Stock Exchange Of Thailand

[cclub75]

Bravo.

It's a good reminder : economy is not only about figures and balance sheet.

It's about politics too. To assess a mid and long term perspective, we have to assess the political/societal side. It's probably the most important factor.

As you pointed out : it could be easy to bet on Korea, or Singapore on the long term, with a reasonable possibility to win.

But on Thailand ? No way. Like Philippines.

Philippines was the second richest country in Asia in mid 60's, behind Japan. Look where they stand since 1990.

Every investor should keep in mind a few keywords to define Thailand : feudalism, education zero, agriculture and corruption.

Some nice financial coups are of course possible on the short term. But on a longer perspective : we just have the perfect recipe for a disaster.

Thailand is incapable of doing anything to address problems in education and the all pervasive corruption that both hold back development more than anything else. The double evils of Thaksin and the coup and lame duck Saruyud administration serve only to entrench corruption and the lack of will for reform and concern about loss of competitiveness even deeper. Thailand's demographics are now looking less good - decline of population entering the labour force. A shift of the workforce away from manufacturing and services back to agriculture due to higher commodity prices allows exports to continue looking goods while masking the lack of sustainability of this type of contribution to growth. At any rate a slow down in investment now indicates a loss of export competitiveness in the not too distant future, although this is masked by the marked contraction in capital goods imports which flatters the current account and accumulation of international reserves. The hopeless education system which nobody seems to care much about is a real barrier to Thailand's ability to move up the value added ladder to compensate for loss of market share in labour intensive export manufacturing. Korea and Taiwan were busy planning for this shift over 30 years ago but nothing has changed in Thailand's educational system since this future trend became obvious in the late 80s. Politically the effect of the coup means there will no longer be any backstop in future, since we now know that a coup is likely to bring in an ineffectual government dedicated to doing nothing about corruption and other national problems. The public is unlikely to welcome future coups, so the military will be less likely to stage them and politicians will have nothing to fear leading possibly to unbridled power and corruption by politicians, including most likely Thaksin. That is why I am not too optimistic about the long term and think the economy and market will underperform once the market has got back to a more realistic valuation. I am putting more in this basket but not all my eggs.

[Arkady]

For those who want to get into market timing, probably the best stock market investor ever, Warren Buffett, and his sidekick Charlie Munger, say they can't predict what the stock market is going to do in future. I can say the same about Joe Granville, who was regarded as a great chartist. He announced in 1981, that his charts were telling him, there was going to be a huge market correction in the U.S., and to "sell everything". This call, before the longest, and greatest bull market, America has ever seen.

Yes, they stay fully invested but, if you have nothing in the Thai market, this approach is not going to do anything for you. Market timing cannot be made to work consistently over the long-term as a strategy in itself but here we a case of an undervalued market that is a no brainer to increase allocations to with a 6-12 month view.

Hi Arkady,

You're right. As I said in an earlier post, the only thing I have in Thailand is what's in an emerging market ETF I own. Here in North America, many investors are fearful because they either think their markets are too expensive, or they can't find anything cheap enough to buy. Over in Thailand, it's the exact opposite, you have one of the cheapest stock markets in the world, with a number of choices, but many don't want to buy because of future politics or other considerations. Sometimes you just can't win.

Local buying of lack of it has been holding back the market. When they decide to jump in it will probably fly for a while anyway. Research US listed ETFs on www.etfconnect.com . The only Thai choice over there is TTF.

[Taggart]

Research US listed ETFs on www.etfconnect.com . The only Thai choice over there is TTF.

Right now TTF is selling at a premium, but if it ever sells at a discount to NAV, I may consider it.

[Taggart]

Well, just bear in mind that they are at bottom with reasons as well. I invested in the Thai exchange in 2002 using this basis of unbelievable fundamentals and I hit the jackpot with only one stock and the others were dud. I now learn that the prospect of each company counts a lot.

Irene:

Any chance the stock you hit the jackpot with, made up for all the duds? Also, you're mentioning that "the prospect of each company counts a lot", have you made any changes in your investment thinking to try and get away from the duds next time, as much as possible?

[bingobongo]

for those loking at ADRs (ability to invest overseas in global securities) you can try:

www.adr.com

can go by region, or country, not all Thai stocks are listed as certain requirments must be met to be listed as an ADR

to get to Thailand:

1) click "ADR universe"

2) then select Thailand in "Country Field",

3) then click "submit" in lower left

Edited May 29, 2007 by bingobongo

[Taggart]

for those loking at ADRs (ability to invest overseas in global securities) you can try:

www.adr.com

can go by region, or country, not all Thai stocks are listed as certain requirments must be met to be listed as an ADR

to get to Thailand:

1) click "ADR universe"

2) then select Thailand in "Country Field",

3) then click "submit" in lower left

I'll buy on the Toronto Exchange, New York, Amex or NASDAQ, but never, ever will I buy on the OTC again, which unfortunately is where all the Thai ADR's listed in North America are held. If you do buy, you'd better hope there's liquidity (at least be able to get a bid and ask), and quite often you won't find out if there's liquidity until you go to sell. Odds are your broker will have to go through a market maker, and most likely it won't be the price you think you're going to get, but it will be "his price". Give it a try if you'd like, but all I can say is I hope you have more success than I did.

[Irene]

Well, just bear in mind that they are at bottom with reasons as well. I invested in the Thai exchange in 2002 using this basis of unbelievable fundamentals and I hit the jackpot with only one stock and the others were dud. I now learn that the prospect of each company counts a lot.

Irene:

Any chance the stock you hit the jackpot with, made up for all the duds? Also, you're mentioning that "the prospect of each company counts a lot", have you made any changes in your investment thinking to try and get away from the duds next time, as much as possible?

Taggart,

The profit from my jackpot stock covered only 30% of my losses on the other ten duds. I still keep these dud stocks of 100 units each in order to remind me of not to take some analysts too seriously.

After these losses, in 2003 I concentrated on big caps insteadand hit the jackpots on all stocks invested, mainly PTT and Shin, and realised them with a total gain of 140% of the investment during the week of Tak Bai fiasco in Feb 2004. If I still hold these stocks today, its value would be reduced to the gain of 30% only. So, this is another important point of investment of "when to realise your profit".

I think I have succeeded in getting away from those duds pretty well by following Ben Graham's philosophy of picking stocks that have a fall back position. Only big-caps give you that comfort. Another advantage is that one's mind remains less fuzzy by concentrating only on the big caps which are not many in Thai stocks. Among SET 50 there are 5 stocks that covers almost half of the Thai stock activities. In order not to miss out on small-caps, I have invested in the small-cap fund as managed by Aberdeen which so far has given me a 4% return after two quarter.

Because of the concentration on the big caps, I have become quite good on the future market on SET 50 stocks and todate has given a nice sum of returns of 50% after a period of six months. The beauty is the index is not easily manipulated and the market is pretty fair for those with economic and financial knowledge.

[Taggart]

Taggart,

The profit from my jackpot stock covered only 30% of my losses on the other ten duds. I still keep these dud stocks of 100 units each in order to remind me of not to take some analysts too seriously.

After these losses, in 2003 I concentrated on big caps insteadand hit the jackpots on all stocks invested, mainly PTT and Shin, and realised them with a total gain of 140% of the investment during the week of Tak Bai fiasco in Feb 2004. If I still hold these stocks today, its value would be reduced to the gain of 30% only. So, this is another important point of investment of "when to realise your profit".

I think I have succeeded in getting away from those duds pretty well by following Ben Graham's philosophy of picking stocks that have a fall back position. Only big-caps give you that comfort. Another advantage is that one's mind remains less fuzzy by concentrating only on the big caps which are not many in Thai stocks. Among SET 50 there are 5 stocks that covers almost half of the Thai stock activities. In order not to miss out on small-caps, I have invested in the small-cap fund as managed by Aberdeen which so far has given me a 4% return after two quarter.

Because of the concentration on the big caps, I have become quite good on the future market on SET 50 stocks and todate has given a nice sum of returns of 50% after a period of six months. The beauty is the index is not easily manipulated and the market is pretty fair for those with economic and financial knowledge.

Irene:

I'm finding what you're posting here, a great learning experience. You had a very high proportion of duds. Aside from the fact they were small cap, was that the only problem, or were there other factors you noticed causing them to be failures, such as high debt ratios, lack of earnings or dividends, obsolete products, or too many stocks in your picks from one sector?

[bingobongo]

speaking of China, strong resistance for the Shanghai index in the 4250 - 4321 range, it will be interesting............when China bursts it will spread throughout Asia

thailand is overbought, correction is coming.....

resistance was close, shanghai hit 4335 (instead of 4321 as posted above) and fell 281 points on May 30, if shanghai does not hold 4015, then the next support is 500 points down to 3500, so support is 4015 and resistance is 4335

only matter of time before it spreads (SET included)

[ThaiGoon]

SET index went up more than 1% today.

[Irene]

Taggart,

The profit from my jackpot stock covered only 30% of my losses on the other ten duds. I still keep these dud stocks of 100 units each in order to remind me of not to take some analysts too seriously.

After these losses, in 2003 I concentrated on big caps insteadand hit the jackpots on all stocks invested, mainly PTT and Shin, and realised them with a total gain of 140% of the investment during the week of Tak Bai fiasco in Feb 2004. If I still hold these stocks today, its value would be reduced to the gain of 30% only. So, this is another important point of investment of "when to realise your profit".

I think I have succeeded in getting away from those duds pretty well by following Ben Graham's philosophy of picking stocks that have a fall back position. Only big-caps give you that comfort. Another advantage is that one's mind remains less fuzzy by concentrating only on the big caps which are not many in Thai stocks. Among SET 50 there are 5 stocks that covers almost half of the Thai stock activities. In order not to miss out on small-caps, I have invested in the small-cap fund as managed by Aberdeen which so far has given me a 4% return after two quarter.

Because of the concentration on the big caps, I have become quite good on the future market on SET 50 stocks and todate has given a nice sum of returns of 50% after a period of six months. The beauty is the index is not easily manipulated and the market is pretty fair for those with economic and financial knowledge.

Irene:

I'm finding what you're posting here, a great learning experience. You had a very high proportion of duds. Aside from the fact they were small cap, was that the only problem, or were there other factors you noticed causing them to be failures, such as high debt ratios, lack of earnings or dividends, obsolete products, or too many stocks in your picks from one sector?

Taggart,

The main reason is that small caps are easily manipulated with small volumes especially by the owners. Another reason is that some of them have bad prospects. They are not money-machines like big-cap. They do not have monopolistic position like the big-caps. Twice I followed the analysts too religiously on these small caps with these attractive fundamentals and lost quite substantially. The analysts have not much to write on the big caps and they love to come out with the prophecy on the small caps. The analysts that I trust now are mainly foreign related such DBS, Phatra, and Tisco. I just ignore the rest. Historically, the three had failed me only 20% on their analysis.

[Taggart]

Taggart,

The profit from my jackpot stock covered only 30% of my losses on the other ten duds. I still keep these dud stocks of 100 units each in order to remind me of not to take some analysts too seriously.

After these losses, in 2003 I concentrated on big caps insteadand hit the jackpots on all stocks invested, mainly PTT and Shin, and realised them with a total gain of 140% of the investment during the week of Tak Bai fiasco in Feb 2004. If I still hold these stocks today, its value would be reduced to the gain of 30% only. So, this is another important point of investment of "when to realise your profit".

I think I have succeeded in getting away from those duds pretty well by following Ben Graham's philosophy of picking stocks that have a fall back position. Only big-caps give you that comfort. Another advantage is that one's mind remains less fuzzy by concentrating only on the big caps which are not many in Thai stocks. Among SET 50 there are 5 stocks that covers almost half of the Thai stock activities. In order not to miss out on small-caps, I have invested in the small-cap fund as managed by Aberdeen which so far has given me a 4% return after two quarter.

Because of the concentration on the big caps, I have become quite good on the future market on SET 50 stocks and todate has given a nice sum of returns of 50% after a period of six months. The beauty is the index is not easily manipulated and the market is pretty fair for those with economic and financial knowledge.

Irene:

I'm finding what you're posting here, a great learning experience. You had a very high proportion of duds. Aside from the fact they were small cap, was that the only problem, or were there other factors you noticed causing them to be failures, such as high debt ratios, lack of earnings or dividends, obsolete products, or too many stocks in your picks from one sector?

Taggart,

The main reason is that small caps are easily manipulated with small volumes especially by the owners. Another reason is that some of them have bad prospects. They are not money-machines like big-cap. They do not have monopolistic position like the big-caps. Twice I followed the analysts too religiously on these small caps with these attractive fundamentals and lost quite substantially. The analysts have not much to write on the big caps and they love to come out with the prophecy on the small caps. The analysts that I trust now are mainly foreign related such DBS, Phatra, and Tisco. I just ignore the rest. Historically, the three had failed me only 20% on their analysis.

Hi Irene,

Thanks for the response. I was reading a very interesting item this morning, related to behavioral finance. If you go to Google and on the web, search for an item called "Turtles in Omaha". Enjoy.

[bingobongo]

speaking of China, strong resistance for the Shanghai index in the 4250 - 4321 range, it will be interesting............when China bursts it will spread throughout Asia

thailand is overbought, correction is coming.....

resistance was close, shanghai hit 4335 (instead of 4321 as posted above) and fell 281 points on May 30, if shanghai does not hold 4015, then the next support is 500 points down to 3500, so support is 4015 and resistance is 4335

only matter of time before it spreads (SET included)

###### I am good (per my post above), as i write this, Shangahi is down to around 3600:

and soon thailand SET will take it on the chin, once euphoria of last week subsides

SSE Composite Index (Shanghai)

[Donnyboy]

speaking of China, strong resistance for the Shanghai index in the 4250 - 4321 range, it will be interesting............when China bursts it will spread throughout Asia

thailand is overbought, correction is coming.....

resistance was close, shanghai hit 4335 (instead of 4321 as posted above) and fell 281 points on May 30, if shanghai does not hold 4015, then the next support is 500 points down to 3500, so support is 4015 and resistance is 4335

only matter of time before it spreads (SET included)

###### I am good (per my post above), as i write this, Shangahi is down to around 3600:

and soon thailand SET will take it on the chin, once euphoria of last week subsides

SSE Composite Index (Shanghai)

well done BB, a career in fortune telling awaits...

hopefully, I can pick up some cheap buys in the days to come

[Mid]

pardon ???

ล่าสุด เปลี่ยนแปลง มูลค่า

(ล้านบาท)

SET Index 760.42 -10.19 12,923.38

SET100 Index 1,172.50 -18.23 10,009.02

SET50 Index 540.26 -9.10 8,205.05

mai Index 214.97 +0.32 131.98

[ThaiGoon]

pardon ???

ล่าสุด เปลี่ยนแปลง มูลค่า

(ล้านบาท)

SET Index 760.42 -10.19 12,923.38

SET100 Index 1,172.50 -18.23 10,009.02

SET50 Index 540.26 -9.10 8,205.05

mai Index 214.97 +0.32 131.98

What a sad clown. He goes ape with a one percent drop in the SET after two consecutive days of 2+ percent increases.

Edited June 5, 2007 by ThaiGoon

[Irene]

[

Hi Irene,

Thanks for the response. I was reading a very interesting item this morning, related to behavioral finance. If you go to Google and on the web, search for an item called "Turtles in Omaha". Enjoy.

Hi Taggart,

Thanks. I will look into it. It always gives me a sense of warmthness on mentioning of Omaha. The man has given me a lot of good lessons.