Patriotic approach to the marketHAN AE-RAN
The author is the head of the financial planning team of the JoongAng Ilbo.
Men push a boat into a sea of roaring waves. The sail flaps with the banner “Buy Korea.”
“We are confident of the Korean economy sailing into a great ocean,” the slogan said in the 1999 TV ad by Hyundai Securities on its “Buy Korea” fund. The main Kospi was still hovering in the 500s as the country was still reeling from the 1997-1998 financial crisis. The ad had patriotic appeal as it followed the famous gold donation campaign in March earlier in the year. The fund pulled in 10 trillion won ($9.2 billion) in just four months.
In an investor relations pitch, then Hyundai Securities chairman Lee Ik-chi projected the Kospi would break 2,000 and reach 6,000 by 2005. Investors went wild for the Buy Korea prophet. The Kospi broke 1,000 at the year’s end, although it skidded for the following five years.
The Buy Korea myth has been broken. But the capitalization of patriotism to bolter stock has become more audacious. Retail stock buying is called the “Donghak Ant Movement” — borrowed from the Joseon peasant revolution and fight against foreign invasion — as if retailers are defending the domestic stock turf from foreigners.
The reference of Donghak did not feel good when it first came up in March when the stock market endured routs from a foreign capital flight after Korea became the second epicenter for Covid-19 after China. In fact, the Donghak movement was a failed rebellion. Ants had been a demeaning collective connotation. It wasn’t clear if the meaning can please or annoy retail investors. The newsroom disputed over whether we should run such headlines. Some even proposed referring to the retail stock fad as a sovereign recovery campaign.
With the Kospi at new highs of 2,700, the stock market indeed must thank mom-and-post investors. President Moon Jae-in mentioned it in a cabinet meeting earlier this month. “At such difficult times when foreign and institutional investors are selling, individual investors have protected our stock market through the Donghak movement.” He also shared the credit, saying the government policy to bolster the stock market and protect individual investors had played a part.
Investing in stocks is not an act of patriotism. The head of a securities company can use patriotism to market a fund, but a president doesn’t need to do the same.