Saturday, June 14, 2008

Sealing Deals: China to Taiwan Direct Flights

Now approved by both sides, you can soon get direct flights (weekends only) between China and Taiwan, although still a round-a-bout measure by flying through HK airspace.

So, rather then delve into the politics of it, I'm going to go into how I'm going to play it.

Whether weekend direct flights will be able to provide a sustained economic boost that the KMT says it would, or whether it will even provide a temporary short term stimulus will have to be seen. The better issue is to discuss involving stocks is, will there be an opinion among investors that there is economic growth happening? If so, the bid/asks will rise, regardless of actual economic improvement. Since lies can only be told until the truth comes out in a yearly or updated quarterly economic report, the largely KMT-controlled media can boast about the economic improvements that this will bring to the economy. As long as the media portrays Ma as a savior to Taiwan's economy, I will be building a position in EWT until before raw data comes out. Until then, I hope to see a good 15-20% rise in EWT from its current prices of around 15 and change. Anything in the 15s is a good buy in my opinion- technically it's close to an oversold position, but has yet to show a break from its current down trend. If you're cautious, hold off until the confirmed reversal, and jump in.

Just received Humanity At Stake: China's Aggression, Taiwan's Democracy, and 23 Million Citizens' Human Right to Self-Determination, upon seeing it mentioned on Michael Turton's blog. Will have my own review on it after I finish it.

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