In the South Korean stock market, a sharp drop in margin trading, CFDs, and ETFs by retail investors triggered massive margin calls and forced loss cuts, with overheated investment in two semiconductor stocks amplifying volatility across the entire market. Following this plunge in the South Korean market, Kioxia Holdings also tumbled in Japan, and the Nikkei 225 moved weakly. At Berkshire Hathaway's 2026 annual shareholder meeting, Buffett warned, "I have never seen people feeling so speculative," pointing to a trend where speculation is favored over long-term investment. During the historic South Sea Bubble, Isaac Newton reportedly lost about 20 million dollars in today's value and said, "I can calculate the motions of heavenly bodies, but not the madness of people." The article argues that mean reversion following state-capitalist-style managed markets leads to catastrophic losses for investors who underestimate risk, and recommends diversifying into highly liquid assets and increasing cash allocations in 2026.
Kioxia Holdings CorporationKioxia tumbled following the South Korean market plunge, reflecting forced selling and margin call contagion.
Berkshire Hathaway Inc