Arcadian Asset Management has attributed recent U.S. market volatility to speculative trading by Korean retail investors.
Korean investors have a history of aggressively buying into stocks on the verge of collapse, such as during the 2008 Lehman Brothers crisis.
Opinion
Korean investors tend to take excessive risks in stock markets, which could lead to significant long-term losses.
Core Sell Point
The extreme volatility in U.S. markets may be a warning sign triggered by herd-driven speculation from Korean retail investors. A cautious approach is advised.
The extreme volatility in certain U.S. stocks and leveraged ETFs has recently been linked to the influence of Korean retail investors. Owen Lamont, Senior Vice President at Arcadian Asset Management, has warned that the U.S. market is increasingly being shaped by Korean-style investing, comparing it to the high-risk survival game in Netflix’s Squid Game.
Lamont noted that while Korean investors account for just 0.2% of total U.S. market capitalization, they disproportionately impact niche sectors, driving wild price swings in speculative assets. In particular, their heavy concentration in thematic stocks—regardless of intrinsic value—has fueled excessive surges and crashes.
He also pointed out a peculiar pattern among Korean investors: they tend to pile into stocks right before a crash. As an example, he cited the 2008 Lehman Brothers collapse, when Korean investors increased their purchases of the doomed company’s shares even as its financial instability became apparent. Lamont compared this behavior to historical cases such as Japanese retail investors in 1989 and growth fund investors in 1999, both of whom became emblematic of poor market timing before major downturns.
Lamont emphasized that such high-risk, speculative investments often lead to devastating losses for most participants. He urged investors to avoid getting caught up in a Squid Game-style trading frenzy, where the vast majority end up losing.
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