Commentator Yoon Ji-ho urges individual investors to 'self-reflect' on July KOSPI crash… “Don’t blame others, know yourself”

Economic commentator Yoon Ji-ho showed self-reflection, stating that the KOSPI index dropped another 20% after he said 'it seems like it's time to buy a little' last week. He emphasized the importance of always approaching the market with humility in stock investing, implying that even experts find it difficult to perfectly predict market movements.

While deeply empathizing with the losses individual investors experienced in this sharp downturn, he also stated that investors need to develop a more cautious and long-term perspective through such experiences. In particular, he represented the feelings of individual investors who thought 'it dropped further after I bought it,' once again highlighting the unpredictable nature of the market.

The 'Stock Market Watchdog' also confessed that its past forecast of the KOSPI's box range bottom, saying 'it wouldn't fall below 5,500,' felt dangerously close in today's downturn. He stated that he was surprised by a sharper drop than his own predicted bottom and once again experienced the market's unpredictability through this experience.

He then added that he bought all the quantities he had set aside during this sharp decline. This shows that he continued investing according to his personal judgment and principles amidst the market's rapid volatility, and reveals that even experts make trading decisions based on market movements.

News recently broke that individual investors bought 750 billion won worth of leveraged ETFs. Regarding this, commentator Yoon Ji-ho raised a question, stating, 'If it's typically expressed as surrender, they wouldn't be buying leverage.' His remark points out that the actions individual investors are taking amidst the market's sharp decline show a different pattern than typical 'surrender.'

Generally, when investors are surrendering, there is a strong tendency to avoid investing in risky assets. However, the phenomenon of increasing leveraged investments suggests the possibility that expectations for a further market rebound or a gambling mentality to recover losses were at play. Commentator Yoon interpreted this phenomenon as another indicator that makes it difficult to predict the market bottom.

Commentator Yoon Ji-ho cautiously mentioned that he believes the market has already seen its peak, reversing his previous market outlook. He stated that in an atmosphere where KOSPI 10,000, 12,000, and even 20,000 were being discussed not long ago, he now thinks 'the number 9,000 might not be that high.'

This indicates that expectations for a trending market rise have been broken, and he is viewing the market from a more conservative perspective, contrary to past optimistic forecasts. Considering the current stock price trend, his analysis suggests that a rapid rise similar to the past will be difficult to expect for the time being.

Commentator Yoon Ji-ho strongly advised abandoning expectations of a trending market rise. He asserted that while many investors expect to recover previous highs if the market rebounds recently, he does not think so at all now. While he previously saw the KOSPI box range between 6,500 and 8,000, given the current situation where it has dropped to the 5,000 line, he downgraded his forecast, stating that reaching anywhere between early 5,000s and 7,000-7,500 would be a tremendous result.

This acknowledges that the overall market atmosphere has changed from the past and emphasizes that investment strategies should also be conservative accordingly. He explained that investors should accept a realistic upper bound for the box range rather than unconditional optimism, and that additional upward potential may be limited. In particular, as the existing box range bottom has been broken, he suggested lowering the new box range bottom to the 5,500 line.

The Stock Market Watchdog raised a point of self-reflection, questioning whether we have accepted abnormal situations too normally. He specifically criticized unrealistic expectations for semiconductor industry profit margins, pointing out that even after 70% margins were achieved, forecasts suggested 'it would have to be 80% next year.'

This shows that the market was caught up in excessive optimism, ignoring realistic corporate valuations. Even in a growth industry, profit margins cannot increase indefinitely, and unrealistic expectations can ultimately lead to great disappointment for investors. This suggests that such abnormal forecasts may have been one of the causes of this downturn.

Commentator Yoon Ji-ho asserted that investing based on 'a friend who works at Hynix or Samsung Electronics says the company is good' is an illusion. He pointed out that often, when a company is doing well, outsiders know more about the company than insiders.

He explained that insider information can be fragmented or biased by personal judgment, and may be far from overall market trends or objective corporate valuations. Therefore, he emphasized that investing solely based on the word of friends or acquaintances is risky, and that self-analysis based on objective data is important.

Commentator Yoon Ji-ho stated that he doesn't often recommend individual investors to invest directly. He emphasized that if one decides to invest directly on their own, 'it's something you can only do if you know a lot about yourself.' He explained that understanding oneself is essential not just for doing well, but even just to 'hit average.'

His advice is that one must accurately identify their investment propensity, how much risk they can tolerate, and what decisions they make in crisis situations to make rational investments. If this self-understanding is lacking, he suggested that indirect investment through an expert might be a wiser choice.

Commentator Yoon Ji-ho strongly criticized the behavior of blaming others after losing money on stocks bought based on someone else's advice, saying, 'It's wrong to say that person is bad because I bought it on their word and it dropped.' He estimated that there are surprisingly many such investors currently, and that the majority who are surrendering now belong to this category.

He made it clear that investment responsibility lies entirely with the individual, and others' advice is merely a reference; the final decision is the investor's own. He warned that blaming others for losses is a failure to acknowledge and learn from one's own investment mistakes, which can lead to repeating the same mistakes in future investments.

Commentator Yoon Ji-ho defined a market crisis as 'when you invest because you think you'll make money, but that money isn't recovered.' He predicted that in areas where large-scale investments have been made, companies are bound to fail, and this time, such companies will emerge in the 'hyperscaler' sector.

Hyperscalers refer to companies providing large-scale data centers or cloud services, a sector that has seen enormous investment in recent years. He warned that in areas where excessive investment has been executed, problems with fund recovery could lead to unexpected crises. This implies a serious issue that could go beyond mere stock price declines to corporate insolvency.

He also emphasized that investors need to be good at distinguishing quality during such crisis situations, warning against the dangers of indiscriminate investment.

Commentator Yoon Ji-ho stated that he is seeing two paths for the recent KOSPI plunge. The first scenario is 'it seems like there was an excessive sell-off due to derivatives, like Black Monday,' analyzing that the Korean market overheated and suffered a shock. In this case, while the peak might not be reached, a trend where the box range is maintained could emerge, and he assigned an 80% probability to this scenario.

The other scenario, with a 20% probability, is that 'a bear market might have truly begun.' In this case, something must collapse, meaning it's not just a correction but a potential entry into a full-fledged bear market. While he leaned more towards 'overheating resolution' between the two scenarios, he also advised keeping open the possibility of the worst-case scenario.

Ultimately, he emphasized that this is a time for careful judgment on whether the current sharp decline is an adjustment of an overheated market or the prelude to a larger bear market.

Commentator Yoon Ji-ho made it clear that the majority of markets are 'minus-sum games where winners are few and losers are many.' He explained that in minus-sum games like lotteries or horse racing, only a few make significant money while many lose money. He described this fundamental nature of the market by mentioning the characteristic of financial capitalism in the US, where only the rich continue to make a lot of money.

This is a harsh reality that individual investors must be aware of when entering the market. He advised that one must understand the zero-sum (or minus-sum) nature of the game, where if someone gains, someone else loses, to have the correct investment perspective.

Commentator Yoon Ji-ho emphasized that one must belong to the minority in a market like the current one, and should question things when the majority surrenders and sells off stocks. He reported that among 10 people around him, 4 used the word 'surrender,' indicating a widespread atmosphere of capitulation, and confessed that he himself felt the urge to 'sell everything and leave.'

However, he suggested that this collective capitulation sentiment could paradoxically be an opportunity for contrarian thinking. He presented a paradoxical situation where investment opportunities might exist at the bottom when everyone is giving up and trying to leave, advising that it is important to have one's own judgment criteria and not get swept away by crowd psychology.

Commentator Yoon Ji-ho defined stock investing as a 'game of grabbing value.' He questioned who would easily give away valuable stocks, explaining that it is natural for investors who have found and bought valuable stocks not to want to sell them. Therefore, he stated that stocks usually change hands when one is forced to sell, that is, when one has to give up something valuable to get out.

He explained that in such situations, other investors 'grabbing' that value is the essence of the stock game. This suggests that the nature of the market lies in selfish value pursuit, that good stocks are not easily obtained, and that it is important to seize opportunities in difficult situations. Ultimately, he emphasized that the stock market is an arena where the buyer's desire to buy good stocks cheaper clashes with the holder's desire to sell good stocks at a higher price.

Commentator Yoon Ji-ho confessed that he was greatly shocked by the recent downturn, stating that 'surprisingly, many people used all the money they had, and even money they didn't.' He analyzed that many people unexpectedly took out collateral loans to invest in stocks, and seemed to have been driven to invest by the 'FOMO (Fear Of Missing Out)' phenomenon.

He explained that the structure of generating leverage by using specific stocks like Samsung Electronics, Hanwha Aerospace as collateral for additional purchases was very prevalent among brokerage firms. This led to many situations where the collateral loan ratio was not met, forcing the sale of original shares, and some brokerage firms struggled with this issue. This case clearly shows the fatal consequences that excessive leveraged investment can have for individual investors during a sharp market decline.

Commentator Yoon Ji-ho advised that if one's current portfolio is underwater from stocks bought at the peak, they should ask themselves 'if it can truly be viewed favorably even 10 years from now.' He further emphasized that one should first question 'if that amount of money can be put in for a 10-year outlook.'

This means that instead of fluctuating with short-term price movements, one should dispassionately evaluate the company's value and one's investment capacity from a long-term perspective. He raised the need to reconfigure one's portfolio by considering a realistic time frame and financial situation, rather than vague hopes of merely recovering losses.

Commentator Yoon Ji-ho pointed out that Korean companies lack the ability to manage cash and argued that they should learn from Japan's 'Ito Report' spirit. The Ito Report conveys the message that if investments don't generate profit, it's better not to invest and keep the money as cash. He criticized the misconception in Korea that companies holding a lot of cash are considered 'junk stocks,' calling it a wrong approach.

He emphasized that the ability to efficiently manage cash and invest it where needed is precisely an indicator of corporate competitiveness, and that the importance of cash holdings should be re-evaluated over indiscriminate speculative investments. This is interpreted to mean that companies should not be preoccupied with short-term performance but manage assets from a long-term perspective.

He suggested that retaining cash is not merely refraining from investment, but can be a strategic choice to prepare for future investment opportunities and respond to uncertainties.

Commentator Yoon Ji-ho assessed that Korea's financial holding companies, or bank stocks, are one of the sectors closest to developed markets. He explained that this is because bank boards are very balanced, and compared to other companies, foreigners effectively hold a high proportion of major shareholders, almost making them foreign companies.

He analyzed that a high proportion of foreign major shareholders creates a structural factor where companies are compelled to pursue shareholder-friendly policies in line with global standards, especially high total shareholder returns. He noted that the continuous rise in total shareholder returns for Korean bank stocks is due to this background, re-evaluating the value of bank stocks as a sector with advanced governance and shareholder return policies.