Investment diary of Taiwan stock market – 2015.09.08

Taiwan’s economic growth may not keep in 0%- be aware of becoming the victim.

The third quarter’s condition have not much difference with my prediction. However, I never dared to speak out “0%" economic growth as I am also afraid of that. I have mentioned about “Filipinize" a year ago, and it is in processing now.

One must be careful if he feel complacency about catch a falling knife in electronic stock nowadays.Taiwan electronic stock’s conflict cannot so easily be ended like the situation today, it is only a break. China’s goal is completely take over Taiwan electronic stock’s place with the future transformation of China. We can foresee that though China’s military parade on September 3rd. .It is a necessary trend that China’s military is moving toward high-tech feature, therefore, Chinese must comprehensive develop his owe electronic industry. Do you think China would allow the electronic devices on his aircraft or missile printed MADE IN TAIWAN ? This is what called “Taiwan crisis."And it is just the beginning, not the end. How can China develop its high precision military industry without first developing a foundry which can replace or compete with TSMC? However, short-term market has some spotlight expect textile stock, because the US real estate market is getting better now.

Currently, the US economy is doing better with low interest rate and strong dollar. This is very similar as the situation of Taiwan and the United States in 2001 to 2002. Let’s take a look of the price of Pultegroup, it has not gone up for more than two years. This shows that we still can look forward to the performance of real estate in the long term process. Although Taiwan real estate’s competitiveness has gone down, but it still has some bright spot.

Over the past 20 years, global economy is basically develop by the rise of China with the support of the United States. For example, Taiwan’s digital era has began after the United States made the RMB depreciated 75% in the 1990s. The United States dropped interest rates making great efforts to build China, in case to start the raw materials era after year 2000. After entering the 2010s, I already warned investors that the help of the United States toward China is over. In another hand, the United States is return to the Asia-Pacific region suppressing China’s growth prospects going forward. You can see the result as gold and oil have gradually fell. China’s GDP has significantly gone down (even with China official’s given “boast" numbers.) Therefore, I have warned investors to be aware of the collapse of electronic stock since 2013. In deed, it is burning this year, and not yet finished. It is said that China’s GDP is certainly not even close to 4% (according to the calculation of electricity usage report). The real number is much lower than Chinese official has boasted. China obviously understand the fact as well. Therefore, it put a lot of effect on its future industrial transformation, as well Taiwanese electronic industry has been gradually refined. For these Taiwanese electronic industries, they will be saved if they can still survive in the next five or six years

Do not trade base on the line patterns between these years. The major shareholders are ready to get out of the tragedy, so they have made the good looking patterns trapping individuals. For example, they are boasting about solar system today. In fact, solar system just like panels, cannot be good at all times. They might have some opportunity to rise a little, but have possibility to be tie-up if without concern. Therefore, don’t throw your money only seeing the price is going up. European and American manufacturers have released from the last trap for nearly 30 years since 1970s. Do you want to be the next one? As HTC is limiting up after been out of (0050) Taiwan ETF, but its problem is not yet solved. Do not catch the falling knife for there aren’t easy money to make.

It is said that there are many day traders today causing newspaper reports that someone was hung-up because of (3008) LARGAN. These people love to do the day trade, unfortunately don’t know how. In fact, there are tips to trade in the short-term market: buying in bull market; shorting in bear market. However, if one don’t know how to choose the right stocks in bull market, how can he be a day trader? During this period, the flat cannot be sold. Because not every securities have standby warrant to do the day trade (For those have warrant for margin usually are big securities with high cost, but the low cost is the requirement for day or short trade. Therefore, this is very contradictory.) Like (3008) LARGAN has fallen into bear market, if one looking for this kind of stocks to trade he obviously would get into the big trouble. However, many day traders used to do that no matter it has already became bear market – they still keep the same stocks. If they understand changing to (1476)ECLAT, they could avoid some problems and risks.

We were forced to sell short only under the condition of market collapse a while ago. We sold short of MERRY, TPK and HTC (by calling warrants) earning 5 times of profit. The day trade has stopped rising after the opportunity time is over. Day traders cannot make easy money everyday. But many people don’t understand this, always doing day trade or short-term. That is why they lose money.

Theoretically, if day trader makes money in every trade although only earning 1%, he would gain thousand trillions’ profit in five year. Of course, not even the ghosts would believe this lie, but people does. Many teach how to do the day trade, so do many learned. However, the future belongs to those who believe in the beauty of their dreams.

Obviously, if one cautiously doing the day trade he would still earning profit more than the long-term investor. Many think I have been a long-term investor since the beginning. In fact, I have been a day trader for more than 10 years. During the process, I gradually realized an “surviving" strategy. But I thought lately, it is better to be a long-term investor than just a survivor. Because it is easy to be a day trader earning no profit even in bull market. Recently, you can see many day traders continually calling stop loss – it is the better condition . Some even been tie-up, and result in tragedy. As for us, the long-term traders, earning big money in bull market; keeping from loss by sell short the stocks in bear market. That is why we could still earning profit 5 times with TPK recently.

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Investment diary of Taiwan stock market – 2015.09.07

Our Textile Warrant is again booming 16%

Taiwanese analysts often trade stocks with technical analysis, therefore, when they face the major events are also interpret by the same skill or speak mass of fundamental. As the example of the US employment report recently. Many analysts are wrongly considered that the US unemployment rate hit 5.1%, as the lowest rate over the recent seven years, will cause FED increase the interest rates resulting in a bear market for stocks. They really made the big mistake of saying. Even if the US have higher the interest rates (Think about it: with the low unemployment rate and the interest rates are near zero, would it not be rising interest rates? If not, this would sow the risk of inflation in the future. ), this would represent that the US is building a stronger economic foundation to against China’s economic slowdown. As the result of exchange rate depreciation caused by interest rate increasing is a panacea for Taiwan’s Export Stocks.

Many scholars said that “saving the economy could not rely on exchange rate depreciation." If it is not true, why Fai-Nan Perng, the Governor of the Central Bank of Taiwan, was devalued 1 TWD recnetly? Why the Unite States was manage Plaza Accord to greatly depreciate the U.S. dollar in 1985? After Japanese yen has been highly appreciated and Nikkei stock average hit an all-time high, why Janpan’s economy fell into the “lost decade"? I don’t understand why they were saying that. Even if the United States, the leading innovative country, has to devalue its currency in case to save its economy. Taiwan, as a country of manufacturing OEM and ODM, how dare to say this? Taiwan’s economic slowdown was resulted by the leading of Fai-Nan Perng in the second quarter of this year.

Therefore, it is definitely a good news for Taiwan’s economy if the US rise the interest rates causing the devaluation of NT dollar. Although some foreign investors might unload some stocks, but they would only sell these have been affected by “Red supply chain" or “China concept stocks". Of course, this will some how affect the performance of the stock market. However, the future perspective of bull or bear market are not depended on the electronic stock or the direction of Taiex. In most cases, the market index is meaningless. When the TAIEX index is going up it only shows the rising of electronic stock, but it does not mean the electronic stock is the exactly mainstream stock now. Only when TAIEX have significant mainstream stock, bull market appeared. Otherwise, why don’t everybody just compare with the muscle( which means the market value, because the market value is main factor of index. ). (1476) ECLAT have run the bull market for 6 years still this year of 2015. However, you have to be careful if you still following the analysts that only see and trade the electronic stock preparing to catch a falling knife. Because you might not catch the knife, but killing yourself. Because the future perspective of electronic stocks will continually drop leaving not much room in long-term market. However, the mainstream stock of the market sectors still have plenty of room. You can understand by the continually reach a record high price stock of (1476) ECLAT.

However, the worst situation now is that half of the analysts are taking about textile stocks. They are the typical stock market laggards. They used to talk about only electronic stocks having no idea about textile stock. Someone even commanded, like Zong Yao Lu’s reply in 2004, the 25 folds of ECLAT when its price was at NT 200 dollar that, “this is only speculation". These laggards knows nothing about the globalization trend, therefore they could only think about the speculation. However, they are gradually talking about textile stock now. It is not only a big joke, but also the dangerous risk. If you could still remember their prediction about electronic stocks such as (2454) MTK, (2402)ICHIA, (3673)TPK and even (2498) HTC, these stocks now down to the bottom. These laggards become senseless to the market ( After ECLAT have boomed in 6 years, they finally said the textile stock performance well. Are they too unaware to become senseless? )

Some people said it is time to buy electronic stocks, isn’t that correct? Definitely, wrong. Just have a look of (3008) LARGAN. Let me explain with an easy example: Chinese cheongsam is very beautiful, well-design and elegant. The sales should be very well if you sold them in China 100 years ago. Nevertheless, if you are selling them at New York mall of America today, do you still think the sell will be good? Although cheongsam doesn’t change its elegant looking, but cannot make money by the difference of time and space. Although Foxconn was well performed in 1990s, but how about now? This is what called " the new one replaces the old one"

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Investment diary of Taiwan stock market – 2015.09.03

Earning 7 times from TAIWAN PAIHO warrant in the 1st quarter ; 5 time from TPK warrant in the 3rd quarter.Nowadays, new bull market will earn good money by warrant again.

A while ago, everyone was so pessimistic about TAIEX had suffer from Chinese economic slowdown and the rise of “Red supply chain”, however, we said ” The market is only head for a correction that the new drives out the old”. We have also said “the new generation will take place of the old industrial” , “the drop of the index will make room for the rise of the new mainstream stock.” You may not understand my words when I was saying that. However, If you see (1476) ECLAT have continually breaking a record high price in the recent days, but still don’t understand what my phrases mean, then you might have no idea about stock investment.

Many books on the bookstore teach how to saving stocks or earning 18-20% with in a year. Although these books are not false teaching, but neither the right attitude toward investment. For the only reason why we are jump into the stock market is find ways to earn big money. Because stock market is a high-risk investment, if one only hope to earn little money with this big risk, it is really unworthy of it. As the example of (2412)CHT, was NTD 100 dollars at the year of 2000, investors still earn no money after they have kept it during the time of decline with all its dividends in 5 years. It will be the same condition after even 8 years. Even if recently, your annual ROE (return on equity) is only about 4%. Is that worthy of investing? You have endured much suffering during 10 years of stock market crashes, because it is so easy to lost what you have gained in the price correction period.

If you want to earn big money, don’t learn from many analysts have taught to catch a falling knife. How much will you gain by trying to pick a bottom? Do not cheat on yourself! You need to learn how to purchase “globalization stocks”, as the kind of ECLAT, earning the most profit with a long-term prospective in 6 to 8 years times. Some may says that where to find many of them like ECLAT? In fact, if one following my words, as my book mentions, will he gain the earning benefit as ECLAT in few years. As another example of TLOONG, we have created about 60 times of profits between 3 years (including trade with warrant). This kind of opportunities still existing in the market today, however, it is easy to miss them if you do not understand this method or impatient with the stock’s performance.

If you ever read my books or blog posting carefully, you would learn why can one accumulates wealth more than ten thousand folds in every 6 to 8 years. Because the endless competition between America and other powerful countries sought for the opportunity to be hegemony on the global stage causing the huge shifts in the global funds. American especially ally with Jewish, with money in one hand and weapons in the other hand. This caused the US stocks have been rising continually and become the world’s greatest powerful winner. Hence, if Taiwanes companies follow the direction of leading America should be win hundreds and thousands times of booming. Therefore, capturing its trend is the key point of making good money in stock investment. However, it’s a pity that almost no one finds this business opportunity except me in Taiwan.

As we have bought Iron & Steel stock earning 50 times since the year of 2002; Buying construction stock earned 6 times in 2003; followed by Stainless steel stock earned 4 times ; (5483) SAS earned 5 times, (2601) FSC earned 10 time , and so on… Until we bought (2915) RUENTEX IND.LTD earing 7 times in 2009, from here we found the changes of American’ strategy and movement toward the global trend. For example, the U.S. military again base at Subic Bay. Therefore, we began to invest the masterpiece of this generation – (4401) TLOONG, accumulating 60 times of profit since its price of 11 dollars with 3 stages of investing.

If you want to earn good money, you need to have a “yearly” plan. Do not be nerves when the stock price have been consolidated for a quarter or two. What is the outcome of the day traders? You should have know better, as they have fear about the sky falls down in this quarter. I have said this is just another adjust of generation replacement. Although many electronic stocks might have become “wallpaper”, but the new generation of mainstream could formally be rising up. Take a look and you will understand why (1476)ECLAT and (1477) Makalot’ prices have broken one record after another. Indeed, half of the analysts have already awarded the new appearance of the trend.

However, the questions now are:

What super profit stocks will arise after the rising of (1476) ECLAT and (1477) Makalot in the future? Do you know these stocks will produce bigger profitable opportunity, rooms from few to decades times, after electronic stocks gradually declined from the market.

Although the movement of globalization trend is slow, but it is continuously processing. Do you know the new direction has gradually unveiled? It is like the rising of (1476) ECLAT and (4401)TLOONG. Were you know about that when their price was at NTD 10 or 20 dollars?

Above are two main reasons why you will need my instruction.

As we said yesterday, we are optimistic while everyone stills pessimistic. However, the reason why we are optimistic is not because of the index, but the mainstream stocks- nowadays is something relate with Vietnam concept stocks. Although many electronic stocks are limit up today, but they are only play the role of a contemptible wretch making troubles. A real investor would never buy these stocks earing only 10% or 20 %. However, take a look about the mainstream stocks like (9904) PCC and (1476) ECLAT. Although they have only rising a little bit, but they have been continually breaking the record high price. That is why we have trade with warrant. And what we called “optimistic”.

We are making 7 times of big profit by the warrant, because of the booming of TAIWAN PAIHO in first quarter of this year; earning 6 times of profit by selling warrants of TPK in third quarter. Still now, we are again making good money with warrant in the period of rising mainstream stocks. Believe or not, as I have told investors that even TAIWAN PAIHO doesn’t want to be regret. And now, we are going to have the new target this quarter. Hope you are not going to miss them again.

Investors should understand your mission and purpose in the stock market is “making good money”, not as the beggar only wants 10% here and 15% there. In fact, many successful stock market investors have told you, everybody and me that you could only make big money unless you choose one or groups of long-term stocks which are going to boom hundreds, thousands and even ten thousands. Although it is hard to find stocks like MSFT boosting tens thousand times over 14 years, but it is much easier to look stocks raising more than hundreds times in the Taiwanese stock market.

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Investment diary of Taiwan stock market - 2015.09.02

We should be optimistic when everyone is pessimistic- ECLAT once again breaking a record high price. 

Numerous electronic stocks have horribly plunged after index has crashed, therefore, attracting many tracking rebound traders and analysts. They seen to forget about how had they been tie-up and experienced a big losing caused by tracking rebound earlier. As those who recommended to buy (2454)MTK at the price of NTD 400 dollar, it still seen to be a critical condition with its 60% of price now. About (3037)UNIMICRON, many analysts was saying," it is a great opportunity to buy when the price is down to NTD 30 dollars from NTD 61 dollars." However, as it has fallen to lows of NTD 10.62 dollars now which is only 30% left than before. In another words, many electronic stocks are only in the middle way of long-term stock market crashed. These analysts, with great courage but less expectation, dare to take the risk of 50% only to earn 10 to 15%. What do you think? Is that right?

Let’s take another look from the view of global trend. The Unite States had oppressed Japan for more than 20 years; the conflict between the US and Soviet Union even last nearly 30 years. This can be understand by the oppression and defeat between countries will not end in just few months. At time, the oppression of US toward China is only the beginning of few years. The pressure of China is only a start, however, many analysts already opinionatedly jumped into it. Take a look about SHARP, the panels seller, the price have continually fallen till now since 1980s although many thought there was nothing to lose. Its market value lost almost 99% in twenty years. Is any of Taiwanese well-known electronics factories have the same miserable condition like that? Nevertheless, these analysts who let their guard down making big mistake of tracking rebound only because they saw the stock plummeted.

Then, what is the best way of investing under the situation now? Buying long-term globalization trend stocks. The price of numerous bank stock has crashed down to 2,3 or 5 dollars only after Asian financial crisis in 1998. Meanwhile, the price of electronic stock was still high above, like Foxconn’s lowest price was settled at NTD 115 dollars after crumbled down. Apparently, these bank stocks considered low-cost, but in few years later, their price finally crashed down to cents from few dollars and result unlisted. Even the government have to pay for their lost. People always give excuse when they were buying at the price of 2 or 3 dollars that “the price of these bank stocks were few hundred dollars before." Nowadays, pursuing electronic stock analysts is like investors who bought bank stock at the price of 2 or 3 dollars.

What if they bought Foxconn at its dropped price of nearly NTD 100 dollar, they would earn more than 3 times after a year; buying TSMC at the price settled down in 61 dollars, they would earn even more than 5 times in one year. Emperor Taizong of Tang said, “Look upon history to learn the tide of time." However, the modern analysts are far behind the ancients. I feel pity for the investors. If you trade on tracking rebound of buying electronic stock, unfortunately (the risk might be high) you may have to repeat a failure of buying bank stock before.

Investors should understand during the process of thousands points plummeted, some stocks could not drop 50% or 60% without no reason. It is like (1476) ECLAT still breaking a record high price today for some certain reason. The stock price could not be considered cheap when it dropped. As people looked at Bank of Kaohsiung dropped from 650 to 6 dollars, they thought the price is cheap, but it finally becomes wallpaper; The price of ECLAT has raised from 8 to 100 dollars, many considered expensive, but it keeps rising from 100 to 519 dollars now and still growing. Who said 100 dollars are significantly more expensive?

Therefore, the point is not on the price but the future outlook. Foreign investors keep buying ECLAT because its great future growth perspective. If it would continually grow in the future, the price should be constantly raising. Otherwise, it might go down till unlisted from the market. Therefore, never buy stock because the price have dropped. Of course many might say, " I am only tracking a rebound." However, if one lacks of long-term investment prospective and strategies, this would be a worse idea and might cause big problems. Because if very stocks are worth of buying under the situation of market rebound, the traders would actually face a big and unknown risk. When the stock market volatility spikes, investors are easily to set stop loss or take profit if they do not understand its long-term holding value. Even if buying ECLAT is also useless. You never know the shares you buy will rally hundred times or the company will give you bad cheques tomorrow. It is true!

When I was in charge of Global Investment 20 years ago, I had been sent to an international investment trust and learned from each other with their local investment’s team. My first impression to them was their biggest share holding stock – Pacific K&S. With their biggest reason why they bought it: the long-term patten looks good and the price had plunged low enough. I was shocked when I first heard their saying. “How could they buying stocks like this? " I murmured myself. After that, I was finding excuse not to go there. As my prediction, this stock was unlisted after nearly 6 months. Meanwhile, the record of this international trust soon became the last ranking of that year. It is ridiculous that the most dangerous mistake even could be done by the international trust, but still today almost 80% of analysts are trading like this way.

However, the situation now is attractive for most investors because TAIEX significantly gets tougher in this tough time of continuously bear market. Actually, this could disclose the long-term opportunity as ECLAT once again breaking a record high price which investors should not miss it. However, it is funny that many analysts said textile stock would easily plunged because the base period is way to high. They are again make the same mistake as above. Wasn’t Foxconn earning 1,000 times at time of middle 1990s ? Who says the stock would stop rising after 100 time of boosting? Investors, never forget that is America leading the globalization trend.

The global trend is not as bad as predicted due to China’s economic slowdown. Because the rising of India is taking over the burden of China, and its economic growth has exceeded than China. Some of the Southeast Asia countries have been down because of China, however, they are gradually maintain stability by the particular support of America. Taiwan’s deep negative feeling was because too much depended on China (same as South Korea). Nonetheless, it is a great opportunity for long-term investment while everyone is pessimistic to the market. As the example of our empty single, we should be optimistic when everyone is pessimistic.

Investment diary of Taiwan stock market - 2015.09.01

(9904) PCC limit up and (1457) YI JINN boom, both have reached a record high price. 

Today, US index is falling because the matter of increasing US interest rate again. However, TAIEX (Taiwan Stock Exchange Index) remains calm for its continually falling. Nevertheless, it doesn’t infect those who follow the “globalization trend” to invest. As we have mentioned earlier, we pinpointed which stock would go up, as the result (9904) PCC surged limit and reached a record high price. (1457) YI JINN also rose more than 7%, according to the old system it can be called “limit up”. However, the most important thing is (1457) YI JINN again reached weekly high price record (regardless dividend yield or not.)

In fact, this is the purpose why we buy stocks. As the previous one, (9904) PCC, although we have known the price is not low, we still heave buying them. Because we know foreign capital would love them. If (1476) ECLAT could rise to TWD 500 dollars and (9910) to TWD 200 dollars, then (9904) PCC rise to TWD 100 dollars would not be a surprised. For their correlation in sales and profit could almost shows this condition. In the first and second quarter of this year, (9904) PCC’s profit increase even better than (9910) FT's. And (9904) PCC’s net profit margin growth is much faster than (9910) FT in this recent years. It does not make sense if the price is only 1/4 of it. 

That’s talk about (1457) YI JINN, this is the best of typical domestic share – low price, small capital and great growth outlook. The recent stocks surge is that because the global stocks plunge shifted investors attention back to the local market? After stocks plunged about 3,000 points, would a stock showcase its strength. Some stocks have continued to fall horribly. However, take look about our stocks, like these great performance stocks, once again reaching a record high price only because of a bit of rebound. Recently, I see some analyst programs vacancy have occurred. This shows the analysts’ skill can not pass the test of stock plunged. They have no choice, but quit the programs. These vacancy were the examples I had warned investors earlier. For example, do not trade on tracking rebound; do not jump into the market only according to the moving average line. These analysts now seek to resign showing what we have told are correct. 

Although Taiex have crashed down to 3,000 points, only when one understands how to choose the right stock will he be able to fine a record high price stock. Is that any changes about the category of stock that I was pinpointing while the index was 10,000 points? Not at all, still are textile stocks, Vietnam concept stocks or sport concept stocks. In fact, so far since the beginning of 2010. While many did not even know what is called "Vietnam concept stock" or "UA (Under Armour)", we began to buy large amount of this kind of stocks like (4401)TLOONG...etc... Could anyone imagine the performance of (9904) PCC and (1457) YI JINN in 4 months ago? Everyone was only thinking about electronic stocks. However, their electronic stocks have plunged 30% to 40%, some even down to 60% to 70% while many stocks having rebounded recently. This shows the true proficiency skills. Be honest with you, look us who invest in stock market, you would understand is not that difficult to invest stocks. The key points are discovering and following the "globalization trends." As simple as that. 

Let me mention it once again- do not operate short-term trading just because you feel like. Just few days ago, solar system have been recommended by many analysts. Their suggestion was only base on trembling have not been breakout yet, however, what is happening now? Many this kinds of stocks plummeted since TSMC has proclaimed its consolidation prior. Is it a tragedy if you were following that? 

Although Taiex have raised more than 800 points from its lowest point, solar system stock price still have no progress and struggling the low point. How many people ever think about Vietnam concept stock in that time period? Many analysts caused trouble to the investors by mistakenly trading short-term investment. It is easily to get hold-up as the result. 

Just by looking at the present index, is the index considers low? You will understand by compared with of China 's future direction. China still fighting with the market now, and will be struggle with it in few years. Therefore, no matter the Chinese stock market is going up or not. Chinese economy and its internal affairs will still face the big challenge. Under this situation, the Chinese concept stock is obviously face a huge problem. We have to know China's impact toward Taiwan is like twinge of pain. Not as hepatitispage, but more like cancer. From the first, second, then the third stage and goes on... Therefore, investors do not misunderstand thinking the stock price will soon plunged.

According to the short-term period, the first birth pain have almost passed. It will take sometime of preparation for the second coming. At time, we are going to look at the GDP predicting the price will goes down or not. Compares with the recent collapse of Taiex, other stock markets seen to be very strong in the short-term period. However, if they compare with some sectors of stock like Biotech, you would see the stock price is just going up and down somewhere here. Look at our sold-short Biotech stocks, they still bobbing up and down till now. 

We could soon emerge from this stock crash proving our investment logic and operation are correct. Because our methods is correct, investors can learn from this lesson. Have your stocks submerge from the market collapse? Why have you submerge? Are your stocks profitably as our warrant, such as TPK, (2439) MERRY, (2498)HTC and (3658)HMI..etc.? Why our short selling could easily earning more than double, like TPK even earing 5 times, but buying stocks only break a record high price due to a bit of rebound? The reason behind is not only about Taiwan stock industrial structure but also the correction of global funds flows.

To be continued...

Investment diary of Taiwan stock market- 2015.08.31

Never forget the bull power of globalization trend, just because the temporary stock price boost.   

Taiwan, a small country as mentioned in my previous blog posting, is an export-oriented economy country between the world's top three economies such as America, China and Japan. Taiwan is located at the unique geographical place, in front of China and around the rim of the Pacific Ocean. Therefore, America have been put it into an important position of defending communism group which is dominated by Soviet Russia and China. For this reason, Taiwan has been rising up by the help of America since Kuomintang exiled from mainland China. During the progress of its ruling in the following several decades, Taiwan stock market’s bust and boom is obviously interweaves and connects with America’s global policy.

Since 1960s, National Taiwan Sugar Corporation, Taiwan’s largest exchange listed company, had finally delisted from the exchange market although Taiwan only had not even 10 listed company at time. It was because the conflict between America and Cuba. Until 1970s, Formosa Plastics Group have risen and boomed to become Taiwan’s most popular and biggest company due to the issue of oil price rising which caused by the representative war between America and Soviet Russia (Arab-Israeli conflict). Other examples like Taiwan’s wealthiest people in 1980s, the founder of Cathay Life Insurance Company, and other richest people after 1990 were emerging by America’s policy at time. In another words, only when one understands America’s global policy, will he be able to control Taiwan’s economic arteries.

When it comes to late 2001, if one wants to profit from Taiwan stock market, he should understands America had already changed its global policy of rising China to Asia-Pacific rebalance strategy since 1990th. In other words, America has been looking for ways to decline the power of China and strengthen the surrounding countries to against it.

Therefore after 2009, the best way of investing Taiwan stock market is to follow America’s updated policy. The most well-known examples were the rising of (1476) ECLAT and (4401) TLOONG at that period of time. (1476) ECLAT had been boomed at least 100 fold, and (4401) TLOONG at least 20 fold. Our main target between the years of 2010 to 2013 was (4401) TLOONG, which we had profited more than 50 fold from three times of its buying and selling transaction (Because we had issued warrants).

Lately, the main scheme of Taiwan stock market still follows the same direction and expends even more, including the shoe-making industry in Vietnam and other neighboring countries. Therefore, our investment direction should be downstream with the flows. Like (9938) Taiwan PaiHo, another Vietnam manufacturing stock, we also created more than 10 times of profit according to the same method of issuing warrant. This year, we have still been set our primary investment direction in the same way although share prices plunged as the result of China’ stock market crash until this year, August 2015. We just increase more warrants as part of a hedge strategy to avoid China’s crash. Our major profit have sourced from here in the recent months. As far as Vietnam concept stock, we consider it has only been a consolation.

Many financial analysts are busy of proving winning-tips, because the index has rebounded strongly and boomed 8% in recent three days. The winning-tips they proved were no more than the theme, line style or even so-called “severe underestimate”, however they are not enough nowadays. Because Taiwan stock market obviously facing the problems of: 1.The power of globalization trend 2. Taiwan's position at the global financial market.

What is called “the power of Globalization trend” (we have mentioned previously)? It is the power of America’s dominant policy. In additional with China’s wrong strategy in the reaction time, these faults have been made and caused irrevocable mistake. So, China’s remedial action is only tackling the problem on the surface. The truth is its hopeless economic crash. It’s useless by any help, but only some delay of time. It is the same as the earlier situation of Japan. China could never go back to the years of RMB depreciation. So far we know it will cause the result of economy continually falling. As for IMF, it said that just the short-term birth-pains. However, China is unprepared for the consequences of fighting against America due to the problem of arrogant in the past days. Although they could learn from Japan’s lesson, but still hopeless. In another hands, we can see how strong America is.

Next, Taiwan has also grown dependent on China in recent years. It leads to the second inevitable injury to the economy. Even Hillary could obviously see the weakness of Taiwan, but the rulers’ nationalism and self-benefit however bring destruction on itself as the candle moth flies into the fire. Although Taiwan is a small country with a population of only about twenty million people, it still finds difficult to turn the situation around. Even if Foxconn cannot escapes the tough circumstance of sell off from the foreign investors, how about a country. Financial supervision’s effect may be useless, because the ruling leader never wants to change his mind.

From the example of (2454) MTK, we would know what’s called “useless”. (2454) MTK is not even move a bit in the recent rebound. It has only raised one NT dollar from the lowest closing price 3 days ago. The same as (6244) Motech, it has no reaction at all to the few hundred points index recently. I see many China’s concept stocks are almost the same. You may have said three days of consideration is too short. But if you take look of the globalization trend’s profitable stocks I pinpointed previously, you could obviously recognize its positive potential. They have been rising at an appropriate speed before the great rebound. The falling of (2454) MTK and China’s stock market has no business with them.

   The situation nowadays still is to know how to profit from the power of globalization trend and avoid in any loss. The arbitrage operation is the most important strategy that we have been talking about in recent days. Never forget the power of globalization trend (the global dominant power of America) just because the present situation of rebound.

To be continued….