"Warren Buffett Bought It?" Ants Flock In... The Stock They Chose Over ETFs [why&next]

Bold Bets on Thematic Stocks...
Tesla Remains the Unshakable Favorite
The Boiling AI Bubble Debate...
Is Seohak Ants' 'Beast Mode' Sustainable?

Following strong buying in July, Korean individual investors, often called "Seohak Ants," continued to shout "Buy America" last month. While domestic stock market activity among individual investors has quieted, the scale of U.S. stock holdings by Seohak Ants is rapidly approaching the 200 trillion won mark.

According to the Korea Securities Depository's SEIBro portal on September 2, Korean individual investors made net purchases of 640 million dollars (about 890 billion won) in U.S. stocks last month. This marks the second consecutive month of net buying, following approximately 685 million dollars in July. In contrast, during July and August this year, Donghak Ants sold off about 7.1 trillion won in the domestic stock market.

The scale of U.S. stock holdings by Seohak Ants has also ballooned. Their monthly holdings of U.S. stocks exceeded 136.2 billion dollars (about 18.9 trillion won) last month, putting them on the verge of surpassing 140 billion dollars (about 19.5 trillion won). Back in March, when U.S.-imposed tariff risks emerged, Seohak Ants' U.S. stock holdings were below 100 billion dollars (about 96.5 billion dollars), but have since steadily increased for five consecutive months.

Bold Bets on Thematic Stocks... Tesla Remains the Unshakable Favorite

The investment trends of Seohak Ants have also evolved. In the first quarter of this year, Tesla and leveraged exchange-traded funds (ETFs) that track its price movements by two to three times dominated their portfolios. Recently, however, thematic stocks benefiting from individual positive factors, such as UnitedHealth Group and Bitmain Immersion Technologies, have taken center stage. Nevertheless, in terms of holdings, Tesla remains the top favorite among Seohak Ants, with holdings valued at 21.8 billion dollars (about 3 trillion won).

Among these, UnitedHealth Group became the most purchased stock last month, with Seohak Ants buying over 315.7 million dollars (about 439 billion won) worth of shares. Despite a series of negative developments since April-including deteriorating earnings due to increased medical payments, sudden management changes, and investigations by U.S. judicial authorities-UnitedHealth Group, the largest health insurance company in the U.S., attracted buyers after news broke that Warren Buffett, CEO of Berkshire Hathaway, had acquired a stake. Berkshire Hathaway purchased about 1.6 billion dollars (about 2.2 trillion won) worth of UnitedHealth Group shares in the first half of this year.

Seohak Ants have also made aggressive bets on newly listed companies. Bitmain, which ranked second in net purchases last month (252.77 million dollars), is the world's largest Ethereum-holding virtual asset mining company and was newly listed on the American New York Stock Exchange this June. Its stock price soared by around 3,900% within a month of listing, but has since crashed to about a quarter of its peak. Other stocks that drew significant attention included Nvidia (176.09 million dollars), Figma, an artificial intelligence (AI)-based design software company (175.22 million dollars), and NuScale Power, a small modular reactor (SMR) company (148.87 million dollars).

Kim Hansoo, a research fellow at the Korea Capital Market Institute, commented, "Individual investors tend to show higher regional and sectoral biases compared to institutional investors, which requires caution. In particular, there is a need to pay attention to the rapid increase in direct overseas investments in high-risk derivative products that are not permitted under domestic law."

Boiling AI Bubble Debate... Is Seohak Ants' 'Beast Mode' Sustainable?

Although concerns about an AI bubble have been raised among industry heavyweights, including Sam Altman, CEO of OpenAI, the optimism of Seohak Ants toward the U.S. stock market remains undiminished. For example, Palantir, a U.S. AI software company, saw its share price drop by more than 20% last month amid bubble concerns, but Seohak Ants viewed this as a buying opportunity, purchasing 116.77 million dollars' worth of Palantir shares between August 22 and 28, making it the top net purchase during that period.

Kim Seunghyuk, a researcher at Kiwoom Securities, noted, "Since Liberation Day in April this year, the U.S. stock market has continued a strong rally without a correction, creating ongoing pressure to realize profits. In the short term, rather than continued strong gains led by large-cap stocks, it is more likely that stocks of relatively overlooked companies will show higher price elasticity." He added that within leading themes, attention should be paid to companies with less valuation pressure or those that stand to benefit significantly from interest rate cuts. He forecast the expected S&P 500 band for September to be between 5,200 and 6,700.

There are also voices warning against excessive optimism. Kang Hyeonki, a researcher at DB Securities, explained, "There is a common belief that stock prices rise when interest rates are cut, but this only holds true when rate cuts are made preemptively before economic deterioration. If rate cuts follow an economic downturn, stock prices fall. In such periods, the market recognizes that rate cuts cannot immediately boost the economy, and stock prices decline in line with fundamentals."