Even Reflecting the Worst-Case Scenario, It's Undervalued Now

Summary

Park Se-ik draws a historical parallel between the current market and 1987, warning that leverage and algorithmic trading could cause sharp declines. However, he argues that the KOSPI is now extremely undervalued — even under a worst-case earnings drop — and expects a recovery similar to the post-August 2024 rebound, dismissing systemic risk.

• Explanation of the 'gray rhino' risks: a memory listing and a potential Fed rate hike.
• Detailed 1987 Black Monday analogy: Fed tightening, program trading, margin calls, and Greenspan's liquidity response.
• Current leverage and algorithmic trading could amplify a sell-off, but a Greenspan-style put may appear.
• Despite the sharp correction, KOSPI P/E of 5-6x prices in a 30% EPS decline, making it too cheap.
• Dismisses China NOR flash, Iran, and Middle East as non-trend-breaking issues.
• Sees falling oil and rising unemployment as potential catalysts for lower rates and market rebound.
• Compares to August 2024 crash: no systemic risk now, yen weak, won stable, recovery likely.
• Concludes the deep valley is just an overcorrection after a high peak, with upside ahead.