossible to buy a house, no matter how much you care about it?” and emphasized, “There is no way to raise money except for stock investment.”

Sales department on the 2nd floor of Kiwoom Securities’ headquarters in Yeouido, Seoul at the end of last month. When I touched the shape of the’Open Account/Inheritance’ task button on the entrance kiosk screen, a waiting list was printed. Waiting number is 7 people. As counseling was in full swing at each window, a gray-haired senior was filling out the documents for opening a stock account. When I asked the employee if there were a lot of elderly people like this, he said, “Only those who are uncomfortable or have a hard time using smartphones are coming,” and “Most of them are open face-to-face.”

From the young to the elderly, you can invest in stock

The stock market is hitting all-time highs every day, and the stock investment frenzy is blowing. You and I, both young and old, are making investments, and the inflow of funds around the stock market is accelerating. In fact, there were a whopping 500,000 new accounts opened at Kiwoom Securities last month. Around 20,000 new accounts were created a day. Kiwoom Securities’ annual number of new accounts opened in 2020 reached 5 times (3,330,000) of the previous year.

As a whole, the scale gets bigger. According to the Financial Investment Association, as of the 29th of last month, the number of active stock trading accounts reached 35.52 million. The exact number of stock investing population can be determined only by the Korea Securities Depository, checking the stockholders list of all listed corporations in March. In the industry, one person usually has about 5 stock accounts and the number of active accounts exceeds 35 million, so it is expected that the number of stock investors (owners) will reach 7 million. Individual investors, also called’Donghak ants’, have become a whopping 7 million troops. Of these, Samsung Electronics’ shareholders alone are estimated to be around 2 million.

Inflow of money to stop the economic downturn

The era of 7 million stocks is a road that the Korean stock market has not gone through. It is no exaggeration to say that such a corps of Donghak ants is the first contributor of the KOSPI 3,000 era. What became a live ammunition was liquidity. According to the Bank of Korea, the broader currency (M2) representing the amount of money on the market is 3,150 trillion won as of October 2020. It increased by more than 276 trillion won in one year. The money that was paid for the small business owners and vulnerable groups in crisis after preventing the recession caused by Corona 19 is flowing into the asset market. Waiting funds (stock deposits) left to securities companies to buy stocks increased from 27 trillion won to 65 trillion won in a year. Abundant liquidity is a global phenomenon. According to Bloomberg News, eight major countries, including the United States, the European Union, China, and Japan, have released 14 trillion dollars (about 5,200 trillion won) of liquidity on the market in the aftermath of Corona 19.

Of course, liquidity alone cannot be a major bull market. Shin Seong-ho, former CEO of IBK Investment & Securities, said, “The most important thing in the stock market is corporate profits.” “The employee or company official who first learned that their company’s performance is improving is one step ahead of investing in stocks.” In fact, companies are making surprise results. Some analysts say that at least half of the top 20 companies by market capitalization will generate the highest sales ever. F&Guide, a financial information provider, predicted that there will be more than 100 listed companies that will record the highest sales ever based on earnings forecasts for securities companies.

Performance Liquidity Dynamics 3 beat, optimism dominant

Interest is how the stock price will be in the future. No one knows the direction of the stock market in 2021. If there is someone who is confident that they know, they are ‘100% scammers’. Knowing that, there is no reason to talk to others.

If you go back to Donghak ant, fluidity, and performance, you will see the answer. It is unlikely that Donghak Ant, which has already loaded 65 trillion won of live ammunition (customer deposit), will suddenly leave the stock market. Rather, whenever the stock price plunges, aggressive buying at low prices prevented the awaited correction. It is not easy for authorities to absorb liquidity in 2021 unless Corona 19 is caught. Foreigners are highly likely to contribute to liquidity. In the end, the question is whether corporate profits can meet already-high market expectations.

First of all, optimism prevails in stock prices. KB Securities forecasted that the top of the KOSPI this year was 3,300 and Shinhan Investment was 3,200. Some people expect that KOSPI will escape’Boxpi’ in 14 years and 3,000 will become the support line in the future. In the era of ultra-low interest rates, as the paradigm of asset management is changing and there is a’money move’ taking place, some advice that the general public should not turn away from the stock market anymore. It means that the time has come for the whole people to study stocks.

On the indicators, there is not much concern about overheating the stock market.

However, there are also few concerns about the bubble in the asset market. It may be when the rosy outlook pours out. Ji-ho Yoon, head of the Research Center for Ebest Investment & Securities, said, “In 2020, the earnings expectations were very low due to the coronavirus, but the stock price rose with surprise results. But in 2021, the expected profit growth rate has already reached 40% (compared to the same period last year). It is not easy for companies to meet this.” It is argued that it is time to take a break. However, if it falls, the low-cost split-buy strategy remains in effect.

As the dollar weakened, investments flowed into emerging markets, and our stock market rose and commodity prices and Bitcoin soared. If the dollar gets stronger again, the opposite can happen. A CEO of a foreign securities company predicted that “the US will not be just watching the weakening dollar.”

The KOSPI’s market cap is close to 2,000 trillion won, and it is also burdensome to surpass gross domestic product (GDP) for the first time in history. Stock prices traditionally judge a bubble with a stock price-to-earnings ratio (PER) that shows how many times the company’s annual profits are. However, the’Price to Dream Ratio’ (PDR), which evaluates how big a company presents dreams and hopes to investors, is emerging. As the market cap of Tesla, an electric car company in the US, soared to 715 trillion won and the PER exceeded 1,300 times, in fact, there is no adequate indicator to explain the stock price other than the PDR. However, there are few criticisms that PDR is sophistication. If it is a bubble, it can only be turned off. The problem is that you don’t know when it will be.

Young-kull, individual investors in debt must prepare for a downturn

There is also the limit of debt. The Bank of Korea announced in its’Financial Safety Report for the second half of 2020′ that as individual stock investments increased, the demand for investment funds utilizing the leverage of the youth grew rapidly. Credit loans under 30s (transactions that purchase stocks from a securities company) increased by 94.2%. Credit loan balances in their 40s and 50s, which account for half of the stock population, also increased by 6 trillion won each in the nine months. This means that virtually all age groups are investing in stocks out of debt. CEO Shin said, “As the stock price rises, speculative sentiment is prevalent, but if the rise stops, the atmosphere will change rapidly.” He asked.

However, it is an atmosphere that everyone agrees that the market for polarization by sport will unfold. A representative of an asset management company predicted, “The rise will continue until the first quarter with three beats such as corporate performance, liquidity, and smart dynamics.” When Samsung Electronics, which used to be in the 50,000 won range, has already risen to the 80,000 won range, asked if it would be okay to go in now, “I said, “I was crazy when the Gangnam apartment was 1.2 to 1.5 billion won, but now 2.4 to 3 billion won.”

Park Il-geun Editorial Writer [email protected]

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