Chapter 10

10. Stocks are Difficult (2)

Concerned about the overheating of the stock market, which had seen a sharp rise over the past six months, the government took measures to stabilize the market. Various regulations were imposed, but the core policy was to increase the margin requirement for stock purchases from 30% to 80%. In the past, it was possible to buy stocks with only a portion of the required funds, but now, one needed to have most of the funds to make a purchase.

Naturally, the reduction in stock buying pressure led to a decline in stock prices. Some criticized the government for manipulating the market, but at the time, it was a common method for the government to deal with the sharp rises and falls in stock prices.

“Ugh, they say bad things happen on the day you leave, but what kind of bomb is this?”

On the morning of April 3rd, Yoo Seojun, holding the newspaper, was dumbfounded by the previous day's stock prices. Most stocks were marked with downward arrows, meaning that many had hit their lower limits. At the time, the lower limit for most stocks was between -4% and -6%. He pulled at his hair in frustration.

Koo Inhyuk, who was heading to wash his face, patted him on the shoulder.

“What’s the big deal about one day? We still have a month left.”

Of course, if the stock prices rose or fell in a single day, it was just a virtual amount unless cashed out. Still, it was undeniably frustrating.

“Isn’t it like my hard-earned money is flying away?”

Koo Inhyuk chuckled.

“The more you get attached, the harder it will be to make a profit. If you decided to wait a month, just hold on and wait.”

“Ah, I won’t be able to digest my breakfast properly today.”

Yoo Seojun couldn’t eat his breakfast properly that morning.

**

April 1987 was chaotic. Until then, presidential elections were indirect, conducted by the National Conference for Unification. The opposition demanded direct elections by the people, not the indirect system, which they criticized as electing a "gymnasium president."

The ruling party argued that electing the president according to the current constitution was the only way to achieve a peaceful transfer of power. This was reflected in President Chun Doo-hwan's constitutional declaration on April 12, which sparked demonstrations demanding constitutional reform on university campuses.

The university campuses also became noisy. Declarations for the direct election of the president were made one after another.

Yoo Seojun faced his first midterm exams in this chaotic atmosphere.

Protests were held daily in the square between the main building and the central library, and the noise from the external meetings could be heard inside the library. Some students studied in the library, while others participated in the meetings.

Koo Inhyuk, a natural sciences student, was relatively distant from this atmosphere, but Yoo Seojun, a humanities student, was not. Debates about boycotting the midterms continued daily within his department.

Naturally, Yoo Seojun couldn’t focus on his studies due to this atmosphere. Moreover, the stocks he had invested in were visibly plummeting, making his mind even more restless.

The campus in mid-April, in the midst of spring, was incredibly beautiful.

The cherry trees lining the circular road were in full bloom, their pink petals adding a vibrant hue. White magnolias also contributed to the beauty of the entire campus.

The willow grove, where Yoo Seojun often took breaks, was also covered in cherry blossoms. In the afternoon, he would lie on the grass under the shade of a tree with a book, studying. The cherry blossoms he occasionally gazed at were breathtaking. When the wind blew, the pink petals would fall like snow, creating a magnificent scene.

His first midterm exams at the university passed in this way. Fortunately, there was no widespread boycott of the exams.

The only regret was that the beautiful cherry blossoms had all fallen during the exam period. Yoo Seojun resolved to find a girlfriend next year and go on a date under the cherry blossoms. He felt envious every time he saw students enjoying dates under the cherry blossoms at night, with the streetlights faintly glowing.

Finally, the last day of April arrived.

Yoo Seojun sold all the stocks he had without hesitation.

That night, Yoo Seojun and Koo Inhyuk had a tea party in their dorm room. They bought a lot of snacks and coffee, laid them out on the table, and chatted.

“Alright, let’s see the results.”

Koo Inhyuk said confidently.

Yoo Seojun was startled and asked.

“Do you know the results?”

“I don’t.”

“Then why are you so confident?”

“Haha, based on the probability, I’m sure I’ll win.”

Of course, Yoo Seojun didn’t know how that probability was calculated. Given Koo Inhyuk’s quirky nature, he just thought it was one of his oddities.

Yoo Seojun opened the box of Kookdaesu cookies he had bought from the cafeteria.

“I’ve been buying and promoting Kookdaesu cookies so much...”

Yoo Seojun’s expression turned serious.

The stock market had declined overall due to the government’s stabilization measures in April. The composite stock price index fell by about 13% compared to the previous month. It was a typical correction phase after a sharp rise.

On the last day of April, the 30th, the stock price of Kookdaesu, which Yoo Seojun had invested in, was 1790 won. Compared to his purchase price, it had dropped by 420 won, resulting in a loss of 19%. The loss amount was 21,000 won, even after deducting fees.

The stock price of Sungchang Enterprise, which Koo Inhyuk had invested in, closed at 980 won. Since he had bought 100 shares at 869 won each, he made a profit of 111 won per share. The total profit was 11,100 won, with a return rate of 12.8%.

Koo Inhyuk, the winner, jumped around like a child.

Yoo Seojun grumbled at Koo Inhyuk, who was staring at him intently.

“I can’t understand at all.”

“What can’t you understand?”

“I chose my stocks carefully, so how could I do worse than average? And you, there weren’t many stocks that rose this month. It was a bear market all month. How did the stock you chose end up being one of the few that rose?”

Koo Inhyuk tapped Yoo Seojun’s head.

“Tada, that’s the power of this big brother.”

Yoo Seojun couldn’t understand at all.

Of course, Koo Inhyuk’s case was like a cow backing up and catching a mouse.

If there were clear answers in the stock market, it would be the domain of experts. For ordinary people, entering the stock market would be suicidal. The stock market sometimes moves irrationally, which is why trades are possible. There must be people who think the price will rise and those who think it will fall for a trade to occur. I can buy stocks today because I think the price will rise, and there are people who think the price will fall after this time.

The more you study stocks, the higher your win rate and profits generally become, but they don’t necessarily correlate. Even famous fund managers can go bankrupt one day, which is the nature of this market.

“So, speaking of which.”

Koo Inhyuk brought up the topic.

“When are you buying the beer? Hehe.”

He remembered they had bet that the loser would buy a beer.

There was no choice. He didn’t expect to lose so absurdly, but he had lost.

“Sigh, I’m ruined. Anytime.”

Koo Inhyuk, munching on a Kookdaesu cookie, said.

“So, I’ve already prepared something.”

“What do you mean?”

Koo Inhyuk replied with a mischievous smile.

“Hehe, I’ve arranged a meeting after the midterms.”

Yoo Seojun’s eyes widened in surprise.

Come to think of it, Yoo Seojun had never been on a meeting (blind date) since entering university. He hadn’t even thought about it in high school. He had only envied his departmental friends who occasionally went on meetings. Of course, he didn’t fit in well with his departmental friends, so he never had a chance to join their meetings.

“With whom?”

“With the girls’ dormitory. I got lucky and connected with a room in the girls’ dormitory. Isn’t that great? I put in a lot of effort to make this connection.”

Yoo Seojun was hesitant about the meeting. If it was the girls’ dormitory, they were from the same school, and the chances of meeting them regularly were high. Whether the meeting went well or not, it could be problematic.

Koo Inhyuk teased him when he couldn’t answer.

“Look at your face. You’re like a bandit, aren’t you? When else will you get a chance to talk to a girl? Just close your eyes and go.”

“I guess so...”

Yoo Seojun made a face like a bandit.

Koo Inhyuk, putting away the empty Kookdaesu box with a regretful look, said.

“All you have to do is buy everyone a beer that day. You have the money from your tutoring fees, right?”

In fact, he had received his second tutoring fee a few days ago and immediately invested it in the stock market. Looking at Koo Inhyuk’s expression, he felt he would have to use some of it.

“Ugh, alright.”

In the end, Yoo Seojun agreed.

Koo Inhyuk would inform him of the meeting time and place later.

As he threw the Kookdaesu bag into the trash, he grumbled.

“Ugh, why do stock prices fall when they’re so delicious?”

**

That night, Yoo Seojun reviewed his stock trading so far.

He had now tried the basics, testing buying and selling methods and realizing that the stock market doesn’t always align with rational judgments.

The books on stock trading he started reading from the library after his midterms were also helpful. He learned about difficult terms and basic technical analysis related to stocks. He felt he could be more strategic in the future.

Before going to sleep, Yoo Seojun took out his diary. Judging from the diary from the future, he started trading stocks in early May. He probably traded stocks for the rest of his life, as he mentioned having a financial investment company before his final suicide.

Yoo Seojun carefully reviewed the content of the diary. For example, the diary read:

*

Thursday, May 7, 1987, Stock Index 372.93, Bought 10 shares of Lotte Chilsung at 17,500 won. The market trend in the first half of May is good. The recent rapid appreciation of the won is casting a shadow over exports. Today, many pharmaceutical stocks hit their upper limits.

Wednesday, May 13, 1987, Stock Index 385.39, Sold 10 shares of Lotte Chilsung at 17,050 won, Bought 20 shares of Sambo Construction at 6,900 won. It’s a temporary adjustment after the rise. I sold Lotte Chilsung at a loss. If I had bought construction stocks that day, I might have made a profit. If I had bought Daelim Industries instead of Lotte Chilsung, I would have made a huge profit with two upper limits. Why do I keep losing money on everything I buy? I wanted to buy Daelim Industries, but it had risen too much, so I bought Sambo Construction instead.

Monday, May 18, 1987, Stock Index 387.68, Sold 20 shares of Sambo Construction at 7,610 won. It hit the upper limit today, but I sold and took the profit. It might rise more tomorrow, but I realized the profit. This time, I succeeded. I’m interested in Dong-A Pharmaceutical. Today’s closing price is 14,590 won. I’ll decide after checking the price tomorrow.

*

The records were like this. Looking at the trading success rate for a few months from May, the performance wasn’t good. He made and lost money repeatedly, staying at about the same level.

“How can I use this information?”

After pondering, Yoo Seojun found a good way to use these records. On April 30th, the stock price of Lotte Chilsung was 15,000 won, and Sambo Construction was 6,400 won. If he bought Lotte Chilsung today, he could make a 2500 won (16.7%) profit per share by May 7th. However, from May 7th to 13th, the stock price of Lotte Chilsung would fall, so there would be no reason to hold it. In other words, buying Lotte Chilsung on the 30th and selling it on the 7th would guarantee a profit. Of course, he wouldn’t know if the stock price rose or fell in between. If it rose above 17,500 won, he could sell it for a bigger profit. Regardless of how the stock price moved in between, holding it until the 7th would ensure the expected profit.

On the other hand, the stock price of Sambo Construction today is 6,400 won, but the record shows it will rise by 500 won by the 13th. It would be better to buy Lotte Chilsung in the morning rather than this stock.

Moreover, the brief mention of the pharmaceutical stock trend on the 7th would be a significant advantage. Many pharmaceutical stocks would hit their upper limits on the 7th, so buying at the closing price on the 6th and selling at the upper limit on the 7th would yield a substantial profit. The upper limit for stocks priced between 10,000 and 15,000 won was 600 won, 800 won for those over 15,000 won, and 1,000 won for those over 20,000 won.

The mention of Daelim Industries on the 13th caught his eye. It hit the upper limit twice between the 7th and 13th, which could also be an opportunity.

Yoo Seojun realized that knowing the future was a huge advantage in stock trading. He could make the best trades with guaranteed profits and no losses. Although he could only trade the stocks mentioned in the diary, it wasn’t a problem given his small capital. Moreover, the stock index and brief trading trends were recorded, allowing him to gauge the overall market atmosphere.

He had invested all 250,000 won from this month’s tutoring fees, bringing his total to about 500,000 won. Of course, it was slightly less due to some losses and fees and taxes.

Starting now, he would begin trading using this method, which guaranteed no losses.

Yoo Seojun felt proud that he would soon become incredibly wealthy.

He wrote down his total assets in his new diary.

*

April 30, 1987, Total Assets: 470,000 won.