Part 7 - Ten-thousand fold profit in six years- the legend of Taiwan stock market

In the strategy of Globalization Trend Investment, “continuity" is one of the most important issues, however, no one ever mentioned about it. No other investment paradigm like “continuity" that could pinpoint the next profitable stock from the previous one. Others security analysis methodology such as technical analysis for short and medium term, and “value investing" for long-term process will not obtain the same result. Because they are only the single term investment strategy that even you had made one profitable stock, you will not able to predict the next profitable one.

What is the correlation between stock movement and its performance? Take the last decade years as the example: What cause the raw material age? The answer is the rise of China’s economy made themselves to become world’s largest construction market in that period of time. What caused the fastest-growth of Chinese economy? Because China lowered its currency and joined the system of global free-trade.Why China wanted to do that? It caused by the dissolution of the Soviet Union led by the conflict between US and Soviet Union in 1970th.

We can think from another way: The conflict in 1970th between the US and the Soviet Union resulted the break down of Soviet Union. By the effect of dissolution of the Soviet Union, the US dollar was able to lower its currency to recovery from the financial crisis due to the Plaza Accord. The joint effect between Intel and Microsoft defeated Japanese semiconductor, and severely impacted the US’s economy. And how these US economy effects impacted Taiwan stock market? Taiwan stock market surged 20 times by the risen of New Taiwnese Dollar. How is the effect on WINTEL to Taiwan? It brought out Taiwan’s digital age, and make it the leading semiconductor manufacturer.

Just as this process, globalization trend movement is time to time, generation to generation related one another. The specialize of its “continuity" proves its correlation between the two, and it appears on the stock market. Only when you grasp the globalization trend and understand the correlation between stock movement and its performance, will you be able to forecast the direction of the market prices.

The specialize of “continuity" causes:

1. To increase the “stability" on stock investing. In another word, you will be able to enjoy the profit growth stably and explosively. The different of your investment is not about make or losing money, but how much profit you make.

2. You are able to keep calm on the investment. For the globalization trend is caused by the government policy and the world’s situation. Therefore, it could not be changed immediately.

If you think world’s situation may or may not be changed, although the price is not going up, you will not running around like headless chicken. Say here: " the line index looks good, buy it now." Say there: “the price is low enough, buy it now."No continuity between every investment. Therefore, It is normal to lose money; making money only if you are lucky. The “Globalization Trend Investment" looks simple, however, I have already investigated the whole process for 20 year. And I believe the same situation will keep going on in the future.

To be continued...