Buffett's Disciple Pabrai: "Never Sell Samsung or SK hynix"

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

Monish Pabrai, a world-renowned value investor often referred to as a "disciple of Warren Buffett," has highly praised the investment value of Samsung Electronics and SK hynix, advising investors to "never sell." He cited the high entry barriers of the memory semiconductor market as the background for the competitiveness of Samsung Electronics and SK hynix.

"The Boom Has Only Just Begun"

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

On June 22, the YouTube channel 'Knowledge Inside,' which has 3.9 million subscribers, released a video titled "The One Treasure I Gained from a $700 Million Lunch with Warren Buffett." The video featured an interview with Pabrai. Pabrai is a globally renowned value investor, often called a "disciple of Warren Buffett," who developed his investment philosophy based on Buffett's principles. He is currently active as a fund manager overseeing assets worth approximately $1.4 billion (about 2.165 trillion won).

Regarding the Korean stock market, he commented, "It is currently extremely skewed to one side," adding, "This is due to what is happening with SK hynix and Samsung Electronics." He revealed that he had previously invested in SK hynix, stating, "It was a company I should have held onto forever, but unfortunately, I broke my own rule and sold." He went on to say, "The memory semiconductor businesses of Samsung and SK hynix are extremely solid."

Pabrai pointed to the high entry barriers of the memory semiconductor industry as the reason for his high evaluation of the two companies. He said, "In the past, the memory market was considered a worthless business, with more than 20 companies worldwide fiercely competing by undercutting prices, but none of them made a profit." He continued, "Currently, only Samsung Electronics, SK hynix, and Micron remain." He added, "It is now nearly impossible for a fourth company to enter this market."

Quoting Micron's management, he said, "For a new competitor to enter this market, it would face numerous patent barriers, challenges in securing key engineers, and recruiting management, making it extremely difficult." He explained, "The manufacturing process itself is so complex that it takes about 10 to 20 years just to build a new semiconductor plant." He then emphasized, "If you have already bought (Samsung Electronics and SK hynix), never sell," adding, "The boom has only just begun."

Concerns Over 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 about Korea's declining population. Pabrai pointed out, "The greatest headwind facing the KOSPI is 'population decline,'" adding, "If the population declines in the long term, it inevitably leads to difficulties in terms of total production, and those difficulties are bound to be reflected in the stock market as well."

He continued, "For countries experiencing population decline like Korea or Japan, the only way to grow gross domestic product (GDP) is to become a strong export nation. Companies lacking export competitiveness will face significant challenges, and while export-oriented firms may experience some tailwinds, no one knows for certain what will happen."

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