"When You Have Money, Just Buy 'This'"—Son Ju-bu Says Accumulating It Can Be Better Than a Gangnam Apartment

[Financial News] The S&P 500's price-to-earnings ratio (PER) has risen to levels seen just before the dot-com bubble, but analysts say it still offers investment value from a long-term perspective.

On the 6th, the YouTube channel 'BuilnamTV' released a video titled, "Now Is the Time to Act as the Exchange Rate Falls—If It Were Me, I'd Move My Cash 'Here.'"
Son Ju-bu (Son Ik-sang), a full-time investor and writer invited as a guest, said, "Based on PER, the S&P 500 is nearly 30 on a trailing 12-month basis. The figure was just over 30 right before the dot-com bubble. Since the historical average has fluctuated around 15 to 16, it is true that the market is currently high when judged solely by PER."
However, he predicted that the U.S. stock market would still be worth investing in over the long term.
"Looking at returns over the past 10 years, they have risen explosively—about 12% annually," he explained. "If that annual 12% compounds for 30 years, the principal grows by roughly 30 times. That's about the level of a Gangnam apartment."
Son Ju-bu also recommended holding U.S. stocks for the long term because of the capital gains tax burden. He stressed, "If you invest with a horizon of at least 10 years, many people say, 'The 22% tax rate on U.S. stocks is too high.' But if you don't sell, you don't pay tax. Just buy them and don't sell."

He also cited the shift in the industrial structure toward platforms and Artificial Intelligence (AI) as a positive factor for the U.S. stock market.
Son Ju-bu explained, "In the past, most industries were based on manufacturing. To double sales, companies had to hire twice as many people and install a lot more machinery. In economic terms, this is called marginal cost."
He added, "Since the advent of the internet and smartphones, platform companies have had very low marginal costs. It costs almost nothing to gain one additional YouTube subscriber."
He predicted that in the AI era, more value added would be concentrated in Big Tech companies that possess large amounts of data.
Son Ju-bu said, "Data is one of the most important things when improving an AI model. The platform companies currently in first place collect data constantly, every day."
He continued, "It seems that more and more value added will flow to a small number of companies related to AI. Nearly all of those companies are included in the S&P 500."
Son Ju-bu also believed that the Federal Reserve or the Ministry of Finance would be highly likely to step in to stabilize the market if the U.S. stock market plunged.
He said, "Since 2008, we have often seen the Federal Reserve or the Ministry of Finance step in to revive the stock market. There is a belief that if something happens in the market, the Fed will intervene and resolve it, so people are investing with confidence."

Regarding asset allocation between real estate and stocks, he advised taking different approaches depending on the region. He suggested holding real estate in areas with limited supply, such as Seoul's prime districts, while selling properties in areas with large numbers of new move-ins or expected oversupply and moving the proceeds into high-quality U.S. stocks or upgrading to a more desirable area.
He also advised novice investors to watch large-cap stocks that have undergone significant corrections.
Son Ju-bu explained, "If you list the companies ranked from first to 30th by market capitalization and focus on stocks that have recently undergone substantial corrections, many of them will have returned to their previous levels over time."
He added, "Companies ranked within the top 30 by market capitalization—or, more safely, within the top 10—periodically undergo corrections before rising again. Entering during those periods can produce decent returns."
[email protected] Ahn Ga-eul Reporter