Tuesday, January 09, 2007

Searching for One Sufficiently Good Idea

I came across this interesting idea.

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I have a subscription to the Motley Fool Boards. This was a leftover from my days of old (when knights were bold) when I used to believe in fundamental analysis. Anyways, there are several boards that I still actively follow and one of them is a swing trading board. From that board came the following interesting idea:

What makes this stock so interesting ?

The answer can be found in this obscure but definitely interesting tidbit of news:
"Taiwanese media reports said that the Mac maker had placed an order for 12 million phone units to be built by contract manufacturer Hon Hai Precision....."
The top 2 holdings of EWT are: Taiwan Semi Mfg. (TSM), and Hon Hai.
Chart of TSM is here.
Chart of Hon Hai is here.
Both are looking decent - of course, TSM's movements will be largely influenced by SMH. However, since both trade on the Taiwan Exchange (which is +13 hrs ahead of New York time), there are arbitrage opportunities available here. EWT, since it is an ETF AND an ADR, will not follow the trading patterns of a regular stock. I will be looking at EWT a bit closer in the next couple of days.

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