The South Korean younger investor, up 43%, is Reuters’ new icon of retail



© Reuters. Kwon Joon checks the investment information in his room in Jeju


By Cynthia Kim

SEOUL (Reuters) – Watching the business news first is a new routine for 12-year-old South Korean Kwon Joon, who dreams of becoming the next Warren Buffett after engaging in a hobby that started just last year Has achieved an excellent return of 43%: buy stocks.

Kwon harassed his mother last April into opening a retail account with savings of 25 million won ($ 22,400) as seed capital, just as the benchmark index began to recover from its biggest decline in a decade.

“I really persuaded my parents to do this because I believed an expert who said (on TV) this was a once in a lifetime opportunity,” said Kwon, who made the steepest jump among MSCI country indices at year-end.

“My role model is Warren Buffett,” he added in a reference to the US billionaire.

“Instead of short-term focused day trading, I want to hold my investment for 10 to 20 years with a long-term perspective, hopefully to maximize my return.”

South Korea’s rookie investors like Kwon, who value investing in blue-chip stocks with cash from gifts, trading mini-car toys and operating vending machines, have boosted retail sales amid the coronavirus pandemic.

More retail investors are teenagers or younger and account for more than two-thirds of the total value traded in the country’s stocks, up from less than 50% in 2019.

The trend has grown as the stock markets disillusion parents with the education system and home-working millennials.

“I wonder these days if a college degree would be so important,” said Kwon’s mother Lee Eun-joo, who fueled his passion by exposing him to business rather than teaching, which was seen as the key to earning science advance .

“Because we are now living in a different world, it might be better to become a ‘single’ person,” added Lee, who feared that even a good education would not prepare her son for dwindling job opportunities.

Approximately 70% of the 214,800 underage stockbrokerage deals at Kiwoom Securities, South Korea’s most retail-friendly brokerage with a market share of more than a fifth, were set up in January 2020 or later, the data shows.

Kwon, who had time during school closings for the pandemic last year, made a wish list of purchases made during the market corrections.

These ranged from South Korea’s largest messenger app operator Kakao Corp. via the world’s largest memory chip manufacturer Samsung Electronics (OTC 🙂 Co. to Hyundai Motor.

Kwon’s success also reflects the employment challenges facing young South Koreans. By January, one in four was unemployed. This is the worst level ever, despite being among the best educated cohorts in the OECD Club of Advanced Nations.

Three-quarters of them go to college after high school, compared to the 44.5% group average, but finding rewarding, creative work is difficult. “There aren’t enough jobs for college graduates, so many choose to diversify their career paths early on,” said career researcher Min Sook-weon.

Kwon understands that.

“Instead of going to good schools like Seoul National University, I’d rather be a big investor,” he said. “I also hope to do a lot of charity work.”

($ 1 = 1,115,1600 won)

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