Applying Macroeconomic Indicators to the Trading Strategy of Predicting a Market Timing in Taiwan Electronic Industry

• Main Authors: Hsiao-Chi Lai, 賴曉琪
• Other Authors: Yeong-Jia Goo
• Format: Others
• Language: zh-TW
• Published: 2002
• Online Access: http://ndltd.ncl.edu.tw/handle/04992530124662369690

碩士 === 國立臺北大學 === 企業管理學系 === 90 === Since the 70s, the foci of industrial development are laid on semi-conductor, electronics, and information. In the stock market, more than 60 percent of the bargaining is related to electronic industry. In other words, it is obvious that a large bulk of money in the stock market goes to the business related to the electronic industry. The recession of the world economy emerged in the late 2000s. First, the Nasdaq index dropped from 5,000 in February 2000 to 1,600 in April 2002, which means a 60% of decline. The same result also interprets the decline of the index of Taiwan Stock Market, which dropped from 10,300 to 3,400 in the past couple of years. As Cunningham (2001) indicated in his book How to Think Like Benjamin Graham and Invest like Warren Buffett, on the basis of the random walk theory, there is no constant rule to follow in the uncertain financial market. One cannot predict the next move of any financial index by reading the historical patterns. The only truth in the financial market is that it constantly changes. Is it true that there is nothing we can do─just like the random theory─about the complicated cycles of the stock market that reflects the economy of a country? Okun (1962) treated as a sign of economic recession a two concessive 25% decline in Gross Domestic Product (GPD). His proposition of the composite index is also employed by NBER to detect the rise or fall of the market. This study is to look at different variables of the global economy and to develop a strategy to help find the best timing to gain profits in the stock market related to the electronic industry.