GeoMarketSignal

GeoMarketSignal Series 02 — KOSDAQ: Pricing Korea’s Next Technology Cycle, Part III There is a popular idea in the Korean stock market. When foreign investors begin buying a company aggressively, they must know something.Sometimes that appears to be true.  Foreign ownership rises.Institutional research coverage expands. The company enters more portfolios. And a stock that was once regarded as an obscure KOSDAQ name gradually becomes part of the mainstream investment universe. But there is an obvious problem with the story. Foreign investors can be wrong. Institutions can arrive late. Professional investors can buy cyclical peaks just as retail investors can. And a rising foreign-ownership ratio does not automatically mean that a stock is undervalued. So the interesting question is not if foreign investors are smarter than Korean retail investors, It is what point does a KOSDAQ company become investable to a much larger pool of capital? Because one of KOSDAQ’s defining characteristi...

GeoMarketSignal Series 2 KOSDAQ: Pricing Korea’s Next Technology Cycle, Part II KOSDAQ has never suffered from a shortage of dreams. Biotechnology breakthroughs. Next-generation batteries. New semiconductor technologies. Aerospace and defense. Robotics. Every generation of the market has produced companies promising to participate in the next great growth industry. Most did not become great companies. A small number did. And that distinction matters far more than whether KOSDAQ trades at 1.5 times, 2 times or 3 times book value. In Part I of this series, I argued that KOSDAQ cannot be understood through a single market-wide valuation multiple. The dispersion inside the market is simply too large. Part II asks the more difficult question: Why did some expensive-looking KOSDAQ companies become genuine quality leaders while thousands of others did not? The answer is not that the winners were cheap. In many cases, they were exactly the opposite. Investors were paying in advance for busines...