12 year old investor made more than $22,000 on stocks

By Harriet Piercy

Published Feb 28, 2021 at 10:00 AM

Reading time: 2 minutes

A 12 year old boy from South Korea, Kwon Joon, is dreaming of becoming the next Warren Buffet. But he isn’t just dreaming about it, he’s turning over trades like a professional already and earned stellar returns, 43 per cent to be exact, from a hobby he seemingly just ‘picked up’: buying stocks. Here’s what we could all learn from a 12 year old.

Joon technically isn’t an investor—the term ‘investor’ is reserved for ‘actual’ professionals, although it could be argued that he is in this case. Joon is officially what would be called a young ‘retail investor’, and he only started buying stocks in 2020. The 12 year old made it his mission to watch the business news every single morning, and his door into trading opened last April after convincing his mother to open a retail trading account for him with his savings, which amounted to 25 million won ($22,598) that he received by selling toy cars at age seven, running vending machines and cash gifts that he’d saved over the years.

In April 2020, the benchmark KOSPI index (or in other words, the performance of all common stock traded on the Korea Exchange) was just recovering from a major dip. Joon stated in a video posted on The Star that “I really talked my parents into it, because I believed an expert who was saying (on TV) that this is a once-in-a-decade opportunity.”

Joon said that he aimed to maximise his returns by holding his investment for the long term, instead of participating in short term focused day trading. He’s pursuing what’s called ‘value investing’ in blue chip shares. Reuters reported Joon’s mother, Lee Eun-joo, saying that “I wonder, in this day and age, whether a college degree would be all that important.” His mother had apparently fuelled his passion by looking to expose him to business, as it was seen by her as a key to getting ahead in academics. She said that “Because we live in a different world now, it could be better to become an ‘only-one’ kind of person,” and feared that even good schooling might not take her son the extra mile down ‘success’ lane.

According to Reuters, after January 2020, about 70 per cent of the 214,800 stock brokerage accounts for minors at Kiwoom Securities, which is South Korea’s most retail-friendly brokerage, were set up. Joon, with time on his hands thanks to the closing of schools due to COVID-19, drew up a wishlist of purchases, which were not the ‘next cool gadget’ like many other kids his age, but equity.

These stocks ranged from South Korea’s largest messenger app operator Kakao Corp., to the world’s biggest memory chip maker Samsung Electronics Co., and Hyundai Motor. Blue chip shares, or corporate stocks are nationally known to be reliable, which makes Joon quite the smooth water sailor in his youth, wise guy.

Data shows that the unemployment rate in South Korea jumped to 5.4 per cent in January of 2021 from 4.6 per cent in the previous month, which is the highest unemployment rate since October of 1999. Jobs are not only disappearing because of COVID-19’s impact on businesses, but they are also changing. Finding rewarding work anywhere has been tough in 2020, but many are opting to diversify their career path, and evidently they are doing that much earlier in life.

The trend of younger people interested in equity markets is luring a new wave of business savvy types. Millennials and gen Zers working and studying from home might just be the generation that turns business as we know it into something quite different, but only time can tell. For now, Joon tells Rappler that “Rather than going to good schools like the Seoul National University, I’d rather become a big investor.” “I also hope to do a lot of charity work,” Joon added.

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