Never Underestimate Korea Again

Rachel's portfolio.

Judging by composition and timing, it was flawless. Textbook, even.

Classic institutional accumulation pattern for a downturn.

The moment the economy peaks and starts to roll over is almost always tied to rate hikes. Capital rotates into names that benefit from rising rates. In the United States, that strategy would have been a lock.

"You figured it would work the same way in Korea."

"Hmph!"

"Wipe your cheek."

"I—is there something on it?"

Insurance and financials. Their earnings expand during rate-hike cycles, and the dividends are fat enough that institutions love them.

Which is exactly why she bought Osung Life and CD Finance.

Invest to the cycle. You might not hit a home run, but you rarely lose money either.

"This is Joseon."

"Excuse me?"

"There's a reason for that."

Nothing here is a single color. Treat an insurance company like a pure financial play and you get your nose broken.

Korean stocks have a complicated kind of charm.

They interact. Stock is chained to stock.

"Osung Life isn't an insurer. It's a holding company."

"A holding company…?"

"Yeah. It owns nearly nine percent of Osung Electronics."

"!!"

Nine percent sounds modest until you convert it at current market prices—over twenty trillion won. An absurd sum.

Bigger than Osung Life's own market cap.

The tail wagging the dog. It didn't matter how well the insurance business itself performed. The stock moved in lockstep with Osung Electronics. She hadn't known about that deformed structure, and that was how she got burned.

"Even so, financials should hold until the Fed's pivot is confirmed—"

"This is Joseon, I said."

Financials were no different. They were routinely billed as the biggest beneficiaries of rate hikes, since higher interest meant fatter net interest margins.

Except Korea runs on state-directed banking.

The government stuck its hand in. Want to operate a bank in Korea? Hand over the money, they threatened. Fund the policy loans. Cap the lending rates. Keep the dividends modest.

"???"

"They don't even announce the dividend for a given year until the next one, so buying on the yield is a pain in the ass."

People bought financials for the dividend and the stability. When you couldn't know what the payout would be—and the state was already skimming off the top—there was no reason left to own them.

For ordinary people, sure, it was a good thing.

Higher rates hammered households. Mortgage borrowers and small business owners groaned under the load. The banks absorbed the hit in their place. For the banks themselves it was bad; for investors, it was an unambiguous negative.

That was why cycle-chasers got stuck holding the bag. Institutions front-ran the accumulation, then dumped everything the moment the real rally window opened.

Which is exactly why the analysis crowd always ends up underwater.

In theory this, in theory that—

And then Korea hit them with "Life is live fire, you dumb fuck."

"Osung Electronics is just a futures-index steering wheel."

"……"

"Healthcare? Straight-up biotech pump-and-dump names."

"……"

"Telecom? In a country the size of a palm, how many more lines are left to connect? Long-term downtrend locked in."

There wasn't just one or two things you had to check before buying. Miss any of them and you got the back of the head.

That's why Korean stocks are hard.

Weren't stocks supposed to be hard in the first place? The truth was, developed markets weren't this tangled. Their financial systems actually protected investors. Blue chips didn't thrash around with no fundamentals underneath them.

"Even Warren Buffett hit GG and ran from this country."

"Warren Buffett…?"

"Never underestimate Korea again."

In Korea, that was daily life. Hell, you could call the entire KOSPI a goddamn scam and not be far off.

Foreigners can't make money here with ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠ordinary investing either.

To retail traders, foreigners felt omnipotent—like they moved prices at will. Reality was different. Even foreigners had no idea which way a Korean stock would bounce. So they grabbed the wheel. They pushed it up when they felt like it and slammed it down when they felt like it.

"If they thrash capital around that recklessly, rival institutions would never just sit there and—"

"There is no 'rival,' I'm telling you."

"What?"

"It's a fixed game of Go-Stop. Everyone's in on it."

That kind of risk was impossible in any other market. But Korean institutions were incompetent enough that the freelancing worked.

They can mess around however they want.

Think of it as a quiet pact among themselves. Petty squabbles happened, but the big picture was cooperation. Fleece the retail.

That was why veterans of the domestic market clung so hard to junk stocks.

"Junk stocks?"

"Yeah. The large-caps get toyed with every single day. Looked at a certain way, the junk names are actually safer."

For Rachel, it must have been disorienting. The whole approach was a hundred and eighty degrees from the United States.

There's a reason for all of it.

Most American retail investors went long-term. Tax advantages, among other things, made it the rational play. Long-term investing for Korean retail? It was a synonym for getting wrecked. Only the short-term traders survived.

"So that's why…"

"That's why I push day trading so hard on the club members. In Korea, reading market psychology matters a hell of a lot more than analysis."

"I understand."

The fastest country on earth. To make money on the domestic board, you had to read the psychology and the order flow.

And it's only going to matter more from here.

Long-term investing worked in America because the market had trended up over decades. Everything else was secondary. The future wouldn't look like that. On a battlefield of pure survival of the fittest, only the strong made it out alive.

…That was his investment philosophy.

A rigid mind like Rachel's might have objected—

‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠

"An interesting perspective."

"Hm?"

"Short-term trading really does move on momentary psychology and flow. If you're serious about digging into that, I won't laugh at your investing."

Old Rachel would have snorted first. She would have worn that arrogant face that said she couldn't care less what he thought.

Different from Lecas, then.

Young Rachel had flexibility. She was listening, and she seemed genuinely interested in Korea.

"I always thought Korean food was just aggressive and overstimulating. I think I understand why, after today."

"That's only the tip of the iceberg."

"I'm sure it is."

Of course, old Rachel was still hot as hell. The looks might have faded a notch, but the atmosphere she carried had only grown more refined. Still in the realm of the possible even pushing fifty—like a Bordeaux that survived long aging and stayed alive.

Problem is, the stubbornness fully bloomed too.

The fucking bitch just thought she was better than everyone. If he needled her head-on, Rachel needled back in slow, circling loops.

Chew, chew.

An opening big enough to punch straight through that. He scanned her from head to toe while working the duck meat.

The flavor is incredibly consistent.

No matter how you ate it, it tasted good. The small duck Rachel had ordered was active enough that the fat was low and the meat clean—not tough, springy and tender. Premium protein that worked any way you cooked it. But if you wanted to suck the marrow out of the spine, you had to make duck stew.

"That was delicious."

"For me too."

"What? You're the one who brought me—"

"I'm about to eat."

"!!"

A warm atmosphere. The restaurant was packed with middle-aged men and women who paid their table no attention at all.

I told her from the start.

Where tonight's date was headed. Only now did it seem to hit her; her expression went rigid all at once.

Gulp.

He just waited. There was no force compelling her to keep the promise. A rigid woman like her didn't even know running was an option.

"Can I?"

"You're asking that now?"

"I'd be happy if you at least said the words."

It was already past nine. The sun was fully down, and the air outside had gone sharp and cold. He pulled her into a tight embrace from behind. Even with the coat on, what she wore underneath was barely a scrap of fluttering fabric.

Thump. Thump.

Skin that had been cold grew steadily warmer. Her heartbeat quickened—she was fully aware of what was happening.

"I don't… dislike the way you talk."

"Oh."

"If you promise you won't be rough."

"I promise."

"And… if we go all the way, you'll have to take responsibility."

She whipped her head away, uncharacteristically. The lack of composure gave her real feelings away.

I fucking knew she'd pull this.

First men who actually took responsibility made up less than ten percent of the total. So why him? Every Gold Sun and virginity bomber in the country would go ballistic. Blatant discrimination.

"All right."

"W-what is?"

"If we go all the way, I'll take responsibility."

"……Okay."

That kind of irrationality. You had to be able to beat it if you wanted to become a first-class investor.

Returns only exist on top of risk.

They headed for the hotel. She seemed to have truly made up her mind; she walked into the room without resistance. The door shut, and he crushed his mouth against hers at once. Startled, Rachel shoved him back and cried out.

"Wait. Stop it!"

"Why? Getting cold feet now?"

"At least let me… shower."

A first time. For a woman this obsessive, the details clearly mattered. He could allow that much. In exchange, he passed along one small request.

"I'm done."

"And what I asked?"

"I—I did it, but why would you even…"

She stepped out wrapped in a towel. More ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠eye-catching than the tight body was—

Nice.

That lush ass. She stood awkwardly, covering it with one hand.

"You told me to use something like an enema."

"You'll figure it out soon enough, won't you?"

"What?"

Time to enjoy some pleasure with no strings attached.