Confucius and Korea Inc. ()

For a long time, investors in Korean equities have sought to understand the anatomy of the so-called 'Korean discount,' the persistent valuation discount that Korean companies trade relative to global peers. Many reasons have been cited over the years, including the structurally weak financial system, the cyclicality of Korean companies, excessive regulations and even North Korean risk. Most recently, the political instability caused by the martial law incident has added to the cynical justification of the Korean discount. All these may be factors, but I think that digging back to centuries-old interpretations of Confucius's teachings may help investors understand the DNA of many issues that continue to hinder the progress of Korean companies and investment culture.