45 Million Rich Households (EP. 475)

A 24-year-old South Korean university student turned his $20,000 military savings into a $200,000 fortune using 5x leverage on his trading app. Within four weeks, it was all gone—forced liquidations wiped him out. His response? "I'm sticking to margin loans." He plans to borrow again as soon as he can. This story, reported by Reuters and discussed on the latest Animal Spirits, captures something strange about the current moment: the stock market is near all-time highs, but underneath the surface, stocks are getting absolutely hammered, and the people who got extended are learning painful lessons.

The Good Kind of Market Rotation

The semiconductor sell-off has been brutal. Micron is down 27% from its highs, Western Digital down 34%, and Sandisk down 46%—yet Sandisk is still up 2,900% over the last year. The hosts frame this as good news, not bad. The S&P 500 is only 2% off all-time highs, and on the day semiconductors dropped 4%, software stocks rose 3.3%. Going back to 1989, that kind of divergence is an absolute outlier. "For all the bubble talk, this is good news," Michael says. The momentum factor had one of its craziest runs ever—the iShares momentum ETF (MTUM) went from down 10% on the year in April to up 40% three months later, then back to a 20% gain in the last month. "This feels a little more healthy," Ben notes. "The gains we were seeing through April were clear