I remember when the KOSPI surged 75% in a single year. The analysts said South Korea was becoming the center of the global AI supply chain. But what no one talked about was that this Korean stock market was built on a fragile foundation.

It all started with SK Hynix and Samsung’s HBM chips, which controlled over 80% of the global manufacturing capacity. These two companies took half of the gains from the KOSPI increase. Curious to know, both depend on energy, and South Korea must import all natural gas.

I’ve been following the news since the Hormuz Strait incident in mid-February. The conflict between the U.S. and Iran led Iran to announce the closure of the strait. About one-fifth of the world’s liquefied natural gas passes through here. Gas prices in Europe surged 50%, and in Asia, they jumped 40%.

And what about the KOSPI? On March 3rd, it dropped 7.24%. The next day, it fell another 8%. The system paused twice. Samsung dropped 10%, SK Hynix fell 11.5%. In two days of trading, the market fell from 6,244 to 5,440 points, a decline of over 13%. This was the worst drop since 2008.

What’s interesting is that it took just 34 days for the KOSPI to rise from 5,000 to 6,000, but it only took two days to fall back down. Foreign investors sold more than 12 trillion won in less than two days—half of the inflows from the six weeks prior.

Coincidentally, retail investors in Korea bought in to catch the dip, but they couldn’t stop the selling pressure. The fact is, the KOSPI is correlated with the real economy, but it’s also driven by the emotions of foreign investors. As long as conditions are good, they call Korea the “core of the AI chain.” But when sentiment turns, they sell immediately because the KOSPI is highly liquid.

This is the lesson the Korean market teaches us: as long as the entire market relies on just two stocks, any energy issues can shake the economy. What rises quickly can also fall just as fast.