Summary of Key Points
The South Korean stock market has recently experienced rollercoaster-like fluctuations: it soared to a record high of 9,000 points in the first half of the year only to plummet by nearly 40% in 27 days, resulting in a market value loss exceeding South Korea's annual GDP. In a market dominated by retail investors, the nationwide enthusiasm for stock trading cooled down. As a result, the media and celebrities have turned the market's ups and downs into entertainment content (such as the variety show "Newbie Kim's Stock Market Mission" and videos of celebrities investing in stocks), which not only resonate emotionally with viewers but also reflect South Korean society's anxiety about wealth. Behind these developments are policy measures (to curb the housing market and boost the stock market), the use of leverage to amplify risks, and the withdrawal of retail investors following stricter regulations.
1. Stock Market Volatility Leads to "Stock Trading Variety Shows": Celebrities' Losses Become Entertainment
The sharp fluctuations in the South Korean stock market have turned celebrities' investment experiences into popular entertainment shows. For example, in Netflix's new variety show "Newbie Kim's Stock Market Mission," comedian Kim Won-hoon invested 850,000 RMB and lost 95,000 RMB (equivalent to the cost of a car). Other celebrities like Hong Jin-kyung and Moon Sang-hun shared their losses from buying stocks in Samsung and SK Hynix on channels with millions of followers. These programs are not traditional financial news reports; instead, they turn celebrities' investment failures into entertainment, allowing viewers to laugh at the situation while also feeling a sense of empathy.
Why is this content so popular? The stock market's extreme volatility creates a need for ordinary people to express their anxiety. The media has capitalized on this sentiment, turning the collective experience of everyone losing money into a form of entertainment that can be consumed.
2. Nationwide Stock Trading: Policies and the Housing Market Drive People into the Stock Market
Why do South Koreans invest in stocks? Mainly due to policy guidance and the stagnation of the housing market:
- Policy Influence: President Lee Jae-myeong has stated that "housing is for speculation, while stocks are for investment," and he used the KOSPI index rising to 5,000 points (later exceeding expectations to 9,000 points) as a campaign promise. The government has also cracked down on the housing market: purchasing property in the capital area now requires permission, mortgage limits have been tightened, and a property tax has been introduced, making it increasingly difficult to profit from real estate. As a result, money is flowing into the stock market.
- Social Demographics: Elderly people are selling their homes to invest in stocks due to the property tax, while young people cannot afford to buy houses and hope to get rich quickly through stock trading. Additionally, with low bank savings rates, retail investors feel that their money would depreciate even more if not invested in the stock market.
- Leverage Tools: Regulators introduced 2x leveraged ETFs linked to Samsung and SK Hynix (which essentially allow investors to "double their profits or losses"), intended to retain domestic capital. However, this has amplified risks; many people sold their stocks to buy these ETFs, leading to even more severe losses during market downturns.
3. Watching Variety Shows for Comfort: Is Entertainment a Painkiller or a Narcotic for Anxiety?
For ordinary investors, watching stock trading variety shows initially serves as a way to learn from others' experiences, but it often becomes a means of finding emotional balance. For instance, IT company employee Ya Jing experienced a significant market drop and felt relieved upon discovering that even celebrities could lose money just like her.
Experts argue that this is a form of "collective trauma healing"—by watching others' losses, people can release their own anxiety. However, there are potential downsides: when losses become a source of entertainment, viewers may become indifferent to the risks and mistake stock trading for a game of chance, forgetting the seriousness of investing. This is similar to the frenzy surrounding South Korea's previous "national cryptocurrency boom," where some people became internet celebrities after losing all their investments in Luna tokens, with 200,000 people suffering huge losses.
4. The Retreat of Fanatic Investors: Regulators Step In
After the stock market crash, retail investors began to "vote with their feet": within 7 months, their trading volume decreased from 48% to 31%, and foreign investors' share surpassed that of retail investors for the first time (37%). The government has also tightened regulations:
- Higher Barriers for ETFs: Buying leveraged ETFs now requires a three-hour risk education course and five simulated trades, with a minimum deposit of 140,000 RMB.
- Penalties for Stock Recommendation Shows: Four financial channels were penalized for encouraging viewers to join stock recommendation groups.
These measures are aimed at cooling down the market. After all, retail investors had already lost 10.2 billion RMB due to leverage; they can't be allowed to continue gambling with their money.
Conclusion
The entertainment-oriented nature of the South Korean stock market reflects societal emotions: on one hand, there is a desire for wealth; on the other hand, there is anxiety following sharp market declines. Variety shows may provide temporary relief, but true risk education cannot rely on watching celebrities suffer losses. Whether the South Korean stock market can move away from a culture of "national gambling" and towards more rational investment depends on the maturity of both regulators and investors. For us, this serves as a reminder: investing is not entertainment; leverage should be used with caution, and luck should not be mistaken for skill.