"If You Own Samsung Electronics or SK hynix, Never Sell" — The Reasoned Advice of a Buffett Disciple Managing $2.1 Billion

Monish Pabrai Regrets Selling SK hynix
"I Should Have Held Onto It Forever, But I Broke My Rule"

World-renowned value investor Monish Pabrai, often referred to as a "disciple of Warren Buffett," spoke highly of the investment value of Samsung Electronics and SK hynix, advising investors to "never sell" these stocks. He cited the high entry barriers in the memory semiconductor market as the foundation of Samsung Electronics and SK hynix's competitiveness.

"The Boom Has Only Just Begun"

World-renowned investor Monish Pabrai. YouTube channel 'Jisik Inside'

On June 22, a video titled "The One Treasure I Gained from a $700 Million Lunch with Warren Buffett" was released on the YouTube channel 'Jisik Inside,' which has 3.9 million subscribers. The video featured an interview with Pabrai. Pabrai, a world-renowned value investor often described as a "disciple of Warren Buffett," has grown by following Buffett's value investing philosophy. He is currently active as a fund manager overseeing assets of approximately $1.4 billion (about KRW 2.165 trillion).

He commented on the Korean stock market, saying, "It is currently extremely skewed in one direction," and attributed this to "the developments occurring at SK hynix and Samsung Electronics." Revealing that he had previously invested in SK hynix, he said, "It was a company I should have held onto forever, but unfortunately, I violated my own principles and sold it," adding, "The memory semiconductor businesses of Samsung and SK hynix are extremely solid."

Pabrai cited the high entry barriers of the memory semiconductor industry as the reason for his positive assessment of the two companies. He explained, "In the past, the memory market was considered a worthless business, with over 20 companies worldwide competing fiercely, slashing prices, and fighting each other, but none of them made any profit," and added, "Currently, only Samsung Electronics, SK hynix, and Micron remain." He further asserted that "it is now nearly impossible for a fourth company to enter this market."

Quoting the management of Micron, he said, "Any new competitor trying to enter this market would face countless patent barriers, the challenge of securing core engineers, and the difficulty of recruiting management, making it extremely difficult. The process itself is so complex that it reportedly takes 10 to 20 years just to build a new semiconductor plant." He went on to say, "If you already own (Samsung Electronics and SK hynix), never sell them," emphasizing, "the boom has only just begun."

Concerns about Korea's 'Population Decline' Issue

The KOSPI index, which recorded its largest single-day drop ever yesterday, started the session on the 24th by rising more than 2% as soon as the market opened. The exchange rate, KOSPI, and KOSDAQ indices are displayed on the status board in the dealing room of Hana Bank in Jung-gu, Seoul. Photo by Dongju Yoon

However, he expressed concerns regarding Korea's population decline. Pabrai pointed out, "The major headwind facing the KOSPI is 'population decline'," and remarked, "If the population decreases over the long term, it inevitably leads to difficulties in terms of total output, and those challenges will inevitably be reflected in the stock market as well."

He continued, "The only way for countries experiencing population decline, such as Korea or Japan, to grow their gross domestic product (GDP) is to become export powerhouses. Companies without export competitiveness will face significant difficulties, while export-oriented companies may benefit to some extent, but ultimately, no one knows what will happen."

This content was produced with the assistance of AI translation services.