October 30, 2024, 17:00 (Updated October 30, 2024) | Li Pu
Former US President Donald Trump. (Trump's Facebook)
Is Trump's investment advisor making a comeback?
The NASDAQ hit a new high, while the Dow Jones Industrial Average consolidated near its all-time high. Logically, the Taiwanese stock market, driven by TSMC's technology supply chain, should rise accordingly and challenge the all-time high of 24,000 points.
Unexpectedly, the Taiwan stock market has recently opened higher but closed lower, with some top-performing stocks falling by 20-30% from their recent highs, resulting in significant losses. This is due to TSMC's strong performance and excessive concentration of funds in a few benchmark stocks, causing the market to slowly decline like a frog being boiled in water. Meanwhile, buying from labor funds, ETFs, and foreign investors has focused on major heavyweight stocks like TSMC, so even with a significant index rise, many small and medium-sized stocks have not been favored and have struggled to gain momentum.
However, the recent headwinds in the Taiwan stock market are clearly due to Trump's increasing chances of being elected and his frequent attacks on Taiwan. Investors are worried that Taiwan's chip industry will be suppressed by Trump, and that he may even raise tariffs on Taiwan. Therefore, they are rushing to sell stocks to survive before the Trump storm hits, causing the Taiwan stock market to decline.
Trump is a madman whose behavior and speech are full of populist style. He often criticizes everything and everyone, including China, NATO, South Korea, and Japan, while boasting that he is good friends with dictators such as Xi Jinping and Kim Jong-un. But Trump's criticisms are intended to please the American working class and ordinary people, and he intends to play the Robin Hood, robbing the rich to help the poor, in order to win the favor of the American underclass.
Therefore, Trump's policies are indeed highly uncertain, and financial markets are most sensitive to risk. Taiwan is a high-risk geopolitical area, so investors should flee at the slightest sign of trouble.
However, looking back at Trump's presidency, when he launched the US-China trade war, the Taiwanese stock market was initially terrified. But it later turned out that Taiwan was not only unaffected, but also greatly benefited from its complete industrial supply chain. Furthermore, Biden's subsequent strengthening of technology controls on China made Taiwan's chip industry even more indispensable, causing the Taiwanese stock market to rise steadily. These factors are unlikely to change significantly if Trump is elected, so investors really don't need to be pessimistic.
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