In order for an unlisted company to be officially traded on the stock market (KOSPI, KOSDAQ), it must go through a process called an initial public offering.
This initial public offering is called an IPO (Initial Public Offering).
An initial public offering (IPO) is when a company discloses its stock and management details to the market so that external investors can purchase the stock publicly. It is similar to a new employee applying for a job by submitting a resume, going through an interview, and then signing a salary contract and receiving a start date to officially join the company.
In short, it can be seen as the process of reporting to enter the KOSPI or KOSDAQ markets. The reason for an IPO is clear.
Most companies need to continuously invest to grow.
To secure investment funds, they borrow money from banks or issue bonds.
Companies listed on the stock market also raise funds directly from the market through capital increases, etc.
Unlisted companies also naturally need a lot of funds.
In terms of financing, the most advantageous option for a company is to raise funds directly from the market.
Since it is not debt, there is no cost burden on the company.

--- p.28-29

Stocks can be divided into common stock and preferred stock depending on their type.
Common stock (principal stock) refers to stocks that allow shareholders to exercise their rights as shareholders, such as attending general shareholders' meetings, voting on major management matters of the company, and receiving dividends.
It's safe to say that most of the stocks you buy and most of the stocks traded on the market are common stocks.
Preferred stock, on the other hand, is a special type of stock.
These are stocks that cannot participate in corporate management.
In other words, these are stocks with limited rights.
It seems odd that shareholders can't attend general shareholders' meetings and exercise their voting rights. That's why they're granted special rights.
That's the dividend.
Preferred stocks are generally recognized as having a priority status over common stocks in terms of profits, dividends, and distribution of residual assets.
Although you cannot exercise your rights as a shareholder, you can receive higher dividends than common shareholders.
Preferred stocks are stocks that can be advantageous to investors who are not interested in corporate management and who focus on dividend-oriented investments.

--- p.39-40

ETF stands for Exchange Traded Fund, a product often referred to as an listed index fund. ETFs are funds that can be freely bought and sold on the market, much like stocks.
This product offers numerous advantages, as investors can buy and sell at any price they desire in the market at any time, without having to go through the hassle of selecting individual stocks.
It's difficult for individual investors to diversify their investments across 100 stocks, but ETFs enable indirect diversification.
The fund pays an operating fee of over 1%, a fee is charged for early redemption, and it takes about a week to secure cash even after redemption.
It's a tricky and expensive product.
On the other hand, ETFs have low management fees, around 0.2%, and, like stocks, cash can be secured two days after selling. There are some tax implications associated with investing in ETFs. While ETFs are exempt from transaction taxes, capital gains taxes may apply, depending on the type of ETF.
Domestic stock ETFs are exempt from taxation and do not incur taxes when capital gains occur.
For other ETFs (bond ETFs, foreign index ETFs, derivative ETFs, etc.), capital gains are taxed as dividend income tax (15.4% withholding tax).
Therefore, please note that for ETFs other than domestic stock ETFs (bond ETFs, foreign index ETFs, derivative ETFs, etc.), if the capital gains are combined with other financial income and exceed 20 million won, they will be included in the comprehensive financial income tax for the following year.

--- p.43-44

At first glance, defensive stocks might seem like a very attractive investment.
Because there are many stable companies that consistently make money regardless of the economy.
However, defensive stocks often do not receive recognition for their value in the stock market.
Because it is stable but has low growth potential.
For example, telecommunications companies make steady money every year, but their growth is stagnant.
If a company that was earning 100 billion won increases its profits every year to 120 billion won, 200 billion won, and 300 billion won, its stock price will also rise significantly.
However, if you only maintain a profit of 500 billion won every year, the stock price will not rise and will remain at that level.
Although it has the advantage of providing stable dividends to shareholders because it earns a lot of money, it may become difficult to reap the fruits of stock price increase.
The stock market is fundamentally a market that gives higher scores to growth attractiveness.
Stocks, which are risky assets, prefer growth.
Therefore, when investing in stocks, it is advantageous to invest in industries with growth potential rather than defensive stocks.
--- p..75

Convertible bonds are bonds that grant the holder the right to convert them into stocks.
Bonds are a relatively safe investment asset that allows you to receive interest and return the principal if held until maturity.
It is a product similar to a time deposit in which interest is paid on a set date and the principal is returned at maturity.
Convertible bonds are instruments that grant the holder the right to convert these bonds into stock.
Convertible bonds are similar to warrant bonds, but there are some distinct differences.
When convertible bonds are converted into stocks, the bonds are extinguished.
Only stocks remain.
In contrast, convertible bonds are a product that grants investors the right to purchase new shares at an agreed price if they wish, while maintaining the bond's original form.
Think of it as holding bonds with the option to receive stocks as well.
Convertible bonds are bonds that give a company the right to exchange them for stocks of another company or its own stock.
Convertible bonds and warrant bonds have the disadvantage of increasing the number of shares because they issue new shares.
Convertible bonds are a positive option because they do not issue new shares but instead give investors shares that the company already owns, so the number of shares does not increase.

--- p.134-136

A stock split is a method of increasing the number of shares by dividing the par value of the stock by a certain split ratio.
The face value varies, such as 100 won, 500 won, 1,000 won, and 5,000 won, and this means lowering the face value by the division ratio.
In other words, if Samsung Electronics, with a face value of 5,000 won, decides to split its stock 50 to 1, the face value will change to 100 won, which is 1/50 of 5,000 won.
When the face value becomes 100 won, the number of shares increases by the amount that the face value decreases.
Conversely, the number of shares will increase by 50 times.
In short, the stock price falls to 1/50th, but the number of shares increases by 50 times.
A company's market capitalization is the number of shares multiplied by the stock price, and a stock split has no effect on a company's market capitalization.
It doesn't really have any effect on the value of the company.
But it creates an optical illusion.
If Samsung Electronics splits its stock, which was worth 2.5 million won per week, it will drop to 50,000 won, which will have the effect of making the stock price look very cheap.

--- p.159-160

A dividend is a portion of a company's earnings paid out to shareholders in proportion to their shareholdings.
In a joint stock company, the shareholders are the owners.
The principle is that shareholders provide funds to a company through stock investment, and the company uses those funds to make investments and operations, earning money and returning the money earned to the shareholders.
The dividend payout ratio represents the percentage of a company's annual net profit paid out as dividends.
A dividend payout ratio of 30% means that a company that earns 10 billion won in profit is paying out 3 billion won in dividends.
If you divide this 3 billion won by the number of shares issued by the company, you get the dividend per share.
If the number of shares is 3 million, a dividend of 1,000 won per share will be paid.
It's also good to know how dividend yields are calculated.
Let's assume that Samsung Electronics' stock price is 60,000 won and the annual dividend is 1,500 won.
If you divide 1,500 won by 60,000 won, you get 0.025, and if you divide by 100, you get 2.5%.
In other words, if you divide the annual dividend by the current stock price, the dividend yield based on the company's current price is calculated.

--- p.166-168

In short selling, the Chinese character for 'empty' is '空' (empty ball).
It literally means selling something that doesn't exist.
It means that the investor borrows and sells something he does not own.
This is an investment method that can generate large profits when stock prices fall.
While we sell the stocks we bought to lock in profits or losses, short sellers do the opposite.
Short sellers first sell the stock and then buy it back after a certain period of time to lock in profits or losses.
Since short selling starts from the beginning, companies with a lot of short selling are bound to suffer.
No matter how good the performance or corporate value is, the stock price will rise only when there are many buyers.
A large amount of selling volume is bound to have a negative impact on the company's stock price.
One thing you must know about short selling is borrowing and lending.
People often confuse short selling with stock lending. Short selling is selling borrowed stock, while stock lending is borrowing stock.
In the United States, you can short sell stocks without borrowing them.
It's hard to imagine, but it's said that it's possible to trade without borrowing stocks by first selling the stocks and then borrowing the stocks.
In Korea, doing this is illegal.
In the Korean stock market, you must first borrow stocks and then sell the borrowed stocks on the market.

--- p.188-189

Those who invest in domestic stocks must naturally know candlestick charts.
Because candlestick charts are the very foundation of technical analysis.
When the stock market opens at 9:00 AM, an opening price is formed. If the stock price rises above the opening price, it is a positive candle (red candle), and if it falls below the opening price (blue candle), it is a negative candle.
For example, if Samsung Electronics opened at 60,000 won and the current price is 62,000 won, it is a bullish candle, and if the current price is 59,000 won, it is a bearish candle.
Depending on whether the opening price is rising or falling, a positive or negative candlestick is determined.
A bullish situation is one where the current price is higher than the opening price, so the buying power is stronger than the selling power.
On the other hand, the negative candlestick indicates stronger selling power.
A bullish candlestick pattern for 3 to 5 consecutive days means that buying pressure is continuously flowing in, indicating a very strong upward trend.
The length of the pole is also very important.
The current price of 65,000 won is a much stronger buying force than the initial price of 60,000 won for Samsung Electronics and the current price of 62,000 won.
A pole with a long length is called a long pole.
A long bullish candle is called a long bullish candle, and a long bearish candle is called a long bearish candle.
A long bullish candlestick indicates a strong rise, and a long bearish candlestick indicates a strong fall.

--- p.199-200

The gap is an auxiliary indicator that shows the gap between the stock price and the moving average.
Stock prices have a unique property of moving away from the moving average and then moving closer to it, and moving away from it and then moving closer to it.
Understanding the gap between a stock price and its moving average can help you determine whether the current stock price is overheated or underperforming in the short term.
The separation is based on 100.
A divergence of 100 means that the stock price and the moving average are the same.
If the current price is 10,000 won and the 5-day moving average is 10,000 won, the 5-day divergence is 100.
If the 5-day divergence is 110, what would the current price look like compared to the 5-day moving average? A divergence of 110 means the current price is 10% above the moving average.
That means the current price is 11,000 won and the 5-day moving average is 10,000 won.
A divergence of 90 means that the current price is 10% below the moving average.
The gap can be set in the securities company's HTS or MTS.
The moving averages used in the chart vary, including 5-day, 20-day, 60-day, and 120-day periods.
There is no single correct moving average, but the 20-day moving average is widely used.
By using the 20-day spread, which is the distance between the stock price and the 20-day moving average, you can identify short-term overheating or stagnation in the stock price.

--- p.228-229

A falling exchange rate means that the value of that country's currency is rising.
A falling won-dollar exchange rate means the won is strengthening and the dollar is weakening.
When the won-dollar exchange rate falls, the Korean stock market shows an upward trend and foreign investors tend to increase their holdings of Korean stocks. Therefore, understanding and forecasting the won-dollar exchange rate trend is very important when investing in domestic stocks.
As of the end of October 2020, foreigners accounted for 34.2% of the Korean market.
Because the amount of funds is large and trading is centered on large-cap stocks, it has a significant impact on the Korean stock market.
Therefore, it is very important to forecast whether foreign investors will increase or decrease their holdings in Korean stocks.
How can foreign investors determine whether to increase or decrease their exposure to the Korean market? They can do so by examining the value of the dollar and the exports of Korean companies.

--- p.258-259

EPS is earnings per share.
It is the net profit earned by a company for one year divided by the number of shares.
It shows how much profit is made per week.
Think of it as a company's performance. The PER (Price-Earnings Ratio) is a multiple. The PER is the stock price divided by the EPS.
This indicator indicates how many times the current stock price is trading at its earnings per share. A higher PER indicates a stock price that's overvalued relative to its earnings. Which company, a PER of 10 or a PER of 20, is more highly valued in the market? Obviously, the PER of 20 is more highly valued.
For the stock price to rise, EPS and PER must rise.
When earnings and multiples rise, stock prices rise significantly.
Anyone would think that it would be natural for stock prices to rise when a company's profits increase.
No one would deny that profit growth is the basis for stock price increases.

--- p.266-267

Stock prices go up and down repeatedly.
There is no eternal rise, and there is no eternal fall.
It may rise for 7 days in a row, but it may also fall for 10 days in a row when the mood changes.
Both the rise and fall of stock prices have an end.
However, novice investors tend to think that ups and downs will last forever.
Investors who are lucky enough to get into a bull market first see stock prices continue to rise after they buy, mistakenly believing that the rise will last forever.
Of course, as long as companies grow and the economy grows, stock prices will rise.
But the upward trend doesn't last forever.
If it goes up by +30%, it can also go down by -10%.
In a way, that's normal.
As stock prices go through repeated ups and downs, they go their own way.
The thing that beginner investors must be most wary of is beginner's luck.
Beginner investors often invest without much experience or knowledge about stock investing.
This is a time when luck plays a bigger role than skill.
If the market is bullish at the time of investment, it will not be difficult to make a profit.
If you're really lucky and buy the market's leading stocks, you can make a lot of money.
It was not my own ability, but the market and the company's ability that increased my profits.
This is where many investors make mistakes.
They believe that their skills are good enough to generate large profits, so they invest very aggressively.
But beginner's luck doesn't last long.

--- p.284-285

If you look at the electronic disclosure, there is a notice called ‘Conclusion of a single sales/supply contract.’
When such announcements appear in the news, the company's stock price often skyrockets momentarily.
As explained above, companies that engage in B2B-related business basically generate profits by receiving orders.
A construction company earns money by receiving orders to build factories or apartments, and a shipbuilding company earns money by receiving orders to build ships.
Semiconductor equipment companies also need to receive orders from companies like Samsung Electronics to manufacture equipment and make money.
You can think of the orders that B2B companies receive as a 'single sales/supply contract.'
Companies that have entered into supply contracts of significant scale are required to disclose their contents.
Because it can have a significant impact on a company's stock price.
KOSPI-listed companies must disclose when they have entered into a single sales/supply contract worth 5% or more of their sales.
KOSDAQ listed companies are required to disclose if the amount exceeds 10% of their sales.

--- p.317

Delisting means being kicked out of the domestic stock market, such as KOSPI or KOSDAQ, and not being able to trade.
For businesses, this can be considered almost a death sentence.
Delisting does not mean that a company will disappear.
The company will continue to exist, but it will not be able to trade on the stock market.
Trading is possible in the over-the-counter market, not in the KOSPI or KOSDAQ markets.
However, over-the-counter trading has many restrictions.
It is difficult to find a counterparty for a transaction, and capital gains tax must be paid on the difference.
Delisted companies are branded as companies that have been removed from the market due to unpleasant events, which negatively affects the credibility of the company.
Once the delisting decision is made, a 7-day liquidation trading period is provided, giving you the last opportunity to sell.
Since the upper and lower price limits do not apply during the liquidation trading period, it is often traded at 1/10 of the stock price immediately before the delisting decision.
If you hold stocks of a company that has been delisted, you are bound to suffer huge losses.

--- p.356