Michael Berry's disciples warned that there is a hidden trap behind the undervaluation of South Korean stocks: most of the value of these stocks are often difficult for minority shareholders to reach. Phil Clifton, founder of Pomerium Capital Management LLC in Cupertino, California, met with about 20 Korean and Japanese companies during his August trip. According to a September 29 letter to investors seen by the media, after returning home, he was convinced that investing in South Korea “requires extreme caution and close attention to management's incentive mechanism.” In his letter, he wrote, “At first glance, the Korean stock market is like a capitalist paradise,” filled with companies with healthy profit margins and steady growth. However, he pointed out that there is often a misalignment between shareholders' interests and those of the actual operators of the enterprise. Clifton said that although the valuations of many Korean companies are heavily discounted compared to their global peers, this added value often makes it impossible for minority shareholders to actually benefit — especially in companies where the founding families maintain absolute control.

Michael Berry's disciples warned that there is a hidden trap behind the undervaluation of South Korean stocks: most of the value of these stocks are often difficult for minority shareholders to reach. Phil Clifton, founder of Pomerium Capital Management LLC in Cupertino, California, met with about 20 Korean and Japanese companies during his August trip. According to a September 29 letter to investors seen by the media, after returning home, he was convinced that investing in South Korea “requires extreme caution and close attention to management's incentive mechanism.” In his letter, he wrote, “At first glance, the Korean stock market is like a capitalist paradise,” filled with companies with healthy profit margins and steady growth. However, he pointed out that there is often a misalignment between shareholders' interests and those of the actual operators of the enterprise. Clifton said that although the valuations of many Korean companies are heavily discounted compared to their global peers, this added value often makes it impossible for minority shareholders to actually benefit — especially in companies where the founding families maintain absolute control.