The "mad bull" hits a wall: Korea's 2026 market, and the gap between price and value

Two numbers from the same month

Look at two numbers from the same month. In July 2026 Korea's stock market (the KOSPI) posted its largest monthly fall on record, down about 23%. Also in July 2026, Korea's exports hit an all-time high.

A country's real business—exports—was booming, even setting records, while its share prices halved in the very same month. Set side by side, those two numbers are already a lesson.

The "mad bull"

First, the mania before July. In 2026 the AI boom drove money worldwide toward chips, and Korea held Samsung and SK Hynix—the two most central suppliers of AI memory chips. Capital flooded in. The KOSPI surged, breaking 6,300 in February and nearly doubling in six months (up about 100%), the best-performing market in the world that year; even Goldman Sachs was calling for new highs.

A familiar mood filled the market—"this time is different," "AI is the future," "get on board before it's too late." Many ordinary people put in not just their savings but borrowed money on leverage, hoping to multiply the gains. The bull earned a nickname: the "mad bull."

Hitting the wall, and the leverage backlash

In July the bull hit the wall. Chip stocks pulled back hard—AI hype had pushed Samsung and SK Hynix valuations too high, so any tremor cut deep. On "Black Monday," July 13, the KOSPI plunged nearly 9% in a day and broke below 7,000; the world's hottest market officially entered a bear market, down about 26% from its peak. How fast? Korea's circuit breakers—which halt trading after a steep drop—were reportedly tripped as many as seven times that year, though a circuit breaker is normally a once-in-years event.

What turned the fall into a stampede was leverage. Anyone who had borrowed to buy in got a margin call once prices crossed a line—add cash now, or be force-sold. In this round, reportedly about 1.2 million margin accounts faced calls and around 360,000 retail investors were force-liquidated, wiped out. Forced selling drove prices lower, and lower prices triggered still more forced selling—a downward death spiral, so out of control that even Korea's president stepped in with emergency intervention.

Leverage is double-edged: on the way up it makes you richer faster; on the way down it forces you out at the bottom, in the ugliest way. And here it shares a quiet trait with the scams we discussed before—what they amplify is never value, but price and emotion.

Back to those two numbers: price is not value

Back to the opening contrast. Same country, same month: it sells chips and does real business, genuinely making money, exports setting records—yet its share price halved at the same time. Why? Because price and value were never the same thing.

A company's real value is how much it actually earns and makes—usually slow to change. But its share price is set by something else: how much people are willing to pay for it right now. And that "willing" gets shoved around by emotion, leverage, and "is there anyone left to buy," so within weeks it can detach entirely from real value—detaching upward is a bubble, downward is panic. Korea got both: in the first half AI and exports were real, but price ran far ahead of value; in July the mood flipped and price crashed well below where it should have sat. The real business barely moved; what kept going wild was the price.

A lesson worth more than the scams

I've written about Carrian and MBI—those were outright fakes, nothing real underneath. Korea is different, and precisely because it is different, it is worth remembering more: here the chips are real, the AI demand is real, the companies genuinely make money. A perfectly legitimate market with strong fundamentals can still have its price inflated into a bubble, and still crash. With a scam you can at least screen by "is it fake"; but when the thing is real and the story is real, and only the price has been blown too far, most people cannot tell—they read "price is rising" as "value is rising," and pile in at the top, on leverage.

So whether you face a scam or a real-but-overheated market, what protects you is a variant of the same question: am I buying the solid value of this business, or just betting that "someone behind me will pay a higher price for my bag"? If the former, a short-term drop lets you sleep, because the value is still there. If the latter, you are playing something close to a money game—your profit is the next person's money, and whether you get out whole depends on not being the last to hold the baton.

One more thing: this lesson is not only Korea's. As the same AI boom lifts U.S. stocks and tech shares worldwide, "price running far ahead of value" is worth keeping in mind at all times. Some analysts said outright that the KOSPI was "trading like a meme stock," and warned that another market could be next.