The Cipher

37 minutes ago, newnative said:

None of us drive Lambos but we all own nice, late model regular cars.  None of us own mansions but we all own nice condos or houses, some of us several.  We employ gardeners and maids, pool cleaners, and use and pay many other service workers as we maintain our cars, fix up our homes, entertain and feed ourselves, attend to our health needs, and more.  Thailand, and its local workers, would be better off if the government could attract a dozen of us for every millionaire.  

Fair and well said. The lifestyle you described is basically what I would expect for a household with $1-3M in net assets spending a material part of each year (3mths+) in Thailand. Assuming you and your friend group are relatively well put together I do agree that the country would benefit from more immigrants like you who would be willing to to commit year-round and put down roots.

1 hour ago, lkn said:

I don’t think we can distill a lot from “number of people with a net worth above US$1M”. As you say yourself, it’s a diverse group. For example, a lot in this group will have family and/or a job, and a long-term stay in Thailand is  just not possible/practical for them.

 

I think a better way to estimate how many wealthy people Thailand can attract, is by looking at what they managed to do in the past and extrapolate.

 

End of 2019 they had 8,602 holders of the Thai Elite Visa. This was their best year, with about 1,500 new sign-ups.

 

Those 1,500 were probably from people who were already frequent visitors, and bought the visa for practical reasons, or said another way, of the close to 40 million tourists in 2019, they managed to sell the Thai Elite Visa to 1,500 of them.

 

So I think attracting even 100,000 “wealthy tourists” (for a long-term stay) is highly unrealistic, when they could only get 1.5% of that, pre-pandemic.

Fair enough point. I wasn't aware of the number of Elite holders and would've expected more holders.

I do think that the proposed visa options are more attractive than Elite, but don't think that they are 10x more attractive. If the quoted Elite numbers are accurate, then it does seem that 100k would be a stretch.

4 hours ago, NanaSomchai said:

I'd rather eat out at your local Ma and Pa restaurant or the discrete food cart vendor around the street corner, that's more in-line with Thailand's image and enriched experience, but that's just me.

So actually I agree with this. But the thing that I think many forumers miss is that they assume that the nebulous 'wealthy foreigner' will not also find the Thai experience charming. That's why you see so many posts here about how 'wealthy foreigner' would never put up with Thailand's idiosyncrasies. Which I assert is false. In fact, one thing I like about Bangkok is that I can have multiple different lifestyle experiences even within the span of one day.

Have said this a bajillion times, but wealthy people aren't a uniform population. Thailand will appeal to some percentage of them, the only question is how many will want to commit in some way to the country? The one million people assumption the gov makes works out to about 2% of all millionaires. That's probably too high. If you assume they'll convince a quarter percent or half a percent of all global millionaires to pick up one of the new visas, that's 125,000-250,000. Intuitively that feels a like a more realistic range.

8 hours ago, lkn said:

This is probably just a million *net worth*, so a lot of that wealth tied up in real estate and/or retirement fund.

 

But even if you have one million in savings, that isn’t what it used to be. For example a high end condo in Thailand will easily cost you $600k or more, which is more than half your savings.

Sure. But I guess the point I'd argue is that from the perspective of the gov, these guys would still have the ability and probable willingness to contribute more to the economy than shoestring pensioner? I can understand why the gov would view them as a more desirable demographic generally also, regardless of finances.

42 minutes ago, LivinLOS said:

Thailand is not cheap.. For luxury goods, or items. 

Had this debate 100s of times but if your saying Thailand is cheap, what your saying is you don't spend money on fine goods and higher end luxury items much. 

But no, tho. I literally wrote in my post that Thailand was a bad place to buy luxury consumer goods. Asia in general is a bad place to buy those goods.

Anyone who actually has wealth knows that (i) intercontinental travel is a multiple-time per year activity. You can take advantage of price differences during travel that you were going to do anyway; and (ii) you very quickly run out of consumer goods to buy so that the relative price matters less anyway.

You don't even have to be particularly rich to understand the above paragraph. Like, pretty much anyone who has been a six fig earner for 3+ years will know that it actually gets harder to spend the money on consumer goods as time goes on because there's just less that you want/need to buy.

Also, luxury consumer goods in Thailand were never cheap. So they wouldn't even be relevant to folks who are complaining that the country is no longer cheap.

I will agree to join you in hating on the car import tax tho. Still waiting for someone to tell me how to get around that (not a joke).

51 minutes ago, NanaSomchai said:

I am sure there are other retrirement destinations that may be worth looking into, I can only speak of what I know, I don't speculate, therefore you should do your own research.

Thanks. I appreciate the good-faith recommendations but am not thinking about retiring for some time yet ????

---

I would never suggest that someone stay in Thailand if they are happier elsewhere. But I also won't pretend that the country doesn't still offer good value per dollar spent.

One of the main reasons I decided to build out a second home in Bangkok was specifically because I had an equivalent-or-better lifestyle to what I'd enjoy in Singapore, Seoul or Hong Kong (the other options I considered) but at a significantly better price.

7 minutes ago, Chomper Higgot said:

Any infection that takes hold and causes damage to health demonstrates a fairly defenseless immune response to the virus. You need to add to the deaths, serious illnesses, hospitalizations and ‘long COVID’ illnesses.

 

The evidence is that without vaccination our immune systems are fairly defenseless to the virus.

Dude, in order for your statement to be correct the default expectation for any unvaccinated person catching the Delta variant would have to be, by definition, the development a serious illness at a minimum.

You can straight up prove that premise wrong by looking at the data. Based on observed outcomes the expected outcome for pretty much anyone catching Delta is that their immune system will defeat the virus. This isn't a debate; literally all of this is plainly visible in the data.

That being said, I will reiterate that the data also indicate that vaccination is highly effective at supplementing an immune system's response against the virus and that it is a good idea for people to get vaccinated.

Quote

Except that, without vaccination, the immune system is fairly defenseless against Delta infection. 

I don't intend to wade into this topic, but every once in awhile I need to call out some faulty reasoning.

If the quoted statement were correct, the implication would have to be that either (i) Delta variant fatality rates among unvaccinated people would be well north of 50% or (ii) Delta is largely benign. Ie, that it struggles to kill people whose immune systems are largely ineffective against it.

Therefore, based on actual data, we can deduce that the quoted statement must be false.

That being said, vaccines clearly do offer a meaningful improvement in protection against Covid. I still think people should get vaccinated when possible.

On 10/10/2021 at 10:26 PM, ezzra said:

Never-mind. soon it will be replaced with even a better and more fancy one courtesy of the famous car's smugglers rings out side and inside this country...

19 hours ago, vinci said:

if you thought he bought the car from Nissan dealer for 10m, you my friend are clueless about Thailand car market, i can go into detail for you to understand, but you know nothing john snow

I would actually like to learn more about this and would very much appreciate more detail. Is there a reliable way to avoid the ridiculous import tax?

Asking for informational purposes only, of course. ????

Quote

This thread only gets busy when BTC  is going down. 

Can't speak for anyone else but, personally, I just don't care about what any other person does or doesn't have in their portfolio (generalization) and don't particularly feel the need to talk about my portfolio movements unprompted.

17 hours ago, webfact said:

BANGKOK (NNT) - The Revenue Department is mulling the possibility of reducing personal income tax for foreign experts to 17% in an effort to bring in foreign talented professionals to work in Thailand.

 

Director-General of the Revenue Department, Ekniti Nitithanprapas said the highly skilled professional must be in the fields that Thailand fall short of and that they would be permitted to work anywhere in Thailand. He said the department is considering a valid period for this tax cut.

The tax cut could attract some people, but total net compensation is also very important. Unless Thai companies intend to also offer globally competitive pay to compete for talent, the tax rate alone is not going going to move the needle.

Hong Kong also has a 17% tax cap and globally competitive pay. Singapore, I believe, caps at 22%. If competing for top talent employed locally, those are the destinations that Thailand will need to outcompete.

That being said Thailand does have some unique features also, and I do genuinely appreciate their efforts to improve diversify the expat mix in general.

Quote

If it is your intention to really want to teach with no regard to income, you can volunteer.

On an unrelated note to what I wrote above, I've toyed with the idea of running classes to teach investment planning and financial literacy when I'm in the country. Could be as basic or complex as folks are interested in and I'd happily do it on a pro bono basis, but I have no idea how to go about doing so.

The language barrier would probably be an issue tho, lol. ????

I answered the actual survey, but...

Quote

Are you planning to visit or return to Thailand this year?

Yes. Targeting early-mid December when professional life quiets down here during the holiday season.

Quote

Have you actually booked your travel?

No, but it's pretty normal for me to book just 1-2 weeks ahead of travel date. That seems even more prudent now with international travel rules in flux.

Quote

Would additional factors - such as the alcohol ban possibly still being in place - put you off visiting Thailand?

Not the alcohol ban specifically, but sure, there are factors that might put me off.

Restrictions that limit my day-to-day experience would be a heavy disincentive. In fact, anything even sorta approximating lockdown restrictions would sour the idea. If I'm required to wear a mask, I'll grudgingly wear a mask, but other than that life on a daily basis needs to feel relatively normal.

9 hours ago, Neeranam said:

What is wrong with Rolex?

This is just my opinion. Doesn't necessarily apply to you and is intended as a generalization. But...

(i) Rolexes are the most counterfeited watches in the world. Replicas can be bought in varying quality from all kinds of vendors. So my default assumption when I see one in public is that it's not genuine. Of course this depends a bit on how congruent it is with the wearer and other factors.

(ii) Even assuming that you can pull off the look congruently, Rolxes are boring. Like, they're the go-to brand of people who have no genuine passion for horology but want to buy something that they think will make them look cool, and so go for the brand that they know (see also: BMW drivers ????).

(iii) Might be a purchase better avoided. Personal story here, but when I was in my mid-20s a few years ago, I blew part of my annual bonus on a nice watch. I did this for 3 years. Now, in hindsight, that cash would have been a lot better off invested. Sure the watches are cool, but did they benefit my life in any meaningful way? No. And now I rarely even wear them, and don't I expect that to change as smartwatches continue to develop. Obviously if you're older and compounding doesn't matter as much anymore, then opportunity cost won't be as big a consideration. But man, I'm going to miss out on 30+ years of compounding that money, so do consider it.

So in conclusion, blowing Gs on a watch is something most people do to flex. And that's fine. Just make sure that if you do buy one, it's fulfilling the function that you bought it for, and also that you won't regret the opp cost tradeoff later.

45 minutes ago, fdsa said:

soooo do I understand correctly that there is going to be some gathering of persons who do posess some digital gizmos which are worth lots of bucks but which are not treated as money or securities thus a loss or theft of these gizmos would not be investigated, and these persons have no rights compared to locals thus their police reports would simply be ignored?  ????

Dw bro. We're all gonna sell out to cash before the meetup. Or at least, that's what I would do if I still had any coins.

But unfortunately I lost my crypto wallet in a boating accident this past summer and now it's gone. ????‍♂️

2 hours ago, lkn said:

Though let me ask you, say I agree with you that Etherium does create value because of Axie Infinity, do you then agree that bitcoin is worthless?

No. Like I said before, the value propositions for different tokens and projects aren't uniform. Bitcoin's value is based on something different than is Eth's. Bitcoin's claim is

something I explained in a previous post. Market participants are actively determining the consensus value of a Bitcoin transaction at all times.

That consensus might be different from your own views, which would lead you to not transact or even to short (or proxy short) the asset. The prior sentences can be generalized to apply to all assets of any kind.

4 hours ago, lkn said:

If you follow our discussion, I am asking how value is created (by buying a token, and then later selling it for a profit), you tell me we can assign a value to interest paying assets/tokens, I say this can only be done in the same currency, but we want to assign a USD value to the asset/coin, and now you tell me that the USD value is set by the market.

 

I mean no offense, but your answers come across as shallow. E.g. demand is creating the value, the market is assigning the price. Yes, that is superficially how it works, but why is there demand? How does the market determine a fair price? These things can be answered for regular assets, they don’t have good answers for most crypto coins.

No. I explained this in the past few posts. If you're curious you can go back and re-read those, because these paragraphs show an incomplete understanding of what I wrote previously and I don't really want to expound.

4 hours ago, lkn said:

 

As long as there isn’t a massive sell off, the price can hold. But Tesla bought bitcoins for more than a billion, MicroStrategy is closer to 3 billion, bitcoin minors in North America has not been selling any bitcoins this year and is sitting on more than a billion (and has corresponding liabilities), the Mt.Gox estate is sitting on 11 billion worth of bitcoins, all this money is just parked on some entity’s balance sheet, it’s hard to believe that sooner or later, these entities won’t sell out of their bitcoins, I mean, what are they waiting for? The collapse of the U.S. dollar?

I actually disagree here. The more institutional money that flows into Bitcoin, the less likely we are to see a massive selloff, in my opinion. Moreover large holders actually have a disincentive to send prices sharply downwards under most conditions.

At some theoretical future point, large-cap coin volatility should drop off a lot when some threshold level of institutional adoption is reached, and when protocols mature and regulation is stable. That will be the beginning of the maturation phase of the crypto market, but it's still some years away, I believe.

4 hours ago, lkn said:

One last remark, you have avoided answering my direct question about whether or not you think it is a zero-sum game. Take a simple coin like bitcoin and consider this carefully. If you do agree that it is a zero-sum game then consider the mining rewards, every 10th minute, 6.25 new coins are given to a miner, who did not pay for these coins. How does that affect the game? It actually makes it a negative-sum game.

No. I do not believe that crypto in general is a zero-sum game any more than I believe any other asset class in general is. You're anchored to the premise that all tokens are inherently useless and therefore valueless. Because you're anchored to that point as your north star and keystone premise, it's affecting your ability to understand perspectives that come with different foundational premises (for instance, that value creation is possible and that something meaningful is being built underneath the noise).

However, there are a lot of scams in the crypto space. Those would be more zero-sum.

5 hours ago, lkn said:

I wonder if you agree that speculation is driving majority of the demand, and majority of activity on the Etherium blockchain is pump and dumps of the probably more than ten thousand alt coins?

Yes. I believe that speculation drives demand in a lot of the space, and that this is amplified by leverage. I don't know that this is necessarily a bad thing, but we will see.

5 hours ago, lkn said:

But I don’t think we are getting much further in this thread, as said earlier, I appreciate your contribution, and the opportunity to express my views without being met by condescending responses (not mentioning names), like you, I do also find that articulating my view is a good way to make sure I actually understand what I am talking about, think things through, etc., and if I am ever in Bangkok, I am game for a meetup.

No problem. I get a kick out of humoring you guys on AseanNow (thereby humoring myself lol).

I've said this before but will reiterate. Although I pipe up to defend the asset class, most retirees would be best served by giving crypto a miss. The nature of that market makes it a poor fit for most retiree portfolios. It's high vol and speculative, extremely fast moving, and the high-value forums and methods of communication are geared in general towards younger generations.

And yes, would be happy to put faces to names. I'm sure we'll be able to arrange something that's fun for all!

7 hours ago, lkn said:

I would be curious to learn what projects you think have value.

This question, and pretty much all of the 'value creation' category of questions, can be answered with a fundamental understanding of Ethereum. It's like asking the value creation prop of the internet. You can also read about Axie Infinity, an online game built on Ethereum with millions of players.

7 hours ago, lkn said:

But they are not generating U.S. dollars, so I don’t see how you can value them in U.S. dollars.
 

For example, I have my AmpCoin, and if you buy 100 of these coins, and then transfer them to me, I will give you 15 additional AmpCoins each year the coins are in my possession. How much in U.S. dollars is that worth to you?

It's worth whatever the spot exchange rate is at the time I want to convert, or the time I want to mark to USD. If I wanted to get precise, it'd be worth whatever my realized exchange rate would be, which would include the actual rate I'd get plus trans costs.

7 hours ago, lkn said:

If it turns out, that gas fees for this is $10, will you pay it? No, you will just not react to my post, because it is too expensive.

Steps are underway to fix high gas on Ethereum. Update EIP 1559 rolled out this year and has been very successful so far. Fee issues are known and will come down in time. They haven't stopped the growth of the network so far anyway. In fact, one of the reasons gas is expensive on Ethereum relative to some other chains is because the network is actually seeing volume use.

7 hours ago, lkn said:

Do you mean like an ICO? I understand why people will initially buy a coin from an ICO, because, as you say, it is basically an investment in a startup.

No, that's not what I mean. I'd have to explain the venture capital model and how their traditional funds work in order to explain this point and there isn't time for that. Basically, crypto protocols are publicly floated at an earlier stage than are most companies. So the markets for many of those are inherently more speculative, risky, and built on future projections. Venture Capitalists are used to playing in this space, but the floating valuations are a new wrinkle.

It would be like if AirBnB had gone public after successfully proving their business model in a handful of properties in just one city.

7 hours ago, lkn said:

Is that good for society?

I don't know. Maybe, maybe not. Depends on how the space develops as it matures.

51 minutes ago, mjnaus said:

Most probably will fall on deaf ears with the fanatic anti-crypto crowd, but I appreciate this writeup nonetheless. Hope you don’t mind me recycling some of this content?

I don't expect to convince anyone. Explaining things in writing helps me make sure I actually understand what I'm talking about by forcing my brain to think through the topic lol.

You're free to reuse any of the content if you think it's helpful, but I make no representations on quality or correctness. I'm not a crypto expert and there's a toooon of stuff I don't understand lol. I mostly learn by hanging out on relevant Discords and reading Tweets and Substacks written by people more informed than I am.

1 hour ago, mjnaus said:

I could be mistaken, but weren’t you the one proposing a meetup in another thread a few months back? If so, and if you’re still in Thailand beginning next year, we should get together for beer/coffee. 

Yeah this was me! In Vancouver now, but tentatively expect to be back around the holiday period. Will be located in Bangkok. Would be happy to meet up with you individually or even as an 'AseanNow Crypto Bulls N' Bears' group more generally. The latter would probably make for a funny as hell evening.

6 hours ago, lkn said:

Demand for real estate and stocks is not based on this This is (one) definition of a bubble, i.e. someone buying an asset, not for its intrinsic value, but because they think they can sell it later at a higher value.

Rest assured, I'm familiar with valuation methods consistent with finance theory.

Here are some quick thoughts re: crypto valuation.

• Most crypto protocols have valuation parallels with traditional assets. You gotta actually make an effort to understand the differentiating value propositions for different cryptoassets to understand which are applicable.
• For instance Bitcoin isn't very 'useful' but claims its value proposition as a fixed-supply source of digital gold. You may or may not agree with that demand driver, but gold has traded on a similar proposition for thousands of years. At the time of writing an ounce of gold costs $1,760/oz, a price detached from the real world 'usefulness' of gold. I could expound but it would get too long. Just think of it as something something longstanding cultural norm and established track record with known correlations allow for a pool of buyers/sellers where each feels relatively sure that said pool will remain over time.
• Some crypto protocols, like AAVE actually do generate cash flow and can be valued by traditional DCF techniques and valuation multiple techniques.
• Other 'useful' cryptos, like Ethereum need to be spent in order to perform transactions and activities on the network (gas fees), or are are often locked (removed from supply) in order to perform a function. When a network sees an explosion in use like Ethereum has this year, demand for tokens spikes as more users need to access the network and need to bid for Eth to do so. 
• Have said this elsewhere, but a lot of crypto protocols can be thought of as akin to venture capital portfolio companies that trade in real time from seed through to maturity (or death), rather than buried in the private closed-end fund structure of traditional venture capital. Hopefully someone understands the profundity of this. It's one of the cleverer things I've written lately. This explains why you see so many famous VC firms (and VC firms in general) as major operators in the space now.
• Speculation in the space, as well as leverage, pushes up a lot of assets to very high multiples when compared to more mature companies. The resulting high volatility makes the a dream for certain types of traders. This partly explains why you see so many famous Hedge Funds in the space now.
• Some investors are making intelligent bets on growth based on research, but others are just aping around and a few tokens have valuations are nonsensical (no, this doesn't mean they all are).

That concludes my thoughts on valuation methodologies for crypto and its related valuation quirks. I won't be covering the second part of your post, ie 'what problem does crypto solve and why would anyone want it?'.

Nothing against you, but I've done that way too many times on here and nobody ever responds to what I actually write on that topic (although collectively the responses to those posts make for an interesting case study on behavioral finance biases, but I digress).