The Big Short

Dr. Doom.

"Professor!"

Kim Won-wook held a professorship in the Department of Economics at Myeongryun University.

In the middle of a perfectly ordinary lecture—

"I watched your lecture on 119 Stock Talk yesterday. Is Korea really going under?"

"Hahahaha!"

A student tossed out the question with theatrical flair.

He was famous among the students, after all. Everyone knew he worked as an analyst. He showed up on YouTube often enough that ignorance was impossible.

Finally taking an interest in how the world actually works.

Until recently they had ignored him. The market had done nothing but climb. No one wanted to hear his rational take.

"Yes. For the time being, you can consider Korea finished."

"It's really going under!"

"Calling it finished is a bit much, isn't it?"

At last the bubble was deflating. The market was recovering its senses. Related stories flooded the news.

Even ordinary people had started to notice. But how serious the situation truly was remained another matter.

"Everyone knows Korea is an export-driven economy, right?"

"Yes~!"

"So when the global economy turns down, we feel it first. That's exactly why the Nasdaq rose recently while the KOSPI fell."

Almost no one truly understood. Even the students he taught mostly sat there going yeah, right while they listened.

As an economics professor, I feel a responsibility.

It wasn't the students' fault. Adults didn't understand the economy either. Korea was a nation of financial illiterates.

"Wow, so that's how it works."

"Even if our country itself is fine, if other countries struggle…"

"No wonder they call him Dr. Doom."

He would start by changing the students. The reason he worked as an analyst was the same: to spread knowledge among investors.

Because the only analysts out there are the ones goading people to buy.

Buy stocks, they all screamed. Hold long enough and everything goes up eventually. They brushed the risks aside. Stocks were risk assets, pure and simple. Miss the timing and you could get crushed.

"Professor!"

"Questions unrelated to the lecture can wait until—"

"Just one! There are people saying the opposite of you—that it's going to rise."

"Hm?"

Especially Yeom Yu-an. They didn't call him the King of Hell for nothing. Even at market peaks he recommended buying.

Compared to him, that young man is rather well-behaved.

There was a rising investor known as Sonik-jwa. He had correctly called both the drop in Osung Electronics and the rise in Osung Biologics. Not a macro call—just short-term price action. Impressive for his age, though.

"Water Rocket?"

"They say you're from the Water Rocket generation, so you ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠wouldn't get it."

"What's a Water Rocket?"

"Water Rocket—fwoosh~!"

The perspective had shifted. After he finished filming, Sonik-jwa had appeared on the same show.

Going long at a time like this?

And then he had dropped that mysterious "Water Rocket" line—aimed squarely at him.

Click, clack!

Kids these days spoke a language he simply could not parse. After class Won-wook searched the term.

What exactly did "Water Rocket" mean? New-generation slang never made sense on the first pass.

In an age of upward equalization, past achievements no longer carry much weight?

Only after digging through the internet for a long while did ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠he finally grasp it. In other words, what Sonik-jwa had been trying to say to him was—

Sneering.

When he checked the 119 Stock Talk comment section, the topic was already boiling over. Viewers had split into two camps and were brawling.

But look closer.

Come now. 119 Stock Talk viewers are far too sharp for this.

Plenty of people were defending him. To the audience it was obvious who was speaking sense. Sonik-jwa had essentially self-destructed. His supporting arguments were paper-thin.

"Simply put, every dog and cow is screaming crash right now."

"And that counts as a reason?"

"Yes."

"No, teacher~! From a macro perspective, or at least like last time with Osung Electronics—you must have some special reason, right?"

"Nope."

No. Astonishingly, the man had gone on an economics broadcast and preached mindless upside.

And this is the kid who called me a Water Rocket?

He looked about the same age as the students Won-wook taught. Sitting in the expert chair and spouting nonsense. Impossible not to feel irritated.

Even Won-wook, normally even-tempered, decided to respond in earnest this time.

His reputation was on the line.

"It's been a while, Professor! You've become such a superstar lately it's nearly impossible to get a face-to-face."

"Haha, so it seems."

As an economics expert he appeared on multiple programs. Lately he had been especially busy. Just as the host said, he had become popular among investors.

"Still taking a dark view of stock prices?"

"I believe Korean equities are overvalued."

"Whew—when the professor says it, it's no small matter."

"We're looking at a prolonged correction. What I'm telling people is that now is the time to reduce equity exposure."

The prophet who foresaw the crash. He might lag a little in bull markets, but bear markets were his specialty.

They were raining on his parade. Won-wook caught the irritating reactions in the chat window.

"But there are people predicting the opposite, aren't there? Messages are popping up in the chat…"

"Who?"

"Someone called Sonik-jwa who, like you, predicted a crash—only this time he's flipped."

The host said it. After the recent Osung Electronics affair the name was famous enough to come up.

Even a blind squirrel finds a nut sometimes.

It did not sit well with Won-wook. He wanted to settle the matter cleanly while he had the chance.

"Prices have fallen a great deal recently, so it's natural some people start thinking that way."

"Right~ It's dropped too far, hasn't it?"

"But corporate earnings are expected to slow, and the U.S. is still hiking rates. It's hard to argue there's much upside left."

"Ah…"

"And as long as Japan maintains negative rates, the won—tied to East Asian currencies—has no choice but to weaken."

Evidence and analysis. Sliding by with vague hand-waving the way that young investor did would be meaningless even if he happened to be right.

This was what a real expert looked like.

Rational investing.

It was the classic delusion of stock-market players.

Even if you walk into a tiger's den, as long as you keep your head you'll survive, right?

That only works when there's a clear reason. Leave the tiger alone and you live.

In the stock market you never know. Everything you see might be a trap—or an opportunity.

Take this trading volume, for example.

Retail investors were thinning out. With fewer buyers, prices had nowhere to go but down. That was the rational reading.

The more rational the investor, the easier it was to walk straight into the market's snare.

Put the other way: there's no one left to get in the way.

Market participants. Retail numbers were low. Institutions never really interfered with the open anyway. The stage belonged entirely to the foreigners. If they felt like it, they could push the market wherever they wanted.

They had been stomping the price into the floor. The reverse was equally possible—yet almost no one could picture it.

Why buy stocks?

The industry outlook was bad—too bad. He simply could not see a reason for the market to rise.

Because they thought that way, they could never climb aboard. Foreigners sat on top of the ants' heads.

As long as you keep thinking like an ant, you will never survive a bear market.

Playthings of the foreigners. The KOSPI was a place that could rise for no reason at all.