My Thai Shares Are Doing Too Well!

[samran]

Right,

Wifey and I have invested a few thousand bucks on the SET. Most of our investments are elsewhere, mainly our superannuation in OZ (ie managed funds), and in a property there too. So in the scheme of things, the SET is probably our 'riskiest' bet, but it isn't huge part of what would loosely be called our 'portfolio'.

Now here is the thing. We invested with a three year time frame in a couple of stocks which we researched well, and viewed as having good growth potential. They also have a good mix of both Thai and international exposure and income streams, and they have sound business plans.

This was back in April when we invested. We've since gained 33% on our investments in a little under 4 months. We're young enought to feel excited about it, but old enough to have been hit by the tech bust hitting our OZ and NZ managed funds between 2001 and 2003 and we both had our formative years during the recession in the early 1990's. So, not bad performance on the SET, but we are realistic at what can happen.

The thing is, I'm starting to get a bit nervous. Not about Thailand per se, but the fact that China stock market may be overheating a bit, fuelled by carry trades, and that at some point it may all start to go pear-shaped. No doubt, there will be some impact on the SET.

If we don't end up making money on the SET, then that is fine. It is not a huge loss for us. But it would be nice to make something.

So my question is, do we stick with our three year plan with this particlar lump of cash? Or do we take our profits now and change our strategy? The thing is, I've had things go badly, and I've cut my losses, but I've never had things go 'too well' so quickly. So I'm at a bit of a loss on what to do!!

Any advice would be welcome.

[chinthee]

All the smart money is taking profits now, including myself.

[Mid]

well ya three yr plan was thrown out the window ...........................

i thinking it didn't include a coup .

[chinthee]

How bout this...a hard rain's a gonna fall. pretty soon.

[lannarebirth]

When you're not in something for the "long haul", one of the most difficult things to do is to let your winners run. That's where all the money is made however. Cull out losers quickly, watch closely underperformers (have a stop loss set), and let your winners run. Barring a negative "event", markets like the SET will run to extremes. You should own it while it does. Take another look at it when you're up another 20%.

[samran]

well ya three yr plan was thrown out the window ...........................

i thinking it didn't include a coup .

Invested in april 2007 Mid. Coup and currency controls has all happened by this stage. They don't bother me for some reason, probably as they are a reflection of the typical Thai knew jerk reaction to things before a slow and face saving reversion back to normality, rather than anything fundamental. The SET even recovered from the currency control thingy pretty quick smart as well.

I think I've told you before, my personal opinion of Thailand, while sober, is marginally more optimistic, than say yours

Anyway, to others, thanks for your advice, keep it coming!

[samran]

How bout this...a hard rain's a gonna fall. pretty soon.

based on what?? Am keen to hear your views....

[Mid]

touché ,

best wishes .

[PCA]

Right,

The thing is, I'm starting to get a bit nervous. Not about Thailand per se, but the fact that China stock market may be overheating a bit, fuelled by carry trades, and that at some point it may all start to go pear-shaped. No doubt, there will be some impact on the SET.

If we don't end up making money on the SET, then that is fine. It is not a huge loss for us. But it would be nice to make something.

So my question is, do we stick with our three year plan with this particlar lump of cash? Or do we take our profits now and change our strategy? The thing is, I've had things go badly, and I've cut my losses, but I've never had things go 'too well' so quickly. So I'm at a bit of a loss on what to do!!

Any advice would be welcome.

Sell half position now and set a stop for the remaining half to breakeven. Therewith you did both, taking profits and letting some run further. When you have a bad feeling with an investment it is important that you react! Making the wrong decision is definitely to give all the paper back which will let you hesitate with your next trade/investment.

With that move you take out your risk and you got paid which is what you want I guess. Doesnt have to be 1/2, maybe 1/3 or 2/3 whatever but take some.

[chinthee]

Right,

The thing is, I'm starting to get a bit nervous. Not about Thailand per se, but the fact that China stock market may be overheating a bit, fuelled by carry trades, and that at some point it may all start to go pear-shaped. No doubt, there will be some impact on the SET.

If we don't end up making money on the SET, then that is fine. It is not a huge loss for us. But it would be nice to make something.

So my question is, do we stick with our three year plan with this particlar lump of cash? Or do we take our profits now and change our strategy? The thing is, I've had things go badly, and I've cut my losses, but I've never had things go 'too well' so quickly. So I'm at a bit of a loss on what to do!!

Any advice would be welcome.

Sell half position now and set a stop for the remaining half to breakeven. Therewith you did both, taking profits and letting some run further. When you have a bad feeling with an investment it is important that you react! Making the wrong decision is definitely to give all the paper back which will let you hesitate with your next trade/investment.

With that move you take out your risk and you got paid which is what you want I guess. Doesnt have to be 1/2, maybe 1/3 or 2/3 whatever but take some.

Yes, excellent advice. Many of us feel this has run to the top, but we could be wrong. Sell the portion you feel will give you the profits you need.

[solo siam]

Double up!

What investors RUN (like many are suggesting) from something giving them a pro rata return of well over 100% on a year?

Keep them, at the first sign of trouble dump them, whats the worst that can happen if you monitor them well? Even in the VERY UNLIKELY scenario that the worst time in the history of the SET would repeat itself, they lost 15% or so in a day, even with that in mind you would still walk away more than 15% up (+ whatever else its gained in the meantime).

[Maestro]

...have a stop loss set...

That’s what I would do, too, with a winning streak like yours. If the stop gets triggered, the price falls some more, and you think the company’s fundamentals remain sound, you can then always buy the stock back again.

--

Maestro

[PCA]

Double up!

What investors RUN (like many are suggesting) from something giving them a pro rata return of well over 100% on a year?

Keep them, at the first sign of trouble dump them, whats the worst that can happen if you monitor them well? Even in the VERY UNLIKELY scenario that the worst time in the history of the SET would repeat itself, they lost 15% or so in a day, even with that in mind you would still walk away more than 15% up (+ whatever else its gained in the meantime).

Thats of course the most aggressive advice and in case the run continues the one which will generate the biggest profits when followed. But you will double your account volatility by that and will you have the guts to sit and watch and will you bite your arse when you see all profits of your initial trade are melting away? Constantly profitable trading takes accurate risk management and your own plan.

He doesnt feel good already with his current positionsize otherwise he wouldnt have asked.

[solo siam]

If he doubles up and his particular shares drop by even the 30 year historic worst case scenario, he's still back to a 2-3% increase on his original investment figure, strangely enough exactly what the banks are paying on savings accounts.

I'm not sure that he doesn't feel good (hes made 33% in 4 months) but has trouble believing that it's happened, it sounds like non-essential money, and its always good to have a diversified portfolio, sounds like the rest of his portfolio is very stable - Surely the smallest part of any portfolio should consist of the higher risk/gain elements.

[Naam]

So, not bad performance on the SET, but we are realistic at what can happen.

securing profits never impoverished an investor

[Mighty Mouse]

Many of the share markets around the world are in record territory right now, and continue to climb.

If you know anything about the three stages of a share market (cycles) you will realise that the DOW is about to enter the third and final phase. The third phase is when the bulls take total control of the market and prices explode higher. The third phase is when the mums and dads come into the market to take advantage of the 'easy money.' Taxi drivers are full of stock advice. Throw a dart at a list of companies, buy shares in that company and double your investment outlay.

The third phase may last months or years...but...it will come to a end and that's when prices will fall. (maybe crash)

Along the way there will be corrections, some corrections more serious than others.

Have a good look at the negativities in the US economy. The bottom is falling out of their housing market, the country is in huge debt, their balance of payment figures are out of kilter, there is a push by some oil producing countries to insist on payment in currencies other than the greenback...yet, their stock market is booming. All the negative sentiment is being either discounted by the buyers or has already been factored into the market. The DOW is leading other world stock markets higher.

Now is not the time to sell good performing stocks.

I can't comment on whether the Thai stocks that you hold are considered "good" but if you are now sitting on a handsome profit, you should allow your profits to run. That's how stock traders make their money. You do however, need to keep a close eye on any share portfolio. You can't afford to put your shares in the bottom drawer and expect them to continue rising. Read as much as you can on-line, check your stock's daily charts.

You also need to be able to sleep at nights. If the worry becomes too much for you, then sell and gain peace of mind.

The Australian property market is just starting to find its feet again. In about 4 - 5 years time, property prices in Oz will be about double what they were 5 years ago. This is the 10 year cycle.

Pulling money out of an over-heated stock market and placing it into a Oz property market should be a good move but your timing needs to be spot on. Timing is everything.

The best time to buy, the best time to hold and the best time to sell. Getting the timing right is not easy, even for the professional traders.

So putting all of that into a single bit of advice: Let your profits run. but keep a close watch on them and be prepared to sell quickly if the <deleted> hits the fan.

[LaoPo]

So, not bad performance on the SET, but we are realistic at what can happen.

securing profits never impoverished an investor

Seconded.

If Samram feels nervous, he could sell 30% (which is pure profit) and keep the rest with a stop loss of 10-15% of the remainder stocks.

In that case you're secure and always win.

LaoPo

[jumnien]

My money comes from commercial real estate investing in the US. My dabbling in stocks over the years has left me with the feeling that I should have just bought and held every stock from the beginning. Over all I'd be better off than my selling and re-buying has left me.

That said, I sold 80% of my Thai stocks off in the last year and took profits. If I'd held on to them I'd be happier, but with the falling dollar I wanted to use some of my Thai baht denominated investments.

[seykota]

QUOTE(Dr. Naam @ 2007-07-16 01:07:42)

QUOTE(samran @ 2007-07-15 22:08:55)

So, not bad performance on the SET, but we are realistic at what can happen.

securing profits never impoverished an investor

Seconded.

If Samram feels nervous, he could sell 30% (which is pure profit) and keep the rest with a stop loss of 10-15% of the remainder stocks.

In that case you're secure and always win.

LaoPo

I agree.

I am interested exactly what constitutes the "panic" selling point, in other words when the shit hits the fan? For example, is it another coup, the Chinese market dropping 5% or 10% ...in a day or over 3 days; perhaps Wall Street dropping 5% in a day? OPEC announcing a severe cut back in supply......? This is a very subjective issue, therefore different people will have different sell triggers.

Investing, as compared to speculating, is about controling fear and greed; it is about being able to sleep comfortably at night. If you are nervous, follow LaoPo's advice and then research your next investment opportunity.

Relax and be happy.

Edited July 16, 2007 by seykota

[Naam]

How bout this...a hard rain's a gonna fall. pretty soon.

based on what?? Am keen to hear your views....

rainy season starts soon. can't say how it will affect world markets and investments as i'am not a prophet... unlike others

[LaoPo]

QUOTE(Dr. Naam @ 2007-07-16 01:07:42)

QUOTE(samran @ 2007-07-15 22:08:55)

So, not bad performance on the SET, but we are realistic at what can happen.

securing profits never impoverished an investor

Seconded.

If Samram feels nervous, he could sell 30% (which is pure profit) and keep the rest with a stop loss of 10-15% of the remainder stocks.

In that case you're secure and always win.

LaoPo

I agree.

I am interested exactly what constitutes the "panic" selling point, in other words when the shit hits the fan? For example, is it another coup, the Chinese market dropping 5% or 10% ...in a day or over 3 days; perhaps Wall Street dropping 5% in a day? OPEC announcing a severe cut back in supply......? This is a very subjective issue, therefore different people will have different sell triggers.

Investing, as compared to speculating, is about controling fear and greed; it is about being able to sleep comfortably at night. If you are nervous, follow LaoPo's advice and then research your next investment opportunity.

Relax and be happy.

Your question will have a thousand answers.

* it depends what you mean by a panic selling point and where; Thailand...USA, World..China...?

* some stock markets have a limit per day, stocks can drop; China it's 10%; not sure about Thailand.

The board of any stock market can decide to 'halt' trading, to ease the market(s) in case of special events. Of course the NYSE/NASDAQ is most important, as is London, Tokyo, Frankfurt etc. The rest will follow, most likely.

* 'Oil' is also very nervous; if '<deleted>' happens in Nigeria or Norway, Venezuela or Middle East, the markets will react; if an Oil tanker is attacked in the Singapore Strait, the markets will react.

SOoooo many things could happen to start panic selling.

It will happen, as it happened before.

But, overtime, the markets will regain, no matter what recessions, disasters or even wars.

Just IMHO

LaoPo

[j_cheung]

Right,

Wifey and I have invested a few thousand bucks on the SET. Most of our investments are elsewhere, mainly our superannuation in OZ (ie managed funds), and in a property there too. So in the scheme of things, the SET is probably our 'riskiest' bet, but it isn't huge part of what would loosely be called our 'portfolio'.

Now here is the thing. We invested with a three year time frame in a couple of stocks which we researched well, and viewed as having good growth potential. They also have a good mix of both Thai and international exposure and income streams, and they have sound business plans.

This was back in April when we invested. We've since gained 33% on our investments in a little under 4 months. We're young enought to feel excited about it, but old enough to have been hit by the tech bust hitting our OZ and NZ managed funds between 2001 and 2003 and we both had our formative years during the recession in the early 1990's. So, not bad performance on the SET, but we are realistic at what can happen.

The thing is, I'm starting to get a bit nervous. Not about Thailand per se, but the fact that China stock market may be overheating a bit, fuelled by carry trades, and that at some point it may all start to go pear-shaped. No doubt, there will be some impact on the SET.

If we don't end up making money on the SET, then that is fine. It is not a huge loss for us. But it would be nice to make something.

So my question is, do we stick with our three year plan with this particlar lump of cash? Or do we take our profits now and change our strategy? The thing is, I've had things go badly, and I've cut my losses, but I've never had things go 'too well' so quickly. So I'm at a bit of a loss on what to do!!

Any advice would be welcome.

If you researched well your company's financial fundamentals & business outlook, why sell? If the company has a good business model and excellent management team, why bail out -- even if the overall economic outlook may not be so bright?

[bendix]

33% in four months? I'm a more cautious investor than samran so my gut feeling would be to do with Dr Naam's advice (and it's always good to follow someone who's done it successfully before). You never got poor cashing in a ###### good profit.

The fact that the OP made the initial post suggests some (understandable) anxiety.

I'd be looking at where i was four months ago, congratulating myself on increasing it 33%, taking a breather and learning to sleep soundly at night.

[bkkexplorer]

As some posters said, if you're starting to loose sleep over this, sell some now and the rest later. Or sell it all. This will give you peace of mind.

If this is not the case, why not stick to your original timeline? I think the SET has pontential to reach new highs and you could lock in more favourable profits in the longer term. As you know, the SET has taken a while to catch up with the rest of the market and is now doing so.

The earlier post was also accurate to note that if you have researched the companies and have holdings in the ones with good fundementals, you should hold on until signs of things turning for the worst. Actually, a longer term investor would probably take this opportunity to increase their holdings.

Your time frame of 3 years has just begun. How crucial is this timeframe? Could you afford to wait longer? What profits were you looking at before you got in the market? Have you reached it? Also, what risks are you willing to take?

BTW, can you share your portfolio with the rest of us? Is this allowed on the forum?

I'm only a novice investor and am not encouraging either way. The decision is yours, and to say again. If this is affecting your daily life somewhat, cash it in.

[samran]

Guys,

The responses here have been amazing. They really have, and is one of the nicer products of the Thai visa board, getting smart replies from extremely smart people. So thanks, I’m really chuffed.

As for my state of mind, no I’m not nervous, and I won’t be in the poor house if this all goes to seed. I haven’t got my eggs in one basket. The only thing that stops me sleeping well at night is our baby. I’ve researched the companies extremely well and continue to do so.

Nevertheless, I’ve never been in a situation where things have gone so well so quickly. I’m from the school of if it is too good to be true, it probably is. Hence my original posting about this.

Still not sure what I’ll do yet, but I’ll pass along what a good friend of mine, a fund manager responsible for about a billion dollars, said to me:

Basically let winners keep running and cut losers! Ie only worry when they are going down (or if stupidly expensive)

The aim is for something to go up 5 times in 5 to 10 yrs.

My head is spinning will all the good and obviously experienced advice.

Cheers

Samran.

[ThaiWanderer68]

Personally I'm not a big fan of picking individual shares these days, as research takes too long. I prefer to "pick the pickers" shall we say. i.e select from best mutual funds/unit trusts. my view being they should have more resources than me and will have more market info sooner.

Not sure how much you were talking about so not sure if transaction fees make much of a diff or not. If they don't, here's a couple of suggestions:

1) You're holding value of 133 on original 100. Sell 100 and reinvest in 2 mutual funds,

- one inside Thailand say Aberdeen Growth or Ing Thai Equity

- one diversified in a different market unrelated to Thailand, eg Black Rock Merrill Lynch Gold & General or JPM Natural resources; or different geography eg Fidelity European

- keep the 33 and see how it goes for fun

2) similar to one but sell all 133, and invest in two unit trusts, one of which is in Thailand. In whatever %split you feel comfortable. That way you still get the Thai play, but have less risk on just 2 companies.

BTW what you're trying to do is time the market. Where would you put an alternative or proceeds. Search the web and you'll find quite a bit on the best investment vs best timing debate

I remember a study for 20th century. Someone compared:

1) best stock each year for over a long time period

2) vs best timing

picking the best stock won by a mile. (Yep some smart a**e will say picking the best stock at the best time is better - but that's not going to happen to mortals like you! ). The point being is that timing is difficult to call. Look over a longer time period at what you think is quality, rather than trying to have quality timing. People who try and get clever in timing the market often miss opportunities.

If you sell where would you go with it. Keep in the markets, but diversify a little. If you're starting to get a bit uncomfortable with these particular investments, start to shift a little of it in proportion to your comfort. I wouldn't pull out of the market altogether, but would change some to other markets if you're having doubts.

[PCA]

I remember a study for 20th century. Someone compared:

1) best stock each year for over a long time period

2) vs best timing

picking the best stock won by a mile. (Yep some smart a**e will say picking the best stock at the best time is better - but that's not going to happen to mortals like you! ). The point being is that timing is difficult to call. Look over a longer time period at what you think is quality, rather than trying to have quality timing. People who try and get clever in timing the market often miss opportunities.

.

That someone was/is very wrong (about single stocks) and guides people to hope and sit like a sheep waiting to be sheered the sooner or the later. And whats the best stock by the way, I just know which one was and how much money I could sit on now.

[joeuk1]

Hang in there and run them for the long haul , as you said you have few grand invested and maybe some time down the line you will want to add to them . I would not sell them if it was me .

JB

[Gary A]

It's a dangerous thing to fall in love with certain stocks. You NEVER lose money by taking the profits off the table.

[ThaiWanderer68]

I remember a study for 20th century. Someone compared:

1) best stock each year for over a long time period

2) vs best timing

picking the best stock won by a mile. (Yep some smart a**e will say picking the best stock at the best time is better - but that's not going to happen to mortals like you! ). The point being is that timing is difficult to call. Look over a longer time period at what you think is quality, rather than trying to have quality timing. People who try and get clever in timing the market often miss opportunities.

.

That someone was/is very wrong (about single stocks) and guides people to hope and sit like a sheep waiting to be sheered the sooner or the later. And whats the best stock by the way, I just know which one was and how much money I could sit on now.

Sorry perhaps wasn't clearly explained. With the benefit of hindsight:

1) compare the best single performer for each/the year. starting 1 Jan and ending Dec31, i.e average timinng/consistent timing. eg this year in US top one is up 300%+

vs

2) best time to be in the market say DOW Jones or Nasdaq

Then repeat each year over a long time frame, and compare the differenmce.

It's one suggestion to say focus more time on the quality of your investment. Not timing of it.

i.e picking the best investment each year with average timing is better than the average investment (eg index) with best timing. Yep it's hypothetical but helps illustrate a point. Wouldn't get too wound up about it tho' , both only statistical bases with hindisght

Edited July 16, 2007 by ThaiWanderer68