"Sell After a 5% Gain" He Went All In on SK hynix, but the Stock Swung 8%... "It’s Not Easy" [World of Retail Investors]

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[The Financial News] Office worker Oh Hyung-cheol, 35, a pseudonym, bought SK hynix Inc. shares on the afternoon of the 22nd, just before the market closed. He made the move in anticipation of the company’s earnings announcement the following day.
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Oh bought 11 shares at 1.223 million won each, even dipping into money he had set aside in a savings plan. He went to sleep on the morning of the 23rd, hoping for a brief post-earnings pop after the announcement. Since he had tried short-term trading a few times after starting to invest and had made modest profits, he thought he could make at least a little extra this time too.
He was not without doubts. The stock, which had fallen to the 890,000-won range right after the war, had quickly surged back to the 1.2 million-won range. It was clearly at a high, but what drove Oh was a severe case of FOMO, or fear of missing out. Instead, he read several brokerage reports and checked consensus estimates for SK hynix.
What’s more, Samsung Electronics had already posted a record first-quarter operating profit of 57 trillion won, and TSMC had also delivered an earnings surprise. That made him confident that HBM monopoly stock SK hynix could not possibly miss out. Oh believed the shares were already expensive, but that they would become 'even more' expensive once the numbers came out the next day. So he decided to buy the day before the announcement and sell as soon as the stock rose after the results were released.
Then, at 9 a.m. on the 23rd, the long-awaited earnings were announced. Operating profit came in at 37.6103 trillion won, up 405.5% from a year earlier. Quarterly sales also topped 52 trillion won for the first time ever. The operating margin of 72% was the highest on record and beat TSMC, long regarded as the strongest player in the semiconductor industry, for a second straight quarter. It was an earnings surprise that far exceeded market consensus of 36.3955 trillion won.
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The market reacted immediately. The KOSPI Composite Index jumped to the 6,570 level at the open, drawing cheers. Oh’s account also began flashing red, just as he had hoped. By his original plan, he should have sold then, but greed took over and his finger froze on the screen: 'Let’s wait a little longer. If it goes up a bit more, I’ll sell.' As he stared at the app thinking, 'I’ll sell if it rises just 5% more,' he suddenly panicked. The stock had already started to turn lower.
In no time, it fell more than 8% from its intraday high of 1.267 million won, sliding to an intraday low of 1.183 million won. The KOSPI Composite Index also retreated to the 6,310 level in the afternoon. SK hynix had driven the index higher early in the session after announcing record earnings, but as the stock weakened later in the day, the KOSPI also lost ground. Analysts said the decline was likely due to sell-on-news pressure after SK hynix’s earnings release.
Oh realized he had lost the timing battle on both the buying and selling sides. The market was unforgiving. Investors’ expectations had already been fully priced in as SK hynix rose from 890,000 won to 1.2 million won.Once the actual numbers were confirmed, savvy investors saw them not as a reason to buy,but asthe starting gun for profit-taking.
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There is an old saying in the stock market: 'Buy on rumor, sell on news.' It means that stock prices rise while expectations are building, then profit-taking floods in once the actual news is released. In the market, when expectations have already been reflected in the price,it is called being'priced in.'
If market participants anticipate good news in advance and reflect it in the stock price, there is no longer any momentum left to push the stock higher once that good news actually becomes reality.
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bng@fnnews.com Kim Hee-sun Reporter