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"Even with a knife at my throat, I'm not getting in right now."
A warning issued three months ago by Hwang Hyun-hee, a comedian-turned-investor, is drawing renewed attention amid the plunge in South Korea's stock market. With the KOSPI falling more than 20% in just eight trading sessions, and with the story of an office worker who said the poster had built up assets of as much as 3.5 billion won before losing most of it also coming to light, concerns about overextended investing are growing.
Rebound After 'Black Monday' Fears: KOSPI Closes Up 1.76%
According to the Korea Exchange, the KOSPI opened on the 19th at 5,488.41, down 179.64 points, or 3.17%, from the previous session, after concerns over the profitability of artificial intelligence investment resurfaced in U.S. markets. Bargain hunting came in during the session, however, and the index turned higher, closing at 5,768.01, up 99.96 points, or 1.76%, from the previous session.
The Nasdaq Composite fell 2.15% on the 16th, and the Philadelphia Semiconductor Index declined for an eighth consecutive session.
The KOSPI, however, quickly pared its early losses and turned positive at around 10:17 a.m. It then fluctuated around the 5,600 level, holding up better than expected.
The move is attributed to bargain hunting following the recent plunge. The KOSPI fell 20.70% over the eight trading sessions from the 6th to the 16th. As of the 15th, its forward price-to-earnings ratio stood at 4.2 times, the lowest level since 2000.
Losses are also mounting for individuals who invested with borrowed money. According to the Korea Financial Investment Association, forced liquidations tied to unpaid brokerage settlement accounts totaled 298.1 billion won from the 6th to the 15th. The 14th and the 15th alone accounted for 89.3 billion won and 80.5 billion won, respectively.
"How Would You Invest 100 Million Won in Spare Cash?" Hwang's Answer
With the market swinging like this, the investment advice Hwang offered in July is back in the spotlight.
In a video posted on the YouTube channel "Lee Hong-ryul TV" on July 21, Hwang was asked what he would do with 100 million won in spare cash that could be invested over three years. He said not to enter the stock market right away.
"A market that rises 7% one day and falls 8% the next is not a market for novice investors," he said, explaining that it is an environment only professional investors skilled at short-term trading can navigate.
The risk is too great, he said, for ordinary investors who check stock prices in spare moments while holding down a job.
Hwang said he himself was holding cash and watching from the sidelines. "Even with a knife at my throat, I don't invest in a stretch like this," he stressed.
He also raised the possibility that the market could enter a full-fledged correction around the end of the year as controversy over an AI bubble flares up in the United States. With concerns over the profitability of AI investment now emerging as a drag on stocks, those remarks are being revisited.
He described "cycle investing" — waiting for sharp declines in share prices — as his own principle. He judges a market to be in a broad downturn when it falls more than 20% from its previous peak, and considers investing in earnest when a correction of around 30% occurs.
He said he would split the 100 million won into five purchases of 20 million won each, and recommended exchange-traded funds tracking major indexes such as the Nasdaq 100 or the S&P 500 over individual stocks.
Comments reassessing his earlier remarks have been piling up on the video recently, including "Why didn't I follow this advice?" and "Hwang Hyun-hee saw it coming."
"I Made 3.5 Billion Won and Only 200 Million Is Left": A Samsung Electronics Investor's Tears
The story of an office worker who said the poster lost enormous paper gains in the plunge has also drawn attention.
A post by a person identified as A appeared recently on Blind, an anonymous workplace community, saying they had built their assets to as much as 3.5 billion won by investing in memory chip stocks including Samsung Electronics.
A began investing in December last year and grew their assets sharply through June this year. A considered selling all the holdings and sitting out for about two years, but as someone working in the semiconductor industry, A expected further gains and kept investing.
The problem was leverage. A started out investing without debt but began using leverage in hopes of larger returns.
Assets then shrank to about 750 million won as stocks tumbled in July. A increased leverage again to recoup the losses but was hit by the October plunge, and after liquidating holdings just before a forced sell-off, A said only about 200 million won — money set aside to pass on to a daughter — was left.
A also bought the rights to a presale apartment with some of the funds during the process, booking about 300 million won in paper gains. Total assets were up about 400 million won from December last year, but the sense of loss over assets that had once reached 3.5 billion won was heavy.
"All the rosy future I'd pictured for a while has vanished, and I'm depressed and in agony," A said, expressing a sense of emptiness.
Online commenters responded with remarks such as "This really doesn't feel like someone else's problem," "When gains get big the world looks easy, and that's when you collapse," and "Greed keeps you from taking profits." A's investment gains and losses, however, are the person's own account posted online and have not been independently verified.
With the market's recent plunge, hopes that this is a bargain-hunting opportunity and worries about further declines are splitting investors.
Han Ji-young, an analyst at Kiwoom Securities, said, "It is true that this is a stretch with strong incentives to buy on the cheap, given that most leading sectors such as semiconductors and IT hardware are in oversold territory on a share-price basis," while forecasting that high volatility could continue for some time.
Huh Jae-hwan, an analyst at Eugene Investment & Securities, said, "As high interest rates have dragged on, investors' expectations have risen and funding has become more difficult," and predicted that a slowdown in AI capital spending would be unavoidable.
"The KOSPI looks like a stretch for staggered buying, but it seems best to approach it conservatively," he added.