Thailand Market Buy Opportunity?

[PCA]

.... I have found the best way to take advantage without picking the bottom is to buy in parcels say 10%-20% at a time on the way down and the way up that way you end up with a nice average. Patience is the key here

Horrible tactic if you're actually trying to time the market. Somewhat akin to catching a falling knife... If you're really into timing as your strategy, wait for the knife to hit the ground first, bounce and then pick it up.... much safer...

Agree with the view on patience, and like the old-fashioned mantra of time in the market being more important than timing the market.

That sounds horribly easy. I only ever made big money buying fear, buying euphoria is a sell.. now who said that... warren bu...

Good luck to all whatever your strategy

I have to confirm that as the best approach to make substantial gains. The trick here is proper size well calculated risk and a seamlessly executed plan.

[Gambles]

.... I have found the best way to take advantage without picking the bottom is to buy in parcels say 10%-20% at a time on the way down and the way up that way you end up with a nice average. Patience is the key here

Horrible tactic if you're actually trying to time the market. Somewhat akin to catching a falling knife... If you're really into timing as your strategy, wait for the knife to hit the ground first, bounce and then pick it up.... much safer...

Agree with the view on patience, and like the old-fashioned mantra of time in the market being more important than timing the market.

That sounds horribly easy. I only ever made big money buying fear, buying euphoria is a sell.. now who said that... warren bu...

Good luck to all whatever your strategy

I have to confirm that as the best approach to make substantial gains. The trick here is proper size well calculated risk and a seamlessly executed plan.

Fletch's DCA strategy has probably been the smartest approach to the Thai market over the last 15-20 years. Going forwards, unless the recent falls are enough to blow the froth off the top, Andrew Milligan thinks that buying developed market stocks with business interests in GEMs is the way forwards, whereas the Templeton guys say buy Thai for the fundamentals and ignore the short term noise.....but both are long term approaches (I'd say that there could well be much, much better buying opportunities for the patient and it's very speculative to commit more capital until we know the macro outlook. John Sheehan calls 2010 the crucial year - he's right; any investment decision made now is a more important timing statement than maybe at any other time. I'd personally prefer the sidelines right now even though I think markets can move higher. I'd rather miss the immediate opportunity than risk the potential loss but it depends on your perspective).

[ray23]

Well you guys have been great I now the best place to learn is in the Mai not the set. So that is the way I will go. Probably boring to most, but it's all new to me

[badge]

Even more opportunity today Ray

If you understand the very high likelihood of losing your first few trades in a new market(as most should), it makes sense for those first few losing trades to be unusually small.

Your experience is the least it will ever be when you first start out, you should only lose the least too

[Abrak]

Fletch's DCA strategy has probably been the smartest approach to the Thai market over the last 15-20 years.

That's a horrible rear view mirror statement. Almost by definition DCA is a good investment strategy in a market that trends sideways or down (or a good investment strategy relative to the market.) And almost by definition it is a bad investment strategy in a market that trends up.

So I dont really do markets but buy stocks. Still, I reckon a much better investment strategy for the SET overall for the last 15 to 20 years would be to do a 5 year MVA of P/BV and buy (below) and sell (above) 1 standard deviation away from the MVA. (That's just a guess - a sort of buy vaguely low and sell vaguely high methodology.)

[Abrak]

Well you guys have been great I now the best place to learn is in the Mai not the set. So that is the way I will go. Probably boring to most, but it's all new to me

Just because Mai might mean 'new' it doesnt mean it is for newbies. It is generally full of horrible crappy companies, illiquid and often insolvent that cannot reach the disclosure requirements of the SET. I am sure there are a few gems in there.

But your comment is a bit like saying I will start investing in NYSE by putting money in penny stocks. It almost certainly wont be boring but it is unlikely to be fruitful. There are people who make money out of penny stocks but they tend to be the very well experienced/informed rather than the average punter.

Rather perversely junior markets (especially in junior markets) are for senior investors.

[ray23]

Well unfortunately it is what I can afford. I still have my Aberdeen. I will continue with that as well.

Should be interesting to see if I can survive the mine field.

But I understand what your saying and I don't question it But, it is what I can do at the moment. Without risking what could really hurt my financial life.

For most this is about making a living and building a retirement I already have mine. It's adequate enough that I can do this and learn something new. I could do nothing and be just fine. This is the risk I will take. I think we are all in different positions in life.

The most I can lose is 15K baht in my plan, I can handle that. Even if I do well I won't make much. But I won't be sitting around doing nothing.

So my goal is to learn something new and stay busy. So the Mai will do for the moment.

Believe me I really appreciate your thoughts we are just if different positions.

It's funny how things go in life I have everything I need and most of what I want. Insurances and retirements are in place for my wife. Takes a lot of of pressure off. Probably would never have done this in any form till those those aspects of life were taken care of

Thanks Again

[churchill]

Fitch lowers Thai baht issuer outlook to negative

Fitch Ratings on Monday revised its outlook on Thailand's long-term local currency issuer default rating to negative from stable, while affirming the stable outlook on its foreign currency ratings. "The outlook change on Thailand's long-term local currency rating reflects an escalation in political uncertainty, coupled with a slow economic recovery and a deteriorating policy environment, all of which are expected to impact adversely on sovereign creditworthiness over time," said Vincent Ho, associate director in Fitch's Asia sovereign ratings team. The U.S. dollar was higher in Monday's currency trading, changing hands for 32.28 Thai baht from 32.16 baht on Friday.

http://www.marketwatch.com/story/fitch-low...tive-2010-04-19

[churchill]

Mobius bullish on Thailand despite political strife

Emerging markets guru Mark Mobius says he continues to be bullish on the long-term prospects in Thailand despite the violence engulfing the country in recent weeks.

Templeton's Mobius, known as the ‘godfather of emerging markets', says he has seen numerous political clashes in the nearly 15 years investing in Thailand.

Mobius believe this clash, the worst in two decades, will definitely result in political changes for the country. He says this makes him more bullish on the country.

"While the current political crisis in Thailand poses big headline risks to stocks over the short term, it is not new or unexpected for the country," Mobius.

"Since absolute monarchy was abolished in Thailand in 1932, there have been about 20 successful and failed coups, numerous unrests, and several changes in the constitution.

"The series of political issues from the Asian crisis in 1997 to recent fears of the Thai King's waning health late last year, have not impacted the long-term growth outlook for Thailand.

"Our investment philosophy and process stresses the importance of having a long-term investment perspective, and companies are typically assessed based on a 5-year investment horizon."

Until last week, Mobius says Thailand was one of the three best performing stock markets in Asia ex-Japan since the start of 2010.

"Despite numerous political uncertainties in the past, several of Thailand's blue-chip corporations have outperformed their peers in more stable countries in the region," he adds.

"Valuations of the stock market remain attractive with estimated P/E of 11.6 times, P/B of 2.1 times, and yield of about 3%."

http://www.investmentweek.co.uk/investment...olitical-strife

Edited April 19, 2010 by churchill

[ray23]

Well being the little guy in the pond I can't agree more. The buy Opportunity is here, What we are we down now 10% from where it started. My guess is it will go more. Bu none of that changes Thailands location between the big players India and China. Easy to export to both.

The economic fundamentals haven't changed it may slower growth but, it will grow.

[Chunky1]

the recent selling is not entirely because of the political crisis. look at the Chinese markets. Something to keep in mind.

[ray23]

They were losses in the states as well Goldman Sachs indictment hit the market there. I wasn't watching to see if it was just a day glitch or not

[midas]

Well being the little guy in the pond I can't agree more. The buy Opportunity is here, What we are we down now 10% from where it started. My guess is it will go more. Bu none of that changes Thailands location between the big players India and China. Easy to export to both.

The economic fundamentals haven't changed it may slower growth but, it will grow.

Incorrect . you should expect to see changes in China

China Is Learning Keynesianism The Hard Way

http://www.businessinsider.com/china-is-le...hard-way-2010-4

[ray23]

You know that is funny I have always learned through mistakes.

Thanks I'll get it yet

That is why 15K right now

[Gambles]

Fletch's DCA strategy has probably been the smartest approach to the Thai market over the last 15-20 years.

That's a horrible rear view mirror statement. Almost by definition DCA is a good investment strategy in a market that trends sideways or down (or a good investment strategy relative to the market.) And almost by definition it is a bad investment strategy in a market that trends up.

So I dont really do markets but buy stocks. Still, I reckon a much better investment strategy for the SET overall for the last 15 to 20 years would be to do a 5 year MVA of P/BV and buy (below) and sell (above) 1 standard deviation away from the MVA. (That's just a guess - a sort of buy vaguely low and sell vaguely high methodology.)

but the question is does anyone have the conviction that either this is an uptrend market or that they can reliably pick uptrend stocks. I don't.

and I'd estimate the outlier VaR of the SET at >70% right now but I don't know enough to comment specifically on individual stocks other than generally I'd assume a maximu risk of 100% on any individual stock - assuming anything better than that would be to overstate my own understanding of the risk - something I learned not to do many years ago...I know that you on the other hand, Abrak, do trust your own ability to evaluate individual stocks and we've had this debate before but I really think that in both cases it just dictates what we're each trying to achieve through investment. We have very different aims and risk profiles.

[ray23]

Well I found one in the set I could get started with at 4.12, went 4.14 should I quit now I'm ahead

Oh what the heck I will hang out a year or two and see what happens.

Bought a 1000 shares so I'm still looking.

I expect to fall and hoping for recovery after the violence really settles down.

After reading all I think I will change my approach to how much I can risk each month, But, not more then 15 K. Hopefully I will slowly build up something to work with in a year. Lest face it guys for me right now it will just be luck. Hopefully I will be able to make am educated guess in a year.

[Abrak]

but the question is does anyone have the conviction that either this is an uptrend market or that they can reliably pick uptrend stocks. I don't.

and I'd estimate the outlier VaR of the SET at >70% right now but I don't know enough to comment specifically on individual stocks other than generally I'd assume a maximu risk of 100% on any individual stock - assuming anything better than that would be to overstate my own understanding of the risk - something I learned not to do many years ago...I know that you on the other hand, Abrak, do trust your own ability to evaluate individual stocks and we've had this debate before but I really think that in both cases it just dictates what we're each trying to achieve through investment. We have very different aims and risk profiles.

I actually agree with you 100% really. I mean DCA isnt really much of an investment strategy (imho) but then again,

I suspect it scores well against the average/no investment strategy that most people employ. (Incidentally, as you are probably well aware, (maybe not compared to your investment strategy but against the industry as a whole), smart guys are forced to buy at the top and sell at the bottom too.)

(I dont see the SET as a >70% outlier at the moment (except in terms of performance). I have a slightly higher P/E and slightly lower P/BV than Mobius on my numbers but I suspect he may be using a very narrow valuation range for his stocks in the SET (say maybe the top 30 stocks). I think he has too many banks in his equation. On my valuation methods (which is based on medium (5) and longer term (10) MVAs of PEs and P/BVs) the SET still looks below fair/good value against other markets. Actually it looks about fair value whilst most other markets look overvalued (dont know really know the stats for most other markets - I look at the S&P500 numbers as a starter.)

[Abrak]

Well I found one in the set I could get started with at 4.12, went 4.14 should I quit now I'm ahead

Oh what the heck I will hang out a year or two and see what happens.

Bought a 1000 shares so I'm still looking.

I expect to fall and hoping for recovery after the violence really settles down.

After reading all I think I will change my approach to how much I can risk each month, But, not more then 15 K. Hopefully I will slowly build up something to work with in a year. Lest face it guys for me right now it will just be luck. Hopefully I will be able to make am educated guess in a year.

Well my advice would be this. If you buy 1000 shares in a stock at 4.12 and sell it at 4.14 you have made precisely nothing apart from some small brokerage fees for your broker. Now the good news is this - that most peoples first trade usually loses them money and you have been unharmed. (Although you have to admit that as you managed to call what at least appears to be the short term bottom of the market, not making money is not much of a reward.0

My best advice is dont try and play casino. Find a stock that you think should double (for whatever reasons) and invest (not too much in that). I have no idea what will happen but if you 'think' it should double and it goes down then maybe it isnt the game for you and if you 'think' it should double and it goes up 30% maybe it is.

I like to think the smart investors whether it be Paulson, Buffett or Lynch all can spot a great investment. I am hard pressed to think of a serious day trader who made a real fortune taking less than 5% out of a stock at a time. They do exist but they are employed by major investment bankers - they have a habit of knowing which way the investment flows are working.

Edited April 20, 2010 by Abrak

[ray23]

Thanks not really knowing what I was doing I found one with no bills and money in the bank. checked it' track history for six months on the Thai stock exchange site. It's had it ups and down buy slowly gaining during that six months. About as much a I can do on my on right now. I was kidding about selling it. I will hold it it makes electronic components. I don't think I will double my money on it but with a little luck I'll I will earn more then I can with the money sitting in the bank at .5%. It does pay devidends and has for the past several years not much 15 Satang. But, something is better then nothing

It will drop with the first shot fired in Bangkok, so this isn't going to happen over night.

I'll keep searching.

Thanks

[ExpatJ]

The most important thing before buying a stock- RESEARCH, RESEARCH, RESEARCH. How has it performed in the last 5 years- does the company have a return on equity of 15% plus? consistently high profit margin? does it have high or low debt? does it have a high earning per share rate ? Those are the fundamentals.

Then check to see if there are any major foreign investment banks in the top 10-20 share holders for a given stock - if yes then that's a good sign, if no then be wary.

Other factors which indicate buy- is there a new CEO? New product?

Finally check use the Relative Strength index to determine when to actually buy.

I have made a 6 % return- cash in hand since i began investing in January this year. Plus 90,000 baht in dividend payments in the bank.

The SET is going up alot today... IF there is no more violence this might be the time to buy...but who knows about whether there will be further violence...

[ray23]

How do you find a five year performance? I went to the stock exchange site they provide six months and that's it. Or I'm missing something on the site.

[Abrak]

How do you find a five year performance? I went to the stock exchange site they provide six months and that's it. Or I'm missing something on the site.

I just checked the SET site and it appears to have only about 6 months investor information. Most of the online trading systems (and there are about 25 of them) will have a 5 year chart. Even on my iphone the Bloomberg App will give me 5 year data on any Thai stocks.

[Naam]

sorry, error!

Edited April 20, 2010 by Naam

[Abrak]

I know that you on the other hand, Abrak, do trust your own ability to evaluate individual stocks and we've had this debate before but I really think that in both cases it just dictates what we're each trying to achieve through investment. We have very different aims and risk profiles.

Actually the fundamental difference is this - you have a business plan aimed at maximizing the profit to the investment fund management company and I have one that is aimed at maximizing profit for the individual (that displays an intellect in line with the average IQ.)

You have shown an investment portfolio that is relevant to your investment case (which is more than I have done) but it seems to involve fees for holding cash and fees for holding investments in diversified portofoilos aimed at diversification. Now my best guess is for the average person this is a reasonable transaction.

Still I could make you sit down and cry (that your whole life has been wasted in this futile attempt at fees based on fees on based on diversification, based on hedging based on collar option transactions etc.) to show you the individual investments that you can make if you only spent half the time you do hedging and diversifying actually looking at the underlying investments. And remember that you are planning to back Paulson based on his reputation for taking big bets against or for big assets (and you will probably take a fee on that advice over and above the fee he might get for getting it right.)

What I find hard to believe is this. You take a risk on an individual investment at 100%. I take a risk on a stock that is on a PE of less than 1x earnings (9 months earnings exactly) and a Price to book value of less than 25% as almost precisely zero. It is almost totally impossible to conceive of a private transaction taking place on these valuations without the seller being remanded in a mental institution for the remains of his life.

Still what I would call utter madness (incidentally a new all time high for the stock today in the Thai stockmarket) you would call luck - so be it.

[Gambles]

Actually the fundamental difference is this - you have a business plan aimed at maximizing the profit to the investment fund management company and I have one that is aimed at maximizing profit for the individual (that displays an intellect in line with the average IQ.)

No I don't think so.

In such a competitive business there's no way to maximise 'profit to the investment fund management company' without it coming out of performance.

I'm always very transparent about fees and it's madness to suggest that there is ever a free ride for anything - when you manager your own investments, Abrak, you give up your time that we would have to assume does have some other value.

Again it's a matter of different aims and priorities

If you are prepared to commit the time to developing a full understanding of Thai financial reports and then travelling the length and breadth of the country to visit businesses and constantly assess them in real time 24/7 I have no doubt that a highly intelligent individual can steal a march on the teams of analysts who ought to be doing the same thing for the myriad institutions investing in Thai equities. Kudos to you for having done that but for most people that's just not viable and all of that to add value in a stock market that typically constitutes no more than 1% of MSCI weightings (if my memory serves). Although obviously weighting is much less relevant than the profit potential in this context and you could argue that the profit potential is far greater here than in many larger and more, ahem, efficient markets....

Still I could make you sit down and cry (that your whole life has been wasted in this futile attempt at fees based on fees on based on diversification, based on hedging based on collar option transactions etc.) to show you the individual investments that you can make if you only spent half the time you do hedging and diversifying actually looking at the underlying investments.

Probably not......my point is that there are plenty of smart people out there who can do that - yourself obviously included. The abilities of such people clearly need to be used but this is very much a secondary skill - deciding where and when and how to deploy these smart people is the primary skill that adds the greatest value on a risk reward basis. I would never want to be limited to Thai equities as my opportunity and risk set (or should that be SET? )

What I find hard to believe is this. You take a risk on an individual investment at 100%.

I take a risk on a stock that is on a PE of less than 1x earnings (9 months earnings exactly) and a Price to book value of less than 25% as almost precisely zero.

Actually that would be hundreds of varying inter-correlated individual investments at any given time

almost precisely zero?

really?? By what definitions? What was your performance in August 2008, in September 2008 and in October 2008?

Almost precisely zero was the risk of a portfolio that held some T-Bills, some managed futures and 90% cash at that time - in hindsight greater allocation to managed futures and T-bills would have brought higher returns but risk was so high at that time that a risk of almost precisely zero seemed more important that chasing return in that environment!

Still what I would call utter madness (incidentally a new all time high for the stock today in the Thai stockmarket) you would call luck - so be it.

With any stock transaction there's an element of luck. I don't believe that anyone can know everything about any business or sector or its prospects, outlook etc. I think that based on probabilities you can back your own knowledge, skill and judgement but w henever you're dealing 'based on probabilities' you want to hedge out the risk as far as possible and you want the law of big numbers on your side otherwise taking unnecessary risks with your investment falls within my definition of 'utter madness'

Abrak, what you do is clearly very successful for you. I'm not knocking it in that context but other than a tiny allocation within a much broader portfolio it has a very limited application to do what I usually do.

You are clearly oustanding at what you do - I like to think that I work hard at what I do but each fulfills a very different need. Based on my experience over the last 25 years, I've become extremely passionate that active, pragmatic diversification is the key.

cheers,

Paul

[Abrak]

Abrak, what you do is clearly very successful for you. I'm not knocking it in that context but other than a tiny allocation within a much broader portfolio it has a very limited application to do what I usually do.

You are clearly oustanding at what you do - I like to think that I work hard at what I do but each fulfills a very different need. Based on my experience over the last 25 years, I've become extremely passionate that active, pragmatic diversification is the key.

cheers,

Paul

Point taken - I am being very boring. I guess that I am just as passionate about my investment style as you are about yours.

Funnily enough, I was reading last night something basically which said. The easy part of investing is coming up with an investment strategy. The difficult part is actually maintaining the discipline to execute the the strategy.

[ExpatJ]

How do you find a five year performance? I went to the stock exchange site they provide six months and that's it. Or I'm missing something on the site.

You can use ft.com stock pages plus buy a setsmart card at chula library next to British council in siam sqaure which allows you to enter setsmart online database of stock data of last 5 years (card is about 300 baht)

[ExpatJ]

I bought GLOW stocks this morning on the expectation that a) the government just announced a new energy policy that emphasizes coal, Glow energy company will benefit given its coal related buisness its dividend (3.5%) payment is due next week , so hopefully people will buy the share for that in coming days c) that yesterdays rally will run on to today.

My strategy is to sell before the dividend date on the assumption that the price will increase in the coming few days based on a, b,c above. (A stocks price will drop the day after the dividend date by an amount equal to the dividend amount- 3.5% in this case.)

Plan B- if the stock goes down due to political situation or other reasons then i hold medium and get the dividend return plus its price is likely to increase in coming months as its coal related profits increase coz of the govt. policy being implemented.

Lets see what happens.

[Naam]

Abrak, what you do is clearly very successful for you. I'm not knocking it in that context but other than a tiny allocation within a much broader portfolio it has a very limited application to do what I usually do.

You are clearly oustanding at what you do - I like to think that I work hard at what I do but each fulfills a very different need. Based on my experience over the last 25 years, I've become extremely passionate that active, pragmatic diversification is the key.

cheers, Paul

Point taken - I am being very boring. I guess that I am just as passionate about my investment style as you are about yours.

Funnily enough, I was reading last night something basically which said. The easy part of investing is coming up with an investment strategy. The difficult part is actually maintaining the discipline to execute the the strategy.

i always stick to my strategy which i roughly devise between 0230 and 0330 hrs and finalise at 0400 hrs with my fourth cup of coffee, NY being closed. there is no wavering, no second thoughts, i discuss the strategy with my wife during breakfast to add her female intuition, the path is set... till London and Frankfurt OTC open. then i either act by buying, selling and switching in a frenzy or i discard my strategy and tell my [very] attentive dogs a [semi] true story whilst feeding them with goodies like small morsels of Bavarian Weisswurst, French Gouda and Thai shrimps. believe me or not, the dogs always fully agree with whatever decision i make and we all spend the day happily ever after.

[Abrak]

i always stick to my strategy which i roughly devise between 0230 and 0330 hrs and finalise at 0400 hrs with my fourth cup of coffee, NY being closed. there is no wavering, no second thoughts, i discuss the strategy with my wife during breakfast to add her female intuition, the path is set... till London and Frankfurt OTC open. then i either act by buying, selling and switching in a frenzy or i discard my strategy and tell my [very] attentive dogs a [semi] true story whilst feeding them with goodies like small morsels of Bavarian Weisswurst, French Gouda and Thai shrimps. believe me or not, the dogs always fully agree with whatever decision i make and we all spend the day happily ever after.

Well if you have Itunes you might like to listen to a podcast called 'Day Trading Freedom'. One of my theories about investing is that it isnt exactly rocket science a mixture of hardwork common sense and and average intelligence (combined with a degree of conviction and discipline.)

The guy on the podcast clearly is totally uneducated and his investment techniques are a total mystery to me but what he says I found fascinating. Essentially it amounts to the fact that people are so bad at investing that virtually any disciplined strategy will work. His basic philosophy is that it is a lot easier than being a plumber.

In fact, it is sort of on the lines of professional golfers. One of the caddies said to me that the thing that the best professional golfers had in common was that they were all brain dead. This guys theory is that it takes 3 months to be a successful day trader but only if you are essentially brain dead - otherwise it can take up to 7 years.

P.S. I never day trade. In fact I trade so rarely despite having the largest internet account at the broker (this isnt saying much) they dont bother even offering me new issues.

Edited April 21, 2010 by Abrak