South Korea has just experienced something worse than the dot-com bust
It's tough to find any historical analogues for what's happened in the Kospi in the past 15 weeks.
Starting from April, the South Korean index rose 80% in just 10 weeks. That's been followed by a 40% decline, mostly wiping out the gain.
To put into perspective how insane a 40% decline over 35 days is:
- Covid was 33.9% over 33 days
- 1987 was 33.5% over 100 days
- Trump's tariff shock last year was 18.9% over 48 days
- If the S&P 500 fell 40%, it would wipe out the past five years of gains
Now no one is exactly feeling bad from the bulls because the 80% rally was only part of a triping of the index in a year.
But if we just take the past 15 weeks, the closest analogue is a scary one: The dot-com bust in the Nasdaq from 1999-2000. It rose 88% from October 18, 1999 to March 10, 2000, then fell 34% in the five weeks to April 14.
The bad news for the dot-com analogue is that the Nasdaq didn't ultimately bottom until October 9, 2002 -- a full two-and-a-half years later -- and declined 78% peak-to-trough. For the Kospi, that would put it at 2064, which is only narrowly below last April's low of 2284. That seems frighteningly possible given the nortorious leverage used by South Korean ants.
This article was written by Adam Button at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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