The investment signal to buy the iShares MSCI South Korea ETF (EWY) stems from a bullish thesis on the South Korean semiconductor market, particularly focusing on major players like Samsung and SK Hynex. Charan.invests revealed that he purchased $10,000 worth of call options on EWY, achieving over a 20% gain in just one day. He highlighted that SK Hynex is trading at a forward price-to-earnings (PE) ratio under 5, indicating that the market perceives the current memory cycle as temporary. However, he argues that if artificial intelligence continues to drive demand, memory could become a structural bottleneck, leading to sustained higher earnings and potentially higher valuations. Additionally, he noted that EWY is approaching a breakout zone while the broader market remains volatile, and he believes that employee volatility is not fully priced in for EWY's potential upward movement. For investors tracking charan.invests, this suggests a short-term bullish outlook on EWY, with the potential for significant gains if the market dynamics shift favorably.
I bought options because employee volatility still doesn't look like it's fully priced in for the move that EWY can make.