Why I Wouln't Invest In Thailand

[deejah]

simply stated

most everything is poorly managed

a good reason not to invest

however this may be too simple

i do think there is a lot of business opportunity here

but not without their major headaches

[djlest]

that may be true but also i have seen investers double or triple their investment in a very short span of time...

having said that you can also lose in a very short span of time too - i have lost a 3rd of my investment very quickly but mostly it is due to exchange rates and the recession.

It is still a good time to invest when the market is down as opposed to when the market is doing well - evidently for me anyways...

[vicco]

that may be true but also i have seen investers double or triple their investment in a very short span of time...

having said that you can also lose in a very short span of time too - i have lost a 3rd of my investment very quickly but mostly it is due to exchange rates and the recession.

It is still a good time to invest when the market is down as opposed to when the market is doing well - evidently for me anyways...

From what I have seen, for every success story there is 20+ failures. (and by success I mean just not going broke) There are opportunities for sure, but the risks are very high. Just day to day living can be frustrating with visa regulations, lack of access to resources and of course having to buy off the police every time they find themselves running short of funds. Personally I view Thailand as a nice place to retire, if you can get an O visa, have a decent income and a clean slate., you can have a pretty nice life, but I honestly would never try to work here, and I don't know why anyone would...but each to his own.

You could of course spend some time in Pattaya. Meet a nice girl in one of those excellent business oriented bars and have her be your investment adviser. Not only will she provide advise on how to invest, she can recruit her family to provide further assistance....

[Soutpeel]

but I honestly would never try to work here, and I don't know why anyone would...but each to his own.

I work here because I am making nearly double what I would be making for the same position in Europe or US and "tax structure" here are very "preferable"

Valid reason to work here...?...

[craigt3365]

but I honestly would never try to work here, and I don't know why anyone would...but each to his own.

I work here because I am making nearly double what I would be making for the same position in Europe or US and "tax structure" here are very "preferable"

Valid reason to work here...?...

You are very lucky! Congrats!!!!!

[huawei]

It can also be a rewarding experience working here. You integrate more and meet people you would otherwise not come across, visa issues etc are dealt with for you by the HR department. Tax is not as punitive as europe. I worked here in the early nineties, had lived here prior to that. I can say that it was one of the most pleasurable periods of my working life and a lot of fun.I still work here periodically, but now being older and it not being so novel the same enjoyment is not there but i would recommend it, if an opportunity arises.

[Microwave]

I have to agree. I was fortunate to live and work in Thailand for almost 15 years earlier in my life. Now I've retired to the LOS and life's great.

[vicco]

but I honestly would never try to work here, and I don't know why anyone would...but each to his own.

I work here because I am making nearly double what I would be making for the same position in Europe or US and "tax structure" here are very "preferable"

Valid reason to work here...?...

Yes of course...but I think you are referring to working on an ex-pat package for a foreign based corporation and all the benefits that come with it. My comment was about people who come here to invest their own money and then work at trying to run a business in a very risky business climate. Employees of foreign companies have no financial risk and as you say are paid very well as a rule. I knew a guy who worked for ADB (Asian Development Bank) and was paid obscene amounts of money and benefits for doing very little work....and it was tax free. Under circumstances like that....yes I would go for it too....

[samuibeachcomber]

if you are careful,if you are lucky,if you have to,then i am sure there are success stories.I would say if you dont have to work,or invest in a business then dont,its safer.

[jackdawson]

most everything is poorly managed

of course, this is a wild generalization which is not true

is mcthai (operator of mcdonalds here) "poorly managed"?

r lotus/tesco and big c poorly managed ?

is beer chang poorly managed?

the problem here is there's NO court system to settle disputes . it's head i win , tails u lose .

therefore, note to self; continue to NEVER invest in thailand

[Dancali]

most everything is poorly managed

the problem here is there's NO court system to settle disputes . it's head i win , tails u lose .

therefore, note to self; continue to NEVER invest in thailand

For those of us coming from places where extortionist, baseless lawsuits are a common and costly part of business, this could be a good thing.

[deejah]

most everything is poorly managed

of course, this is a wild generalization which is not true

is mcthai (operator of mcdonalds here) "poorly managed"?

r lotus/tesco and big c poorly managed ?

is beer chang poorly managed?

the problem here is there's NO court system to settle disputes . it's head i win , tails u lose .

therefore, note to self; continue to NEVER invest in thailand

good points and i am glad you called me on one

yes i would say that mcthai is poorly managed compared to mickie dees in the usa

i do notice the difference

i have also noticed things at tesco and big c as well that are questionable

but i am sure there are some exceptions to my generalization

thanks

[chiangmaibruce]

On the issue of poorly managed businesses, I suspect you are basing your judgement mainly on the basis of your observations of the public sector (e.g. police, infrastructure providers) and lower-level private sector staff that interact with the public ... rather than bottom-line financial performance. No-one would argue with you about the need for more work in areas like customer service.

Yes there is a significant level of risk present, even before the current crisis. But on that issue, it's perhaps relevant to separate out failures that resulted from factors that are integral/unique to Thailand (e.g. politics, culture, etc) versus the characteristics of many who invest here (e.g. undisciplined and sometimes clueless). On the issue of returns, many have made a good deal of money over many years and there is plenty of further potential to do so.

For the average joe investor though, given ongoing political instability and the issue of succession, there are similar or better returns available at lower risk in other countries. It would be prudent now to adopt a wait-and-see approach to Thailand ... whilst not writing the country off entirely. More details and discussion on this topic at www.burning-bison.com

[wasabi]

Where there is risk there is the chance for reward and there is plenty of risk in Thailand. I wouldn't invest because I think the odds of success are very low.

[Time Traveller]

Yes, I will continue to invest in Thailand because there are many good quality businesses that are priced cheap when compared with other countries.

To elaborate, I consider a sound business/company to be one that has a long term track record (at least 10yrs) of profits each year, the company must have a good balance sheet ie. Significant Assets against little if any Liabilities. Thirdly, it must be priced cheap such as at a price below it's book value, unless it has some industry advantage. Another good way to value the price of your investment is to calculate based on an average of past profit how many years it would take to repay back the capital invested. Obviously there are other factors that are at play such as the industry (e.g. avoid tourism related), the future prospects, how much exposure to political problems, etc.

I do think the rule of corporate law and dispute resolution to be on par with other countries. If your think otherwise then I'd be glad to provide counterexamples. On the other side of this argument, the main problems with Thailand as an investment destination (not including the current political risk) has been that Thailand is a very competitive market place. So if you are selling into Thailand margins are very low and competitors often quickly steal marketshare. Intellectual Property rights have traditionally been a problem here also, but authorities are definitely cracking down on this at the moment to improve credibility and protect IP rights.

Not really much interest in starting a business (since most new businesses fail within several years why take the risk when you can buy into established companies) nor investing in property or government bonds. Although property may be attractive to purchase cheaply when compared with other Asian countries.

In summary, if you have any doubts about investing Thailand I recommend that you follow what professional investors are doing, and they are definitely not shying away from Thailand despite recent turmoil.

Edited April 27, 2010 by Time Traveller

[clinique]

timetraveller, could not agree more. As a professional investor thailand offers many opportunities. many investors come here and lack the skills to negotiate and resolve issues here (mainly language and cultural understanding).

We ahve done very well here in property and services business. Currently own 2 7/11 stores and initial investment was returned in 18-24 months, both stores very profitable. Likewise property deals..(commercial deals) 200-300% profit is not uncommon..

sharing is an issue here,, andneeds to be addressed upfront and in writing with "professional" witnesses.

Also learn tocheckthings out by yourself, ie: go to the land department and talk to head of department in your area - he will tell you how to protect yourself AND help you do it.. all for free..

still a place to invest currently looking a large investment in a hotel..

[Odysseus221]

It seems to me that the government here in SE Asia, like many other "emerging markets" is caught up in a quandary: how to maintain its culture, values, traditions and so forth, plus its sovereinty AND attract business. The truth is, they are diametrically opposed and everybody knows it. Global markets are just that--global. In order to attract global businesspeople the government must create greater equality in the law for foreign business people, responsive police, lawyers and infrastructure. Since they cannot do this, or haven't as yet, it will always be kind of a rip off situation.

On the other hand, to be truthful, Thais have a country and a heritage which is beautiful, kind and loving--and worth preserving. I would rather be Thai and poor than Rich and American! So there! These people have a cheerfulness, an acceptance of life and kind dispositions that cannot be equaled in western material cultures where self worth and esteem is always based on money. A quality life in Boston is a million dollar apartment where pleasure amounts to drinking a coffee on the veranda overlooking the city and congradulating yourself that you're so bright you live in a nice town where you don't have to fight (potentially) walking down the street...

Regarding the welfare system or lack of welfare thereof; really, RED SHIRTS ARE RIGHT ABOUT THEIR NEEDS--HOWEVER, BEFORE THEY START TROUBLE, THEY SHOULD TOUR NEIGHBORING COUNTRIES AND MAKE SURE THAT REPRESSIVE REGIMES OF BURMA, LAOS OR DISASTERS OF CAMBODIA ARE MORE SUITABLE FOR THEIR TASTES. As a market economy Thailand is well positioned to thrive in the future.

As Tanksin said, "keep working...". This is good advice. A few years ago the IMF predicted that the per capita income could double here.

As the country descends into mental confusion caused by the abandonment of traditional values, GDP will plunge and hope with it.

The solution is either: more intense Buddhism (less reliance on materialism), or invite the West in on more favorable terms--and ultimately surrender your heritage and political control to capitalism and international manipulations.

Which will it be? A sleepy kingdom or a rat race to material posessions that starts with a car and house and winds up with prices escalating 300% for houses, food and so forth in an effort to provide social services that the country cannot afford. Yes! You can be like America and just inflate to prosperity until the end--which won't be more than 15 years away if you do!

[sarahsbloke]

There is a civil war coming.

Wait until it's finished for best the investment opportunities.

Also you will get twice as many baht for your $$$$$

[Naam]

There is a civil war coming. Wait until it's finished for best the investment opportunities. Also you will get twice as many baht for your $$$$$

and the tooth fairy is coming too. don't forget to look every day under your pillow. there will be $$$ galore

[ExpatJ]

There is a civil war coming.

Wait until it's finished for best the investment opportunities.

Also you will get twice as many baht for your $$

Youll miss the boat- civil war will never happen. In the meantime the Thai stock market is up @4% since this morning- i have made 100,000 baht since 10 am:)

Edit- while drafting the line above and sipping coffee, i checked my portfolio again and its up another 15,000 baht.

Edited May 4, 2010 by ExpatJ

[ray23]

I haven't been the market very long at all and I'm up 6.9%. In the past month I have have one negative day. Since I'm new to all this I started small and will probably remain that way for another year. I followed the model portfolio on thiastocks.com. Got to learn somewhere. No complaints I have done OK. certainly better then that whopping 1/2% I get at the bank.

[kevozman1]

Not a business man. Not smart enough or hard working enough to be honest.

Even with a lack of knowledge of business I would have to say investing

into anything in Thailand that costs more than a scooter seems risky to me.

When it comes to insurance, contracts and the people you will be dealing with

.................. very risky.

[seanocasey]

Yes, I will continue to invest in Thailand because there are many good quality businesses that are priced cheap when compared with other countries.

To elaborate, I consider a sound business/company to be one that has a long term track record (at least 10yrs) of profits each year, the company must have a good balance sheet ie. Significant Assets against little if any Liabilities. Thirdly, it must be priced cheap such as at a price below it's book value, unless it has some industry advantage. Another good way to value the price of your investment is to calculate based on an average of past profit how many years it would take to repay back the capital invested. Obviously there are other factors that are at play such as the industry (e.g. avoid tourism related), the future prospects, how much exposure to political problems, etc.

I do think the rule of corporate law and dispute resolution to be on par with other countries. If your think otherwise then I'd be glad to provide counterexamples. On the other side of this argument, the main problems with Thailand as an investment destination (not including the current political risk) has been that Thailand is a very competitive market place. So if you are selling into Thailand margins are very low and competitors often quickly steal marketshare. Intellectual Property rights have traditionally been a problem here also, but authorities are definitely cracking down on this at the moment to improve credibility and protect IP rights.

Not really much interest in starting a business (since most new businesses fail within several years why take the risk when you can buy into established companies) nor investing in property or government bonds. Although property may be attractive to purchase cheaply when compared with other Asian countries.

In summary, if you have any doubts about investing Thailand I recommend that you follow what professional investors are doing, and they are definitely not shying away from Thailand despite recent turmoil.

timetraveller, could not agree more. As a professional investor thailand offers many opportunities. many investors come here and lack the skills to negotiate and resolve issues here (mainly language and cultural understanding).

We ahve done very well here in property and services business. Currently own 2 7/11 stores and initial investment was returned in 18-24 months, both stores very profitable. Likewise property deals..(commercial deals) 200-300% profit is not uncommon..

sharing is an issue here,, andneeds to be addressed upfront and in writing with "professional" witnesses.

Also learn tocheckthings out by yourself, ie: go to the land department and talk to head of department in your area - he will tell you how to protect yourself AND help you do it.. all for free..

still a place to invest currently looking a large investment in a hotel..

wise words for those that will listen.

[ray23]

I agree there are well managed established companies here. Until I got into this I had the same thought they didn't exist in Thailand. But, they do exist. We probably think that way because for the most part we never have contact with them.

I'm still trying to learn to do the proper research. Right now I get that through Thaistocks.com, Paul has been an investor here for around 20 years. His research includes company visits. Works in small and medium caps. You can tap into that knowledge as either a paid member or a pubic member up to you.

I know my limits and would limit my mistakes as much as possible. So I eased into this at 15K a month. Not investing anything that I couldn't lose and walk away from. If you follow guide lines and are diversified. you would really have to have your brain park to lose everything. You can sell anytime.

This time frame has been a mess to say the least, but by listening and following through I still made a profit, That doesn't mean that I made money on each stock. It means that the portfolio made money I only had one that was losing more then I was willing to accept. I sold it and got a portion on my investment back took about 15 seconds.

None of the others have even met a 10% loss, so I wait for them to move to the positive.

Originally I was told that no broker would talk to me without at least 200K to invest, by several people. But if you do the work you can find something that fits your needs. Asiaplus at Bangkok Bank will let you get started with 15K baht.

I also opened a fund with Aberdeen for my wife at 5k a month.

I've slowly built the stock account up to 100K. I'm not making a fortune but I can't lose a fortune either. But. I'm learning and I know I have dues to pay. Not really many sources available for that. Very few will even discuss Thai Stocks on the forums.

The first thing I did was make five year plan for this and now I will work that plan. It is encouraging to see a profit as quickly as I did.

Tell you one thing for sure I made more money on this then I did the 1/2% on the savings in the bank. I have more then enough there to take care of emergencies.

There is risk in any business, including investing. But if you have a good plan you can set the level you willing to risk.

I wish I could offer more insight. But, this is the level a I'm at and a long way to go.

[TravelerEastWest]

I have several American friends who run businesses in Thailand all do well.

The key to their profits and ability to handle problems is simple - they have experience in the business world and cultural understandings which include speaking Thai.

Are there special problems with dealing with Thailand - sure - and special benefits also.

As an example corruption is a challenge but labor costs are low great for exporting.

I have not seen any studies on why some foreigners do not do well in Thailand but I wonder about the basics:

Do they speak Thai?

Do they have capital?

Do they have business experience?

Do they have patience and the ability to stay calm in a foreign country?

Do they understand business law and accounting and marketing etc? 

Formal business education or if not lots of prior experience?

I could go on but you get the picture...

[chiangmaibruce]

I agree with you 'traveller', but I would broaden it out to include all foreign investors in Thailand - not just those running a business. A lot of the discussion (about bad investments in Thailand) focusses on real and perceived problems inherent to Thailand ... but this is just one side of the coin. The other is of course the skills, experience, temperament, etc of the foreigner making the investment. It's a combination & interplay of the two that determines the eventual success or otherwise of the investment

[thomo]

I've invested in gold here.

So easy to do.

And am 25% better off in only 2 years.

Easier than buying an ice-cream at a 7/11.

Edited May 30, 2010 by thomo

[Odysseus221]

From a foreign perspective, it seems; everything is backwards here. But in reality, everything is the way it should be. Foreigners should not buy land since it raises the price beyond what Thais can pay and destroys their ability to earn a living. Foreign capital is necessary to build wealth and so they encourage business ventures particularly capital intensive ones; meanwhile, foreigners get alot more than they can get in their own countries. Its a win win situation.

I particularly object to foreign capital buying farmland. This raises the price of soil which raises the cost of production and lowers the profit. This is a big issue now.

Foreigners: DO THE RIGHT THING. LEASE LAND AND PROPERTY(IF YOU WANT TO LIVE OUTSIDE THE DESIGNATED INTERNATIONAL AREAS) DON'T TRY TO GET AROUND THIS, IT WILL HARM THE THAI PEOPLE.

Edited June 12, 2010 by Odysseus221

[ray23]

Well I'm now up 27% But, I only invested as I could afford to do so, in my case 15 K a month. I didn't have clue what I was doing got lucky and found Thaistocks. Used the model portfolio as the recommended.

So I played it safe and ventured forward a little at a time But think about a year 1s 180K, without any profits. Nothing stops you from selling the stocks accept you. So five years out you should have a very good account and not have risked your normal income money.

I would say from what I see you can beat the bank account rates. But you should also have your savings for emergency's. So don't go empty that account do what you can afford to do without risking something that will hurt you,

I have began studying stocks where I can find information, so I have a better understanding. In the mean time I'm happy with the results from Paul at Thai Stocks. He is a professional investor, with 20 year experience her. They is a flat annual fee to be contributing member. If not there is free information available as well.

I use Asiaplus as a broker and I'm very happy with them. They have been helpful every time I ask. What's the difference my broker there works on commission. Really scratching her head why I'm not buying and selling everyday

When i have been at there offices I see same guys there each time they are day traders and I assume have more knowledge then I have.

From what I have seen you can do well as a midterm and long term investor, if you can or have access to the proper research on the companies you invest in.

[Naam]

From a foreign perspective, it seems; everything is backwards here. But in reality, everything is the way it should be. Foreigners should not buy land since it raises the price beyond what Thais can pay and destroys their ability to earn a living. Foreign capital is necessary to build wealth and so they encourage business ventures particularly capital intensive ones; meanwhile, foreigners get alot more than they can get in their own countries. Its a win win situation.

I particularly object to foreign capital buying farmland. This raises the price of soil which raises the cost of production and lowers the profit. This is a big issue now.

Foreigners: DO THE RIGHT THING. LEASE LAND AND PROPERTY(IF YOU WANT TO LIVE OUTSIDE THE DESIGNATED INTERNATIONAL AREAS) DON'T TRY TO GET AROUND THIS, IT WILL HARM THE THAI PEOPLE.

because Thai people can still use the land, which a farang has leased to build his home, to grow rice, vegetables and raise pigs?

what <deleted> are preaching Odysseus? and where are the "designated international areas" located?