How to Properly Utilize the Current Market

Summary

Park Se-ik explains how investors should use valuation to exploit market inefficiencies rather than relying on trading. He criticizes Korean institutional investors for failing to buy when markets were cheap and failing to sell when they were expensive. He highlights that KOSDAQ and small/mid-cap KOSPI stocks are currently deeply undervalued and present a buying opportunity, while warning strongly against holding leveraged single-stock ETFs on cyclical names like Samsung Electronics and SK hynix.

• Park stresses the primacy of intrinsic value over price in investment decisions.
• Korean pension and stabilization funds missed buying during the ‘Korea exit’ panic and failed to sell near recent highs.
• KOSDAQ and KOSPI small/mid-cap stocks are currently “smashed” and materially undervalued.
• Investors with valuation discipline should consider buying these beaten-down segments now.
• Leveraged ETFs tied to cyclical stocks like Samsung Electronics and SK hynix suffer from negative compounding and must be avoided for long-term holdings.
• Market irrationality is a permanent feature that disciplined value investors can exploit.
• The key distinction is whether a position is entered as a valuation-based investment or as a speculative trade.