Will the stock continue to grow?

It seems like the time has come to restrain our stock investment.

The financial crisis that began 10 years ago in the United States led to a sharp decline in the global stock market, and since then, countries have released enormous liquidity into the markets to save the global economy, so it is now booming again.

It is really easy to make money when you know when the stock will go down and when it will go up. But since it's such an easy stock, did you really make money out of it?

We humans use quantitative and qualitative methods to assess any object or situation. Quantitative methods are easy for those who are good at numbers. Qualitative methods apply to situations, living things or objects that are difficult to express numerically, and their results may vary from person to person. For example, when someone says 'He is Handsome', we can't use numbers to express these things like whether he's very handsome, a little bit handsome, maybe he's medium handsome, or maybe he's getting more handsome than the first time we saw him. In this case, we use qualitative methods and usually tend to use them for assessing people or living things.

But did you know that not only quantitative methods but also qualitative methods should be used to assess the stock market? If only quantitative methods were sufficient to predict the ups and downs of the stock market, everyone would make money. However, the reason why the majority of people do not make money from stock is that it also takes a qualitative method to assess the stock market. Perhaps this is why people compare the stock market to a living organism.

Anyway our goal is to make money from stock. Then you can earn money if you know the qualitative method as well. But the problem is that qualitative methods are too difficult and often wrong, even though you try it.

I'm not here to teach you qualitative methods. Because I don't know the qualitative methods. But let me tell you three things I know. You can read these and decide whether or not to put it into practice.

First, I will explain something by Korean case.

In 1977. Korean Construction Industry Stock collapsing
In 1987. Black Monday, in the U.S.
In 1997. Asian financial crisis and the International Monetary Fund helped Korea
In 2008. U.S. financial crisis
In 2018?

Do you get it? South Korea experienced a huge stock market crash these years and made desperate efforts to revive the economy. People call it the ten-year cycle, which is not necessarily the case. It's just a rough guess.

The second is the behavior of people around you.

It is like someone who was not interested in stocks at all, suddenly decide to sell the house and run to the securities company.

In real, a year after the stock market crashed in 2008, a friend of mine at a securities company told me this story. The years 2006 and 2007 were the years of the booming equity investment funds in Korea. The buying power of funds were so great that those who didn’t buy them were considered fools.

one day in the second half of 2007, a female high school student visited the securities firm of my friend to buy a fund with a million won. ‘Isn't it crazy that even if fund buying power is very strong, even a high school girl would bring one million won and buy a fund? it is time for stocks to go into a tailspin.’ My friend thought. And in 2008, real stock prices crashed.

Never trust stock experts or stock company employees. They know stocks will go into a tailspin, but they never tell you because they really need your money to defend their shares, and they need to consider the profit of their company which gives them salaries. My friend didn't tell me then that the stock was about to crash either. Bad boy...

Third, it is to observe carefully what people say and do, such as Warren Buffett and New York University professor ‘Dr. Doom’ Roubini. In the 2000s, Warren Buffett bought stocks of China's largest oil refiner PetroChina in quantity. And the shares steadily rose as a result of the bullish stock market, but Warren Buffett began selling PetroChina shares in 2007. He warned of a possible decline in global stock markets. However, people criticized Warren Buffett, calling it crazy. When stocks crashed in 2008, most of stock experts cried because their cash was tied up in stocks and couldn't do anything but Warren buffet went shopping for plummeting shares of the famous global enterprises such as GM and Goldman Sachs.

When the stock market crashed in 2008, a famous stock expert said that it was creative destruction in the stock market. But that is only true for people who have cash instead of stock at the time. Creative destruction seems to mean very expensive stock is destroyed with very cheap stock. But if the stock market collapses while you have stocks, not creative destruction occurs, but the destruction of the home and the destruction of life occurs. I think that life is a success if we avoid this kind of disasters.

All right, everybody.
Don't you have someone who sells his house and buys stocks?
Doesn't a female high school student ask you to open a stock account?
Will the stock continue to grow or fall?

Everything is up to you...

What is Warren Buffett doing these days?
I wish he gave us a piece of advice or a warning...