For one who gets into the stock market, conducting research on which countries and industries might be dangerous or influence the market considers the most important investment indicator.
In the year of 1986, I was in my early thirties. I got admitted to the gugraduate school with the top grad in my department. However, continuing study was just a dream for me while I was already working. I thought working and learning to invest at the same time could not made me enrolled that great school. Fortunately, by the grace of God, I had been finally accepted by the school. Not very long after few classes, all my classmates knew I was involved in the stock market. Although my major was closest to the stock, my classmates felt less interesting about it. For the Taiwan stock exchange index settled just between 850 to 1,000 points during that time. And there was not many securities, people did not even know where to buy the shares.
However, Taiwan stock index suddenly stepped up at 1,000 points, even to 1,100 points in January 1987. I was full of enthusiasm and energy to tell my classmates, colleagues and professors that,"the index will boom at least 8,000 points. In terms, reaching at 8,800 points and the stock volume will increase up to one hundred twenty billion NT dollars." while the index was just few hundreds million per day. Everyone was laughed at me about my crazy idea. These words seemed like nonsense to them, however, my reason for that involved with the political issues that I was carefully not to defended the government for I was not as bold as Nori Shih and Shin-chieh Huang just after the period of martial law. My reason simply was that if only half or one third of money, from the calculation of trade surplus in the past decade, goes into the stock market after decontrol of foreign exchange, it will probably be at least ten billions US dollars. And the index will boom to 8,000 points. I thought Japanese price earning ratio was close to 50 times, Taiwan will probably be 60 times (In my option, Taiwan was greater than Japan. ) No matter what happened, the index kept going up and boomed to 4,000 points. This made me “the sage of stockbroker", and impressed the department’s professors in September 1987. I think this had caused me to work at the financial department of a well-know legal person in the future.
Seriously, I did not know the fact about decontrol of foreign exchange was forced by American. Ching-kuo Chiang, the former president of Taiwan, had no choice but to appreciate the currency at that time. Therfore, I felt “what a great president" Ching-kuo Chiang was. And the classmates from my department zealously attended the speech out of Kuomintang party seemed so inconceivable to me. My most problem block me to see the clear picuture was lacked in basic knowledge and resulted to insufficient data collecting. I did not even know the major international agreement which was not signed by Taiwan would severely impacted Taiwan’s market.
After all of these, it seem unbelievable to me that many investors have infatuated with only “Technical Analysis", but ignored the globalization events which severely affected Taiwan stock market. Most technical analysis operators like to said, “all the information will be shown on the trend line", although it has its time difference between the fact and the trend line.
To be continued…
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