"Why Is It Going Up?" I Sold Samsung Electronics on a Strong Conviction It Would Plunge, but It Rose 4%... "Was That the Bottom?" [World of Retail Investors]

15 © News1 / Ahn Eun-na, News1 \r\n [Financial News] Before heading to work on the morning of the 18th, office worker Oh Bo-young, 37, a pseudonym, made up her mind to sell all 300 shares of Samsung Electronics she had bought when the stock was in the 80,000-won range. 78 on Friday the 15th before quickly reversing and falling below the 7,500 level.
Over the weekend, she also saw weakness in United States semiconductor stocks, which convinced her that a correction was coming. On top of that, there was still no sign that the Samsung Electronics labor union strike issue would be resolved."It looks like it will fall more today. Let’s sell now and buy back at the bottom." Thinking that way, Oh sold all of her Samsung Electronics shares shortly after the market opened. The stock was in the red, but she had built up her position since the 80,000-won range and felt she had locked in a profit, so she could walk away satisfied.
Then afternoon came. As usual, Oh checked the KOSPI and was stunned.29 and at one point slipped to the 7,170 range, had recovered to the 7,500 level and turned positive. She quickly looked up Samsung Electronics’ share price.At 2 p. m.
15 © News1 / Ahn Eun-na, News1 \r\n [Financial News] Before heading to work on the morning of the 18th, office worker Oh Bo-young, 37, a pseudonym, made up her mind to sell all 300 shares of Samsung Electronics she had bought when the stock was in the 80,000-won range. 78 on Friday the 15th before quickly reversing and falling below the 7,500 level.15 © News1 / Ahn Eun-na, News1 \r\n [Financial News] Before heading to work on the morning of the 18th, office worker Oh Bo-young, 37, a pseudonym, made up her mind to sell all 300 shares of Samsung Electronics she had bought when the stock was in the 80,000-won range. 78 on Friday the 15th before quickly reversing and falling below the 7,500 level.
In other words, the Samsung Electronics shares she sold because she thought they would keep falling had risen by nearly 5% in just one day. If it was fear rather than prediction On stock communities and open chat rooms, people who had made choices similar to Oh’s continued to voice regret.
Reading posts such as, "I sold because I thought it would drop today, but it went up after I sold," "I tried to buy back at the bottom but missed it," and "I thought I had taken profits, so I won’t even look at it for a while," Oh tried to soothe the bitterness she felt despite having realized a gain. In behavioral economics, this is called 'myopic loss aversion.' It refers to a phenomenon in which investors become overly sensitive to short-term losses and repeatedly make irrational decisions. The stronger the previous day’s decline, the stronger the illusion that prices will fall again the next day.As the KOSPI has entered the 8,000 range, this phenomenon is appearing in even more extreme form. When the index was at 2,000 in the past, 1% meant just 20 points.In the 8,000 era, however, 1% equals 80 points. Even a small swing can now create a hyper-volatile range in which hundreds of points move up and down.As the numbers visible to the eye grow larger, it becomes even easier for the shock of the previous day to distort an investor’s judgment the next day. .
The paradox of 'buy low, sell high' What Oh experienced can be seen as a classic pattern of herd trading. Afraid of a drop, she sold first.When the stock actually fell, she felt reassured, thinking, "My judgment was right after all." Then, when a rebound began, she rationalized it as "just a temporary bounce" and watched from the sidelines.
15 © News1 / Ahn Eun-na, News1 \r\n [Financial News] Before heading to work on the morning of the 18th, office worker Oh Bo-young, 37, a pseudonym, made up her mind to sell all 300 shares of Samsung Electronics she had bought when the stock was in the 80,000-won range. 78 on Friday the 15th before quickly reversing and falling below the 7,500 level.15 © News1 / Ahn Eun-na, News1 \r\n [Financial News] Before heading to work on the morning of the 18th, office worker Oh Bo-young, 37, a pseudonym, made up her mind to sell all 300 shares of Samsung Electronics she had bought when the stock was in the 80,000-won range. 78 on Friday the 15th before quickly reversing and falling below the 7,500 level.
In the end, she repurchased at a higher price than the one at which she had sold, creating the exact opposite of the principle experts always emphasize: buying low and selling high.Oh hesitated as she looked at Samsung Electronics, which was holding in the 280,000-won range, and then put her phone down.A headline said a Global investment bank had raised its target price for Samsung Electronics to 590,000 won.Another article caught her eye with the title, "This is the time to scoop it up." But even though she knew in her head that she should get back in, she could not bring herself to press the buy button at a higher price than the one she had sold at.
Even after taking profits, she somehow felt as if she had lost money.
15 © News1 / Ahn Eun-na, News1 \r\n [Financial News] Before heading to work on the morning of the 18th, office worker Oh Bo-young, 37, a pseudonym, made up her mind to sell all 300 shares of Samsung Electronics she had bought when the stock was in the 80,000-won range. 78 on Friday the 15th before quickly reversing and falling below the 7,500 level.15 © News1 / Ahn Eun-na, News1 \r\n [Financial News] Before heading to work on the morning of the 18th, office worker Oh Bo-young, 37, a pseudonym, made up her mind to sell all 300 shares of Samsung Electronics she had bought when the stock was in the 80,000-won range. 78 on Friday the 15th before quickly reversing and falling below the 7,500 level.
bng@fnnews.com Kim Hee-sun Reporter