For those who don't know what's going on in Korea, KOSPI is up 3x in the last year and a large amount of HBM employees have made huge amounts of bonus pay. This has led to an insane FOMO frenzy in a society that's already very competitive.<p>Add to that, stock gains in Korea are often used to finance housing purchases (or real estate investment) so many retail investors are scared of being "locked out" of housing (which is a requisite status symbol for dating or marriage) if they're not making the same capital gains others are.<p>Currently Korean social media is full of stories of leveraged day traders who've gotten rich the past year, HBM employees who've made bonuses worth decades of salary (e.g. memes of Samsung employees in luxury cars), etc. Lots of comments along the lines of "everyone is getting rich except me". It's all reminiscent of the crypto frenzy in the US a few years ago but way more intense and concentrated.
I wish we had a word for this, where everyone’s getting rich, there’s a run on stocks, but prices of assets are all going up. Some people are missing out completely whereas a select few hoard wealth in other forms. And of course the government starting to notice and trying to intervene.
Roaring 20s?
Irrational Exuberance
> housing (which is a requisite status symbol for dating or marriage<p>I get that culture is hard to change, but it still seems easier than changing the economics. There are men and women out there who presumably are interested in partnering up; at some point you'd think biology will take over irrespective of which achievements have been unlocked. What's stopping them?
Social status is a big part of what makes a person attractive especially if you're a man.
System of education? The current form of it have nudges and blockers everywhere to stop population explosion leading us all into Soylent Green type situation.
I thought Biology drives coupling, not partnering.<p>Porn and 4B divert coupling...
Housing usually is needed for living. Not a status symbol for dating. I see how it can help the same way as not starving to death will also help with dating, but the framing is odd.
With housing their being so cheap, what the hell is the problem anyway? It's impossible to have expensive real estate in a country that's dying out fast.
Housing is incredibly expensive. Roughly half of Korea lives and works in the Seoul metro area. The average salary is roughly 40,000 USD and the average apartment (maybe 84 square meters) is over 1 million USD.<p>Government efforts to cool housing inflation have resulted in a 40 percent minimum down payment for a mortgage.<p>Housing in Seoul and much of Gyeonggi is a pipe dream for most
Huh? According to <a href="https://seoulhomes.kr/en/properties/prices/" rel="nofollow">https://seoulhomes.kr/en/properties/prices/</a>, in Q1 2026, the average apartment in Seoul sells for ~₩1.2B, ~₩45M per 3.3sqm, that's ~840k USD and ~9.6k USD per sqm or ~900 USD per sqft, in what world is that cheap?<p>Population can age fast while the supply of desirable places to live still doesn't meet demand.
>It's impossible to have expensive real estate<p>no it's very possible because in an aging country people relocate to a handful of cities. 50% of South Korea's population now lives in the Seoul metropolitan area. The real estate that's getting cheaper is the one decaying in the countryside.<p>It's like saying Russia can't have expensive real estate because the country is big, what matters is where people are actually moving.
Cities in Australia consistently rank in the top 5 most expensive real estate indices and we ain't short of space here, it's just not many people are interested in living in a dusty Outback desert.<p>And for many, if the property is not within 10km of the Sydney or Melbourne city centre, it might as well be in the dusty Outback desert.
The story we were telling young people that if they apply themselves, go to school and get a job they'll be able to afford family, house, vacations is moving further and further away for more and more people.<p>The turn towards financial nihilism will continue.
We live in a capitalist society, not a labor-oriented society. The way to make big money is through capital - ie: purchasing property and then selling it for (hopefully) profit.<p>Laboring in a capitalist economy is a loser's strategy because your capital is you body's ability to produce value and that has a maximum physical limit. Why participate in an economy using a strategy that has a natural upper bound? It makes no sense. You're not even playing the game poorly - you're not playing the game at all.
This is the logical end conclusion, but in reality, we live in a middle ground where plenty of people have and will live in a society where they can sell their labor for a perfectly content life.
Did it never occur to you how the vast majority of people acquire initial capital is via labor?
Yeah, but it’s also plain greed, and it’d be hard to tell the ratio.
The threshold for greed is higher than the median net worth of an American. We tell people they need "generational" wealth to a make it in this country because housing, education, and healthcare are all so expensive
While "financial nihilism" is part of it, I think we should be putting even more attention towards the forces that are trying to deliberately encourage it for profit.<p>Kind of like pathological gambling: Sure, some people are susceptible, but there's also an entire industry around finding them and making them succumb.
"Smart men go broke three ways: liquor, ladies, and leverage." -- Charlie Munger<p>(Which is not to imply that these are smart men).
The problem isn't leveraged funds, it's margin on leveraged funds.<p>Leveraged funds are the safest way for the average investor to get access to leverage because unlike margin there is no risk of margin calls, and your money generally won't go to zero unlike options which are vastly more complicated and can expire.<p>The reality is that using leveraged funds (or any leverage) is a completely rational move because the average person will never retire wealthy unless they're already making a tech salary or similar.<p>Investing has always been gambling, even Warren Buffet made his biggest early wins on all-in bets.
> Leveraged funds are the safest way for the average investor to get access to leverage<p>I... do not agree that leveraged funds are somehow a safest way to access leverage.<p>Every product including leverage has inherently a non-linear P&L. And from my experience, non sophisticated investors <i>always</i> struggle to grasp the implications of that. It makes returns (on capital) very path dependent, and very nasty during volatile regimes. It breaks the naive assumption of "well I could always hold and wait for the dust to settle".<p>> unlike margin there is no risk of margin calls<p>This is a bit of a weird statement. Leverage implies margin, you cannot make it disappear, the funding and associated risk has to come from somewhere, it's just that it is continuously applied, instead of fixed timings.<p>I do agree that it simplifies planning and reserve management though.<p>> even Warren Buffet made his biggest early wins on all-in bets.<p>This is a bit disingenious, note that Buffet did not use leverage...
Leveraged funds can be an excellent tool for portfolio construction, for example, products like 100% stocks + 100% bonds (so -100% cash; internally borrowed in the ETF), e.g. RSSB.<p>And just because it's available doesn't mean it should be your only ETF/ETP. Not a recommendation or advice, but something like 50% TQQQ, and 50% risk-off asset (gold, bonds, whatever); rebalanced regularly isn't crazy, and might even have alpha.
I would be really interested to learn what the default advice for retail investors is across countries.<p>In Germany the consensus is MSCI World or FTSE All-World ETFs.<p>I believe in the US most advice goes to VTSAX (US Total Market), VOO (S&P500) and maybe QQQ (NASDAQ100) which means only US stocks.<p>What gets recommended in other countries?
Italy - vwce or any all world<p>This of course if you're doing by yourself, banks definitely won't recommend that but some other bullshit fund with high costs and poor performances
Generally the default fund in a decent 401(k) (employer managed but largely employee funded retirement plan) will be a "target date retirement fund" that contains a mix of equities and bonds according to the expected risk tolerance of someone at that age, and generally the equity component is also split between US and foreign equities.<p>e.g. Fidelity's fund for people planning to retire around 2050 <a href="https://fundresearch.fidelity.com/mutual-funds/summary/315792416" rel="nofollow">https://fundresearch.fidelity.com/mutual-funds/summary/31579...</a>
Disagree on that being the advice in the US. Most basic investment advice (and target-date funds) will use a three-fund portfolio containing US, ex-US, and bonds.
For a second, it appeared some found out.<p><a href="https://www.reutersconnect.com/item/south-korean-retail-investors-send-funeral-wreaths-urging-delisting-of-single-stock-leveraged-etfs/dGFnOnJldXRlcnMuY29tLDIwMjY6bmV3c21sX01UMU5VUlBITzAwMFIxQU9QUA" rel="nofollow">https://www.reutersconnect.com/item/south-korean-retail-inve...</a><p>But it seems there's still a lot in their FA phase in the FAFO cycle.
It’s just gambling, not investing.
It may be true but if you have nothing else going for you I can see why some folks would throw their leveraged hat in the ring.
Not the first time, not the last either. <a href="https://www.pbs.org/wgbh/pages/frontline/creditcards/themes/korea.html" rel="nofollow">https://www.pbs.org/wgbh/pages/frontline/creditcards/themes/...</a>
<a href="https://www.bis.org/publ/bppdf/bispap46k.pdf" rel="nofollow">https://www.bis.org/publ/bppdf/bispap46k.pdf</a>
South Korean gamblers are the index species of any global credit bubble.
As a Korean, the reason people rush into stocks is simple: labor value has been completely destroyed.<p>Realistically, it's nearly impossible for high income young people in their 20s and 30s to buy a house in Seoul. That forces them to move to the provinces, but then there's almost no infrastructure. No companies either.<p>So many people turn to leverage in hopes of a life changing reversal.<p>The recent rise in the KOSPI index happened because some of the loopholes that Korean conglomerates used to make inheritance easier were blocked by revisions to the Commercial Act. One of the uncertainties that had been called 'Korean risk' was removed, and the market went up.<p>For a Korean man, the moment you leave Seoul, not just the outskirts, but out of Seoul entirely, there's no one to talk to about IT jobs. I live outside Seoul, and the infrastructure gap is about 10 to 20 years behind. On top of that, there are no IT companies, just mostly low income manual labor jobs.<p>The median monthly income for Korean men is about 3 million KRW, while the average Seoul apartment price is 1.3 billion KRW and the median price is 997 million KRW. That means you'd need to work for about 25~30 years just to buy a home, but job tenure is getting shorter, so that's not realistic.<p>So people gamble on leverage, hoping for a life changing win. Everyone around me knows it's gambling, but they figure they're already in a dead end situation anyway, so they have nothing to lose.<p>I live and work in IT outside Seoul, but the IT business has already matured, and there are many well established companies. The Korean market itself is small, so early movers have already taken the lead. There's no room for latecomers like me. That's why I take on work from the West, China, and Japan regardless, but even that's hard without a reputation.<p>The moment you leave Seoul, a Korean's chances of success drop to nearly zero. That's why people cling to the city so desperately.<p>And honestly, I've hardly gambled on my life. But I'm drowning in debt, and sometimes I feel like a fool for working so hard.
> I live outside Seoul, and the infrastructure gap is about 10 to 20 years behind<p>That actually sounds like a business opportunity, if there is a steady stream of people moving out if Seoul.<p>> On top of that, there are no IT companies<p>Why don't Korean companies embrace WFH? Again sounds like a huge competitive advantage on the job market
Can people live cheaply in the outskirts and work remotely for a foreign company? Or would that still not get you on track to be able to buy in/near Seoul?
It could work, but those types of jobs (paying significantly more than local salary and yet fully remote in a different time zone) are few and not easy to get nowadays (not that they were ubiquitous before).
English(lang) is the problem.<p>Korean and English have very different grammatical structures. I can read English in real time, but writing, listening, and speaking are difficult. (Maybe it'd be different if I were more proficient, but I've never lived abroad, so that's how it is.)<p>Because of that, remote work usually requires speaking, so most interviews end in rejection. I can communicate through chat, but the vast majority of employers want interviews.<p>And as the IT industry has grown and become more established, Korea has developed its own standards that diverge from global norms. This makes Korean IT hard to sell globally. I try to follow global standards, but in Korea, I'm told I'm using 'wrong technology' or doing 'over-engineering.'<p>Either way, the technology you learn or implement is often quite different—because the market leaders set the technical standards.<p>So independent developers in Korea have to learn both Korean IT standards and global standards—on top of English. (This is extremely painful.)<p>So if I could do remote work for a foreign company, it would be really, really great. But in reality, English is usually where things fall apart. Koreans often praise Korean as a 'scientific' language, but for most Koreans, it actually acts as a shackle. On the other hand, it's also because of this language that the domestic market is able to maintain at least a minimum level of viability.
The headline is brilliant.
Are other countries like the West where 'markets' (equities, derivatives, prediction) have a wide ranging pervasive effect on culture?
Around the Evergrande collapse there were stories about Chinese retail investors who had pushed money into their domestic real estate industry’s stocks.<p>Also you might painting too wide a brush with “the West”. I wouldn’t assume that Americans and, say, Austrians have similar exposure to public markets.
US household assets are fairly well distributed between real-estate and equity markets. China for example previously had ~70% of its household wealth tied up in real-estate, which has suffered enormous declines over the past four or five years.<p>That said, there's no question that US households have grown fat on the massive expansion of the tech giants. A one trillion $ market cap was shocking not long ago, now you've got Apple and Nvidia at $4-$5 trillion, each about as valuable as China's top 25-30 stocks combined. The US wealth base is highly exposed to a PE multiple compression event, which is likely whenever the bubbly valuations centered around the AI boom reduce.<p>Also to put a reference figure on it, China's top 500 stocks are roughly worth $11.5 trillion. Nvidia + Apple are worth a combined ~$9.6 trillion.
Auatralians are a great case study. Once you control for pensions and similar indirect exposure, Australians have very high stock market exposure.
The Indian derivatives market is <i>huge</i>. Lots of people gambling there.
Indeed. It's so much bigger (in notional terms) than the underlying stock market that you can manipulate it by making large bets in the derivatives market, then move the underlying cash markets with much smaller bets, and collect profit.<p>That is what Jane Street (IIRC) was accused of. Some of its traders then went to another hedge fund and did the same trick there, reducing Jane Street's profit, and ended up being sued by Jane Street. (BTW, Jane Street claims it was not manipulation, but basis trade arbitrage.)<p>Of course, 9 out of 10 gambler end up in the red.
Do you consider South Korea the "West"?
Korea. A lot of people have been gambling on margin.
Especially in Korea, I know there's a sense of despair in the young adult population on their future. How will they afford to get married, have kids, have a house? Leads to chasing financial outcomes that are uncertain - crypto boom in Korea years back is an example
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