For decades, investors in Korean memory stocks learned a counterintuitive lesson: sometimes, the time to become interested was when the price-to-earnings ratio looked expensive — and the time to become cautious was when it looked cheap. There was a reason. Memory semiconductors were among the world's most cyclical industries. At the bottom of the cycle, collapsing memory prices crushed earnings. P/E ratios could rise dramatically even as share prices approached a bottom. Near the top of the cycle, the opposite happened. Memory prices and profits surged, earnings expanded rapidly, and P/E ratios fell. Stocks could suddenly look remarkably cheap precisely when the earnings cycle was becoming increasingly mature. For this reason, investors in companies such as Samsung Electronics and SK hynix could never rely on P/E alone. P/B, inventory levels, memory pricing, capital expenditure, capacity utilization and expectations for the next supply cycle all mattered. Then came artificial intel...