While virtually the entire world’s financial markets are in “Full Costanza Mode”, there is a high level of risk as the latecomers take the market parabolic before the April 15 401k-IRA contribution deadline.
Sure, the parabolic part is fun and rewarding if you are properly positioned, but it almost always ends in just as steep of a descent once the energy is spent.
As a counter to “chasing”, may I propose an idea that has been truly undervalued: Taiwan. It is the place of the most highly precise technology manufacture. It is also the place at constant odds with “Mainland China”. I won’t get into a 20th Century history of China/Taiwan relations but suffice to say, there has been a “China Discount” on Taiwan shares since forever.
Relations between the two China’s have been thawing with a new Taiwanese Administration and today a new law has been proposed allowing larger Chinese investment in Taiwanese firms. Currently a Chinese firm can only own 10% of any Taiwanese company. The new proposal ups the potential stake to 50%. That is a sea-change for the investing environment and could lead not only to new investment but perhaps a multiple expansion as tensions ease further.
There are only a handful of Taiwanese ADR’s and the iShares ETF symbol EWT but remember, Taiwan is an investment story and not a trading story.
| Taiwan To Raise Ownership Limit Of Chinese Investors In Taiwan Tech Firms To 50% |
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TAIPEI (Dow Jones)–Taiwan’s government plans to raise the The person, who asked not to be named, told Dow Jones Although |
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TSM is one of my long-term holds. INTC, TSM, and the newly-created Global Foundries are the only ones left. They will have pricing power as they become a duo/trip-opoly!
My father in law has been in IC for 35 years and said this about TSM: I have a comment from the integrated circuit point of view. That is, Taiwan has been first class in integrated circuits for the last ~25 years. They have focused on the development of silicon foundries that will fabricate a customer’s design in their in-house technology. More and more that technology is only slightly behind Intel. Taiwan Semiconductor, TSMC, is the #1 IC foundry. Taiwanese and Japanese companies have invested in China by either building factories there, or contracting with Chinese companies to build their parts rather than building additional factories in the home country to provide the required capacity. China is still catching up in quality and manufacturing yield.
Thanks Dirk.
Thanks. Interesting to know. I didn’t think they were that close to INTC, so good to know. I thought only INTC has 5 nano 3D designs, from what I understand (though IBM has some advanced tech in this space, too, though without foundries). I’m far from an expert IC guy. This is a must-own space, it seems to me, as it will drive the next long-term productivity cycle beyond, and it is a must-own in Asian stocks.
You are a wise man.
The CPC cannot directly tell you the exact day that the markets will begin the sell off. But what it does say, once a 0.7-ish number is printed, is that typically within 0 to 10 trading days the markets will experience a sell off
This week it was announced that four major financial institutions failed the Fed’s stress test.
This dooms day scenario staged a 12% unemployment rate and a 50% drop in the stock market. You might want to ask yourself why the Federal Reserve would even conduct such a test unless they thought there was a possibility of this coming to pass..? !!