Today’s interview is on Jun Choi, a senior finishing his degree in Business and Economics at UC Berkeley. He has run two online business in the past relating to an online bookstore, international trade, and e-commerce. His passions lie in competitive strategy, entrepreneurship, and stock & real estate investment. I met Jun through Berkeley’s undergraduate real estate club (UREC) and he has given me some great advice in real estate and the stock market.

1) How did you begin investing in the stock market?

Jun: I became interested in stock market after I started getting lazy working on my international business. It was probably back in 2005; my importing-exporting business was so successful that I was able to purchase my favorite dish, sushi, for every meal. My business generated huge profit from a small initial investment, but I realized it consumes quite a lot of time to operate; you have to come up with a strategy to fight against big companies, figure out numbers in cash flow, design listings, drive to the post office to ship items, and make sure the customers are satisfied with each transaction.

I couldn’t keep doing this work by myself, while simultaneously taking 35 units in three different community colleges. So I had to come up with an alternative to support my “already-super-high” cost of living (man, I just can’t give up Sushi). I went to Barnes and Nobles to find an easier way to make money, and then happened to end up reading a bunch of stock investment books.

After reading “Stock investment for Dummies” to “Understanding Stocks by Michael Sincere,” I opened my online discount brokerage account after reading these books.

2) Was there any crucial knowledge you wished you had known before entering stocks?

Jun: I wish I took accounting more seriously. I got an A in accounting but I forgot almost everything when I entered the stock market. I had to relearn everything in order to read annual reports and 10Ks.

3) What is your general thought process when it comes to picking stocks?

1. Sustainable competitive advantage & expectations on a company
2. P/E Ratio and Expected Future Growth Rate (Fundamental)
3. Technical Analysis
4. Overall market, Bond market, Option market, Sector, Interest rate, etc…

4) A lot of investors claim that choosing individual stocks is like “a monkey throwing darts at a dartboard,” and they recommend other investments such as mutual funds and ETFs. What’s your personal opinion about this statement?

Jun: Choosing mutual funds, ETFs, or even sector funds are for 30 year olds. Do you seek safety? Then go for those. You may choose them to diversify, but at your 20s, growth stock is the way to go. (I only agree with Jim Cramer on that.)

Also, in my opinion, if you don’t have more than 10,000 dollars, mutual funds don’t seem appropriate.

5) Do you have any advice for people interested in getting into the stock market?

1.Buying stock is like being the owner of the company.
The decision you make for investing 1000 dollars must be as serious as when you are investing 100,000 dollars or more.

2. I recommend following several company almost everyday. (I’ve been following companies in my portfolio everyday for the past 3 years). Even when you don’t invest money yourself, if you follow the company for a long time, you’ll build a skill to “feel” when it would be the right time to jump in to take long position or the short position. I followed Dendreon, a pharmaceutical bio-tech company for over 2 years, and this practice of following led me to make a 300% profit after waiting three weeks and jumping in at the right time.

3. Read books and follow macroeconomic articles through magazines and finance websites. Every business is related to each other somehow. For example, FED – Bank – Real Estate - Stock market (REIT) – insurance company – International fund - bank- corporations – small business – bank , etc.

4. Save money. “Your DAY” to invest will come. Save up now so you don’t miss that chance.

5. Don’t open a discount brokerage account unless you’re ready to invest. Usually you get 100 free trades or free trade for a month after opening an account so you shouldn’t be wasting this. Also, depending on your brokerage company, if you just open an account with no money and don’t trade, you may be charged with fees.

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Jun’s Site
Stock Blog