To succeed in stock trading, you need various skills. But what is the most essential skill to have first? Have you ever thought about this? I’m not sure how each of you feels about it, but I believe the most important skill to develop is the ability to manage losing stocks. This is because, in the world of stocks, it is inevitable to encounter situations where you are underwater. Stock prices go up and down in an unpredictable manner, and the longer you trade, the more likely you are to face a 50-50 chance of being in a losing position. While you certainly experience positive situations, there are many instances of being underwater behind those moments. Ultimately, how you handle the situation when you find yourself in a loss will differentiate the profits you can make during positive times and determine whether you end up with significant losses.

Or, can we turn that crisis into an opportunity and do even better? This is the kind of thinking that comes into play. Most of the people who come to my channel are men, so I assume you all like soccer, right? You probably enjoy sports a lot. Whether it's soccer or basketball, the condition for a championship team is not just a flashy offense. It is essential to have strong defense to win the championship, and that's a well-known fact. No matter how well I can attack, if the defense is a mess, it's hard to win in sports. Now, in a situation that's even more complex than sports, we are navigating investments. What is truly important in this investment world is how we handle things during difficult times and how we manage that defense. So, you know that I run my channel and another channel called Honest and Stock Build-Up, right?

When asked how to deal with difficult situations, people often talk about what to do. If there are viewers among you who have never thought about managing stocks that are in the red, I will put a link in the top right corner, so please take a look. There’s a way to manage and recover even stocks that have halved in value. This is about managing stocks in the red through a method called rebalancing, which was explained in detail on the Honest and Stock Build-Up channels some time ago. It would be good to take a look at that. However, in the comments section of that video, surprisingly, many people mention that while they understand the concept, it would be easier to just cut their losses and switch to other stocks.

What this is about is managing the stocks that are losing value. I understand the method and the necessity, but doing it is quite complicated, time-consuming, and uncertain. I'm thinking about managing them, but what if it doesn’t work out? Because of thoughts like that, I’m considering taking an easier route—cutting my losses and switching to another stock to bet on again. It's much easier and more intuitive to move to another stock rather than managing everything in a complicated way. Plus, it might feel refreshing. It's like pulling out a painful tooth and just putting in an implant right away; it can feel really liberating to buy another stock after cutting my losses. However, there are two critical problems with this approach. As you know, the first problem is that if I switch to another stock and it doesn’t perform well...

Switching to a different stock is easy; making that decision is simple. But what if it doesn't go well? Today, we talked about a stock on the Honest and Stock Build-Up broadcast, which is Shinil Electronics. It rose over 10% during the day, riding the seasonal theme of summer. However, is it really just a theme? It was good while it lasted, and if someone bought in quickly and made a profit, that would be fine. But there might be those who got greedy and bought at the wrong time, getting stuck in the process. If someone is stuck like that, they might be feeling a mix of emotions, wondering if it will turn around in the short term or not. Those who engaged in day trading might have cut their losses somewhere along the way, but there are certainly others who are still suffering, for instance, those who bought at higher prices and are still in pain now.

Some people may have tried to solve their problems by averaging down, but instead, they have only increased their burden and now find themselves in a very difficult situation. For these individuals, I could explain how to manage their underwater stocks by suggesting steps to take moving forward. However, if someone in this situation thinks, Really? But rather than managing this so painstakingly, it seems easier to just cut my losses now and move on to other stocks, that’s a valid perspective. This reflects the reasoning of those who believe it might be easier to switch to different stocks. However, there is a strange logic in this. If you were going to cut your losses, as I mentioned earlier, you should have done it sooner. Why wait until the situation has become so difficult and uncertain? Managing underwater stocks should be approached in this manner.

When you say that, it raises the question of why you don't want to do it now. Why only at this point? We also need to consider why Shinil Electronics is being invested in. Is it because it was recommended on the broadcast and tied to a seasonal theme, making it seem like a good opportunity? There must be a reason for entering this stock. There would be a reason for choosing this particular stock and for not easily cutting losses since then, but rather trying to manage it somehow. However, that reason is likely something that was thought of very simply. The decision to choose and trade this stock was probably made with a very straightforward mindset. Yet, things haven't gone as smoothly as expected and have turned out to be more difficult. So, we need to consider that there is another aspect to think about here.

When we take action without careful consideration, the likelihood of facing difficulties later increases significantly. If we enter a situation thinking it will go smoothly and generate profits, we might believe that we will never encounter tough times. This leads us to think that we made an easy decision and achieved good results effortlessly. However, in all cases where things do not turn out as expected, it is because we entered the situation without enough thought, leading to future challenges. 

Managing stocks that have declined in value means, in essence, taking responsibility for those decisions made lightly. Therefore, at least in situations where we are accountable, we should not think too simplistically. The idea of cutting losses and buying something else is an overly simplistic way to solve problems. Yet, this approach has not worked, which is why we are facing the current consequences and suffering from our investments in underperforming stocks.

So, let's try to set aside our thoughts and think a bit more seriously about the complexities. From now on, we should consider how this stock might flow if it continues in a certain direction. We need to seriously contemplate these possibilities. The stock Shinil Electronics has seen a significant surge in trading volume today, but on most days, it trades with very little volume, simply flowing along with natural fluctuations. It experiences meaningless ups and downs. Moreover, the fluctuations aren't that large; while it may seem like a big wave, it only oscillates around 10%, 20%, or 30%. This pattern has been consistent not just this summer but also last year and the year before. Now, with this summer expected to bring extreme heat and unusual temperatures, there’s a seasonal theme related to air conditioners and fans.

Stocks are benefiting, but will this change dramatically? It could, or it might not. In cases where it doesn't happen, and the trading volume dries up, we need to consider what will happen to the stock prices in such a situation. Therefore, you should think about how to respond accordingly. However, saying this might make you reluctant. You might have entered the market hoping for a significant rise, but now you find yourself managing stocks that are languishing due to low trading volume and natural fluctuations. You might think, I don't want to deal with this. Then where do you go? You end up switching to stocks with more liquidity, often referred to as thematic or leading stocks. But what if that also doesn’t work out and they don’t rise as much as you expected?

So where are we going? It seems that many people these days are saying that the U.S. market is doing well, while the domestic market is facing difficult issues like capital gains tax. However, many are wondering what easy options are available. They are thinking and trying to figure out what can yield quick results. After all that contemplation and attempts, when things don’t work out, they end up looking towards the U.S. market. I think that’s the case. So right now, it’s really good. Most people investing in U.S. stocks are probably humming a tune. Of course, there are many who aren’t, but if you look at it positively, they’re likely to be humming. Why? Because the Nasdaq is at an all-time high, and the S&P is also at an all-time high. They keep breaking records. In such a situation, you don’t necessarily have to be anxious like with domestic stocks if you just hold onto the so-called leading stocks that are performing well.

Is it going up a lot or just a little? It's really just a matter of difference. But the question is, how long will this continue? If you look at U.S. stocks in the long run, the likelihood of them trending upwards is high, but there has never been a stock that just keeps going up indefinitely. So, how long will this last? When it doesn't go that way, most people choose a behavior pattern where they cut losses and invest in other stocks. They keep trying to challenge stocks that have the potential to go up, but in doing so, they end up losing everything. It's not that investing in stocks is incredibly complicated or difficult, leading to losses. It's that, as I mentioned, when trying to make it easy, it becomes difficult, and when trying to avoid difficulty, it also becomes hard. Repeating this cycle often leads to losses. So, as I said at the beginning, the most important thing in investing is to avoid getting into a situation that becomes too difficult.

In a situation where you're at a loss, it's crucial to know what to do and how to handle it. So, what does that mean? You need to accept that it might be a bit complicated and somewhat tedious. You should also be prepared to struggle in a low trading volume environment for the next few months. While it may seem like everyone else is making money, you will need to focus on managing your underperforming stocks. Accepting this reality and developing a strategy is essential. You need to be determined about what actions to take. Ironically, once you do this, investing in stocks becomes easier. Recently, I posted a video discussing five reasons why investing can be difficult. In response to such videos, there are always people who comment without fully watching the content.

Ah, it seems like you’re having a hard time with stocks. You might say that, but the reason I mention this is clear. If you recognize that it’s difficult and think about how to respond to that challenging situation in a somewhat complex and tedious way, then stocks are not that hard anymore. That’s what I mean. If you watched my video today, you should take away one thing: I want to say that you shouldn’t make investing in stocks too easy. It’s better to approach it with a bit of complexity. By complexity, I don’t mean that you should use the quadratic formula, substitute values, or apply sine, cosine, or calculus. All you really need for stocks is basic arithmetic; anyone can do it, even elementary school students. However, while it’s true that elementary school students can do it, there’s a big difference between thinking about it too easily and responding carelessly.

You need to be prepared to handle things a bit more complicated and consider various possibilities from the moment you first choose a stock until you make your initial purchase. After making decisions based on those considerations, even when things start to unfold in an undesirable and challenging direction, you should apply the strategy plan that aligns with the scenarios you initially anticipated to achieve the best possible outcome. If things go in an unwanted direction, cutting your losses can certainly be a strategy, but the problem with this approach is that if the situation deteriorates beyond your expectations and you fail to cut your losses, you may not be able to respond effectively, leading to failure. In the process of learning about stocks, you need to at least become adept at responding correctly even without having to cut losses. It's like going into a boxing match.

Are you playing the game with the intention of avoiding punches? But how do you avoid them all? It's about getting hit in a way that hurts less, maintaining your stamina while looking for an opportunity to counterattack, and practicing those skills. In a way, that's the first preparation you need to do. What's really necessary in stock trading is knowing what to do when you get bitten. To do that, you need to have a solid plan even before you get bitten, and that plan is not easy. It will be complicated, but you must do it. However, when you tackle that complexity, stock trading becomes easier. It simplifies things. I hope you remember this flow. That’s it for today’s discussion, and I’ll see you next time with a more beneficial video. Thank you for watching until the end; you did great!

주식을 쉽게 하는 방법

자본주의를 살아가면서 필요한 투자와 비즈니스, 주식 등 돈에 관한 이야기를 나누고 강의를 공유하는 채널입니다.

주식을 쉽게 하는 방법

주식을 쉽게 하는 방법

Scripts