President Biden looks like an old gentleman, but in terms of policy, isn't he a bit stronger than Trump? If the Biden administration spends too much money, the fiscal deficit is increasing, and in fact , it is currently involved in two wars. In the past, Rome The same goes for empires and things like that, but when an empire is doing too well, it is very exclusive to others and appears in the form of excessive expansion, and this manifests itself economically. [Music] Hello everyone, this is Infomax Live. Hello, this is Sa. What issue have you prepared today as well? Let me say something first. Okay, welcome. Hello, yes, nice to meet you. No, now I only see the director of the center. We used to have a 2nd anniversary broadcast, and now we have committee member Yeol-Mae, committee member Han Sang-hee, director Lee, and I. At that time, we did a special broadcast. I did. Director Lee Jin-ho selected our Center Director Kim Hak-kyun as the performer he most loved and trusted at the time. When I said, “That’s what comes to mind when I look at the former Center Director,” I think that’s a unique standard for interpreting people. I’m actually saying this again. Today, you also brought information about the U.S. stock market. When I looked at the sheet you brought, I saw that you wrote in large text that an asset has a cycle. That's what I have in mind. Ah, the price of a certain asset will rise in the long term. If this happens, some people will not be able to think about the fact that it will break down. I think the public's evaluation of the price of an asset is actually linked to the movement of that price. When it rises a little from the bottom, it rises a lot. And then it goes up a lot. If it goes up, I can't buy it because it has gone up. If it goes up further, I think, ah, what am I doing now? So if you look at it that way, it's like the American stock market, which is now treated like a somewhat invincible asset in our time. It's been good for the past few years, and recently. The stock price is kind of moving sideways, but if you look at it broadly, the reason it's soaring like this and hitting an all-time high at the end of March and not falling well is because it's a very strong trend. So, I'm going to talk about the US market today. In fact, it will break down at some point, but it's almost the truth , but we don't know when that will happen . Now , I'm not saying that it's always a bit difficult for us, but it's just that the assets that have risen a lot have to be a little more difficult. I think it should be viewed with strict standards. In the end, I see good assets as all American stocks and very good stocks. When good stocks decline, it is not because the company is bad, but because the stock price reflects even very distant future expectations. In fact, even if the target is very good , things like that are happening now that the market has been moving sideways for a long time. First of all, the picture you see now is a drawing of the SM 500 index over the past 100 years. Well, if you look at it in the long run, there were difficulties, but well. There was a trend, but it went straight up to the right . I shaded it to show that the U.S. market is no longer just rising all the time. Well , right after the Great Depression, it was unable to surpass the high point for 13 years and went largely sideways. Also, in the 1950s and 1960s. In the good times called the Golden Age of Capitalism, American stocks were good, but then they went sideways for a long time from 1968 to 1982. So now in the summer of 1982, it was called a business crisis. In that magazine, uh, stocks went sideways for 14 years. Dead, the era of stocks has passed. That story just came out. Now that story has come out, stock prices should rise again. They have been rising for 20 years. And it was in 2013 that the US market surpassed the high point recorded during the dark computer bubble in the early 2000s. At that time, our KOSPI went up in level. So, regarding the country called the United States, I think it is good for Koreans to increase their investment in the long term. The United States is a country with innovation and good protection of property rights, so it really acts as a shareholder. It's a very good country, but I would like to say that in the long run, you need to look for good things about those assets over a long period of time, and that the market is not just going up without stopping. Since the stock price has gone up for a record-breaking 10 years now, uh, me too. I'm not saying when the U.S. market will fall, but there are now some common features that appeared when the U.S. market collapsed, so I'd like to share some opinions about them. Well, when stock prices fall, the market becomes expensive. Yes, and now. The performance that indicates long-term strength in stock prices is very good. Now is the time for the U.S. economy to be good, so when people are not worried and there is great optimism about the stock market, a phenomenon like this occurs where the stock market valuation increases. What you see now is shaded in red. Created by Professor Robert Shiller, who won the Nobel Prize in Economics, this is an economic adjustment. The price-to-earnings ratio, which we usually call PR, compares next year's performance with the current stock price, but this person is looking at the past 10 years' performance. So now. We are looking at how the stock price is evaluated compared to the profit power of the company at the time, which is highly volatile. If you look at it that way, the stock was very expensive during the Great Depression, and right after that, the stock price has been moving sideways for about 10 years. Also, when the DACOM Act was passed, Well, it was the most expensive time in the history of the U.S. stock market, and as of May, Professor Robert Shiller's blood is now 33 times higher. It's better than when it was enacted, but it's higher than during the Great Depression, so stocks are not cheap anymore. It seems like that , so now, before the market goes sideways for a long period of time, before the bull market ends, the market is now overvalued. In some ways, this is in line with our common sense intuition, but in terms of content, uh, the growth stocks of the time are very good companies for the United States. There were a lot of them. In the 1930s, just before the U.S. market went sideways for a long time due to direct purchases from the airport, I think the 1920s was an era of inventions that enriched people's lives much more than they do now. Gunpowder was made, radios, and automobiles. As a result, stock prices rose a lot, and it is difficult to find data related to the valuation of the U.S. stock market before and after the Great Depression, but the 1920s were a time like the one in the Great Gatsby novel when America was very heated . So those stocks were good, and the 1970s The United States has been moving sideways for 10 years, but what appeared just before that was 50 attractive stocks called Lyft. These were really blue-chip stocks. There were stocks like McDonald's, Xerox, and IBM, so people were excited about the growth potential for the distant future, and these companies were very good. In order to justify the current stock price, there was an addiction to certain growth stocks that companies pulled up to 10 or 20 years of performance to justify the stock price . And in the early 2000s, just before the US broke down, Well, there was this kind of enthusiasm for the dot-com, which many of you may remember. In that respect, in the past, I had a history of growth stocks rising from time to time, and in that respect, I thought of Magny, which is leading the U.S. market recently. I think the stocks called the Fisant 7 are much bigger companies than the stocks we saw in the past. Yes, they just sent a spaceship and are carrying out the government's agenda. You know, Google is just creating its own library of texts, so when I look at the stock prices of very good companies and how their stock prices reflect that good thing , I feel a sense of déjà vu, which is very similar now to back then. I would like to ask you a question before coming in today . Yes, 20, there are many. If you look at the data, even at this time, it was about 100 times like this, and Niti had a thesis, and at that time, things like Johnson & Johnson Pfizer were included in it, and they were all around 100 times. Yes, and Comber, at that time, the Nasdaq was 30,000 times the price. There is no valuation. But now, M7 is trading at about 40 times the price. Then, compared to then, the valuation of the ultra-large stocks and ultra-blue-chip stocks that lead this market are much cheaper. Compare them together. There are some who say that it is difficult to do, so it can be done, but in my opinion, the fact is that the 40 times the expected return on this stock is about 2.5%. Oh well, you can look at it that way, and I am also wondering what the current valuation is. I am not claiming that it has reached a certain critical point. In fact, the stock price is not falling because of excessive valuation. In fact, it is 40 or 100 times more expensive. If people have that faith in this company, it will not fall even if the valuation is high. I don't think so, so in a way, if there is a trigger that can break people's faith, the stock price will fall. In that sense, as you said, the current bubble is more effective than ever before. It's like a handover that is more difficult to sustain. It seems a bit difficult to make such a claim, but now I want to talk about a certain trigger. Well, when stocks are in a long-term sideways trend, before that, the bull market is a record-breaking bull market. Progress is being made and the U.S. economy is also very good. A government-sponsored anti-government organization called the National Economic Research Institute has recorded all economic cycles according to their own standards since the U.S. became independent in 1770-6. This period is the period of economic expansion. It needs to contract . Uh, the U.S. market went sideways from the late 1960s to the 1980s, and just before that, the 1955-1960s saw an economic expansion that was so extreme that it was called the golden age of capitalism. So, it's now expanding at a record high and stocks are rising a lot. After the value rose, a sideways trend appeared. And now, the period of the IT bubble in the 90s is actually a time when we say it was a bubble in hindsight, but when looking at the economy as a whole, that period was a time when there was great innovation in the economy. Stocks were overvalued. It's just that the American Internet innovation in the 90's really enriched the lives of mankind, and there was a record-breaking expansion of 120 months at this time, and now 2 Since the 8-year financial crisis, there has been an expansion of 128, so in some ways, it is now This partly explains why US stocks have been good over the past 10 years. The boundaries were very good, and stock prices have gone up to reflect that. But what I think is a bit ironic is that, as you may have intuitively felt as an analyst, people If everyone speaks with the same voice, the stock won't do well. So, when I was a junior analyst, I felt uncomfortable when I was the only one with an original opinion and a different opinion, but when I became a senior, when others expressed the same opinion as me, I felt uncomfortable. Oh, this must be wrong. I have been there. So in the end, what happens when the United States expands horizontally for 100 months and does too well is that the United States overexpands. That overexpansion means going very aggressively abroad. So, in the 1960s, If you look back on the United States over the past 10 years , the Cold War was on the other side of the Soviet Union, but in the capitalist bloc, the United States was the undisputed leader before Japan and Germany grew, and its soft power was also very strong. Season and fascism. James was treated as a hero for saving the library. However, as this country was doing so well, it basically got caught up in a lot of wars and entered the Vietnam war. So now that the United States, which was a free country, has been exposed to massacres of civilians in Vietnam, the Yankees are suffering. Such a legacy appeared at the end of the 1960s. So the increase in the fiscal deficit during the war was a phenomenon that occurred at the end of the long-term expansion of the 1960s, and the process of the U.S. economy collapsing in the early 2000s after the long-term expansion of the 1990s was actually also in the 1990s. If you think about it, the United States was an overwhelmingly strong country, but now the ideology has become capitalism, and in that situation, the United States was very powerful, but even then, there was a fiscal deficit. Ah, after the 9/11 terrorist attacks, Bush started a war. Let's invade Iraq and invade Afghanistan. In particular, when we invaded Iraq, even after we had passed, we said there were large-scale snow weapons, but there were none. And at least the US invasion of Iraq was not approved by many countries. Only the UK supported it, all over the world. As anti-war protests emerged, President Bush was treated as a symbol of lack of communication. Even now, when I think about it, there was an expectation that China would rise after the 2008 financial crisis, but I don't know about the future, but now China is somewhat of a bit of a bit of a bit. The United States is in a pinch, and there have been innovations over the past 10 years, and the United States is doing very well as in the past. But now, if the Biden administration spends too much money, the economic deficit is increasing, and in fact, it is in two wars. There is also intervention in America's soft power. If Trump is elected, then it goes without saying that he is now a very exclusive and bi-president. He looks like an old gentleman, but in terms of policy, he is a bit stronger than Trump. Isn't it much stronger? Yes, yes, but the tariffs are made by your country and make you pay a lot of taxes when you sell to us, but now they are telling you not to sell anything at all and to move the factories. In fact, it was the same with the Roman Empire and things like that in the past, but the empire was. When things are going too well, it is very exclusive to others, and overexpansion occurs, and what it shows economically is the expansion of the fiscal deficit. Now that you are talking about comparing each era, you start to see certain patterns and cycles that you mentioned. What do these hints do right before a sideways move ? If these signs appear one by one, the reason the center director showed this at this point is that now is the time to think about how to respond in preparation for the move. Whether this kind of upset will occur next year will be known only in passing. It may be possible, but I don't have any special ideas about it. However, if you look at each period, the optimism about the country called the United States is the strongest and the community is so confident that they just go to war. So, looking at the situation, at that time, It seems to be a bit similar to what we saw, so as investors, we have to pay attention to one standard. Well, in fact, it may not be true, but what I want to look at is the fiscal balance of the United States. This is the fiscal balance. You know, the reason why the fiscal balance is usually a problem is that when the fiscal balance worsens, the value of the currency weakens, and since you mentioned the Roman Empire, when Rome fell, it started to collapse as it began to depreciate its gold coins . This is not possible and instead it is Eurohas. However, the United States also has a severe fiscal deficit and is in a very difficult situation, but the dollar and other developed countries included in the index are even worse. They are more vulnerable to the dollar and are maintaining their currency by maintaining the value of the dollar. It's going back to a different pattern than the past. That's why they're trying to kill China. As long as the Chinese currency doesn't rise, no matter how much money the US prints, it's okay because the rest of the currency is not good. Can't we think of the picture like this? But that's a bit overly engineering. I think the dollar is actually stronger against the yuan now, and it's stronger against the won. Some people say that, okay, the US is bad, but Europe and Japan are even worse . If you think about it , the interpretation of the phenomenon may change, so I think the point you mentioned may be true, but it seems insensitive to say too much about the United States itself and Americans printing money. I think it's getting worse, but in that respect, I'd like to talk about a person called a rapper. Yes, the picture on the left is the U.S. government 's debt as estimated by the IMF. Yes, it's a ratio to GDP. Yes, it's 137%. In 2028, this is now the Biden administration. Last year, they paid about 6% of GDP, and if they spend it that way, this is what will happen. Now, this is one scenario that can be thought of when the Democratic Party recommends reappointment. But I think that when Trump was elected, there was a big change in the financial aspect. What I think is likely to appear is that the person called Assol is now an economist, but he is not a person who has gained that much authority in Academia. During the Reagan administration in the 80s, a person called Rapper has applied the idea to some extent. It is said that the rapper wrote about this curve on a napkin while eating at Woo Restaurant. Until the 1970s, the American economy was dominated by the government rather than leaving many things to the market. Since the Great Depression of the 1930s, Keynes has emphasized the role of government as a thief. Economics is now, in a way, the mainstream of capitalism. As we work with a lot of information, we have to pay a lot of taxes, so until the late 1960s, the highest income tax rate in the United States was as low as 92%. That's right, those rich people have no pleasure, but the government charges a lot of taxes. I'll do everything for you. That's what I heard when I was young: from the cradle to the grave. From birth to death, the welfare state model of Sweden and other countries was a general model of capitalism at the time. But these economic conservatives, people like Professor Eppo. At first glance, if all the information is collected through taxes, who will work? Productivity will not increase, and so Professor Arthur Laffer argued that it is now called the Leffer Curve. If the tax rate is cut, the government's tax revenue will decrease, but people work hard to calculate the output. The claim is that tax revenue will increase due to this increase, so it is Professor Laffer's Leffer-Laffer curve, and this is now 9089. This has been mentioned in all Korean economics textbooks since the late 1980s. But now, Professor Arthur Raber was born in 1940. I don't know what will happen or not, but these days, his name appears in the Korean media, and foreign media outlets say he could become the Federal Reserve Chairman after Chairman Powell . So in a way, I don't know what role he will play in the Trump administration, but in a way, he is now an economic conservative. It's a typical thought that they have . So, like the Democratic Party of the United States, progressives or liberals need to do something with a lot of information. They need to pay a lot of taxes and use information because they need it. The market is, well, they are capitalists, so they don't ignore the market, but the market is. It's not always perfect, and the government needs to intervene to make up for the market's imperfections. Well, the current Biden administration shows that. Oh well, they spend all kinds of money at all times. They say it's all eco-friendly, but in a way, they 're economic progressives. On the contrary, now, uh, the Republican Party. If possible, let's leave it to the market. I can see Reagan's face. Well, in a way, since the 80s, the era of economic conservatives has begun, and the era of so-called neoliberalism, where power goes to the market, has now opened. That's why I am President Trump. I think economic conservatives can cut taxes. That fits the conservative philosophy. Yes, progressives increase taxes, but the problem now is that if you look at history, President Reagan cut taxes in 1980. He cut taxes significantly in the United States. If you look at the highest income tax rate, the blue rate is now falling sharply. But I think the argument that tax cuts can revitalize the economy can be thought of as such. If you look at the tax cut, which is the philosophy of conservatives, the fiscal deficit will increase. It increases, and after the 9/11 terrorist attacks in 2001, the son Bush 's finances deteriorated while fighting terrorism, but he cut taxes again. So, during the Crington administration in the 90s, the U.S. fiscal balance was in surplus, but then the finances deteriorated. Trump Tax cuts will increase the fiscal deficit. Yes, so I think tax cuts are a choice that economic conservatives can make, but I think it is a superstition to say that tax cuts will improve the fiscal balance. The reason why is that is because of the philosophy of economic conservatives. That's right , then we need to cut taxes and reduce government spending. So when President Reagan took office, he made a statement that was very consistent with the identity of an economic conservative. He said that the American economy has many problems, but the existence of the government itself is the problem. Now, when President Carter was President, the U.S. government spent an average of 520 billion dollars per year in fiscal spending over the past four years. However, during Reagan's first term, fiscal spending increased by 56%. So, of course, this is a nominal value, so it is as much as the price increase. Biographically, it is going up, but in the early 80s, US prices did not improve in this way as inflation was controlled. So I think there is a dilemma. These conservatives need to cut taxes and reduce the role of information, but from the politicians' point of view, the money they once spent I think it's difficult to reduce, so I'm saying we'll cut taxes because the rhetoric of conservatives is that they can't reduce spending, so they cut taxes and the fiscal deficit worsens dramatically. In the case of President Trump, well, the Obama administration. Well, it's a government that spent a lot of money on information. It spent about $3.9 trillion under Obama, but $5 trillion was spent on Trump. Of course, the government spent a lot of money on fiscal spending in 2020 due to the coronavirus outbreak. Even if you exclude that, it's $4.4 trillion. The dollar amount was increased by 14%, and it was a time when prices almost didn't rise, so I thought, well, maybe nothing much happened, but in this situation where the U.S. fiscal deficit has increased a lot, people are now worried about the credibility of the U.S. government. Although it is high, I think it is special. What I think is the question of how the bond market and other things will react when a tax cut is made at this point, how can I say for sure that this will be a trigger that will decisively put an end to the long-term strength of the US market ? It could be an opportunity to bring about change, so I think we need to pay close attention to things like what will happen to American gold and the value of the dollar if Trump is elected and cuts taxes. It seems like the Fed bought your bonds. In fact, there was a similar issue in the UK, but it was resolved right away when Bo came forward and decided to buy the bonds. So, it can be resolved, but there is no possibility that the Fed can't do it. And now, in fact, it is. Everyone is worried that if they cut taxes and reduce finances, stock prices will fall, but there is actually a belief that if we just use finances and increase the budget deficit, stock prices will go up even more. Because more money will be released, I think that's what I was talking about in 2000. In 2022, Leeds Trussline was going to bench Thatcher. Yes, it lasted 50 days. So, in the 80s, there was Reagan, the dominant business owner whose conservative economics ruled the world , and across from that was Thatcher. So this Leeds. The person who became Prime Minister of the UK in the fall of 2022, Taurus, had a very similar hairstyle and said that he would cut taxes significantly. So now interest rates in the UK and the US are rising sharply, but as you said, the Bank of England has now taken on a quantitative policy. In some ways, I think the reason people are calmly thinking that nothing will happen is that the Federal Reserve can just buy bonds. I think there is a very high probability that even if there is a problem in the financial sector, it will not matter. I think it's a scenario we can respect, but what I think we need to look into now is that it will eventually become Japanese. Japan will buy bonds and government bonds under quantitative jurisdiction. If this happens, it will have the effect of increasing the central bank's assets. Then, Japan's boj, uh, asset size compared to Japan's GDP is 120%. You bought those stocks. You bought city stocks. Yes, you also buy Rich. So if you look at it that way, now after 2008, the central bank's In terms of the leading role, this is something that some in the economics world don't like about modern monetary theory, which can be said to be a minority opinion. The government has no vitality in the economy, so the government has to spend money. Then the government has to spend money. In my opinion, the idea that someone can accept the spent bonds and that the central bank can accept them is one of the most likely ways to avoid problems if the U.S. fiscal deficit increases, so we need to look at that possibility as well. However, one more thing I would like to say is that I think this is a very good book on the world economy viewed from the perspective of balance instability. Yes, this person is an economist at Nomura in the U.S. But in a way , it has been 15 years since this book came out. It's been a while, so back then there was no concept of MMT, but this person is actually in the position of defending MMT. Now they think that the Japanese government spent a lot of money, and as debt increased, they were unable to restructure, and Japan was lost for 20 years. Richard Coe's argument is the opposite. Oh, Japan spent money on information, so the community is unbroken and the same. But Richard Coe's core argument is that when the private sector does not spend money, the government can use it. So now, the private sector can use it. There is no way to know whether this money is being spent or not, but we generally call the side effects that can occur when the government spends money, which we talk about in economics textbooks, as the crowding-out effect. That's right, the government saves money in taxes for the private sector, which is government bonds. If interest rates are issued and taken away , the private sector and the government will compete for limited economic resources. If that happens, the interest rate trapped in the money will rise. So Richard Koo's great insight is that interest rates have continued to fall in Japan, which means that the private sector has no place to spend money. There is no, and then the information justifies spending money. And the reason why the interest rate did not rise is that Japan was in a deflationary economy, which in some ways is a very good condition for MMT . What we need to consider when it comes to buying government bonds is that the state government itself is spending money, and an environment has been created in which Japan can issue government bonds at will and the central bank can take over deflation. Since we live in an inflationary world and there is a situation where prices are rising due to the retreat from this world between countries, I think we need to think about whether the Federal Reserve can continue to do things like Japan. And anyway, Richard Koo According to that logical standard, interest rates should fall. In a situation where interest rates are falling, you can spend a lot of money on information, but in the United States right now, anyway, the interest rates are not the lowest interest rates. So, what I want to say now is, actually, what is the world like? Well, if someone says that this won't work because of this, the reality is that it won't work because of that. Something that we don't know about is coming, but I really, really like the United States, and we can see this through the stock market, but uh, it's not possible because of that. In relationships as well, in the end, I think that things get stronger when the moon is full. So, I think that this is one of the ways in which the United States is weakening, and what makes it vulnerable is the U.S. finances. Well, like you said in your reasonable objection, something special may or may not happen. However, as a point of observation, I would like to say that we may need to wait until the U.S. presidential election. As for the dollar, the light green index is now in general, and the U.S. market is in a sideways trend for a long period of time, and in times like this, the dollar is weak. Things have appeared and that's why I think it's like that when I'm in the financial market. The static expectation is that something doesn't happen. If we look at this static expectation, the world is very stable and even if something like that happens, this is what people will do. Now, I believe in the Federal Reserve and think so, but if the collective opinion of people is focused on whether there is some weakness, I think there is a dynamic in which that crisis becomes a battle again. In that respect, in the end, the U.S. I think it will be very good and important to know what the central bank will do, and now that the current inflationary environment is the US government spending money and changing the global value chain to its own taste, in some way, it will stimulate prices even a little. So , in the end, it seems like excessive optimism is shooting oneself in the foot or something like that. It's not about who's doing what, but if you look at it that way, then, well, I don't have the ability to make a claim like this. I don't even want to do that, but if we look at it with strict standards, wouldn't it be necessary to think about what happened in the past when the market was down? In fact, now when things are going well, we actually go up a lot. We often say that we need to stock up on stamina to prepare, but now, even the center director, there are many people who are optimistic, and so among our viewers, some of them have burned a significant portion of their assets in U.S. stocks . So, at a time like this, with the presidential election ahead of us, we ca n't be certain, but as you've emphasized, we can't be certain, but just in case, there were traces of this when the atmosphere in the U.S. market or the U.S. economy changed, so that's what I want to say. So, from what I heard right now, you said that it would be nice to see things like interest rate movements due to tax cuts and how weak things like the dollar move . But if you go into more detail and say that this kind of phenomenon occurs, it can be said to be a really dangerous signal. Could you please give me an example? I think it will ultimately be Lee. Gold prices. Especially now, the style of the stock market is a bit vulnerable if interest rates rise suddenly. Anyway, stocks with high valuations are what many of us think about in 2022. Now that inflation has occurred, which has not been done before, Huayu stocks have fallen even more. So, when people start to doubt trust in the U.S. government , how will interest rates in the U.S. move? So, what if I wonder if U.S. interest rates are If there is an adjustment in the market , I think that in this cycle, interest rates may rise and the dollar may weaken. Yes, now that people are fundamentally worried about the credit of the U.S. government, these things will ultimately lead me to think that U.S. interest rates will be higher. I don't think it's important. As you said, I don't know about gold, but when did the dollar weaken? It's the same as in the 1970s, so now it's not a market that gets adjusted by 25% for 22 years, but it's a 50% decline market that's almost a structural risk. I think so, but you are also thinking about it. Actually, it is difficult to know a priori that I will fall to that level, but if the United States collapses once, it collapses by 50%. It happened three times, and it happened three times in history, except for the Great Depression. That's because after the long-term expansion I mentioned, in 1973 and 1974, when the Lift PT collapsed and collapsed by 50%, there was a record-breaking expansion right before that. Actually, I'm not saying that's going to happen, but it 's the market. What I am saying is that anything can happen, so after the stock price rises sharply, the stock price undergoes another rapid adjustment, so something like that could happen. What is more important now is that it feels like a period of recovery. Yes, but now, it was really during the dot-com bubble in the 2000s. There were a lot of trash stocks, but Microsoft was a good company then, and it is still number one in market capitalization. It was number one in that cycle 20 years ago, and it is still number one if it is a great company. Microsoft will soon burst the bubble. At that time , it was adjusted by about 60% , but that can happen. But the important thing now is that it was adjusted like that in one year, and it lasts for about 6 or 7 years. That is why the stocks that people were all optimistic about actually once the big trend breaks . It takes a lot of time to recover the stock price from that high point, and I essentially think that this bubble, which is 80 times less than 40 times, is now a bubble. And it is not a matter of whether this is a bubble, but the logic of the American capital stock game is a bubble. This is necessary, but it is difficult for countries with bank-centered financial systems like the U.S., Japan, or Germany to have innovation. Ultimately, finance is supposed to provide money to new industries, but if a banker takes a step and does this and that, money is lost. I'm not going, but the country with the American-style VC-type capital market ultimately costs money, but I think the bubble is a necessary evil in American-style capitalism. When the DACOM Act was enacted, many companies were rising and falling. We were there for 20 years. In the past, what portals were doing attracted a lot of attention. People who bought dot-com stocks 20 years ago thought that Yahoo or Lycos Empas would become the main players in the portal world. But now there is Google. In Korea, it's Naver. But when there was a bubble, Google It wasn't listed at all, but I think Google wouldn't have been able to grow if it hadn't been for the boom like Yahoo or Lycos . So in the end, it's really good if people are smart and the money doesn't go to Yahoo through an economic path, but if the money goes to Google. That's after the fact. Luck is also important in business, and now, in what is called American capitalism, a big bubble is created, people get excited, the industry as a whole makes money, and the few that survive change the ecosystem. And what about the bubble? The bubble collapses. It causes serious damage to exposed investors, but other bubble boy technology bubbles have less side effects. There is something left. Well, Amazon was 93% correct at the time, Dacom and 300%. Yes, so this is true. In some ways, Amazon and Microsoft are now. It's a great company, but one person has emerged. The ups and downs are now very severe and in our country, uh, I looked it up once and in March 2000, in Korea, which was the leading market of the Dacom bubble, KOSDAQ Inverse, out of the 30 stocks with market capitalization, there were only nine left. There was nothing outside . They were all ruined, so the three worlds we think of were the Internet world. Shopping on the Internet and music also opened up, but the main players in that were the stocks that existed back then that are no longer there, but in reality, those stocks are going bankrupt and investors. Now they are suffering a lot of damage, but Korea has a dedicated Internet line, so I think this mechanism is a serious bubble or something less. I think it is worth discussing this, but this in itself is what American capitalism is like. Because of the dynamic way of overcoming it while taking it, I think that investors may suffer significant damage if it breaks down. It has always been like that, and I don't think the essence of what is happening now is fundamentally different. If you ask me one more thing, I'm originally different from the past. They always say that IS is the four most expensive English words. But now that you're talking about it, let's say it differently. Yes, in the past, it was difficult to buy American stocks overseas. So now, the proportion of people buying American stocks is If you look at it, you can see that the proportion of foreign companies has increased enormously. They used to hold the positions of old institutions, but now they buy them in places like Korea and Japan. For example, as countries like Vietnam and India develop more and more, they also want to go to the U.S. and buy stocks. You know, as time goes by, the supply and demand base of stocks in the United States gets better, so it is much less vulnerable to risk. How does it come to be seen this way? In the long run, I think this is the superiority that the United States has. I think it's the location, yes, but now, if we look at the current standards, Koreans can't be directors at all, they say it's the American society, but if that expectation changes, I think that trend can become a big trend in the long run, but now I'm looking forward to it. The moment it changes, it eventually sympathizes with that price, so people's enthusiasm is now there. It's clear that it's expensive. But now, if you look at it structurally, what are those things now? Regardless of the cyclical short cycle, it could be a factor in the positive U.S. market. Well, okay. Well, it's unfortunate, but I 'll end Part 1 here and send it to you. Part 1 was with Kim Hak-gyun, head of the Shinhyeong Securities Research Center. Thank you for listening. Thank you. Hello, this is Lee. If you want to see more videos, please click the subscribe button on the right side of the screen. And you know that liking is essential while watching the video. Thank you for always loving Infomax Live.
