Samsung Electronics and SK hynix Share Declines Caused by Mechanical Trading of Leveraged ETF Liquidity Providers

These providers are structurally required to force-sell about 2 billion won worth of stock about 10 minutes before the close if a particular stock falls during the session. This accelerates the price decline, and investors have come to learn this pattern, he explained.

Son said, "If it falls during the day, the liquidity provider has to dump 2 billion won about 10 minutes before the close. They have no choice but to sell. So it falls further. People have learned this." He emphasized the market impact of this mechanical trading, which amplifies retail investors' anxiety and creates a cycle that triggers further selling.

He stressed that because these two stocks account for such a large share of Korea's total market capitalization, their movements have a massive impact on the overall market index.

Son said, "Hynix and Samsung fell, so the other Korean stocks beside them fell too." He pointed to a domino effect in which the decline of these large-cap stocks dampens investor sentiment across the market and negatively affects other stocks. This is closely tied to the characteristics of the Korean stock market.

He assessed that these policies do little more than hinder retail investors' activity rather than solve the market's fundamental problems.

Son said, "It's not a fundamental solution, it just mildly gets in the way of retail investors." He criticized current restrictions as failing to address the structural problems behind market distortion, such as mechanical trading by liquidity providers.

He analyzed that weakness in the Korean semiconductor market signals to U.S. investors a negative outlook for the memory chip industry as a whole, which in turn leads to selling in the U.S. market. Conversely, Korean investors watch the Nasdaq when making investment decisions, forming an interdependent structure, he said.

Son said, "Korea fell, so U.S. investors started looking at the Korean market and investing. Memory must be bad. Sell U.S. stocks. But Korea looks at the Nasdaq. Circular reference." He pointed out that these links amplify volatility in both markets, a clear example of the importance and interconnectedness of the semiconductor industry in global markets.

Son said, "News often turns out to be the opposite. When bad news comes out, someone is spreading it because they want to buy cheap. When good news comes out, the accumulation is finished, so they throw it to retail investors and take their profit." He urged investors to identify the hidden intentions behind news and maintain an attitude that does not get swept along.

He described this investment style as "alpha," implying that it is a strategic choice that takes market trends and potential into account.

Son said, "I'm aggressively having fun with some things, this is alpha, and I wanted to give you a general idea that I'm investing in memory semiconductors and ESS-related companies." He indirectly revealed his investment philosophy and his confidence in the growth potential of these industries, reflecting his positive outlook on core technologies in the semiconductor and energy transition era.

This shift is part of a U.S. strategy to maintain global economic dominance through advanced technology industries such as semiconductors. In particular, semiconductor technology has emerged as a core element directly tied to national security, and the U.S. aims to control global supply chains and expand economic influence through it, according to this analysis.

Unlike the past, when oil underpinned the dollar's status, the tech dollar system is now being replaced by advanced technologies such as semiconductors. This is expected to bring fundamental changes to global trade structures and capital flows.

Son therefore stressed that investors need to understand the flow of this macro economic power shift and pay attention to technology-driven industry trends. He said this change could become an important consideration in shaping investment strategies.

This differs in form from traditional quantitative easing, but the analysis holds that it would be a similar policy that releases funds into the market to boost the economy. It suggests a political intent to raise approval ratings through economic activation ahead of the election.

He explained that keywords such as 'Trump stock portfolio' entered into Google search can surface related information.

This suggests that these records are not recommendations for individual investors to buy or sell, but can serve as a reference for tracking the investment trends of influential politicians. Their portfolios are sometimes interpreted as reflecting insider information or policy direction regarding particular industries or companies.

Expert Son Ju-bu stressed that investors should closely monitor not only interest rates but also the 'net liquidity' indicator. In particular, to anticipate the direction of President Trump's future economic policy, he suggested watching changes in net liquidity in the Treasury General Account (TGA).

He said, "Don't look only at interest rates. Look at net liquidity. If you look at it, you can get a sense of how President Trump will act. Personally, I think it's good to monitor the point when the Treasury General Account drops below." He offered specific monitoring points. A decline in the TGA balance signals a possible injection of liquidity into the market, so it can be an important indicator for gauging future policy changes.

This kind of indicator analysis goes beyond simply understanding economic phenomena and helps investors anticipate in advance how political decisions will affect the market, Son advised.

Expert Son Ju-bu emphasized ROE (return on equity) as a key indicator for judging a company's investment value. He explained that a higher ROE means better profitability for the company, and that this is closely related to barriers to entry in the industry.

He said, "I always stress looking at ROE, because high ROE means good profitability. But in industries with many substitutes and competitors, ROE is very low." He pointed out that in highly competitive industries with many substitutes, ROE tends to be low. Accordingly, a high ROE can be an indicator suggesting that a company has a strong competitive advantage or secures a monopolistic position.

Expert Son Ju-bu offered a distinctive view of Apple's AI strategy. He analyzed that rather than recklessly joining the competition to develop its own AI models, Apple will leverage its powerful platform to pursue market opportunities. This is similar to the strategy it took with LCD and memory companies: when one company falls behind or struggles in the technology race, Apple will acquire it cheaply, he forecast.

Son said, "Apple holds the platform, so when one company falls behind in the AI model race, they'll buy it at a bargain price. It's similar to how they dealt with LCD and memory companies in the past." He suggested that Apple will pursue AI technology acquisition with a long-term view. Since Apple already has a vast user base and hardware ecosystem, it is likely to focus on integrating external AI technology to create synergies.

This strategy is interpreted as Apple's intent to build a foundation for a leading role in the future AI market without taking on unnecessary risk. In other words, the analysis holds that Apple will strengthen its AI capabilities through acquisitions and partnerships that leverage its ecosystem advantage rather than through direct technology development competition.

Apple's AI strategy is therefore likely to maximize platform value with a long-term view rather than pursue short-term results, and to respond flexibly to market changes.

Expert Son Ju-bu strongly warned about the risks leveraged investing can pose in volatile markets. He explained that leverage creates a 'negative compounding' effect that accelerates principal losses and makes recovery very difficult.

Son said, "With leverage, it's hard to recover. When market fluctuations are severe, negative compounding occurs and your principal melts away." He pointed out that when the market moves sharply up and down, small losses under leverage snowball and can ultimately erode the principal. This clearly shows the trap of leveraged investing that seeks short-term gains.

He explained that one indicator may suggest the economy is slowing, while another may judge it to be overheating.

Son said, "Some indicators show the economy is slowing, and others say it's overheating. Honestly, statistics are open to interpretation." He stressed that while statistics contain objective facts, their interpretation can vary depending on one's perspective or analytical criteria. This suggests investors need to look at a range of indicators in combination before making judgments.

This indirectly shows the intensity of competition in the secondary battery market and the difficulty of securing technological advantage.

He said, "Just don't sell. If you don't sell, it's just an unrealized loss, but the moment you sell, it becomes a confirmed loss. If your stock fell because the company is really garbage, then you should cut your losses and get out quickly." He added that the key is not to sell indiscriminately, but to judge whether the company's intrinsic value has been damaged. If a company truly has problems, you should cut losses decisively, but if the decline is due to temporary market conditions, you need to be patient and wait.

In the end, Son stressed that long-term investing is not simply about holding for a long time, but about the mental discipline to withstand market noise based on conviction in the company you have invested in.