"As Long as Semiconductor Exports Don't Decline, Adjustments are an Opportunity" - Park Se-ik & Cho Jae-wan of Chesley Investment Advisory

Cho Jae-wan, Quant Portfolio Manager at Chesley Investment Advisory, explained that the domestic KOSDAQ market has a specific pattern, much like the four seasons, and presented the results of analyzing past data. Looking at KOSDAQ market returns from 1999 to 2024, in even-numbered years, it recorded an average return of -17.8%, showing weakness.

On the other hand, in odd-numbered years, it recorded a high average return of +39.7%, showing strength. Manager Cho Jae-wan emphasized that based on this clear pattern, investors should understand these market flows, similar to climate, and utilize them in their investment strategies.

Park Se-ik, CEO of Chesley Investment Advisory, focused on the correlation between semiconductor stock prices and export amounts, analyzing that the current stock price adjustment in the semiconductor sector could be an opportunity for bottom fishing. In the past, in 2015, 2018, and 2022, semiconductor export amounts decreased, and stock prices also tended to fall concurrently.

However, currently, despite the continuous increase in semiconductor export amounts, only stock prices are falling, which is an unusual situation. CEO Park Se-ik emphasized that this discrepancy could be a good opportunity for investors.

He predicted that if semiconductor export amounts do not decline within the next 2-3 months, the current stock price decline is likely to be a temporary adjustment, and now would be an excellent time to buy.

CEO Park Se-ik cited comments made by SK Group Chairman Choi Tae-won regarding the semiconductor industry outlook, presenting a positive forecast. Chairman Choi Tae-won reportedly stated that there would be no new増設 (expansion) of memory semiconductors until the end of next year.

At the same time, he emphasized that demand for memory semiconductors remains very strong. CEO Park Se-ik stated that he gained confidence from this statement that semiconductor export amounts would not decline within the next six months. Generally, price adjustments may be necessary to prevent new competitors from entering, but currently, strong demand is offsetting this, he analyzed.

CEO Park Se-ik evaluated that changes in South Korean companies' shareholder return policies would act as a positive signal for investors. In the past, there was a tendency to utilize treasury shares even after purchasing them, without canceling them, but recently, many companies are shifting to shareholder-friendly policies, including the cancellation of treasury shares, he explained.

In particular, he positively noted the increasing number of companies adopting policies to use 50% or more of their free cash flow (FCF) for shareholder returns. He emphasized that these changes would enhance corporate value and investment attractiveness from an investor's perspective.

Cho Jae-wan, Quant Portfolio Manager, explained strategies for responding to event risks such as unpredictable 'black swans.' While black swans deliver unexpected shocks, analysis of past cases shows that the market tends to recover within approximately 50 business days after a crisis occurs.

Therefore, he advised that rather than succumbing to fear and selling when a portfolio has lost 30-40% due to a black swan, it is a wise strategy to hold and maintain stocks at that point. He explained that by holding instead of panic selling, one can recover losses and even seize opportunities when the market recovers quickly.