The Korean stock market is incredibly hot these days. The Kospi index finally broke the 8,000 mark, which people used to call a “dream number”. I have never seen this number in my life. However, I do not really feel it. It might be because the petrochemical industry where I work is not doing well. But even looking around, I am not sure if things have gotten good enough to reach 8,000. I could not even imagine this number before, but now that it is real, I feel a bit strange.
For a FIRE investor like me who mainly invests in the S&P 500 index, this explosive growth in the Korean stock market might feel a bit unfamiliar, even if I am slightly jealous. So, I looked deeper into it. Did the overall Korean economy really get that good to hit 8,000? I checked the data and found a surprising fact. From January last year to April this year, the Kospi index went up by more than 4,200 points, and just two companies, Samsung Electronics and SK Hynix, created 53% of that huge growth. Right now, these two semiconductor companies make up 47% of the total Kospi market size. Is this right?
It is clear that the profits of these two companies are at an all-time high. The labor unions of these companies are trying hard to share these operating profits. The Samsung Electronics labor union is about to go on strike, and the government is worried about it. The idea of sharing 15% of the operating profit with employees feels quite strange to me. And it is also ironic that just one company is supporting the entire Korean economy.
This is not really an “unprecedented Korean stock market rally.” It is actually more like “two top AI chip companies pulling the whole index by the collar”. People are celebrating the 8,000 mark, but many normal individual investors who do not hold semiconductor stocks probably feel left out in the cold. Looking at these abnormal numbers, I did not just feel FOMO or jealousy. I felt a strange sense of alarm. It made me realize how the whole world can go crazy over just one thing: AI.
Right now, global big tech companies are pouring hundreds of billions of dollars to build AI infrastructure. As the demand for advanced chips like HBM (High Bandwidth Memory) explodes, money from all over the world is being sucked into Korean memory chip companies like a black hole. In this madness, there are even predictions that the combined operating profit of Samsung Electronics and SK Hynix next year will easily surpass TSMC, the world’s number one foundry company in Taiwan.
How to view and invest in this abnormally hot market is completely up to each person. Some might try to jump on this massive semiconductor rally even now to make big money. Others might turn away, saying this fever is just a bubble that will burst someday. The situation in Korea has already gone up so high that it is hard for anyone to easily jump in. I do not know if this situation is normal.
I will still go my own way. Instead of putting all my retirement money into hot individual stocks, I will continue my index investing, buying the whole market. But one thing is certain. This AI boom we are seeing is not just a simple stock market theme. It is a historic turning point where the rules of the world are changing and massive capital is moving.
In the world of investing, the fact that something I do not fully understand is changing the world so crazily always sends chills down my spine. Protecting the numbers in my account is important, but these days I feel I must keep my eyes wide open and watch how the world is changing more closely than ever.