18 Aug 2026
What Korea's wild swings and SpaceX's crash reveal about momentum investing
Just 16% of Americans consider themselves regular readers of books, but over 60% of Americans gambled in the last year.
This is an odd mashup of statistics, but together they may encapsulate a skeptic’s view of today’s market. Certainly, we have not all become illiterate. We just read from different sources now: the internet and social media. Those sources may be considered questionable at best, and one could argue that they leave little room for independent thought, deep thinking, or quiet reflection.
Source: National Endowment for the Arts (NEA), “Federal Data on Reading for Pleasure: All Signs Show a Slump,” data as of October 3, 2024; and PBS.org Frontline, “Gambling Facts & Stats.”
Combine that with the explosive rise in gambling, which ranges from the innocence of DraftKings to the sophistication of prediction markets and Robinhood. It’s not a huge leap to imagine that a herd of market participants are combining internet-fueled logic with a gambling culture in their approach to investing, which might explain a few things.
What Korea’s stock swings are telling us
Speaking of gambling, I’ll begin with Korea. The iShares MSCI Korea ETF is down 22% in July but is still up 120% over the past 12 months. What could explain such erratic behavior? After a fanatical run-up in prices, the index is now 40% concentrated in just two companies: SK Hynix and Samsung. Just a month ago, a few people outside investment circles knew what SK Hynix was. Now it’s the talk of the internet investing echo chamber.
When does momentum turn into gambling?
Money flow in today’s market seems to slosh back and forth between stocks with old-school fundamental valuations and those thematic, story-based names that dominate the internet. On days the tech-heavy S&P 500® is down, value stocks typically outperform, and vice versa. That tug-of-war was on display again in July, as tech stocks declined but value stocks gained.
Stocks to Mars
The internet can’t devote equal attention to the roughly 6,000 stocks traded on U.S. exchanges. Instead, it focuses on whatever is hottest and most likely to generate clicks. In July, that story was SpaceX, and what a story it was. SpaceX stock didn’t go to Mars, it fell to Earth. SPCX reached a high of $225 on June 30 and closed the month at $108, a decline of 52% from its peak. Keep in mind that IPOs exist because original owners and founders are trying to sell shares, and the greater the hype, the more those original owners stand to make.
What the Fed is signaling
The Federal Reserve left the Fed Funds Rate unchanged in July. Bond investors, however, didn’t seem impressed. The bellwether 10-year Treasury yield, the rate that matters because it underpins loans, approached levels not seen in 19 years. One interpretation is that the S&P GSCI Copper Index, which gained 3% during the month and over 47% over the past year, may be signaling future inflation pressures. If that’s the case, the Fed could once again find itself behind the curve.
Quick answers
Is the stock market acting like a casino right now?
In pockets, yes. Money is moving quickly between highly speculative, story-driven stocks and fundamentally valued ones, and a handful of hyped names are driving outsized swings in indexes like Korea’s, a hallmark of momentum-driven, not fundamentals-driven, pricing.
Why did SpaceX stock fall 52% from its high?
SPCX rose to $225 by June 30 on intense hype, then fell to $108 by the end of July. Steep post-IPO reversals like this are common when early enthusiasm outruns the underlying fundamentals, and they’re a reminder that IPO pricing often favors early owners over new buyers.
What is causing Korean tech stocks like SK Hynix to be so volatile?
The iShares MSCI Korea ETF is now roughly 40% concentrated in just two companies, SK Hynix and Samsung, as of July 31, 2026. That concentration means the index behaves more like a bet on two stocks than a diversified basket, amplifying swings in both directions.
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