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내가 팔면 오르는 주식, 월가 18년 차는 매매 기준을 이렇게 세웁니다 | 댄 하 대표 [얘기좀합시다] — Transcript

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0:00Are you worried about your kids '
0:01financial education? How about a
0:03Saturday afternoon family finance class
0:05?
0:06John Lee, Kim Kyung-il, and current
0:08teachers will be joining us. Apply via a
0:11search for "Nol Ticket" or the pinned
0:14comment below the video for a special Q
0:16&A session with Dong-ju So.
0:31>> Yes.
0:35I came here because I was so curious
0:36about the difference between analyzing
0:38the market and taking responsibility for
0:40clients' money.
0:41We will invite CEO Dan Ha, who started
0:43as an analyst on Wall Street and now
0:45leads an asset management firm, to talk
0:47with us. Hello, CEO. Yes.
0:49>> Hello. Yes.
0:50>> You're already quite famous, but could
0:52you please introduce yourself briefly?
0:54Ah, yes. I'm Dan Ha, and I run Karani
0:57Management.
0:58>> Yes.
0:59>> I'm in my 18th year of working on Wall
1:02Street.
1:03I graduated from college in 2009, joined
1:05Bank of America, and started my career
1:07on a team that managed a global equity
1:10fund.
1:12I eventually left to start a new company
1:14when the opportunity arose, and I've
1:16been running Karani Management ever
1:18since.
1:20>> Yes.
1:21You've been on Wall Street for 18 years
1:23.
1:23>> That’s right. Yes. You've been there for
1:25a very long time. When you work there
1:26...
1:27>> If you say you've worked on Wall Street
1:28for 18 years, do people usually say, "
1:30Wow, that's a long time"? Or is it more
1:31like, "That's how long you need to be
1:33there to be recognized"? What is it like
1:36? How is it received?
1:38>> Honestly, looking at others in the
1:40industry, I don't feel like 18 years is
1:42a very long time.
1:44>> Oh, really? Because the investment
1:46industry is actually something you can
1:49keep doing as long as your mind is sharp
1:52. It’s that kind of work. That’s right.
1:55>> Warren Buffett, for instance—though he’s
1:57stepped back now—has shown it’s work you
2:00can do well into your 90s, and when I
2:03was around my 15th year, a friend asked
2:05me: "Now that you've been doing this for
2:0815 years, do you see how it's done?"
2:10>> Yes. What do you think?
2:11>> Yes.
2:12To answer honestly, if I said I could
2:15see exactly how it should be done, that
2:17would be a lie.
2:19It would be an exaggeration.
2:20>> Yes.
2:21>> But after about 15 years,
2:24>> I did start to see what*not*to do. I had
2:27said something like that before.
2:29>> Yes. Now, about three years since then,
2:33my feelings are still the same.
2:36>> I’d like to ask you about that in detail
2:38later, but can you tell me roughly how
2:40many things there are?
2:42The things you shouldn't do—are there
2:43about ten?
2:44>> Oh, there are a lot. A lot? There are so
2:46many.
2:47>> Yes. It’s hard to put a number on it.
2:50But figuring out what not to do is
2:52actually very important, because I
2:54believe avoiding big mistakes is half of
2:57the success in stock investing.
3:00It might even be more than half.
3:02>> Yes.
3:03>> Uh, so I believe that identifying things
3:06you should not do is, um, quite, uh,
3:09valuable in its own right.
3:12>> I see. Oh, the point about only needing
3:15to avoid big mistakes really resonates
3:18with me.
3:18>> Oh, is that so? Yes.
3:20Small mistakes can somehow be recovered
3:23from with little impact, but a big
3:25mistake can leave you reeling.
3:27Yes.
3:28>> Understood. Yes. I’d like to ask my
3:31first question. I heard that you entered
3:33Wall Street right before the financial
3:35crisis. That’s right. I started my
3:37internship right around then. Yes. Yes.
3:39>> Yes. Back then, when you were interning
3:41at Merrill Lynch, were there any moments
3:43you witnessed on the scene that still
3:45influence your investment decisions
3:47today?
3:48Were there any such moments?
3:50>> Hmm.
3:51So, I had the great opportunity to
3:53intern at Merrill Lynch in 2007 and 2008
3:56.
3:57>> Hmm.
3:58>> It’s true that my first taste of Wall
3:59Street began before the financial crisis
4:01.
4:02Because the summer of 2007 was a time
4:04when all Wall Street firms were
4:06recording their absolute best
4:08performance.
4:09Yes.
4:10>> Yes. I first entered then, and when I
4:13returned a year later, the atmosphere
4:15was very different.
4:17>> Hmm.
4:18>> Because by the summer of 2008, the S&P
4:21had already started to drop, but
4:23>> Yes.
4:24>> Bear Stearns had already collapsed,
4:26>> Yes.
4:27It was that March, and by the summer of
4:302008, stocks like Merrill Lynch, Lehman
4:33, and Morgan Stanley had already fallen
4:37by more than 50%, so
4:39>> Yes.
4:39>> The atmosphere was already quite bad,
4:42>> you could say.
4:43>> Yes. Yes.
4:44>> But the part I still remember and apply
4:47to my investments is that after I
4:49finished my Merrill Lynch internship, as
4:51you might know, in the U.S., regarding
4:54employment,
4:56>> that internship you do in your junior
4:57year of college is essentially your
4:59ticket to a job.
5:00>> Right. As long as you don't cause any
5:03problems and finish it well,
5:05>> you get an offer to return after
5:07graduation once the summer ends.
5:09I finished my summer internship at
5:12Merrill Lynch in August 2008.
5:14>> Yes.
5:15>> And a month later, Merrill Lynch was
5:18urgently sold to Bank of America.
5:21Yes.
5:21>> Well, it was sold and survived, but in
5:23reality, the company had failed. And
5:25Lehman wasn't chosen, so it collapsed.
5:28>> Right.
5:31I left just one month before that
5:33happened to the firm, but at least among
5:35those I dealt with and spent time with,
5:38no one thought the company would go
5:40under.
5:43>> Oh, so it hadn't really sunk in yet.
5:45>> Right?
5:46>> Even just a month before.
5:47>> So, looking back on it now,
5:49>> Yes.
5:50>> it was a situation that had reached the
5:52very edge.
5:53>> Yes.
5:54Of course, I was just an intern, so the
5:57CEO and CFOs
6:00>> might have been
6:01>> preparing for this in secret. If I had
6:04spoken with them, maybe I would have
6:06known.
6:08But a lot of time has passed, and the
6:10circumstances at the time have been
6:12revealed in books and interviews, but
6:14yeah.
6:15>> I think they didn't know either.
6:17>> They must have been in denial.
6:18>> Right. Back then, the managing directors
6:21and such at the group said, "Anyway,
6:23have a good final year," and, um, "
6:26>> We'll be in touch," and that's how we
6:28parted ways.
6:30>> So, the point I find important there is
6:33that even people inside a company don't
6:36know the realm of the future.
6:40>> Because
6:41>> Yes.
6:42>> I mean, people inside a company can
6:44provide information.
6:46They can certainly tell you about the
6:49present, the company's atmosphere, or
6:52its culture, but I don't think
6:54predicting tomorrow is a matter of
6:57information.
6:58>> Then what realm is it?
7:01Because, honestly, since we are
7:02outsiders, from an outside perspective,
7:04one might ask, "How could you not have
7:05known?"
7:06Especially when it was just a month
7:07prior.
7:08>> Then when did they know? Did they know a
7:10week before? Did they know three days
7:11before? Did they know the day before?
7:13Yeah. These kinds of things
7:16>> Right. It might depend on what position
7:18you hold in the company,
7:21>> but as an investor, that's what I think
7:23. It is extremely difficult to predict
7:27the future, yet we make an effort to try
7:30, right? Investors do.
7:32>> Right. Constantly.
7:33>> But honestly, I think the future isn't
7:35something you predict, but something you
7:37prepare for.
7:38>> Yes. Yes.
7:40>> So I invest that way, and if you ask, if
7:42predicting the future isn't a realm of
7:45information, what is it then?
7:47>> Yes.
7:48>> I can only answer that it's a matter of
7:51belief.
7:51>> Ah.
7:53>> You invest in the future with a belief
7:55based on information and analysis. Um.
8:00>> I think it’s very dangerous to invest
8:02with the absolute certainty that the
8:04future will turn out a certain way.
8:08>> So, it's a matter of
8:10>> that
8:10>> part, not necessarily a
8:13>> question of faith. In a way, even
8:16without such conviction,
8:18>> to give you an example, everyone tries
8:20to pick a company they think will do
8:22well. When investing.
8:24>> Right? Yes. Let's say there's a
8:26structure where you can bet only on the
8:28top students in each school. These days
8:30, there are prediction markets, so maybe
8:32that could actually happen.
8:34>> But
8:35>> looking at the top students, while not
8:39all of them do, most continue to do well
8:42even after graduating high school.
8:45>> Yes.
8:46Suppose, for example, there’s a certain
8:49statistic, and you take that data, using
8:51the framework of what has been factual
8:54up until now, and assume that, looking
8:56at the whole picture, these things will
8:58continue to do well in the future.
9:01>> That isn’t really a forecast, is it?
9:03Right?
9:03>> That’s right.
9:04In our case, while there are certainly
9:06people on Wall Street who work hard at
9:08forecasting,
9:09>> we always think about the future in
9:11terms of probabilities.
9:13>> Ah.
9:13>> Yes.
9:15So we think probabilistically, select
9:17stocks based on that, build a portfolio
9:20, and then look at the win rate of that
9:22portfolio.
9:24"You must buy this stock.""This will go
9:27up." Saying things like that—
9:29>> people ask me that a lot. My friends,
9:31acquaintances, family; they ask, "What
9:33should I buy?""What should I buy these
9:35days?"
9:36I can't pinpoint just one thing to buy,
9:39because even Warren Buffett can get it
9:41wrong if you ask him to pick a single
9:44stock.
9:45>> Right.
9:46>> So who am I to—
9:47>> Hmm.
9:48>> I don’t think I’ve found an investment
9:51target yet that I have enough conviction
9:54in to point at one stock and say, "You
9:56must buy this."
9:59There was a time when I thought I had
10:00found one in the past.
10:01>> Yes. Around when was that? How many
10:03years into your career?
10:04>> About five years in.
10:06>> Five years in? Wow. Yes.
10:08>> But looking back, it turned out to be a
10:10very wrong judgment. I don’t have any
10:12expectation of finding one in the future
10:14, either.
10:14>> Hmm.
10:15>> However, constructing a portfolio with a
10:18high probability of winning, bringing
10:20together various stocks to build that
10:22portfolio, is something I can do well.
10:26>> You're doing this work because you’re
10:28confident in that, right?
10:30>> Yes.
10:31I think people who work on Wall Street
10:33generally work with that kind of mindset
10:35.
10:36We did random interviews on the street
10:39yesterday, and people of all ages and
10:41genders were saying similar things.
10:44So, they said don't follow trends,
10:47>> and that if you're an average person,
10:49you should invest in indices,
10:51>> or get consulting from an expert; they
10:54talked a lot about a more conservative
10:56approach. Hmm. Yes. Yes. So it was a
10:59sentiment I could fully resonate with. I
11:01think that’s what it was.
11:03>> Then, CEO, while you were studying
11:05finance,
11:06>> Yes.
11:07>> You must have gone there with a lot of
11:09dreams and expectations in mind. There
11:12must have been some differences between
11:14the Wall Street you imagined and the
11:16reality you saw when you actually got
11:18there. What were they?
11:20To be honest, when I went there as an
11:23intern, it wasn't that different from
11:26what I had imagined.
11:29>> Hmm.
11:30>> If anything, it was more fascinating
11:32than I had imagined,
11:33>> Yes.
11:34>> and so cool, that I just thought, "I
11:36want to graduate soon and go work there
11:38." Honestly, that was about all I felt.
11:41I don’t think I had any deep experience
11:44where I felt, "I imagined it would be
11:47like this, but the reality is different
11:49."
11:50You just mentioned having a heart full
11:53of excitement.
11:54>> If anything, that excitement only grew,
11:57and I just had a really great experience
12:00overall.
12:00>> However,
12:03>> now that I've been here for 18 years,
12:07>> Right. there are aspects that are
12:09different from what I first imagined.
12:11That’s only natural. Of course, there
12:13are.
12:13>> Hmm. It was either similar to what I
12:15thought or even cooler.
12:16>> Exactly. Because I didn’t really have
12:18any specific expectations. So, just...
12:20just...
12:21>> That’s exactly what that is.
12:23>> Just "Wow, that's cool."
12:24>> That’s why you do it. "I want to be
12:26there, too."
12:28>> Ah,
12:28>> And for instance, in 2008, I interned in
12:32the trading field, so I had to go to
12:35work very early.
12:37>> I mean, it's probably the same in
12:38Yeouido or anywhere else in Korea.
12:40>> What time did you usually get to work?
12:41>> Back then, everyone had to be in before
12:447 AM, but since I was an intern,
12:46>> I was even
12:47>> more diligent and got there even earlier
12:48. I would wake up early, head to Wall
12:53Street,
12:54>> and watching myself walk there, I felt
12:58really proud.
12:59>> Like an out-of-body experience, watching
13:01myself from above.
13:02>> Exactly. Right.
13:04But at that time, everything looked good
13:06and I gained a lot of energy because,
13:09even though I thought I was ready so
13:11early, people already out there running
13:14breakfast shops or selling newspapers
13:16were there even earlier.
13:19>> Right.
13:20So, looking at them, I thought, "I
13:23thought I was working hard, but there
13:25are so many people in this world working
13:28harder than me," and I’d get inspired by
13:31that and head into work.
13:33>> Right.
13:33>> Yes. It was just like that.
13:36In 2008, Merrill Lynch's stock was
13:38already down 50%, but what did I know?
13:42I just had a good experience, and as I
13:44mentioned, no one at the company was
13:46saying, "Are you crazy?"
13:49The atmosphere wasn't like, "Look at the
13:51state of the company right now." They
13:53were also looking at their monitors,
13:54thinking, "The stock is falling, but...
13:55"
13:56"
13:56>> We’ll probably survive," is what
13:58everyone was thinking.
14:00>> Because we tend to imagine guys like
14:02Leonardo DiCaprio being there,
14:05>> cursing and throwing documents around,
14:09>> with rough men working away—that’s the
14:11kind of image we have.
14:13But we interviewed in front of JP Morgan
14:16yesterday, and it wasn't like that at
14:17all; it was very quiet. Exactly. Right.
14:20I also...
14:23>> I wasn't here in the 80s so I don't know
14:25, but the movie*The Wolf of Wall Street
14:27*is set around the 80s, I believe.
14:30>> It was wild back then. That’s just
14:31stories I’ve heard, too. Back then,
14:33those kinds of things really happened.
14:34>> Oh, they say so.
14:36>> Everything was done by phone back then,
14:37so they'd break monitors with phones and
14:39leave work early that day.
14:41That person, that...
14:45>> I don't know exactly what they did, and
14:46I didn't come here thinking about that.
14:49>> Ah.
14:50>> But the Wall Street I experienced was
14:53either similar to what I imagined, or I
14:55didn't think much of it at the time, so
14:57everything just looked good.
14:59>> Right.
15:01Then, CEO, you used to work as an
15:04analyst at a large financial firm, and
15:07now you're running your own firm, so I
15:10imagine there must be significant
15:13differences between then and now.
15:16Hmm.
15:17>> There are.
15:18First, many people think it's different
15:20, but let me tell you about what isn't
15:22different.
15:25>> Many people think that being at a big
15:27company gives you a lot of resources for
15:29investing.
15:31>> Naturally.
15:33But I don't know if it was just Bank of
15:35America where I worked, but as I worked
15:38here and got to know people around me
15:40and heard from acquaintances, they were
15:42all pretty similar.
15:44I see.
15:45>> Of course, the company's total resources
15:47are huge.
15:48>> But our team's resources weren't
15:51actually that abundant.
15:53I mean, Bank of America has a huge
15:55number of research analysts.
15:57>> Yes.
15:59>> I expected to work with them and hear
16:01their insights, but in reality, we...
16:05>> Sometimes we had almost no interaction
16:08with them at all.
16:09>> Oh, really?
16:11No matter how big the company we were at
16:13, our investment team was always three
16:15to four people, five at most.
16:19>> Oh, that's a very small number of people
16:21. Yes.
16:23We operated as such a small team, and in
16:25fact, when at such a large firm, if I
16:28wanted to do something, I had to get
16:30permission.
16:32>> Like, "This research is supposed to be
16:33really good lately.""I...""
16:35>> I'd like to buy and read this research.
16:36" Even if I asked, I couldn't decide it
16:38myself; I needed approval from above,
16:39and if they said, "The budget is tight
16:41this year," then I just couldn't see it
16:43.
16:43>> That's how it was.
16:45That's why, even though we're out on our
16:49own now, there's almost no difference in
16:53terms of research or investing; in a way
16:57, I can now more freely choose the
17:00resources I need, which could be
17:03considered an advantage.
17:06But if you ask what the biggest
17:09difference is, it's freedom. It's
17:13freedom. I mean...
17:15>> When it comes to investing or research,
17:17they’d say, "Your overall investment
17:19risk-taking direction for this time
17:21should be like this."
17:23>> Hmm. "
17:23>> Otherwise, you can't." Even if we
17:25thought that now wasn't the time to
17:27reduce risk, but rather to increase it
17:30...
17:30>> Yes.
17:30>> If they said no from above...
17:33>> It was a situation where we couldn't do
17:34anything. That is why...
17:36>> That must have been frustrating.
17:37>> It’s not about just doing whatever I
17:39want, but being able to make the best
17:41investments for our clients, as I see
17:43fit, without having to ask for anyone’s
17:45permission.
17:46Hmm. Hmm.
17:47>> I think that is the biggest plus.
17:50However, there are some downsides that
17:52come with it that I have to bear.
17:54>> Yes.
17:56>> But I believe the gains are greater, so
17:58this is how I operate.
18:00>> Hmm. In a way, you could say that the
18:02differences and similarities are
18:04connected. Ultimately, it’s data and
18:06freedom.
18:06>> That’s right. Exactly.
18:08>> Yes. They are connected.
18:09>> Yes. Then, CEO, I’d like to ask you
18:11about this as well.
18:13The fact that the U.S. economy is good
18:15and the decision to buy U.S. stocks are
18:17actually two different things; just
18:19because the economy is good doesn’t mean
18:21you have to jump in and buy stocks, and
18:23vice versa.
18:24I’m curious about what criteria you use
18:27to judge that difference.
18:28>> Hmm. They are deeply related, but in the
18:31end, they are different issues, and the
18:34way we view the economy is...
18:37>> We don’t look at it to guess what the
18:39economy will be like in the future.
18:42>> Yes. Hmm.
18:43>> Ultimately, whether the economy goes one
18:46way or another, we are buying the
18:48scenario already reflected in the stock
18:51price.
18:52>> Ah.
18:54>> Because every stock price reflects
18:56certain expectations about the company's
18:59future.
19:00>> Right.
19:01However, the reason we must analyze the
19:03economy is, for instance, there are
19:05consumer companies.
19:07That consumer company, no matter how
19:09well it does—if the GDP is, say, 3%—
19:11that company, at best, will do GDP plus
19:142, or maybe just 3.
19:17>> It’s a business model that can only do
19:19up to that much.
19:20>> Hmm.
19:21>> But if the company is too popular, if
19:23the stock is too popular,
19:24>> Yes.
19:25And the expectations are already
19:27reflecting, for example, that much.
19:31>> If the market is already predicting that
19:33it will bring over 6%growth.
19:37Then we take a look at that situation.
19:40We lay out a few scenarios for what the
19:42U.S. economy might look like in the
19:45future, and judge how much better the
19:47company’s performance could actually be
19:50if it outperforms those expectations.
19:54>> Or, if the economy takes a turn for the
19:57worse, we must judge how the company’s
19:59performance will turn out and how much
20:01worse that is compared to the
20:03expectations.
20:06>> So, we look at the economy, how much a
20:09specific industry is influenced by the
20:12economy, and judge how large the entire
20:15industry pie will be under scenario A,
20:18or how much it will shrink under
20:21scenario B. Because we view the economy
20:24from that perspective, there is no need
20:27to decide that the economy and stocks
20:30are separate issues.
20:32We start with the stock price first.
20:34>> We identify what expectations are
20:36reflected in the stock price through
20:38analysis,
20:40>> and since we compare how realistic this
20:42is through economic and industry
20:44analysis,
20:46>> Yes. you could say that’s how we
20:48approach the economy.
20:49>> When you analyze stocks like that, you
20:51look at the numbers, right? Like, in
20:54this case, it seems it’s already priced
20:56in. In this case, it seems we can raise
20:57expectations a bit more. You must build
21:00various scenarios, but how many
21:02scenarios should you typically create?
21:05Hmm. There isn’t a fixed number. It’s
21:08not just us; if you look at many
21:10sell-side reports on Wall Street, they
21:14don’t strictly stick to just three—a
21:17bull case, a bear case, and a base case
21:20.
21:20>> Right.
21:21>> The reason I said it’s about preparing
21:24for the future, not predicting it, is
21:25that
21:26>> Yes.
21:28when we analyze a stock, a "
21:29double-or-nothing" situation doesn't
21:32really hold much meaning for us.
21:36For instance, if someone presents a
21:39stock to us saying it could go up 50%if
21:42things go well and drop 50%if they don't
21:45,
21:46>> Right.
21:47>> that’s not a stock I’m particularly
21:49interested in. Because we don’t know
21:51what the future will look like anyway,
21:53>> Yes. + 50%if it goes well and -50%if it
21:57doesn't—sorry, I'm using English. My
22:01Korean is a bit rusty; it’s a binary
22:04outcome. Just one of the two.
22:08>> So, when we look at a stock, we don't
22:10have a view that "this stock will go up
22:13" or "this stock will go down," but
22:15rather that this stock could, for
22:17example, rise up to 40%when things go
22:19well.
22:21Ah,
22:22>> and maybe drop about 20%when they don't
22:25.
22:26>> If the downside—well, when looking at a
22:29few scenarios—if it turns out that way,
22:32then that stock is very attractive to us
22:34.
22:35>> It’s a stock we like. People in our
22:37field talk a lot about winning rates, or
22:40probability. Like,
22:42>> Right.
22:43saying things like, "I think there's a
22:4670%chance of success and 30%failure," or
22:50"90%and 10%," but we actually don't
22:53think that's very meaningful.
22:56>> Ah.
22:57>> Because either way, it’s going to go up
22:59or it’s going to go down, one of the two
23:01.
23:01>> Exactly.
23:02>> So, when we construct our entire
23:04portfolio, we build it assuming that
23:06we’ll be right 50%of the time and wrong
23:0950%of the time.
23:10>> Right. Hmm.
23:12>> But as I mentioned earlier, if every
23:15stock in our portfolio can go up by 30,
23:1840, or 50%when things go well, but when
23:21they don't,
23:24>> uh, well,
23:25>> If it drops by 10, 20, or 30 percent,
23:27>> and you assume that half of it is right
23:29and half is wrong,
23:30>> when you look at the whole picture, it
23:32is designed to rise. Structurally.
23:36That doesn't mean we guarantee it will
23:38happen that way, but since we build
23:40portfolios based on a framework, we
23:42don't know either.
23:44I mean, even the employees at Merrill
23:46Lynch didn't know what would happen to
23:48Merrill Lynch the next month. So, I also
23:51>> I also
23:52>> Yes.
23:52>> don't know what will happen to the U.S.
23:54stock market tomorrow or next month.
23:55>> I don't know.
23:56>> I don't know what will happen to the
23:58U.S. economy or oil prices either.
24:00However, our role is to analyze how much
24:03we can earn if things go well and how
24:06much we could lose if they don't.
24:10>> Hmm. Ah, I see exactly what you mean.
24:13Thank you. Yes. Then, I'd like to ask
24:15you a little bit about the market as
24:17well.
24:18>> So, in a way, you might judge that "Oh,
24:21things will be good for a while."
24:23But it could go poorly or differently
24:26than expected. In such cases, there
24:28might be times you think, "If I wait a
24:30little longer, it will go according to
24:32my scenario." Or there might be times
24:34you think, "Oh, I must have been
24:36completely wrong," and decide to adjust
24:38your strategy. How do you decide on that
24:41timing? Hmm.
24:44>> I think that must be a very difficult
24:45thing to do.
24:46>> I really can't do that. Of course, I
24:48don't work on Wall Street. That's such a
24:50relief. I'm just constantly failing on
24:53my own.
24:54>> Sadly, it really is a very difficult
24:56thing. To be very honest, I think the
24:59only way is to do your best every time.
25:02>> Ah, so the mindset is the same. I do
25:05have that, too.
25:06>> But, speaking more realistically, that's
25:09why having a process is extremely
25:11important.
25:12Ah.
25:13>> So, when a certain criteria is met, I
25:17will sell this. Of course, those
25:21criteria can change over time.
25:24We also have such criteria, or what we
25:27call a checklist, and we keep updating
25:29it.
25:30After experiencing a major bear market,
25:33we think, "To avoid making this mistake
25:36again, we should make this change to our
25:39checklist."
25:40Most people probably do that, right? But
25:43we don't use that newly updated
25:45checklist right after experiencing a
25:47bear market.
25:48>> Oh, really? Why?
25:50Because usually, the changes made to the
25:53checklist after experiencing a bear
25:54market are often of a certain type.
25:58I mean, it's things like, "From now on,
26:00in this situation, I will definitely
26:02sell."
26:02>> Right? "
26:03>> From now on, if these conditions are met
26:05, I will sell no matter what."
26:08Because there are many things like that
26:10, and since your heart is quite closed
26:12off at that moment—
26:14>> Yes. Yes. If you immediately use an
26:17updated checklist in that situation,
26:20when you actually need to be more
26:23courageous, you might
26:25>> become overly inhibited.
26:25>> You can become inhibited. Because you
26:27might end up being overly cautious,
26:30>> we save the updates made after
26:33experiencing a downturn
26:36>> to be used in the following upturn, in a
26:39way.
26:40>> Yes.
26:42Likewise, if you make changes to the
26:44checklist after experiencing an upturn,
26:46you don't use it right away,
26:49>> but rather
26:50>> use it in the next downturn? That is
26:52>> for example, if you missed the bottom.
26:54>> Yes.
26:55>> Then, when it’s going up, you diligently
26:58update the checklist.
27:00Saying, "Next time, if the stock price
27:02drops by this much, I'll definitely buy
27:04."
27:05>> Or, "If these conditions are met, I'll
27:07hold on longer."
27:08>> Hmm.
27:09You update these items, but if you apply
27:12them immediately and use them
27:13incorrectly, even though you should be
27:15selling and getting out now, you might
27:18think, "No, my newly updated checklist
27:20>> said to be courageous."
27:22>> Ah.
27:22>> And so on.
27:24>> It's a human error where you keep
27:25holding at the wrong time.
27:28Because that happens, it's very
27:30important to pay attention to what my
27:33current state is, what I've experienced
27:36, and what kind of biases I might
27:39currently have because of those
27:41experiences.
27:44>> Thinking about that is crucial, and
27:47having a process is important because
27:51while following any process in this
27:54world, there are naturally cases of
27:58false positives.
28:00>> That's right.
28:01>> Because it involves the future, how
28:03could it be 100%correct every time?
28:06>> That's right.
28:07>> However, just because there is a false
28:09positive doesn't mean the process itself
28:12is wrong.
28:12>> When it's based on a process you can
28:15trust, and on data and experience,
28:18>> Yes. "
28:19>> Yes, following this might lead to
28:21occasional misses."
28:24"You might occasionally sell by mistake
28:27at the bottom."
28:30But if you can reach the conviction that
28:33you are right more often than you are
28:35wrong when following it, I think it's
28:38very important to consistently follow
28:41that process.
28:42>> Yes. Hmm. So, in conclusion, a checklist
28:46is clearly necessary to make judgments,
28:48specifically for timing.
28:51>> And you're saying that this checklist is
28:54created by synthesizing the mistakes
28:56made during downturns and upturns, but
28:59when to apply it depends on the
29:01situation.
29:03>> Exactly. Yes. That's difficult. It
29:05sounds easy when I hear it like this,
29:07but if I think about actually putting it
29:09into practice, it seems like a very
29:11difficult thing to do.
29:13>> So we also spend a significant amount of
29:16time designing our processes,
29:18identifying our weaknesses, and creating
29:21systems to compensate for those
29:24weaknesses.
29:25>> Hmm.
29:26>> I mean, we certainly spend a lot of time
29:29analyzing companies and watching the
29:31market,
29:32>> Yes.
29:34but I’d say we probably spend half our
29:37time developing processes to perform
29:40better next time and to avoid repeating
29:43past mistakes.
29:46>> That wouldn't be an exaggeration.
29:48Ah, I think this is a really important
29:51point because many people think that
29:53since AI is so advanced these days, even
29:56individual investors can buy
29:59high-quality data and perform analysis
30:02at a level comparable to those on Wall
30:04Street, potentially leveling the playing
30:07field between Wall Street experts and
30:10individual investors.
30:13But after listening to you today,
30:16>> I’m starting to think that’s not really
30:18the case.
30:19>> You are incredibly systematic in how you
30:21build these processes and checklists.
30:24Yes. Yes. That’s right. One of the many
30:27misconceptions
30:29>> that people outside of Wall Street
30:30>> often hold
30:32>> is the tendency to believe that we have
30:35a massive advantage when it comes to
30:37information.
30:39>> Of course, there is some information
30:40advantage. We might come across things
30:43faster,
30:43>> and meeting many people through our
30:45networks means we hear a lot more as
30:47well.
30:47>> Exactly. That’s right. And since people
30:50like us are always focused on that, we
30:53may see things sooner.
30:55>> Yes.
30:56However, I don’t believe that difference
30:59in information is what ultimately
31:01determines success or failure.
31:03Ultimately, what determines the outcome
31:05isn't that I have more information than
31:08you, but that I
31:10>> have more experience than the other
31:12party and the judgment that comes from
31:15that experience—and that judgment, in
31:17the end, is about having a process that
31:20reflects all of that: buying when
31:22certain conditions are met and selling
31:25when others are fulfilled.
31:28>> And no matter how confident I am,
31:31>> Right.
31:32>> I don't take on risks beyond a certain
31:35level; assembling those elements into a
31:37good portfolio is what we do, and that
31:40is the difference between a professional
31:43and a non-professional.
31:45It’s not like we have some information
31:47that the world doesn’t know.
31:48"
31:48>> Oh, they already know everything and are
31:50moving accordingly." No, well...
31:52>> You know...
31:53>> Of course, there’s a lot of that. Yes. "
31:55>> Wall Street did this."
31:57"Institutions came in and moved the
31:58Korean market."
32:00Things like that.
32:00>> Right. If someone were to ask, "How
32:03would you know, given you've only been
32:05doing this for 17 or 18 years?"
32:07I actually interviewed Professor Aswath
32:09Damodaran recently, and...
32:10>> Yes.
32:11>> I think he’s been doing this for over 40
32:13years. He has.
32:14>> But he said something to me, too.
32:17While we were interviewing, he said that
32:19so-called "smart money," money that
32:21moves early or has some sort of power,
32:24>> he said he hasn't found any such money
32:28yet.
32:28>> Is there only "dumb money"?
32:30No, no, people talk about those things,
32:32but he just said, "I haven't found it
32:35yet." But I agree with him on that. I
32:37mean, I haven't found it yet, and he
32:40hasn't found it either.
32:42>> When I started working full-time in 2009
32:45, I went to visit a friend's house, and
32:47his older brother,
32:49>> an acquaintance, was saying things like
32:51that. He said, "Everyone on Wall Street
32:53knew." Uh, "
32:54>> They all knew the financial crisis was
32:56coming and had already prepared for it.
32:59"
32:59>> Right.
33:00>> But for example, I asked, "Then why did
33:02Merrill Lynch go under?""
33:03>> Why did Bear Stearns go under?""Why did
33:05Lehman go under?"
33:05>> You were there at that time, too.
33:07>> Right? I told him. "Ah, they didn't know
33:09.""Even the people there." Right.
33:11>> But then, people often say things like
33:12that, don't they? "Oh, Goldman Sachs
33:14knew."
33:16Since Goldman Sachs didn't get hit too
33:17hard and managed to get out of it
33:19relatively unscathed.
33:21>> Right.
33:22They might have known, but personally, I
33:24don't think so. So, what made them
33:27different?
33:28They managed risk better than other
33:30companies,
33:31>> Ah.
33:33>> They prepared better than any other firm
33:36on Wall Street, and because that kind of
33:39preparedness was deeply embedded in
33:41their corporate culture for a long time
33:44, yes,
33:47>> people who were there say they were able
33:49to overcome that situation better than
33:52others, and I think so too, but if
33:54someone still says, "That guy doesn't
33:57know what he's talking about," if
33:59someone says to me, "Goldman Sachs is '
34:01Government Sachs,' so they already knew
34:04everything,"
34:06>> well, I have nothing to say to that. Yes
34:09.
34:09>> Exactly. Some people only believe what
34:12they want to believe.
34:13>> So, this is a side note, but I have a
34:15question.
34:16>> People call it a "bull market." And they
34:19call it a "bear market."
34:20>> A bull market is the bull, right? The
34:22bull.
34:23It's a bull, and when they attack, they
34:25thrust their horns upward, so it's a
34:27rising market, and bears strike downward
34:29, so it's a falling market; is that
34:31right?
34:32>> Yes. That is the most widely accepted
34:34theory.
34:35>> Oh, is it?
34:36>> As far as I know,
34:37>> I heard it somewhere and thought, "I
34:39should ask about this here on Wall
34:40Street," so I brought it up. As far as I
34:43know, the exact origin is not really
34:46known. But that is the most plausible
34:49theory.
34:49>> I am also aware of that.
34:52>> So even those on Wall Street don't
34:54exactly know how it started.
34:56Ah, I was curious about that. Right?
34:58Then, I’d like to ask you something; I
35:00went to your website to study up on it.
35:03On your website, terms like "culture
35:06practice" and "corporate culture"
35:09appeared frequently, so I saw that you
35:12place a lot of importance on corporate
35:15culture.
35:17I was curious about what that really
35:19means, because some companies might just
35:21project a good image to investors, while
35:24others actually have a good corporate
35:26culture, and I'm curious how you
35:28distinguish between the two.
35:30Yes. In fact, the idea that corporate
35:33culture is important
35:35>> is something many fundamental investors
35:37would agree with.
35:39However, a frustrating part that hasn't
35:42been resolved is that for people in our
35:44line of work, the primary source of
35:46information
35:48>> Yes.
35:49>> is the company itself. We get a lot of
35:51information through the company's
35:52executives or the IR team.
35:54>> Yes.
35:54>> I get a lot of information through them
35:56, and as I’ve been doing this,
35:59>> I have met hundreds of CEOs, CFOs, and
36:03other high-level company officials,
36:06>> Yes.
36:07>> but not a single person has ever said, "
36:09Our company's corporate culture
36:11>> is really garbage or terrible."
36:15>> I suppose not.
36:17The only ones who say, "It's really bad
36:19and needs to change," are newly
36:21recruited CEOs.
36:23>> Ah.
36:24>> Yes, CEOs brought in to fix problems
36:26because something is wrong with the
36:28company sometimes say that. "These are
36:30our current problems.""We have to fix
36:32them." So, what that means is
36:35>> that we can't get the answers we want
36:37from management anyway.
36:39>> Yes.
36:40So, we’ve always pondered how we can
36:42actually get this information; it’s not
36:44like we just woke up one day and decided
36:46that corporate culture is important.
36:50>> We gradually worked on it, but starting
36:52around the 2010s, a phenomenon began to
36:54occur where data transparency regarding
36:56corporate behavior
36:58>> Yes.
36:59>> began to increase; for example, ESG was
37:03a huge trend, even if people don't talk
37:06about it as much these days.
37:10For over 10 years, the ESG trend has
37:13been very helpful to us; as ESG became
37:16popular, companies started voluntarily
37:19releasing data on their behavior as a
37:21corporation—whereas in the past they
37:24only published financial statements—and
37:27a significant amount of data on how they
37:30act started to emerge, along with social
37:33media and the internet.
37:37>> For example, in Korea, there are
37:39platforms where employees can leave
37:40anonymous reviews, right?
37:43At first, those sites were just for
37:46people who either loved or hated a
37:49company, but now that they've become
37:52more common and have more data, they
37:55actually serve as a very useful database
37:58for us.
38:01>> And also, consumer reviews and other
38:03types of reviews are becoming more
38:05frequent, aren't they?
38:07They accumulate, and we have been
38:09consistently trying to get a glimpse
38:13into corporate culture through such data
38:16.
38:17>> Hmm.
38:18So, you mentioned corporate behavior or
38:20transparency, but in a way, those can be
38:22decisions and actions made by the
38:24management.
38:27But I feel like there must have been
38:29moments where, observing those decisions
38:31or actions, you felt that these people
38:34are trustworthy even if the company hits
38:36a rough patch.
38:38Hmm. Yes, yes.
38:39>> Yes. Were there any use cases like that
38:42?
38:42>> Right. As I mentioned, our investments
38:44are ultimately based on belief backed by
38:46data and experience.
38:47>> Yes.
38:49>> It's not a blind belief that a company
38:51will do well without any grounds, or
38:53thinking, "I met the CEO and he's so
38:55charismatic." It's not that kind of
38:57belief. "
38:58>> This person is so great."
38:59>> Right. Right. "This person is so great.
39:01" Yes.
39:02We look very closely at whether the
39:06company's past actions, its stated
39:10direction, or its claims about how it
39:15operates match its actual decisions and
39:19the results they produce.
39:24So when they match,
39:26>> Yes.
39:27>> that's when we invest,
39:29>> with the belief that they will continue
39:32to do so in the future, and because we
39:35invest based on that, even if we firmly
39:38believed they would follow through,
39:42>> Yes.
39:43>> and then they don't, resulting in poor
39:45performance,
39:46>> those kinds of risks can exist.
39:49But since that's not an area we can
39:50analyze anyway, I believe that's
39:52something to be handled through risk
39:54management in our portfolio.
39:56So, in terms of selecting stocks,
39:58>> Yes. if
40:00>> there is a belief that this company will
40:02do well, where does that belief come
40:05from?
40:06You can gain that belief by looking at
40:10how the company has acted so far, but
40:13since investing requires belief, putting
40:17everything into one place is too risky,
40:20so effectively managing that risk at the
40:24portfolio level is another one of my
40:27roles.
40:29So, in the end, when a company has a
40:31very clear management philosophy and
40:34vision, and reinforces that vision and
40:36philosophy through various real-world
40:39decisions, we can conclude that the
40:41company has a good corporate culture.
40:44>> That's right. Exactly. There's this US
40:46company called Old Dominion.
40:47>> Hmm.
40:48>> It's a trucking company.
40:50>> Yes.
40:51We didn't initially start analyzing that
40:54company because we were interested in
40:56trucking.
40:58We have certain metrics we always look
41:00at, and this company just happened to
41:03show up on our radar.
41:05A trucking company.
41:07When we looked closer, its stock
41:09performance over the last 10 or 20-plus
41:11years was incredible.
41:13>> Right.
41:14>> So we dug deeper and found the reason
41:16why this company had such good returns.
41:18>> Oh, what is it? Well, they're just
41:19really good at what they do.
41:20>> Ah.
41:21>> For example, their on-time delivery rate
41:24is the best among their peer group.
41:27>> Or the percentage of lost or damaged
41:30cargo is...
41:31...
41:31>> extremely low.
41:32>> Exactly. Much better than their
41:34competitors.
41:35>> Yes.
41:36>> Ultimately, those things led to their
41:38strong performance.
41:40>> Right.
41:41>> Looking at that, we became very curious
41:43.
41:44>> Why are they so good? Because it’s not
41:46like they have better trucks, you know.
41:49>> Right?
41:50>> All trucks are basically the same.
41:51>> They're similar.
41:53>> So we dug deeper, and other factors
41:56behind the company's operational success
42:00started to emerge.
42:03For instance, the founding family is
42:05currently running it in its third
42:07generation.
42:09>> Yes.
42:09>> And they are still the largest
42:10shareholders.
42:11>> Oh.
42:11>> But they aren't the controlling
42:13shareholders.
42:14>> I see. It’s just that a large portion of
42:16their wealth is tied up in the company.
42:19So they still operate the company very
42:21much like a family business, and since
42:23the corporate culture is good...
42:25>> Yes.
42:25>> It's not just that they claim to have a
42:27good culture. We don't just take their
42:29word for it; we look at actual employee
42:31turnover.
42:32Their resignation rate is lower compared
42:36to their peer group.
42:38>> People work there longer.
42:40>> Those kinds of things are definitely in
42:42the realm of culture.
42:44>> There must be aspects like employee
42:45benefits involved as well.
42:46>> That's right.
42:47>> Yes.
42:48Because of that, we judge that as long
42:52as this company maintains these
42:55principles, it’s highly likely that they
42:59will continue to outperform their peer
43:03group in the future.
43:07>> And that’s how we make the decision on
43:08whether or not to invest in the stock.
43:11>> Right.
43:11>> Yes.
43:12I’d say that those factors have a huge
43:15influence on selecting companies that
43:17are likely to do well.
43:20>> So, thinking about it, there must be
43:22cases where you don't invest because
43:25even if the performance and such are
43:27great, the management's words or actions
43:29are a bit off.
43:31No matter how good the performance is.
43:32>> Hmm. That's right. Exactly.
43:34>> For example, there was this one company
43:37, a very large mining company in Africa
43:40.
43:40>> Yes. They said they discovered a huge
43:43copper mine.
43:43>> Yes.
43:45>> So, a sell-side analyst presented it to
43:47us as their best idea, saying that just
43:50by mining and selling that copper, the
43:52value would be much higher than the
43:54current market cap.
43:57But in such a case, if you only look at
43:59the numbers, you would be right to
44:01invest. Because, as I mentioned earlier
44:04, the upside is huge when things go well
44:07, and since the stock price is already
44:09down, the downside is not...
44:12>> Well, compared to the upside.
44:15>> It’s small, so it fits our investment
44:17style, but the reason we didn't end up
44:19investing was because, while researching
44:22the company, a real veteran in the
44:23mining industry told us that we
44:25shouldn't get involved with the CEO who
44:27was running it.
44:30>> Yes.
44:31>> The founder—he told us it’s better not
44:33to get involved with that person.
44:35>> Yes.
44:36>> But just because you get involved
44:38doesn't necessarily mean things will go
44:41wrong.
44:41>> That's true.
44:42The problem that arose there was that
44:45while we could be somewhat confident
44:47about the downside if things didn't work
44:50out, we also needed a guarantee that we
44:52would get a fair share of the upside if
44:55things went well.
44:57>> Right.
44:58>> We judged that as long as that person is
45:01the leader, even if things go well, we
45:04might not actually see the upside we
45:06expected.
45:08>> That was our judgment.
45:09>> Yes.
45:10Because of that, the downside and the
45:13upside we originally saw—after we
45:15adjusted for that, it became a bit of a
45:17gamble.
45:19>> Like a 50-50 chance.
45:20>> Yeah, once it becomes that kind of
45:23situation, it’s no longer an attractive
45:26investment for us.
45:28And it wasn't just relying on one
45:31person's word; that person had run
45:34several companies in the mining industry
45:38before, and looking at their track
45:41record, if you look at the companies
45:44they ran—for mining companies, for
45:47instance, safety records are often
45:50public.
45:51>> Yes.
45:52>> If they had truly run the company well
45:55and with a good corporate culture, it
45:57should have been safer than the average
46:00. That would make sense. But that wasn't
46:03the case either.
46:05>> So, looking at it from that perspective
46:08, strictly by the numbers, it was the "
46:11down is up" scenario I mentioned earlier
46:14, but I decided not to invest based on
46:17the judgment that reality could just be
46:20a "down turn is an up turn."
46:25But talking with you today, I definitely
46:28feel that even if we knew, there must
46:30have been an extensive checklist and the
46:33processes you mentioned prepared in
46:36advance.
46:37>> Right. And those processes are only
46:39meaningful if they are prepared
46:40beforehand. When things are happening
46:42immediately—to use an American
46:43expression, we're putting out fires—
46:46>> you can't prepare then, so we share the
46:48same mindset of preparing in advance. So
46:51that when a situation like this comes
46:54again, we can move immediately.
46:58Then, if you go anywhere here on Wall
47:01Street, including your firm, are these
47:05contingency plans for worst-case
47:08scenarios, like a financial crisis, now
47:11very highly developed?
47:15>> Mm. Mm. Looking at it from this point in
47:17time,
47:18>> I haven't worked at those companies, so
47:20I'm not entirely sure. But I do want to
47:22say this. Just because they have them
47:24doesn't mean they always follow them.
47:25>> Ah, that's another issue entirely.
47:27>> Exactly. During the financial crisis,
47:29Merrill Lynch, Bear Stearns, and Lehman
47:31Brothers all had their own risk
47:33management processes.
47:34>> Right.
47:36However, I think the first question is
47:38how robust those risk management
47:40processes were, and even if they were
47:43robust, as you know from investing, no
47:45matter how much you resolve and tell
47:48yourself, "Next time, if these
47:50conditions are met, I will definitely do
47:52this,"
47:54>> when the actual situation hits,
47:56>> Yes.
47:56>> there are so many cases where you don't
47:59do it. I relate to that so much.
48:01Actually, a week ago, I swore to myself
48:03that I would never average down again.
48:07>> I made that vow, but I'm in the U.S. now
48:10, and SK Hynix hasn't been doing well
48:12lately.
48:14So, as it dropped to the 1.2 million won
48:16range, I ended up averaging down again.
48:19>> So I had a contingency plan. I had a
48:21plan that I would absolutely never do it
48:23, that in such cases I wouldn't do it,
48:25but I ended up breaking it.
48:26>> Yes. Right. Yes. Even on Wall Street,
48:30many banks think, "Oh, Goldman Sachs is
48:32doing it that way, so we should learn
48:34from them."
48:35>> Then they might recruit someone from
48:38there,
48:39>> Yes.
48:39>> and that person sees how they handle
48:41risk management and comes here to apply
48:43it just like that.
48:44>> They would do that, right?
48:45>> Yes.
48:47But the reason it doesn't always work is
48:49that, in the end, every company has its
48:52own long-standing culture, and those
48:55cultures don't change easily.
48:57>> Yes.
48:59>> So, no matter how many times Warren
49:01Buffett tells investors "this is how you
49:03should invest," there are those who
49:05actually do it.
49:08>> And while some may resolve to "do it
49:09like that next time," there are others
49:12who fail to follow through when the next
49:14opportunity arrives. That would also be
49:16included in the corporate culture you
49:18observe, right?
49:19>> That’s right. Indeed.
49:21Corporate culture doesn't change easily
49:24, so for example, betting that a culture
49:26will shift because someone comes in to
49:29restructure a company that has had
49:31long-standing issues—well, those
49:33problems are usually already embedded
49:36deep in the culture.
49:38>> Exactly.
49:39And for a new CEO to come in and
49:42suddenly change that.
49:44There are successful cases, of course,
49:47but as I mentioned before, no process is
49:49without false positives, so just because
49:52there are a few success stories...
49:55...
49:55>> does not mean...
49:58...
49:58>> it provides a sufficient basis to break
50:01the rule.
50:02>> Hmm. When you look at it from a
50:03probabilistic standpoint, that would be
50:04true. Yes. Right. Lastly, I would like
50:07to ask you a little bit about yourself,
50:10sir. You've been on Wall Street for what
50:13I consider a very long time.
50:15I’m sure your investment skills were
50:18excellent, but there must be another
50:20reason you've been able to sustain a
50:23career for 18 years.
50:26>> If there is one characteristic of yours
50:28that you could share with us.
50:30>> Yes. Hmm.
50:31>> Yes. Diligence was already mentioned
50:33earlier. Earlier.
50:35>> Well. For me, well. I don’t think
50:38there’s anything...
50:41...
50:41>> particularly special, but if I had to
50:43name a common trait among those who last
50:46a long time, it’s that they didn't take
50:49excessive, dangerous risks.
50:51Ah.
50:53>> Of course, if someone takes a huge risk
50:56once, succeeds, makes a lot of money,
50:59and gets out, we don't know what would
51:02have happened if they had kept investing
51:05that way. Since they already cashed out
51:07.
51:07>> Right?
51:09But I think taking risks that could be
51:12fatal if they go wrong is like walking
51:14through a minefield.
51:16>> Ah.
51:17>> I mean, I’ve never actually crossed a
51:20minefield.
51:20>> But just...
51:21>> It would be very nerve-wracking.
51:22>> Right?
51:23You might cross it without stepping on
51:25one.
51:26>> Hmm.
51:29But just because you made it across once
51:31doesn’t mean it’s "doable," and if you
51:35keep walking across it, you might avoid
51:37them the second or third time, but
51:40eventually, you will hit one, so that
51:42...
51:44>> Yes.
51:45>> As a professional, it’s really not easy
51:49to sustain a career if you take risks
51:52that could be fatal.
51:55Even if you succeed once or twice.
51:57>> Yes.
51:58>> So, it’s not that I’ve never made big
52:02mistakes myself, but fortunately, I’m
52:06still here and surviving.
52:10>> Well, so far, I haven't made any fatal
52:13mistakes that would be game over.
52:15>> Hmm.
52:16And to avoid making such fatal mistakes
52:19in the future, I think it's very
52:22important to keep those things in mind
52:25when building a portfolio and to
52:28actually put them into practice. Yes.
52:31>> Hmm.
52:32It seems to be in line with what the
52:34masters always say, that not losing is
52:37the most important thing.
52:38>> Exactly. Yes. Yes. Yes.
52:41>> It’s like, making a huge bet or, for
52:44example, going all-in because I'm so
52:47sure about this.
52:48>> Yes.
52:50It might look cooler to go all-in and
52:53hit the jackpot, but reality isn't like
52:56that.
52:58>> In reality, I sometimes use this
53:00expression: I build a structure to
53:02ensure that my clients 'money is not
53:04lost significantly.
53:06So, we don't prepare for home run plays
53:08. If I were a baseball manager, for
53:10example, relying on home runs...
53:12>> Yes.
53:14I think it's better to devise a strategy
53:17where you can win with base hits, and if
53:20you keep hitting those, sometimes you'll
53:22connect perfectly and a home run will
53:25happen.
53:27Therefore, a strategy or portfolio that
53:30relies on home runs......
53:32>> if that's the case, then...
53:34...
53:34>> I think that is a bit of a dangerous
53:37strategy. Yes.
53:38>> Hmm.
53:39You've shared many things, and lastly,
53:41I'd like to ask you something because
53:43there are many individual investors in
53:45Korea who invest in U.S. stocks.
53:47They are probably watching this
53:49broadcast today.
53:51>> If those people could take away just one
53:54thing from your experience after hearing
53:57all these stories today, is there a key
54:00point you would really want them to
54:02remember? Yes. Yes. I think it would be
54:06good to think in terms of probability.
54:09Thinking in terms of probability means
54:11it's better not to have too much
54:13certainty about the future.
54:15>> Yes.
54:16>> I’ve mentioned that the future is not
54:19something to predict, but something to
54:21prepare for.
54:23>> Yes.
54:24>> I wish more people would think that way
54:26.
54:27>> Hmm.
54:28>> Because how can you predict the future?
54:30>> Exactly. Also, in stock investing, I
54:34think too many people are focused only
54:37on what will go up or what will go down
54:40.
54:40>> Yes.
54:41>> The market is, quite literally, a market
54:43.
54:43>> Right.
54:44It's really like a supermarket, a place
54:49set up so you can easily buy countless
54:53companies, and I think you should just
54:57go into that market and buy what you
55:01need right now.
55:04So when you're investing and building
55:06your portfolio, for example, if someone
55:08says, "The most important thing for me
55:10right now is the highest return," then
55:12they should go to the market and work
55:14hard to find things that can provide the
55:17best returns.
55:18>> Exactly.
55:19However, you must understand the risk
55:22that in searching for them, you might
55:25pick a dud that yields the worst returns
55:29; in our case, while we have AI-related
55:32stocks, we also have very boring
55:34consumer stocks in our portfolio.
55:38>> Oh, really?
55:39>> So, do we hold those consumer stocks
55:42because we think they will perform
55:44better than the AI stocks in the future
55:46?
55:47That’s not the case.
55:49We have an overall portfolio, a desired
55:52risk level, and a target balance, and we
55:55need to include other items to achieve
55:57that necessary balance.
56:00>> Yes.
56:01>> So, if people look at the market in that
56:05way, wouldn't it be helpful for many
56:08people?
56:10But to do that, you need to know what's
56:12in the market.
56:12>> That's right.
56:15If you are good at it yourself, or even
56:17if you aren't but enjoy doing it, you
56:19can handle it directly; but if you don't
56:21know how to go about it, in that case,
56:23you can get help from an expert,
56:26>> or
56:27>> you can receive their guidance.
56:29>> Yes.
56:30>> I believe that thinking this way can
56:33create a healthier investment culture.
56:37Yes.
56:37>> Yes.
56:38CEO, thank you so much for sharing your
56:40long stories and experiences today.
56:43Listening to you, I realized we really
56:45need to think more in terms of
56:47probabilities, and I felt a bit of
56:49remorse for having such easy convictions
56:52; it was a truly valuable time that gave
56:54me a lot to think about. Thank you, CEO
56:57.
56:57>> Yes. Oh, thank you.
57:00>> Are you worried about your child's
57:01financial education?
57:03How about a Saturday afternoon economics
57:04class for the whole family?
57:06John Lee, Kim Kyung-il, and active
57:09teachers will join you.
57:11Including a special Q&A session with So
57:13Dong-ju, please apply via the No Ticket
57:15search or the pinned comment below the
57:16video.

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