Investor grows assets from 200 million to 3 billion won using investment diary

After suffering losses of 80% on unlisted stocks, Choi Seo-yeon grew her assets from 200 million won to 3 billion won in five years by using an investment diary to track her decision-making.

What is the most dangerous moment in stock investing? While many think of market crashes or plunges, Choi Seo-yeon, author of "The Mom Next Door's Stock Account," points to a different moment: the moment an investor jumps into a stock based solely on someone else's word without knowing why they are buying it.

A conversation shared by The Man Who Explains the Economy (Kim Kwang-seok TV) contains the painful failures and the resulting investment philosophy of an individual investor who grew 200 million won in assets into 3 billion won in five years. Drawing from her experience of moving from a self-described "minus hand" to a securities firm VIP, Choi warned of the traps that novice investors easily fall into.

"Even if I wanted to sell, there were no buyers"... Painful lessons from unlisted stock investment

The biggest turning point in Choi's investment life was an investment in unlisted stocks (KONEX) experienced 10 years ago. At the time, she began investing with a mindset of aiming for a "big hit" rather than having an investment philosophy or criteria. After reading an article that a famous retail investor had invested in a certain unlisted stock, she was swept up in vague expectations and purchased the shares through a securities firm.

However, the result was disastrous. The stock price fell by more than 30% to 50%, eventually entering a record loss zone of minus 80%. Contrary to expectations that it would generate large profits through a KOSDAQ listing, the listing was delayed, and the stock price continued to hit rock bottom. Choi recalled the helplessness of that time, saying it was "a time when I had to hold on forcibly because there was no one to buy even if I wanted to sell." Since stock trading is only completed when someone accepts your shares, there were no buyers at all as the price dropped like scraps of paper.

In particular, she cited her failure to properly understand the concept of a "bonus issue" (free issue of new shares) as a painful mistake. She realized too late that a bonus issue does not increase the company's value or directly increase shareholders' assets, but is merely a procedure to move capital surplus to capital stock. At the time, seeing the bonus issue message, she mistakenly thought she was making money because the number of shares increased like a "one plus one (1+1)" deal. Ultimately, feeling the limits of the restricted upside of domestic stocks, she sought new investment paths by turning her eyes toward the United States stock market to seek larger and faster profits.

"Holding is a continuous series of choices"... Why following others is dangerous

Choi emphasizes that investors must guard against "follow-along investing," which relies on expert recommendations or information from others. While many investors think only the moments of buying and selling are moments of choice, the entire process of holding a stock is actually a continuous series of choices. Every moment—whether to absorb the volume being dumped by other investors, whether to endure without realizing profits, or whether to sell to move to another stock—is the responsibility of the investor themselves.

She pointed out, "If you buy a stock based on someone else's recommendation, you don't know why you bought it, so you also don't know when to sell it." If the basis for buying is not clear, the criteria for additional buying or stop-loss orders disappear. She explained that this is a dangerous state, no different from walking with one's eyes closed. Anyone can buy a stock after listening to an expert, but if one does not know the direction of the choices continuing throughout the holding period, investing becomes very dangerous.

"Memories are distorted"... An 'Investment Diary' to avoid repeating mistakes

The solution Choi presents to investors suffering from repeated losses is to write an "investment diary." She pointed out that human memory is constantly reconstructed based on current circumstances. When stock prices rise, people believe, "As expected, my choice was right," and when prices fall, they distort their memories by thinking, "It was a mistake to listen to others." She explained that a psychological error occurs where past choices are interpreted differently depending on the current position.

In an investment diary, one should write the honest reason for "why this stock was bought," rather than grand analyses. Even honest motives such as "because the mom next door told me to buy" or "because a YouTuber said it was good" are fine. Only by reviewing one's own choices through records can one identify in which segments they feel greed and in which segments they feel fear. Since greed and fear are the psychological factors that ultimately determine profits and losses, this is an area that experts cannot do for you.

Choi emphasized that "what is more important than which stock to buy is knowing what kind of person you are when making choices," and that establishing criteria for buying and selling through an investment diary to avoid repeating the same mistakes is the key to asset growth. On page 264 of her book "The Mom Next Door's Stock Account," "things to check with an investment diary" are specified to assist in this process. This includes the most important reason for buying the company, the facts supporting the judgment, and the reason for choosing this stock instead of others, which can help investors reduce trial and error.

Source: original video (YouTube)