I guess you can see right now of the bubble we are in. We have both: a huge surge in AI and big tech stocks, and a real risk where geopolitics — especially anything that affects Taiwan — could change the whole tech supply chain overnight. That combination makes markets fragile. If you own property, stocks, or crypto, you should know how these forces connect and what to do.

The big picture I’m seeing is this. In every cycle bull run and peak like we have now, banks and lenders make borrowing easy which prop up prices for assets — especially land and houses.

And at the same time, as rates get lower and lower, people start to search for yield and they start to take on riskier investments like stocks, real estate, and crypto. New tech (like AI) becomes the perfect investment since the return is insanely high, companies are all blue chips. And as always, this investment is only focused toward a few big companies because of their economies of scale and unfair advantage. That concentration makes markets more fragile.

With such concentration, every nation wants a piece of it. And that piece is now concentrated in Taiwan, the capital of AI chip semiconductors. That’s why right now, wars, blockades, or even threats around places like Taiwan can break supply chains and sequentially the whole global stock market.

I keep coming back to this important idea from history because it underpins every single thing you’re seeing right now. In my reading and study of cycles, one thing that I know for sure is that CYCLES ALWAYS REPEAT. And if you’ve been reading my newsletter for a while, you would be very familiar with this. The cycle I’m talking about is the Real Estate cycle, and it on average repeats every 18.6 years.

Right now, we are in the Winner’s Curse phase, right near the peak, and every signs the cycle mentions is showing right now. Geopolitical issues, wars, overconfidence in the stock market, highest ever debt level, ridiculous valuation and speculation, high level of commodity prices, etc…

Now Taiwan matters because it makes most of the advanced chips we use. If Taiwan were blocked or attacked, chips stop shipping, factories stop, and tech earnings will drop. That affects stock prices and can push economies into recession.

For property, a sudden economic slowdown can lead to job losses and lower housing demand — especially in places highly exposed to tech sectors. And we all know, once the housing market crashes, everyone suffers, from the rich to the poor (since a home is something most social classes have). Not only that, given how our retirement funds are all in the stock market right now and how passive investing has been an time high trend, the collapse can be worse that we can imagine.

Thank you for reading. I’ll keep watching the mix of AI hype, real estate cycles, and geopolitical risk — especially anything that affects Taiwan and semiconductor supply — and I’ll share what I learn. If you want, tell me which part of this you want me to expand on next time: real estate timing, a step-by-step stock screen, or a deeper scenario plan for geopolitical shocks.

We also have have other similar articles on our website too.

Sharing with you the tools I’m using at the moment.

📚 Books I read: https://linktr.ee/smartxcapital

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Talk soon,

Ace — Smart X Capital’s Founder