The World’s Craziest Stock Market Has Turned Into a Fright Ride
A slow-motion collapse in South Korea’s Kospi index erased $2.5 trillion in market value, burning investors who bet on the AI boom
https://www.wsj.com/finance/stocks/stock-market-crash-south-korea-ai-ccb00cba
[South Korea], which introduced Squid Game and K-Pop, now hosts the [world’s craziest stock market], showcasing a[ stomach-churning volatility] not seen in major markets in years. The benchmark Kospi index more than tripled in value, driven by faith in the AI boom. Two South Korean companies, memory-chip makers [Samsung] and [SK Hynix], soared to trillion-dollar valuations and became the twin forces pushing record market gains.
Then the Kospi plummeted around 40% over six weeks in June and July, burning hundreds of thousands of investors—a sober warning to those betting big on the AI industry. The roller-coaster ride has continued: The Kospi has..
9 Likes
Photo of an investor who got FOMO and jumped into the Kospi at the beginning of summer:
1 Like
All stocks, all investments, all products, all real estate—is worth what someone is willing to pay for it. That is usually based on anticipated future earnings, value, etc.
Excessive exuberance can create bubbles that can burst. Investments w solid earnings potential should be ok. But the lemmings sometimes go rushing to the sea.
2 Likes
Investments w solid earnings potential should be ok
Not being snarky here but how did stocks like that fair in 2000 and 2008?
3 Likes
Yes, and what were their price earning ratios. Most had no earnings. It was anticipated earnings. Clearly Nvidia is not over valued.
When Apple released the Apple II, how many did they expect to sell? How many PCs have been sold?
Investors seem to believe once the current series of data centers are built sales of memory chips will collapse. I think that is head in the sand investing.
Does anyone doubt AI is the future? Does anyone doubt it can grow 1000 fold from here?
At the risk of being pedantic, I doubt it can grow that much - I think you are at least one order of magnitude off (an extra zero). Market value of AI companies in the US currently sits around $2T. To grow 1000 fold would mean that AI grows to 2Q (Quadrillion). That number is more than 10 times the total value of all stock companies on earth, and twice as much as the estimated value of the entire world.
7 Likes
Not me! …and as so often artistic vision sees earlier than most: https://youtu.be/qxW0yGvWRTk
and https://youtu.be/W3S_0F1pcJc
2 Likes
Meanwhile Yahoo reports Nvidia earnings are up 64.75% yoy. Put that in your compound interest formula.
At that growth rate my calculator says Nvidia will be up 1085 fold in 14 years.
That may be a tad optimistic.
Jk
2 Likes
::chuckle:: You’re funny.
Tesla once thought they could achieve at 50% CAGR too. How’d that work out for them?
I will happily put that in my calculator - since you don’t seem capable of doing so.
Revenue in 2nd qtr: 96.2 billion - annualized 384B
1000 fold would be 384T - which is about 3 times the total global economy.
Not happening in our lifetime.
10 Likes
At that growth rate, trees will grow to the moon!
5 Likes
