Founder Securities: A Mirror of History 1990 Taiwan Bull

[Abstract]

Investment Points:

Taiwan's stock market rose 12 times in the three years from 1986 to the beginning of 1990, and the "Taiwan bull" of that year had many similarities with the current one, and many bubble characteristics were extremely similar and had great reference value:

Summarizing the eight characteristics of the performance of the "Taiwan Bull" market that year: 1) the market is keen on small market capitalization, there is a story, and it is difficult for high-performing blue chips to outperform the market; 2) the government's invisible guarantee; 3) retail investors dominate, and the turnover has climbed; 4) the supervision of securities companies is relaxed, similar to the current stage of financial innovation; 5) the high price-earnings ratio; 6) the underground money bank collection is prevalent, similar to the current margin allocation transaction; 7) the underwriting of new stocks at low prices; 8) the lower rise and fall limit of 5%, the effect of which is to promote the bubble rather than reduce risk; 1990 Background, prelude and opportunity of "Taiwan Cattle":

In the background, Taiwan in the 1980s has entered a period of economic shifting, with GDP shifting from a high growth rate of more than 10% to a medium-high growth rate of about 7%-8%, and the economy is also entering a new stage of transformation from export orientation. At that time, Taiwan also experienced the process of infrastructure-driven economy and the establishment of Hsinchu Economic Park to attract talents to return, and the engineer dividend at that time played a great role in the development of its later transformation of the electronic semiconductor industry; and the "prelude" of Taiwan's cattle, like this round of A-share bull market, was the "last fall" caused by the outbreak of the credit crisis, the credit crisis, the risk caused by the old financial system no longer adapting to the needs of economic development, and the reform of the financial system after the credit crisis appeared. It has also become one of the important driving forces of a new round of bull market; and the "opportunity" for the stock market to go bullish, Taiwan in 1986, the Taiwan dollar entered the appreciation range, and the internal monetary easing, internal and external funds jointly easing to promote the "bull market". This is different from the current A-shares, the current renminbi has depreciation pressure, but interest rates and reserve requirement ratios also have a lot of downward space.