2020 COVID shock and Korea's retail army

Stocks fell 30% in a month and recovered within the year. Korea's retail investors bought what foreign investors sold.

30% in a month

In March 2020, as the World Health Organization declared a pandemic, world stock markets fell about 30% in a month. The 2008 crisis took a year to reach that depth; this one took a few weeks. In April, with demand gone, WTI crude futures traded below zero for the first time in history.

KOSPI 1,458 and the circuit breakers

The KOSPI started the year above 2,100 and closed at 1,458 on March 19. In March, US markets halted trading under circuit breaker rules four times (March 9, 12, 16 and 18), and Korea triggered its own circuit breakers too. Foreign investors sold Korean stocks in record amounts day after day. Unlike in earlier crashes, individual investors bought it all. They were nicknamed the "Donghak Ants", after the Donghak Peasant Revolution against foreign powers. New brokerage accounts surged, and investing became a national topic in Korea.

The V-shaped rebound

Governments and central banks ran the 2008 playbook, bigger and faster. Rates went straight to effectively zero, followed by relief payments and unlimited quantitative easing. The market rebounded in a V and passed its previous high before the year ended, and in 2021 cheap money lifted stocks, property and crypto at the same time. A year after the March bottom, investors who sold in panic, held, or bought were in very different places.