Buying Zone for Samsung Electronics and SK Hynix... Review Portfolio Instead of 'All-in on Semiconductors'

Lee Jae-gyu, Senior PB Manager at SK Securities, pointed out that excessive focus on specific stocks can narrow an investor's perspective. For example, he noted that a common investor sentiment is to wait for the right moment to repurchase a stock after realizing profits, simply because they "like" that particular stock. He emphasized that now is the time to break away from such preconceptions and re-examine portfolios. Especially as the year-end approaches, he explained that a 'refresh' is needed to explore new investment strategies suited to current market conditions, rather than being confined by past successes.

He added that this can cause investors to miss out on other opportunities in the current market, so it's crucial to re-evaluate the market from a zero-base every day and consider buying and selling opportunities, even for stocks not currently held.

Manager Lee Jae-gyu emphasized that the most crucial aspect of participating in the stock market is the degree of cash allocation. He advised against extreme investments, such as selling all stocks or, conversely, going 'all-in' on a specific stock with all assets. He drew a clear line, stating that many investors aim for short-term high returns to achieve financial freedom and exit the market, but this is a dangerous idea.

Instead, he explained that it is important to allocate portfolios stably from a long-term perspective and flexibly adjust cash allocation. He stressed the importance of portfolio management for sustainable investment rather than short-term profit goals, advising a strategic approach of increasing or decreasing cash allocation according to market conditions.

He added that adjusting cash allocation is essential to prepare for market volatility and secure the capacity to respond immediately when new opportunities arise.

He explained the importance of risk management by likening stock market investment to driving. Just as one doesn't continuously press the accelerator while driving but adjusts speed and observes surrounding traffic conditions, stock investment also requires adjusting speed according to the situation and consistently monitoring market trends and risk factors. He added that just as one sometimes needs to reverse, it is important to know when to retreat from the market.

In particular, he explained that adjusting cash allocation is like maintaining a safe distance while driving, emphasizing that securing reserve funds to prepare for sudden market changes or crises is essential. This implies an attitude of flexibly responding to market volatility by appropriately combining aggressive and defensive investments.

Manager Lee Jae-gyu projected that the semiconductor and growth stock-centric trend that dominated the market in the first half would change in the second half. He noted that sectors and stocks previously not highly noticed are now showing movement, citing Binggrae as an example. This suggests a shift in global asset allocation standards, and he advised investors to recognize these changes and rebalance their portfolios.

He mentioned considering diversifying asset allocation to food sectors like Samyang Foods and Binggrae, rather than concentrating on semiconductors or technology stocks. This shift in market-leading sectors means that investors need to find new growth engines and should not rely solely on past successful formulas.

Citing Paul Tudor Jones' investment adage, he advised viewing the market from a zero-base every day as a crucial investment strategy. This means that regardless of whether an investor holds a specific stock, they should objectively consider daily whether that stock is a good buying or selling opportunity. He emphasized the importance of making the most rational decision at the current moment, without being bound by past judgments or emotions.

He explained that investors should evaluate stocks in their portfolio with a fresh perspective daily and be prepared to respond flexibly to market changes at any time. This mindset is essential for effectively dealing with market uncertainties and seizing new investment opportunities.

This conveys the message that investors need to train themselves to let go of attachment to specific stocks and focus solely on market signals to make rational decisions.

Manager Lee Jae-gyu analyzed that a shortage in the secondary battery ESS (Energy Storage System) sector is highly likely to occur around 2027. He anticipated that Korean companies would benefit most from this shortage, as domestic companies are building vertical integration in the ESS sector or have production facilities in the U.S. Vertical integration is advantageous for increasing production efficiency and ensuring supply chain stability, while U.S. factories can benefit from local policies like the Inflation Reduction Act (IRA).

This analysis suggests a structural growth potential that goes beyond mere short-term momentum. Therefore, the long-term investment value of related domestic ESS companies may be highlighted, and investors should closely monitor the trends of these companies. However, he added that when making individual company investment decisions, investors should comprehensively consider the company's technology, market competitiveness, and financial status.

Manager Lee Jae-gyu pointed out a peculiar discrepancy in the KOSDAQ market, stating that while the composite stock price index has risen by 100% over the more than 20-year period from 2005 to the present, the KOSDAQ market capitalization has surged by a staggering 1300%. This data indicates that although the number of newly listed companies on KOSDAQ continues to increase, individual stock prices have not grown commensurately.

This suggests that while the market size has grown due to many new listings, there is insufficient post-listing management for companies or a general lack of growth momentum in the market. Many listed companies fail to achieve sufficient growth, disappear, or see their stock prices underperform, leading to a situation where the index itself does not show a significant rise despite the overall increase in market capitalization.

Manager Lee Jae-gyu recommended an ETF (Exchange Traded Fund) approach for the pharmaceutical and bio sector, citing the difficulty of analyzing individual stocks. He explained that individual pharmaceutical and bio stocks have very high price volatility due to various variables such as new drug development success, clinical trial results, and technology exports (licensing out), making them difficult for general investors to predict. Although Hanmi Pharmaceutical recently announced a technology transfer licensing out worth over 3 trillion won, its stock price movement responded more to expectations for obesity drug sales in the second half, independently of this news.

This case demonstrates the complexity and high specialization of the pharmaceutical and bio industry. As it is difficult to accurately grasp the fundamentals of individual companies, he advised that ETFs, which invest across multiple companies, can be a relatively stable investment alternative. He emphasized that investors should approach the sector by looking at overall growth potential rather than being swayed by fragmentary news about individual companies.

Manager Lee Jae-gyu revealed his short-term response strategy by disclosing his investment portfolio adjustments from last Thursday to the present. He stated that he increased his semiconductor allocation by 5% and his ETF allocation by an additional 10%. While these increases reflect expectations for specific market conditions, he also made it clear that this is a short-term approach.

He emphasized that if market trends move differently than his expectations or if he feels it's 'not right,' he plans to immediately cut and sell those holdings and re-secure a 30% cash allocation. This demonstrates an aggressive risk management strategy to flexibly respond to market changes, minimize losses, and secure cash for the next investment opportunity.

Manager Lee Jae-gyu stated that his current KOSDAQ allocation is 35%, and he intends to increase it to a maximum of 40% after re-evaluating market conditions this Thursday. Just as he previously likened the stock market to driving, he explained that he plans to pursue a more aggressive portfolio strategy if he determines the KOSDAQ market has entered a 'safe zone.'

This shows a predisposition to flexibly adjust his portfolio according to market trends and his own judgment, and to actively increase investment allocation when opportunities arise. The stability of the KOSDAQ market will be the key condition for increasing allocation, and investors should pay attention to Manager Lee's next market analysis and strategy changes.