Korean Stock Market Casino?

There was an interesting article in Barrons this past weekend, about the Korean stock market.

The article discusses the "Korea discount," in the Korean Stock Market "reflecting fear that North Korea would launch a nuclear strike against the South and the reality that Corporate Korea treated minority shareholders shabbily."

The quote I found most interesting was:

"For the moment, major institutions don't take their (the Korean Stock Market) market seriously, and look at it as a glorified casino," says Nicholas Bratt of Lazard Asset Management in New York, a longtime investor in Korea. But individual Koreans' new ability to invest in stocks suggests that's changing. "Do I think the discount is in the process of vanishing? Yes, I do."

What is fascinating is the implication that other markets are "taken seriously" by institutions and are not casinos.  The fact of the matter is that all stock and financial markets, particularly the US Stock Market,  are glorified casinos. The reason is because there is little fundamental basis for the valuations given to the vast majority of equities. Shares trade hands with little correlation with the underlying business or any rational economic expectations. It´s merely a matter of large capital flows into and out of various asset classes.

Of course, this somewhat cynical viewpoint, should not prevent you from investing and making money in world stock markets. The point to remember is that stock markets, are rigged casinos, and you simply need to tilt the odds in your favor when gambling in these equity markets.