Fill Your Wallet and Raise Yourself through Investing in Stock
Fill Your Wallet and Raise Yourself through Investing in Stock
  • Reporter Lee Ji-a
  • 승인 2015.03.04 17:22
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POSTECH used to have a stock club, but now the club changed its purpose to monetary policy challenge held by Korea Bank. They got second prize in Gyeongbuk in the 2014 contest, but they have difficulty recruiting enough members. It shows that Postechians tend to be indifferent toward investing in stocks. But people, who have invested, recommend it because investing provides a good opportunity for students to know how the world works and develop a good sense of economy. It is not just about generating income.
On Feb. 13, Korea Investment & Securities Company held a seminar in POSCO International Center for investors in Pohang. They explained about global issues, including low oil prices and Grexit, and they chose Fin Tech, mobile payment, Solo Economy, and Healthy care with good outlook. They suggested strongly one investment strategy. “You have to buy stocks when day moving averages, an arithmetic mean value of stock price, for 5, 10, 20, 60 and 120 days converge. There is a point to increase sharply.” Above this, they explained various patterns but it was for very experienced investors, not  starters. The Postech Times interviewed three experienced students to give tips for starters: Yoon Sang Woo (IME 07), Jungtaek Kim (CSE M.S.-Ph.D. integrated candidate), and Yingu Han (EE 13).
Stock market is in a flood of information so starters have problems to find blue-chip companies. There are five indicators showing companies have high potential power or not: Earnings Per Share (EPS), net profit during one year/total number of stock, Price Earnings Ratio (PER), price/net income per stock, Book-value Per Stock (BPS), net worth/total number of stock, Price Book-value Ratio (PBR), price/net assets value per stock, and Return On Equity (ROE), net worth/equity capital. Having high EPS, low PER, and high ROE means the company has high potential power. The standard of PER is up to its fields but some books say degree of 9-12 is appropriate.
After finding a blue-chip company, using above indicators and financial statements, starters have to approach the company by technical analysis. Technical analysis consists of candle, day moving average, and patterns. The amount of transactions shows how stock prices may change, but not accurately. For example, Head & Shoulder pattern tends to decrease for stock price and Inverse Head & Shoulder pattern tends to increase for that. Also in case of Square box base, the price is inside a box but, at a moment, by amount of transaction the price is decided to be increased or not. It can expect the price but starters have to keep in mind that the patterns are not always right and they shouldn’t concentrate on only technical analysis. Another option is to use Exchange Traded Fund. This entails buying stocks of companies that have bought many stocks of  other companies with different ratio for each company, which decreases risk.
To succeed in the stock market, how one treats and approaches to stock is also important. In short, starters have to use only surplus funds and invest in a number of companies, not only one. They shouldn’t transfer too often; long term investments are better than short term ones. This is only basic information. Experts recommend reading books about stocks and studying rather than listening to others’ sweet words.