Homin Lee

Memory remains a sticky bottleneck in the AI supply chain, driving continued upgrades in the earnings outlook for South Korea; Korea also benefits from tailwinds from Hormuz resolution and manageable monetary policy, making Korean memory stocks constructive.

Memory remains a sticky bottleneck in the AI supply chain, driving continued upgrades in the earnings outlook for South Korea; Korea also benefits from tailwinds from Hormuz resolution and manageable monetary policy, making Korean memory stocks constructive.

The speaker's firm maintains a "country preference for South Korea" because memory remains a key bottleneck in the AI ecosystem, and they forecast ~140% earnings growth for South Korea this year. The market has gotten cheaper as prices haven't kept up with significant earnings upgrades, and the underlying AI supply chain fundamentals remain firm. If the Middle East event risk can be overcome, the valuation and growth outlook for South Korean equities, particularly in tech, is constructive. A significant escalation or prolonging of the Middle East conflict that triggers a broad risk-off event impacting all equities.

The speaker's firm maintains an "overweight" position in gold in its portfolios as a hedge against geopolitical risk and a structurally less inflation-sensitive Fed. Geopolitical priorities are dominating macroeconomic discipline, leading to a view that the Fed will be slower to hike even amid supply-shock inflation, which is bullish for non-yielding hedges like gold. Gold is a preferred portfolio hedge in an environment of binary geopolitical risk and shifting central bank reactions. A swift and sustained de-escalation in the Middle East, coupled with a return to hawkish Fed prioritization of inflation.

He is overweight Japan because the broad market is well set for earnings, the global cyclical boom supports cyclicals with high operating leverage, and even if the BOJ raises rates slightly he does not expect major appreciation. Financials, industrials and materials are nicely positioned for the rest of the year and the AI theme.

He is overweight Japan because the broad market is well set for earnings, the global cyclical boom supports cyclicals with high operating leverage, and even if the BOJ raises rates slightly he does not expect major appreciation. Financials, industrials and materials are nicely positioned for the rest of the year and the AI theme.

The US-China tech stack competition will not be resolved soon, but China's steady progress in technology and cheap offshore equity valuations below 11x make Chinese equities worth holding as a portfolio hedge; if the China ecosystem produces unexpected significant innovation or investment, investors benefit.

In the US, the hyperscaler cash flow and financing debate is not going away, but the software sector is performing well and he likes that sector.

The South Korean financial sector offers compelling valuations, significant recovery potential, and strong fee income from M&A and trading activity. It provides a combination of defensiveness, valuation appeal, and earnings stability, making it a favored sector heading into the second half of the year.