Wall Street Bear Celebrates After KOSPI Crash Vindicates His Prediction

As the KOSPI index plunged 7.24% on the 3rd amid concerns over U.S. airstrikes on Iran and potential closure of the Strait of Hormuz, former JP Morgan chief strategist Marko Kolanovic—Wall Street's prominent bear—is taking a victory lap after his crash prediction proved accurate. Having left Wall Street after repeated forecast failures during the bull market, he now appears emboldened by finally calling a downturn correctly.

"Didn't I tell you the date of the war? Didn't I say NKY and KOSPI would crash and the Strait of Hormuz would be 'closed'?" Kolanovic wrote in a series of posts on X (formerly Twitter) on the 3rd (local time). "I told you not to trust Monday's U.S. market rebound, but most people still chose to wear blinders believing 'nothing will happen.'"

He then highlighted that iShares MSCI South Korea ETF (EWY), the leading U.S.-listed Korea investment fund, was plunging 12% in pre-market trading, touting the accuracy of his analysis. This was not the first time Kolanovic warned of a decline in Asian markets, particularly Korean equities. On the 12th of last month, he had issued an early warning: "Korean stocks (EWY) are the new silver (SLV). Watch out for the coming crash."

Since late last month, he has been promoting his KOSPI "bubble theory" daily through social media. Regarding KOSPI's steep rally, he noted: "It took 40 years to go from 1,000 to 2,000, but rising 4,000 points in just a few months represents more than 100 years of historical average returns. Investors buying now have a very high probability of never seeing these levels again in their lifetime." He also raised the possibility of a "blow-off top"—a phenomenon where prices and trading volume surge sharply before an even steeper collapse.

He has also been critical of domestic semiconductor leaders including SK Hynix. On the memory supply shortage driven by the artificial intelligence boom, he remarked: "It's like selling a bottle of water for $100 to someone in the desert during a temporary water shortage. Eventually, most water will sell for $1 per bottle."

Once dubbed "Gandalf" for his accurate market calls, Kolanovic damaged his reputation by calling for bullishness during the S&P 500's sharp decline in 2022, then stubbornly maintaining bearish views throughout the 2023-2024 rally. After persisting with his failed investment strategy for over two years, he departed JP Morgan in July 2024.