Hormuz & Hyundai: A South Korean Caper

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Alright, settle in, folks. We’ve got a bit of a kerfuffle brewing in the Persian Gulf. A war? Oy vey. It’s always something, isn’t it? Oil prices are doing the jitterbug, and investors are pacing like caged tigers. Now, before you start building a bunker, let’s talk strategy. Because, honestly, panic selling? That’s for amateurs. And I, my friends, am not an amateur. I’ve seen market crashes come and go – usually while enjoying a nice pastrami on rye.

This whole Strait of Hormuz situation is, shall we say, inconvenient. It’s like someone put a cork in the world’s oil bottle. And naturally, everyone’s blaming everyone. The President promised it’d be over in weeks? Bless his heart. He’s an optimist. I’m a realist… with a healthy dose of skepticism. The Middle East? It’s a region where “weeks” can stretch into decades. But enough geopolitical hand-wringing. Let’s talk money. Specifically, South Korean money.

You see, while everyone else is hyperventilating about Brent Crude, I’m looking at Seoul. Asia, particularly Japan and South Korea, are the thirsty ones here. They’re the ones really dependent on that oil flowing through Hormuz. Japan gets 95% of its oil through there? That’s like being addicted to a really expensive spa treatment. South Korea? 70-75%. They’re practically intravenous with the stuff. So, when the oil spigot gets pinched, they feel it. And when South Korea feels it, the Kospi… well, the Kospi gets a little dyspeptic.

The South Korean Juggernaut (Or, Why I Like Their Chips)

Now, the Kospi. A lovely stock market. It’s been on a tear lately. A real rocket ship. And it’s not just luck. They’ve got companies like Samsung and SK Hynix, the memory chip kings. These guys are building chips for everything – phones, computers, and, most importantly, those fancy AI data centers. AI, my friends, is the future. And the future needs chips. Lots and lots of chips. It’s a beautiful thing. Like a perfectly orchestrated Yiddish wedding – chaotic, but ultimately profitable.

Hyundai and Kia are also doing quite well, building cars that don’t fall apart after a week. Remarkable! Even with the recent pullback – thanks to the Hormuz hullabaloo – the Kospi has more than doubled in the last year. It’s down about 10% since the war started? That, my friends, is a sale. A big sale. And I, for one, am a shopper.

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1 ETF Poised to Pop (If That Strait Reopens, That Is)

So, how do we play this? Simple. We buy the dip. Specifically, we buy the iShares MSCI South Korea ETF (EWY). It’s down more than 10% since the crisis began, and at one point, it was down 18%. That’s like finding a diamond in a pickle barrel. And, as you can see from the chart – a lovely chart, if I do say so myself – it’s been moving inversely to oil prices. Which means, when oil goes up, EWY goes down. And when oil eventually comes down… well, you get the picture. It’s elementary, my dear Watson.

Before this whole mess, EWY was soaring. And why wouldn’t it be? Nearly 50% of the fund is tied up in Samsung and SK Hynix. And those chip constraints? They’re going to persist for years, especially with all this AI building going on. Nvidia’s CEO just said they’ll bring in a trillion dollars in revenue over the next two years? That’s like winning the lottery twice! It bodes well for the chipmakers, and, therefore, for EWY. And it’s trading at a price-to-earnings ratio of just 18? A steal! A veritable bargain! I haven’t seen a deal this good since I bought a slightly used camel in Marrakech.

Look, the Strait of Hormuz will reopen. Eventually. It always does. And the AI boom? That’s not going anywhere. Between those two factors, and the ETF’s low valuation, EWY looks set to deliver superior returns. So, don’t panic. Don’t sell. Buy the dip. And remember what my grandmother always said: “A little chutzpah goes a long way.” Now, if you’ll excuse me, I have a pastrami to finish.

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2026-03-18 04:43