Two attributes to make you a better investor

**SPEAKER_1** (0:00)
Good to be back. How's everything over there at Munro Partners?

**Qiao Ma** (0:03)
Going pretty well. You know, we've had a couple of really strong years. Just wrapped up a pretty strong financial year and dive right into a pretty volatile earning season. So a lot to talk about, lots to say.

**SPEAKER_1** (0:16)
Yeah, most definitely. Well, I'm going to use that as a convenient segue to our first question. I know we don't usually focus too much on, you know, kind of current market events, but I thought given, you know, your areas of expertise around, you know, tech and AI and things like that, and also your mandate being in small mids, you might be able to offer an interesting perspective on what's been happening in the Korean stock market lately, and in particular around SK Hynix and Samsung.
I was just wondering, did you have any insights as to what's been happening there? You've got two companies worth close to or on either side of a trillion US dollars, that seem to be trading like nano cap mining explorers at the moment, moves of 15-20% per day, it's quite unusual. What do you think is going on there?

**Qiao Ma** (1:16)
Yeah, I mean, look, I think in the near term, the market always have some pretty quirky dynamics, especially when you start to look at an emerging market, sort of stock market like the Korean stock market. So I think, if we zoom out a little bit, what actually happened and obviously the hindsight is always 2020 I think with all these really big volatilities, I think the answer tend to be more clear a little bit after the event. So when you're still sort of tumbling in the vortex, I think both stocks are up more than 20% today. It's hard to pinpoint exactly what's causing it. But I think in terms of the massive rise and then collapse over the past couple of weeks, there's definitely a lot of retail leverage. I think there's some funny antidote again, really hard to verify that one in 30 people in South Korea has received a margin call from their brokers. Again, just here to say an antidote, but I think you did illustrate just this retail participation and frenzy in the stock market. And then obviously yesterday, we also saw a fairly large US hedge fund that is very heavy in the AI stocks. It's called situational awareness.
Also got a pretty severe margin call, basically folded the assets and Citadel ended up buying it on the cheap. So you do have some quirky things happening in the capital market as we speak. But I think it all goes back to the good old Warren Buffett's great quote. I think in the near term, the market is a voting machine. What you are seeing is 20% ups and downs is literally just people voting.
More people voted yesterday than no, so the stock goes up, more people vote no, so the stock go down. But ultimately, the stock market, the stocks do reflect themselves as a weighing machine. Ultimately, you go back to the profits, the fundamentals, the free cash flows. From that aspect, I would say the memory companies in general are probably going from strength to strength, and we have seen no cracks on the end demand, the economics, the financial aspect of these companies.

**SPEAKER_1** (3:25)
Yeah. I've always found it interesting that Korea is classed as an emerging market. From what I understand, it's something to do with their currency rather than the actual structure of the economy itself. But it always seems like a very fully developed economy from my perspective.
Yeah.

**Qiao Ma** (3:42)
But if you actually look at the stock market, you will say, yeah, this looks like an emerging market reaction. But regardless, people are very passionate about stocks.
In Korea, there are not that many national champions. So this is, again, understandable. But again, if you just zoom out to a longer period of time, the stocks do eventually go back to following their earnings.

**SPEAKER_1** (4:04)
Yeah, fair enough. All right. Well, let's move on from the current market news and events of the day.
Something I've heard you say before is that curiosity is a key part of how you invest. What does that actually look like in practice? And how does it lead you from an observation to a potential investment idea?

**Qiao Ma** (4:27)
Yeah. I mean, curiosity, it's a word that's often used, it's just so key to what we do.
So one of our key cultural tenets at Munro is turning over stones. And what does that actually mean? That literally mean we are all generalists here.