Recently, J.P. Morgan released a report predicting a “KOSPI 6000.” Many of you likely scoffed at this number, thinking, “Here we go again,” or “That’s ridiculous.” I understand. The KOSPI has been a frustrating ‘Box-Pi’ (trapped in a box) for us, and honestly, even surpassing 4,000 feels unstable.
But today, I want to tell you that the number ‘6000’ is not the point. This report is not a simple stock price forecast. It is a signal that the massive framework of capitalism is shifting, and it carries a message of ‘opportunity’ about why we endlessly pursue side hustles and self-improvement yet never move forward, and what we must execute.
“No Way,”… Why We Scoff at This Number
Why can’t we believe in “KOSPI 6000”?
It’s simple: We have learned from experience. For decades, we have painfully felt how individual investors are treated in the Korean market and how our capital is undervalued.
- The profits of the companies we diligently worked for disappeared, not through fair dividends, but through strange mergers or internal dealings.
- The value of the stock we bought sometimes became worthless paper, regardless of the company’s growth, due to the decision of a single majority shareholder.
As a result, we gave up on being ‘investors.’ We made an implicit agreement to live only as ‘laborers,’ grinding away to earn money. We immerse ourselves only in side hustles, second jobs, and self-improvement to increase our ‘labor income.’
It is at this exact point that we are missing the biggest opportunity in capitalism.
Why J.P. Morgan Says Korea is ‘Cheap’: The Essence of the Korea Discount
The perspective of foreign investors—like the giant capital represented by J.P. Morgan—is completely different from ours. They say, “Korean stocks are unbelievably cheap.”
This isn’t a feeling; it’s a number.
According to recent data from the Korea Exchange (KRX), the valuation of the Korean stock market (KOSPI) is shocking:
- PER (Price-to-Earnings Ratio): Approx. 12.7x (Developed Market Average: Approx. 21.3x; Emerging Market Average: Approx. 15.2x)
- PBR (Price-to-Book Ratio): Approx. 0.9x (Developed Market Average: Approx. 3.5x; Emerging Market Average: Approx. 1.8x)
Let me explain what these numbers mean in a more ‘fun’ way.
PER is how many times the stock price is compared to the money the company earns (earnings). Our stock prices are cheap relative to their earning power, even compared to other emerging markets, let alone developed nations.
PBR is even more astonishing. A PBR of less than 1x (0.9x) means that the stock price is cheaper than the value (book value) you would get if you liquidated the company immediately and sold off all its assets.
Why does this absurd situation occur? This is the essence of the ‘Korea Discount,’ and it is directly linked to the issue of ‘corporate governance’ that J.P. Morgan is pointing out.
How Does ‘Corporate Governance Improvement’ Relate to Me?
“Whether the PBR is 0.9x or not, what does that have to do with my side hustle?”
This is the very core reason we fail to grow into economic agents.
Let’s use the ‘pizza’ analogy to explain why the PBR is 0.9x.
- We pool money with 10 friends and start a 1-billion-won pizza shop (company). The shop’s assets are 1 billion won.
- However, the friend in charge of running the shop (the majority shareholder) secretly siphons off the pizza toppings and gives them away for free to their sibling’s store. With the remaining profit, they don’t pay a dividend (shareholder return) but suddenly buy an expensive motorcycle no one will ever use.
Knowing this fact, would other people want to buy a stake in this pizza shop?
“That shop’s assets are 1 billion won, but the person running it is going to skim off 200 million won, so I won’t pay more than 800 million won.”
This is the reality of a PBR of 0.8x to 0.9x. Because the ‘corporate governance’ is messy, the market has already factored in the ‘money to be skimmed off’ right into the price.
We cherish the 100,000 won earned from working a side hustle all night, yet we were numb to 200,000 won being ‘shooking’ (skimmed/embezzled) from the 1 million won we invested. Our money was treated as mere ‘pocket change,’ not ‘capital.’
J.P. Morgan’s rationale for shouting “KOSPI 6000” is simple:
If the law and system prevent the pizza shop manager from siphoning off toppings (Corporate Governance Improvement), that shop will be valued at its original worth of 1 billion won, or even more.
What the government and the market are attempting to do now, under the name of ‘Value-Up,’ is exactly this. This is not mere stock price boosting. It is a structural change to normalize the ‘Korea Discount’ that has been abnormal for decades.
The Capitalist Survival Guide: From ‘Laborer’ to ‘Economic Agent’
Oing always emphasizes action and execution.
Side hustles and self-improvement are great. But if they only revolve within the confines of the ‘labor income’ treadmill, we will struggle to achieve economic freedom for life.
We must grow into an ‘Economic Agent.’
An Economic Agent is someone who does not rely solely on labor income but can read the flow of capital and knows how to put their assets into that flow.
J.P. Morgan’s report is not just a number.
This is the strongest signal that the ‘rules of the game’ in the Korean capital market are changing. We stand at the entrance of a massive trend where PBR 0.9x assets are seeking their value of 1.8x, or even 3.5x.
What should you execute now?
First, Study. Search right now for what ‘PBR’ is and what the ‘Korea Discount’ is. Dig into the history of why the PBR of Korean companies was uniquely below 1x. You see as much as you know.
Second, Become a Participant in Capitalism. We have lived until now as ‘bystanders’ or ‘victims’ of capitalism. Even a small amount is fine. You must start the ‘execution’ of injecting your capital into this massive structural change. You must transition from a ‘laborer’ who only sells time to a ‘shareholder’ who injects capital.
Third, Change Your Perspective. Do not be seduced by the number “KOSPI 6000.” Focus on the ‘structural reasons’ that will create that number. Understand the driving force behind why the messy ‘corporate governance’ is trying to change now. That is the insight that penetrates capitalism.
We are living in an era where it is difficult to survive on ‘labor income’ alone.
Only by penetrating the essence of capitalism and growing into an ‘Economic Agent’ who rides the flow of capital can we survive. Whether you ride this massive wave of change or still sell only your labor time depends on your execution.
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Oing contemplates realistic side hustles and survival strategies in the capitalist structure, together with you.
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