Fahmi Quadir Reveals Long Korea Position, Sidesteps AI Boom

Short-seller Fahmi Quadir, founder of Safkhet Capital, disclosed a new long position focused on South Korea during a May 22, 2026, interview on Bloomberg's Odd Lots podcast. The investor, known as 'the Assassin' for her short positions in Wirecard AG and Valeant, is initiating her first-ever long market bet. Her interest in Korea is explicitly detached from the current artificial intelligence supply chain narrative that has dominated foreign investment in the region. This pivot from a prominent fraud identifier to a long-only advocate for a specific market represents a significant shift in strategy.

Context — why a noted short-seller is going long now

Fahmi Quadir built her reputation on identifying corporate fraud during what she describes as a 'golden age of fraud.' Her successful bets against Wirecard, which collapsed in 2020, and Valeant Pharmaceuticals exemplify her forensic approach to uncovering malfeasance. The current macroeconomic backdrop features elevated interest rates and stretched valuations in major US tech stocks, creating a challenging environment for traditional long-only investing. Quadir’s move suggests a hunt for value in markets where accounting standards are rigorous but investor sentiment remains muted. Her shift indicates a belief that the potential for fraud in overhyped sectors may be outweighing the opportunity cost of not being long certain undervalued assets.

The Korean stock market, represented by the KOSPI index, has historically traded at a discount to global peers. The last time the KOSPI’s price-to-earnings ratio saw a sustained re-rating above its 10-year average was following the 2009 global financial crisis. The catalyst for Quadir's interest appears to be a combination of strong corporate governance improvements and a market structure that has been largely ignored by the recent AI-driven capital flows into neighboring Taiwan and Japan. This creates a potential value opportunity disconnected from the cyclical tech boom and bust cycles.

Data — what the numbers show on Korean equities

South Korea's KOSPI index has a trailing price-to-earnings ratio of approximately 11.5, significantly below the S&P 500's P/E of 22.8. The market’s price-to-book ratio sits near 1.0, compared to a global emerging markets average of 1.6. Foreign investors have been net sellers of Korean equities for three consecutive quarters, offloading a cumulative $12 billion in stocks. The Korean won has depreciated 6% against the US dollar year-to-date, amplifying the valuation discount for foreign buyers.

Metric	South Korea (KOSPI)	MSCI Emerging Markets	S&P 500
P/E Ratio	11.5	14.2	22.8
Dividend Yield	2.1%	2.9%	1.4%
YTD Return	+3.5%	+5.1%	+8.7%

The market capitalization of the Korean equity universe is roughly $1.8 trillion. Key sectors include technology, which constitutes 35% of the index, automakers at 12%, and steel and chemicals at 15%. Household debt-to-GDP remains high at 102%, a persistent macro concern that has suppressed investor enthusiasm.

Analysis — what Quadir's move means for markets

Quadir’s public endorsement could redirect institutional capital towards Korean value stocks, particularly in the automotive and industrial sectors. Companies like Hyundai Motor and POSCO Holdings may see increased investor scrutiny and potential inflows. The Korean financial sector, including KB Financial Group and Shinhan Financial Group, could benefit from a reassessment of stability and dividend yields. A successful deployment by Safkhet may trigger a 5-10% re-rating in mid-cap stocks with strong balance sheets that are currently off the radar of major global indices.

The primary risk to this thesis is Korea’s geopolitical exposure to tensions with North Korea and its economic dependence on Chinese demand. A slowdown in the Chinese economy would immediately impact Korean exporters, negating the value proposition. Another counter-argument is that the 'Korea discount' is structural, relating to the dominance of large conglomerates and minority shareholder issues, and may not be easily resolved. Current positioning data from futures markets shows speculative accounts are still net short the Korean won, indicating prevailing skepticism. Flow data suggests any initial buying would likely be concentrated in exchange-traded funds like the iShares MSCI South Korea ETF before trickling down to individual securities.

Outlook — what to watch next in Korean markets

The next catalyst for Korean equities is the Bank of Korea's policy meeting on June 12, where officials will signal their stance on interest rates amid currency weakness. Korea’s Q2 GDP growth figures, released on July 24, will provide a critical read on domestic demand and export resilience. A close watch on the USD/KRW exchange rate is essential; a break above 1400 could trigger further foreign selling, while stability below 1350 may encourage the inflows Quadir anticipates.

Key technical levels for the KOSPI index include near-term support at 2,650 and resistance at the 2,800 level, which it has not sustainably breached since early 2025. A decisive move above 2,850 on increasing volume would confirm a significant bullish breakout. Monitoring foreign ownership data, released monthly by the Korea Exchange, will be the clearest indicator of whether Quadir’s view is gaining traction among other institutional investors. For more on Asian market dynamics, see our analysis on `fazen.markets/en`. The performance of Japanese equities, which have attracted massive foreign inflows, will serve as a competing narrative and a benchmark for Korea's potential success.

Frequently Asked Questions

Why is Fahmi Quadir interested in Korea instead of Japan?

Quadir's focus on Korea, while markets are captivated by Japan's reforms, highlights a search for deeper value. Japan's TOPIX index has already undergone a significant re-rating, rising over 30% in the past two years, reducing the margin of safety. Korea offers a combination of technological sophistication and cheaper valuations, with corporate governance improvements that have not yet been priced in. This makes it a more compelling opportunity for a value-oriented investor entering a long position for the first time.

What are the biggest risks for investors following this long Korea thesis?

The most significant risks are external macroeconomic shocks and geopolitical tensions. Korea's export-dependent economy is highly sensitive to a slowdown in global growth, particularly in China, which accounts for nearly 25% of its exports. An escalation of threats from North Korea could trigger rapid capital flight and a currency crisis. Internally, the high level of household debt constrains domestic consumption and makes the economy vulnerable to higher interest rates.