I just wrote about stock investment philosophy.
So, what exactly is the stock investment method that CEO John Lee was talking about?
In my opinion, stock investment should not not a gamble, but rather long-term investments in growing companies.
So what kind of investment is called gambling?
Predicting the market’s rise and fall is really difficult. However, many ordinary investors try to guess the direction of the market to make a quick short-term profit.
For example, in March-April 2020, oil prices plummeted due to the COVID-19 virus. Many people thought it is a good opportunity to invest simply because it fell so much.
However, predicting whether oil prices will rise or fall is so difficult that even professional traders would have difficulties. In fact, the price of oil rebounded a little and then started to fall again in October, about half a year later.
Likewise, buying an inverse derivative product (e.g. KOSPI inverse) to make a profit, thinking that the stock market decline, is also an odd/even gamble.
So what is an investment that is not gambling?
It is a long-term investment in the top quality company belonging to a growing industry about which you know well.
In long-term investing, the definition for long-term may vary from investor to investor.
- CEO John Lee says to hold the stock investment with you for the rest of your life.
- Warrant Buffet says do not invest in a stock if you cannot hold for at least 10 years.
- I think at least 10 to 20 years.
Let’s take an example. I am personally a fan of Jin Young Park (JYP). I really trust and value the way he manages JYP company, and his philosophy of selecting, nurturing and debuting artists, and his self-discipline.
To be more specific, I invested in JYP company stock because:
1) A growing industry: K-pop is spreading all over the world, including BTS. It is, of course, a promising and growing industry.
2) No. 1 company in the entertainment industry: I think JYP Entertainment is the best company for the following reasons.
- Jinyoung Park’s business philosophy: He values the character of artists, especially those with good personality. In contrast to YG, which prioritized their skills and potential, there are very few scandalous incidents in JYP Entertainment. This is a low risk investment from an investor’s point of view.
- Future growth potential: Park Jin-young announced the K-pop localization strategy in 2018 as part of JYP 2.0. As part of this strategy, NiZiu, who is all Japanese nationals, have debuted in December 2020, and have widely become popular in Japan. There is already Boy Story in China, and it is said that they plan to create a K-pop group composed of locals in a country such as the United States (“A2K” project) in the future.
- Skills and Consistency: The business can only be sustained if they keep producing quality groups over a long period of time. Traditionally, all female idol groups by JYP hit the jackpot as soon as they came out, and male idols aren’t bad either. Creating a quality group of artists consistently is much more difficult and profitable than making just one super-popular group like BTS.
I especially like Park Jin-young’s personality-related philosophy in finding artists with sincerity, humbleness and diligence, because in the entertainment industry, where most people tend to be overly confident and less genuine, he really wants and only lets people who are sincere, humble, and diligent debut in his company.
In fact, I bought JYP stock when it was 5,000 won and sold it for about 20,000 won, and recently bought it again after seeing the potential of NiZiu. Jinyoung Park says he plans to dance and sing as an active artist until he is 60, with very strict self-discipline in his training.
I already wrote the above thoughts in another blog as an English article. Articles recommending JYP Entertainment in English can be read here and here.
Korean article can be found here.
