The Market Isn't Over... Prices Became Tamer After Overheating | Chesley Investment Advisory Executive Director Park Se-ik

Summary

Park Se-ik argues that Korean equity market overheating was concentrated in semiconductors, while the rest of the market was already beaten down. After a 35-40% correction in chip stocks, persistent supply shortages and strong memory-maker pricing power make semiconductor valuations attractive. Meanwhile, forced selling from margin calls and institutional stop-losses has crushed KOSDAQ and small-cap stocks to excessive lows, creating a bargain opportunity that is being exploited by foreign buyers. He recommends accumulating both the corrected semiconductor names and the deeply undervalued small-cap/KOSDAQ indices.

• Market overheating was isolated to semiconductors; non-semiconductor stocks were already battered.
• Semiconductors corrected 35-40% and are now attractively priced; chip shortage and tight supply continue.
• SK Group chairman’s comments confirm memory makers hold strong bargaining power with clients.
• Forced selling (margin calls, stop-losses) caused KOSDAQ and KOSPI small caps to plunge beyond fundamentals.
• KOSDAQ at 750 is far cheaper versus expensive 1200; foreigners are buying quality bargains.
• Market stabilization fund’s failure to buy signals extreme undervaluation and a buying opportunity.
• Park advises buying both semiconductor stocks and small-cap/KOSDAQ positions.