If You Had 25m Baht How Would You Invest It?

[Abrak]

Diversify with multiple investments and remember high returns = high risk.

I so totally disagree with this. I have had 2 stocks this month go up 25% which were bought below book, no significant gearing, and PEs of below 4x. Now the fact that they went up a lot is lucky admittedly but on those sort of valuations they are bound to sooner or later. And I consider them as having virtually no risk - I can simply sit there and take the yield if the price doesnt go up. So in my view if you buy value and are patient (I mean I bought a stock on 3x and it went to 2x last year) you essentially will get good returns with fairly limited risk.

[ronz28]

Too many management spin artists and analysts creating funnymentals out there for me to rely too much on any fundamentals. I mostly rely on the charts and some on revenue growth, margins, and debt to equity.

I could also really get hurt putting all my eggs in one basket. True over diversification makes it too difficult to keep up but one or two investments is too risky for me.

[Steps]

From what iv'e been reading there is only one word for me........................GOLD!

[sscsamui]

So obviously I know Thai Visa isn't the best place for economic advice, but it looks like i've sold my business, so have around 25m baht to invest somehow.

Being relatively young, 32, i'd rather have modest income and a higher capitol growth. I wish to stay in Thailand and already have several of my own ideas, but in these tricky economic times was just wondering what other members would do to achieve the goals i'm after with such a sum.

I do not wish to work, just invest it somehow that will bring in enough each month to live, maybe 100k or so, i'm mainly concerned with longterm growth of the original investment.

Take it to Vietnam and invest there. Better opportunity for the long hall and easier to do business

[Heng]

5-6 shophouses from LK for a no hassle acquisition, or perhaps build 20 myself if I wanted some hands on headaches (but greater payoff).

Edited October 24, 2009 by Heng

[monty]

5-6 shophouses from LK for a no hassle acquisition, or perhaps build 20 myself if I wanted some hands on headaches (but greater payoff).

They seem to be in fashion!

Never in my 16+ years in Pattaya I have seen so many built!

Frigging everywhere, especially East of Sukhumvit...

[TheGoodDoctor]

What is LK?

[TheGoodDoctor]

Take it to Vietnam and invest there. Better opportunity for the long hall and easier to do business

That is suspect. Thailand has a much longer history of pro-foreign investment than Vietnam. You don't have any idea <deleted> is going to be happening there tomorrow. Didn't the currency lose 75% of its value over night some time recently?

Thailand is clearly a safer (which is what OP asked for) place to invest.

[johninbkk]

So obviously I know Thai Visa isn't the best place for economic advice, but it looks like i've sold my business, so have around 25m baht to invest somehow.

Being relatively young, 32, i'd rather have modest income and a higher capitol growth. I wish to stay in Thailand and already have several of my own ideas, but in these tricky economic times was just wondering what other members would do to achieve the goals i'm after with such a sum.

I do not wish to work, just invest it somehow that will bring in enough each month to live, maybe 100k or so, i'm mainly concerned with longterm growth of the original investment.

Ironic, at this very moment I am committed to an investment that will return 12%. I feel more than confident it is a secure investment. It's a UK based company with local council contracts. An accountant recommend this company and I will sign the investment application next thursday. If you want further info you can either mail me direct, or contact the accountant, he's based in Bkk. Alan 087 970 3321 Regards and good luck john. 081 376 1773

[PCA]

So obviously I know Thai Visa isn't the best place for economic advice, but it looks like i've sold my business, so have around 25m baht to invest somehow.

Being relatively young, 32, i'd rather have modest income and a higher capitol growth. I wish to stay in Thailand and already have several of my own ideas, but in these tricky economic times was just wondering what other members would do to achieve the goals i'm after with such a sum.

I do not wish to work, just invest it somehow that will bring in enough each month to live, maybe 100k or so, i'm mainly concerned with longterm growth of the original investment.

Ironic, at this very moment I am committed to an investment that will return 12%. I feel more than confident it is a secure investment. It's a UK based company with local council contracts. An accountant recommend this company and I will sign the investment application next thursday. If you want further info you can either mail me direct, or contact the accountant, he's based in Bkk. Alan 087 970 3321 Regards and good luck john. 081 376 1773

really ironic

[Penefattore]

Theoretically a convertible bond is ideal for you - they usually have a 5% yield to maturity with the ability to convert into the shares if they go up. You have to be a bit careful though as they often think the conversion is on their side to not pay you back.

Please show me a convertible bond yielding 5% to maturity in whatever market

[Penefattore]

Take it to Vietnam and invest there. Better opportunity for the long hall and easier to do business

That is suspect. Thailand has a much longer history of pro-foreign investment than Vietnam. You don't have any idea <deleted> is going to be happening there tomorrow. Didn't the currency lose 75% of its value over night some time recently?

Thailand is clearly a safer (which is what OP asked for) place to invest.

Unbelievable what sort of bullshit you can read on this forum....

[Abrak]

I could also really get hurt putting all my eggs in one basket. True over diversification makes it too difficult to keep up but one or two investments is too risky for me.

Actually when I said I 'really disagreed' with you I wasnt referring to diversification - I agree 100% with that. It was that you need to take 'high risk' for 'high returns'. Many very successful investors - like Lynch and Buffett - who have generated consistently high returns have done so through investing in fairly low risk equity assets.

[Penefattore]

Diversify with multiple investments and remember high returns = high risk.

I so totally disagree with this. I have had 2 stocks this month go up 25% which were bought below book, no significant gearing, and PEs of below 4x.

Feel free to make names , buddy

[jazzbo]

Kuhn Womble, to the best of my reading, has not said what was the nature of the business that was sold, and therefore what it is he really knows.

[fletchsmile]

Way too little info known about you to say much. A few suggestions though:

1) Think you may benefit from reading the two attached .pdf files from Fisher Investments - useful reads: 1) 15 min retirement plan 2) 10 Critical Invesments Questions a portfolio survival guide..These will give an idea of the problem you're facing.

2) If you're still on a Thai payroll and it's not too late, consider investing up to THB 500k in an Long Term Equity Fund, eg by ING. You would obtain up to 37% Thai tax back. so up to THB 185k back immediately this year in tax. Advantages: capital growth potential, div potential if say ING Big Cap Div LTEF and regular payouts, THB so matches your currency risk if living here, mutual fund so spread investment risk. Disadvantages: equity risk, need to hold for 5 calendar years (3yrs 2 days min)- tho' pays annual divs. This is worthwhile for the tax and given only 500k/2% of your portfolio may be acceptable to you

3) really think about capping those expenses. One kid's education in Thailand is expensive... two or three.....

You could find that a THB 3k - 15k vasectomy may be the best investment you ever made for cutting costs...

Personally don't think you have enough to retire yet with a kid in tow, and at your age. Would be looking for 7% pa returns and max take out of 4% pa on your money, which is more like 80k a month to spend than 100k, once you leave a cash reserve. Remaining 3% return keep back for inflation, and really hope we don't hit high inflation rates in your lifetime - inflation plus volatility in returns (as you will need to take some risk) are some of the main reasons I think you're short.

Edited October 24, 2009 by fletchsmile

[ESB7]

££££££££££ is set to gain 20% in the next 6 months

[Penefattore]

££££££££££ is set to gain 20% in the next 6 months

Compared to what currency ? ZWD ?

[Penefattore]

Interesting attachments, Fletch ^^^ .

While I agree you have to keep your yearly expenses lower than 5% of your capital (I would say even lower than 3%), I disagree on the suggestion that a 100% stock portfolio is less risky of a bond portfolio. This might have been true in the past, but that's no guarantee it will be also for the future.

[fletchsmile]

Interesting attachments, Fletch ^^^ .

While I agree you have to keep your yearly expenses lower than 5% of your capital (I would say even lower than 3%), I disagree on the suggestion that a 100% stock portfolio is less risky of a bond portfolio. This might have been true in the past, but that's no guarantee it will be also for the future.

Penefattore,

I'd agree that a 100% stock portfolio is not necessarily less risky than a bond portfolio - I don't believe that was the intended conclusion though. The take away really is that that risk depends on what your objectives. I kind of liked these illustrations, as they highlight this. eg on the $1mio 30 year timeline horizon, using the assumptions they gave:

- 100% stocks would give the highest median expected value (=highest expected return) but you could end up with your money only lasting 11.2 years vs a desired 30yrs. So on this criteria you could say most risky if minimal survival is your criteria.

- 70/30 stocks bonds gives the highest probability of portfolio survival (=best chance of survival)

- 50/50 bonds/ stocks on average survives the longest at 28.7 years

- 50/50 bonds/stocks has the highest minimum years survived (=best worst case if you like)

The 4 views of median return, minimum survival, average survival, probability of survival show depends on what you're looking for. The survival is portfolio/asset surival. Interesting even the best of these 3 portfolios only had a 80% surival chance of making 30 years if you take 5% pa.

None are 100% guaranteed to survive 30 years, giving a 5% takeout and terminal value of $1mio.

Edited October 24, 2009 by fletchsmile

[Abrak]

Theoretically a convertible bond is ideal for you - they usually have a 5% yield to maturity with the ability to convert into the shares if they go up. You have to be a bit careful though as they often think the conversion is on their side to not pay you back.

Please show me a convertible bond yielding 5% to maturity in whatever market

I guess it would be cheating if I chose all those bank ones because they may never mature or a convertible that is trading below par but there are still plenty about.

http://blogs.reuters.com/reuters-dealzone/...off-the-shelves

The average yield to maturity of Singapore convertibles in November 2008 was 12%.

[Abrak]

Penefattore,

While I understand your argument my 'feeling' is this. People make the best returns in what they understand best almost irrespective of market performance. It is much better to know your asset than to slightly know every asset. Say property really hasnt done much in Thailand but people have made money in property. Shares have risen 5% in baht terms over 15 years but I have done pretty well (and my property investments have been rubbish). I suspect people who understand and follow the bond market can say the same thing (I have never bought one.)

[hansnl]

1 Don't trust banks

2 Don't trust investment "specialists"

End

[CaptHaddock]

So obviously I know Thai Visa isn't the best place for economic advice, but it looks like i've sold my business, so have around 25m baht to invest somehow.

Being relatively young, 32, i'd rather have modest income and a higher capitol growth. I wish to stay in Thailand and already have several of my own ideas, but in these tricky economic times was just wondering what other members would do to achieve the goals i'm after with such a sum.

I do not wish to work, just invest it somehow that will bring in enough each month to live, maybe 100k or so, i'm mainly concerned with longterm growth of the original investment.

Congratulations on your early success. You don't have enough money to retire at 32 and live off the interest. You know about running a successful business. You don't know about investing in stocks, bonds, property, etc. The latter category would be a good way for you to lose your money. It's pretty obvious that what you should do is start another business. Maybe after you have done that a few times you will still be able to retire quite young.

[Abrak]

Congratulations on your early success. You don't have enough money to retire at 32 and live off the interest. You know about running a successful business. You don't know about investing in stocks, bonds, property, etc. The latter category would be a good way for you to lose your money. It's pretty obvious that what you should do is start another business. Maybe after you have done that a few times you will still be able to retire quite young.

Very Sound advice but running your own business is such a hassle and pretty difficult. I have had 2 proper ones in Thailand and they both did ok but just to make a 20% ROE is difficult enough. Investing in say equities is just so much inherently easier. Let me give you an example. A pulp and paper business is inherently cyclical perhaps averaging 15% ROE with losses some years and profits others. Owning that business is a hassle. Still if it is listed when it is losing money it will usually trade down to 0.5x BV and at peak cycle earnings trade at 2.5x BV (obviously you wont catch the top or the bottom). But it is just infinitely simpler, more profitable and less hassle to trade the equity of the company than to own it yourself. Or if you can by a company at BV making a 25% ROE what is the point of trying to do it yourself?

[Penefattore]

The average yield to maturity of Singapore convertibles in November 2008 was 12%.

Please find me any convertible bond that has been traded at all in Singapore in all 2009.

I can see only warrants http://www.sgx.com/wps/portal/marketplace/...tures_loan_Stks

[Penefattore]

I guess it would be cheating if I chose all those bank ones because they may never mature or a convertible that is trading below par but there are still plenty about.

Please feel free to cheat. Link me to whatever stock market site showing a whatever convertible bond actually traded with a 5% ytm. Edited October 24, 2009 by Penefattore

[Abrak]

I guess it would be cheating if I chose all those bank ones because they may never mature or a convertible that is trading below par but there are still plenty about.

Please feel free to cheat. Link me to whatever stock market site showing a whatever convertible bond actually traded with a 5% ytm.

Ok here is a link....

http://www.scribd.com/doc/7786974/Converti...Yield-Singapore

It is dated November 2008 so I imagine represents the bottom of the market but there is a list of about 25 convertible bonds all but one yielding between 9% and 23% YTM/YTP (One only yields 7.4%). They have probably all gone up a lot since but I think that is good enough. I mean if I am allowed to just choose Citibank issued an 11% convertible, Barclays a 14% convertible etc...

Then the next page contains another page of about 25 what Goldman calls investment grade convertible bonds all YTM/YTP between 6% to 13%....

There are another 50 or so conv bonds mentioned (maybe some repetition).

[womble]

Just wondering the liquidity of these Singaporean convertible bonds, convertible bonds outside the US often suffer from liquidity issues.......

[sokal]

So obviously I know Thai Visa isn't the best place for economic advice, but it looks like i've sold my business, so have around 25m baht to invest somehow.

Being relatively young, 32, i'd rather have modest income and a higher capitol growth. I wish to stay in Thailand and already have several of my own ideas, but in these tricky economic times was just wondering what other members would do to achieve the goals i'm after with such a sum.

I do not wish to work, just invest it somehow that will bring in enough each month to live, maybe 100k or so, i'm mainly concerned with longterm growth of the original investment.

I would just live off of dividends, preferably 5% and up. But this is a tricky time to start doing that. Who knows what will happen in the next couple years. That is why I am hiding in gold right now.

Edited October 24, 2009 by sokal