Transcription
This bubble, does it mean it will burst? It will definitely burst. It won't survive. Everyone already knows it has to burst one day. We have had many lessons, but I can tell you that when I say it will definitely burst, it's because when you expand and become widely invested like this, and everything is interconnected in a messy way, it becomes systematic. It becomes a full-blown systemic risk, just waiting to burst. However, I do recommend that if you choose the second path, I only ask that you don't overextend yourself. You can go all-in on your portfolio, but you must also account for risk, so if it goes bankrupt, you must be able to exit within the acceptable range. And accept the losses within the range you have set for yourself. Currently, the investment trend in Korea is not it. It's past its peak, and it only focuses on Samsung, SK, HIC, with leverage. This means it will swing a lot. Like last Friday, you were up 3%, and then you were negative. It will swing back and forth like this. Let it be. If it were me, I would go find other stocks.
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If it's like this, it's good. Guitar, it's good this way. For example, when inflation started to rise, and the Fed signaled that inflation could still be controlled.
Let's assume, assume the Fed signals that inflation can still be controlled. Inflation can still be controlled. And they don't raise interest rates. The market interprets that as no interest rate hike, right? In the past, for example, oh, inflation is coming, but we think it won't be sticky. It won't be sticky. Inflation might be approaching the target. The market interprets this as dovish, no interest rate hike. What does the market do? It goes all in on stocks. It goes all in on stocks. But in the end, inflation really came, so they had to raise interest rates. Did the market suffer? Yes, it suffered. But if the Fed truly changed its approach, according to principles. According to principles. According to principles, since according to principles, inflation is starting to come, according to principles, we must know that if inflation remains sticky like this, the Fed will have to raise interest rates anyway. We must start being cautious in our investments. And when they actually start raising interest rates, there is no damage. Do you understand? In the past, the Fed, I think, signaled too much. As Kevin said.
If it changes to a new approach, saying, "Well, according to principles. According to principles, we'll see." Something like that.
Yes.
This is an example. Excuse me, Guitar.
Yes, Ping.
Okay. So, ultimately, if it's the Fed in this "re-change" version, Ping, do you think we need to adjust our portfolios accordingly? We need to know if they can manage inflation. Will inflation truly come down? Everything points in a direction that should be better and more in line with what principles should be. How are you managing your investment portfolio now?
I think the direction of policy will be more correct, as Kevin said. It will be more detailed and will favor those who understand principles. This means if you understand economics, you will benefit. And as I assess, they probably won't raise interest rates this year. It's difficult. And from now on, they will stop. I've also asked a few times, and I've never been accurate.
Maybe, maybe correct in direction, but the numbers have never been right.
So, they will stop. Therefore, investing speculatively based on the Fed from now on will be nonexistent or very little. It should make investing more based on principles, which is good. Now, back to the present. If we use principles as I said, they probably won't raise interest rates anymore, and the situation is all relaxed. It's highly possible that we can continue in a speculative mode. Because if we remove the disturbing factors now, like inflation and interest rates, you have to look at earnings. And I think earnings in the second quarter shouldn't be a big problem, especially in America. It might even expand further. This means earnings should boost stocks to continue rising. As for whether it will become a bubble and when it will burst, we will have to worry about that in the next phase. But right now, it's unlikely to happen. And now, we have to admit that AI is just starting. It hasn't reached its peak yet. Why do I think it's starting? Because investment has just come in, and next year there are still plans for heavy investment. Therefore, everything related to this cycle, all of AI, must boom. Because the capital is enormous. I think whatever you do, don't argue with the capital. So now we have to follow it.
Yes.
This means, for example, for text, Ping, do you think it will continue to move forward and not stumble? It might be in two groups. The first group is those who already have it. Are they increasing their portfolios? Are they going all in? Those who don't have it yet, is it too late to get in now?
There is. First of all, will it burst? Does this bubble mean it will burst? It will definitely burst. It won't survive. Everyone knows it has to burst one day. We have had many lessons. But I can tell you that when I say it will definitely burst, it's because it involves leverage, borrowing, and a lot of fundraising. The structure of fundraising is extensive. Therefore, it will definitely burst. Okay? Anything that is too much becomes a bubble. If it's your own money invested, there's no problem. But whether it's good or bad, the problem will be concentrated in one place, right? It will be like an unsystematic problem, a specific problem. But when you expand and become widely invested like this, and everything is interconnected in a messy way, it becomes systematic. It becomes a full-blown systemic risk, just waiting to burst. Now, actually, there are only two strategies, Guitar. Either stop today, stop, and wait for it to burst. I believe that when it bursts, everything will fall lower than today. Do you understand? For example, if the stock price is 100 today, it might go up to 150, whatever. But on the day it bursts, it will be lower than 100. We can wait. But you will lose the opportunity during this period when it's rising.
But what you gain is peace of mind. You wait for it to burst, shop leisurely, and wait for things to become cheap. Case 1. Case 2 is that you might follow along during this period, follow along without thinking too much. However, I recommend that if you choose the second path, I only ask that you don't overextend yourself. You can go all-in on your portfolio, but you must also account for risk, so if it goes bankrupt, you must be able to exit within the acceptable range. And accept the losses within the range you have set for yourself.
Yes.
Ah, but if you are too aggressive, for example, you invest in Korean stocks, you take Samsung, SK, HIC, and then you go and buy ETFs with high leverage, focusing on those stocks, like you're afraid of getting rich slowly. You want high leverage. Like this, you can't control losses when problems arise. You must be careful. I don't really... I would recommend that if you want to reap the rewards, don't go that way. Just invest according to your means, with the money you have, and manage the problems. So, the answer is, right now, just go for it.
Yes.
Just go for it, but with caution.
Yes, but what about those that have peaked or risen sharply, like before, the chip stocks, or even those linked to Korea, Samsung, SK, HIC? The index has risen 100%. Ping, do you think it can still be pursued?
I avoid those. Because currently, the investment trend in Korea is not it. It's past its peak, and it only focuses on Samsung, SK, HIC, with leverage. This means it will swing a lot. Like last Friday, you were up 3%, and then you were negative. It will swing back and forth like this. Let it be. If it were me, I would go find other stocks that benefit from the capital of hyperscalers. Think about it. With such investment, how many data centers do you need? And don't data centers need power cables? Even the power cable manufacturers should benefit. During this period. Right? Everything related to it, you can go for those. There's no need to sit with things that swing up and down, and everyone is flocking to play there. There's no need.
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