Three hours earlier, at the risk management meeting.
The risk team, recently on the verge of becoming unemployed, attended the meeting with unusually tense expressions.
It felt as though this might be a year recorded in the history of the Korean stock market. Donald had threatened tariffs and hounded companies to build semiconductor plants in the United States, but our KOSPI had pierced the sky without taking any damage.
The reason even the threats of the almighty U.S. president had failed was because of the demand outlook for HBM semiconductors.
Every global ratings agency had predicted that the supply-demand situation for DRAM semiconductors would become even tighter going forward. Thanks to that, no matter how much Donald glared and harassed everyone, stock prices soared. Just as pickaxe companies raked in money during the gold rush, it seemed the AI era would ultimately have semiconductor and GPU companies raking in the cash.
And that was not all.
The war that had broken out on the other side of the planet was sending our defense stocks up like manipulated shares. When they surged nearly tenfold from their lows, concerns about a bubble rose sharply. But Europe’s defense industry turned out to be flimsier than expected, NATO’s division raised the probability of Europe rearming, and that naturally led to growing expectations for Korean defense companies.
The cost-effectiveness of the K9 self-propelled howitzer could be called the “reusable launch vehicle” of the defense industry.
And it did not end there.
The auto industry, which had been falling without a floor, was revived along with Atlas. Asan Motors, which had secured both technology and unit costs through its acquisition of ARG, announced that it would commercialize it as early as next year, and many experts predicted that its first testing ground would be Alabama or Georgia.
Although it had built factories in the United States while gritting its teeth, observers believed it would challenge unmanned manufacturing processes through a joint project with the American robotics industry.
“If everyone’s here, let’s start the meeting.”
In this way, the Korean stock market was enjoying its first super boom since the beginning of history, but today, the risk team’s faces were grave.
“Who’s presenting? Team Leader Kim?”
“Yes, Director. It’s me.”
“All right, start the meeting.”
“I think we need to liquidate our KOSDAQ holdings.”
Team Leader Kim began with a bombshell statement, wearing a bitter smile.
“These are the top ten KOSDAQ stocks by market cap, including Alte. But the picture is another theme-stock frenzy. Comparing the two stocks that rose close to the daily limit, there has been no change in revenue or operating profit.”
“I was going to ask about that anyway. Why on earth did those go up?”
“They rose on the news that Hoam Electronics had acquired shares.”
“Other than that?”
“They say it’s because of expectations that they’ll benefit from robotics... but honestly, I don’t know. Their performance doesn’t support it at all.”
Recently, KOSDAQ had broken through the 1,000-point mark for the first time in five years, writing a myth of hidden champion companies.
They played in a different league. When KOSPI blue chips rose just 5%, people shouted “surge” and “jackpot,” but here, 25% was the baseline.
It would be a wonderful thing if Korea had more strong small and medium-sized companies, but the problem was that their momentum—growth engines—was questionable.
The recent rise in KOSPI blue chips could be explained by the perfect alignment of three factors: supply-demand outlook, market caps of peer companies of similar scale, and immediate operating profits. But every reason behind KOSDAQ’s rise was opaque.
“Director, haven’t we seen this more than once or twice? It was exactly the same during the last secondary battery craze. They suddenly rise, then suddenly fall. Stocks that rise purely on expectations, without operating profits to back them up, are bound to fall like balloons losing air. We need to dispose of them immediately.”
Director Oh sank into thought.
KOSDAQ, having broken past 1,000, had now settled at 1,200 points. But if the pension fund dumped its holdings, it would soon return to three digits again.
Should they really do something so cruel again to our small and medium-sized companies, which were finally enjoying a warm breeze for once?
“...”
But that hesitation vanished the moment he checked the stock charts.
Three straight days of 20% gains. P/E ratios of 6,000 times, 7,000 times, 8,000 times... These charts, which made Bitcoin look safe by comparison, seemed like the very peak of madness, to the point that he could not bear not to press the sell button.
Hadn’t they already experienced this several times? Most recently, the great crash of secondary batteries.
“Damn it. This isn’t stock investing, it’s baccarat. Does anyone have a different opinion from Team Leader Kim?”
Everyone was silent.
Having confirmed their stance, Director Oh opened his mouth.
“Good. Team Leader Kim, liquidate the holdings according to the report you submitted today. And this won’t be the end of it. Each team lead, look further for stocks whose operating profits haven’t been confirmed but have risen solely on expectations, and start liquidating those holdings too.”
“Yes, yes. Understood.”
After ending the meeting, Director Oh looked at his watch.
“By the way, why is Lee Sejun so late?”
*
The KOSPI 6,000 era.
Another task had arrived for our stock market, which was writing the greatest history since its inception.
It was called “K-shaped growth.”
It was a term referring to polarization in the stock market, showing one side of our market where only sectors like semiconductors were growing intensively.
In truth, this was not a criticism that had only recently been raised. For over a decade already, many experts had pointed out that the Korean economy was hanging by a single tightrope called semiconductors. But that tightrope was tougher than the ropes used in rock climbing, so we were somehow continuing to climb just fine.
‘We shouldn’t sell this...’
After reading the report, I repeated the same worry for several days.
Our risk team had judged KOSDAQ, which had now reached 1,200, to be overheated and decided to dispose of a considerable portion of our holdings. Among them were secondary batteries.
So I searched through my memories of the future.
I could not remember clearly. Several decades later, had SecondPro still existed, or not...?
SecondPro was a rare tech stock on KOSDAQ, a company specializing in secondary batteries. In the coming age of electric vehicles, high-nickel cathode materials were essential, and SecondPro, while taking outsourced work from leading conglomerates such as Hoam SDI, Seongyeong, and Geumseong Energy Solutions, had instantly emerged as a KOSDAQ big fish.
But it had also been another theme-stock game...
SecondPro, with unrivaled domestic production capacity, had shown its spirit by seeing its stock price jump fivefold in just a few months, but over the following years, it gave all of those gains right back. And now, whether another craze had blown in or not, it had suddenly begun to skyrocket again.
[Why Is SecondPro Surging Again?!]
[Industry Expert: Hard to Find Major Improvements in Operating Profit and Revenue...]
[Expectations Due to the Blue House’s Remarks on Reviving KOSDAQ...?]
[Secondary Batteries Are Essential in the Electric Vehicle Era! Many Say This Is Its Fair Price!]
As I rummaged through the references, I smiled bitterly.
In truth, secondary batteries were the fate of industries across the board. Unlike primary batteries, which had to be discarded after one use, secondary batteries could be reused semi-permanently. You could understand them as the reusable launch vehicles of the energy industry.
The market that would unfold in the future was also vast.
Electric vehicles and secondary batteries shared an inseparable relationship; just as more car sales meant more car wheel sales, secondary batteries could not fail to sell as long as the electric vehicle era continued.
But there was one crucial blind spot here.
China, again.
Recently, China had conquered every energy-related sector, including solar power, and had expanded its business terrifyingly. Because of this, many experts assessed that Korean secondary battery companies would not be able to withstand China’s low-price offensive.
Just as our ambitious solar company KD Solutions had been smashed by Chinese companies, they predicted the same scene would unfold in this field as well.
“...”
That was precisely why my concerns ran deep.
The experts’ predictions were correct. China was practically sweeping up everything from resources like rare earths to battery anode materials, and no country could keep up with its cost competitiveness.
The recent growth of BYD, which had surpassed Teslan’s market share in the European market, was a preview of that. Going forward, China would threaten not only Europe but also the domestic automobile market with its tremendous cost competitiveness. Following Toyota’s bankruptcy last year, even the Volkswagen Group would now collapse, and China would grow into the undisputed greatest automobile company in the world.
And the larger their electric vehicle market grew, the more explosively demand for secondary batteries would increase.
These days, with so many industries overlapping with China’s, that also meant our rice bowl was in danger.
‘SecondPro... SecondPro...’
And I knew those side effects well too.
Whenever China held a material or component in its grip, it always threw its weight around. Just like the Korean Wave ban, Korean dramas and THAAD had nothing to do with each other, yet when diplomacy did not go their way, they always took out their anger in some unrelated place.
Secondary batteries would be no different.
Batteries were one of the core components of automobiles. We could not let them monopolize that.
“...”
Having made up my mind, I rose from my seat.
*
“Don’t sell SecondPro? No, buy more?”
Early morning, in the director’s office.
After reading the buy report, Director Oh hastily barked at me.
“Yes. We need to buy more.”
“Team Leader Lee, that’s basically baccarat. It’s gone up 88% in a week. No matter which institution’s explanation you listen to, it’s overheated.”
“Yes, so I also think we should be cautious about additional buying itself. But I’d like us to at least buy back the amount we already disposed of.”
The pension fund’s stake sold off up until yesterday was roughly 300 billion won. Besides that, the pension fund still had more than 1 trillion won worth of shares.
Originally, our management strategy had been to liquidate that position in stages, but with the petition I had just submitted, a speed bump had been placed in the way.
“Why on earth? We’ve already been burned once, haven’t we?”
The pension fund had a painful history with SecondPro.
Four years ago, when the secondary battery craze had been in full swing in Korea, we analyzed SecondPro’s value very objectively and coolly, and increased our stake to 2 trillion won.
But long-term investing was not always right.
After that, SecondPro plunged to the floor without any particular bad news and ended up worth a quarter of what it had been. In truth, the scariest stocks in the stock market were the ones that fell without bad news. That meant the original price had been a bubble.
“It was four years of hardship. The best move is to get out quickly before the bubble bursts again.”
“Director. You know secondary batteries are a core material for electric vehicles, don’t you...?”
“Solar and wind power were also core projects for carbon reduction. But what happened to KD Solutions?”
“This will be different!”
“It’ll be the same! Whether it’s secondary or tertiary, batteries will eventually be pushed out by China’s low-price offensive and lose the market.”
“Then all the more reason to grow it! Doesn’t that mean our automobile market will become even more dependent on China?”
“Hey! Why are you worrying about that? Are you Chairman Choi? Or are you the president?”
I answered.
“Director... I think we can do it. Please?”