Thai Stocks For Mid To Long Term Investors

[Abrak]

To be honest what I fear now is we are do for a correction.

As you know I'm on thaistocks as well. Paul is urging caution at the moment. In practising charting what I see is volume down in my performers. Other indication's are for a slow down. Most of my stocks are close to their highs in the past five years. You know it were all up all the time I would have done this 40 years ago.

In my case having more cash on hand then 15K wouldn't be a bad thing. I've done well with that concept but there is no doubt with a 100K cash.

It really takes time for things to sink in with me. I do know I will be very cautious next week. Or maybe longer, to be a value investors values have to be down. I have had simple blind luck along the way that won't last forever.

Ok Guys chip in. At this point I have two people whom I respect, say to be cautious.

Ray,

There is always something of a nice cosy feeling to have some cash to put back in when the market comes back. If you have made a few gains why give them away. Also when you are fully invested you are usually in too far a bullish mood. I am actually not expecting to make any more money this year.

I am fascinated though by this local buying into a rising market. What usually happens is foreigners buy and the locals take profits as the market goes up. When foreigners sell, market goes down and locals buy and cant get out at profit. In general this works ok for the locals they buy when foreigners are panicking etc..

However once in a while locals start getting bull market fever. There are already some signs - my GF is trading. A lot of stock charts are very aggressive local driven movements. When foreigners spot this they often jump on board. There are a lot of people playing short dollar long baht through the market too (especially with spec over the yuan.)

One thing for sure if you find a good stock it will go up - people are looking for value - so dont worry about say a 10% correction in the market.

If someone has the data I would be very interested in the net local buying into a rising market (they were sellers last year.) Rates are low, dividends good, volume decent and some good speccy stuff going on. I also think we are like 1.5 years into a 3 to 5 bull market which could easily hit 1500 simply v. the S&P. The China chart looks like a nightmare though.

[ray23]

Thanks I have core stocks that I'm holding on to, I got them when things were low, good solid companies. I haven't really read much about the foreigners coming back in after their escape. Other then if they call off the emergency decree they will come back.

My personal thoughts that is a double edged sword, this isn't over yet. The current Government could be desolved by the courts. So political certainty doesn't seem to be in the cards for some time. But that is Chamber's of Commerce talking, looking for more tourist again I would believe. So best guess mostly locals right now.

I did see major things going on Ford moving a plant from the P.I. apparently with lots of financial assistance by the Thai Government. Mitsubishi establishing a plant here for it hybrid cars development.

Japanese getting real gun shy with the hold up of the projects in Chon Buri.

So far I haven't seen anything about hedge funds coming back in.

Electronic parts manufacture's seem to have done well, with telephone parts and computer hard drives.

We saw a increase interest rates last week by the BOT and what sounds like a clear plan to raise them further. I know what that will do to my dollar, not a clue what it will do with the market.

The EU bond sales went well last week, which seems to be taking a bit of pressure out of one of Thailand's export market. The U.S. slow growth another market, China putting on the brakes a bit. Boy now that sound odds when your talking about 10% growth

So lots of factors in play how they will play out in the Thai Market I don't have clue. Which is usually a good signal to me not to do anything

If we do see a slowdown, there will be some good value buys out there.

Patience is something I need to work on sounds a like a good time to start. :jap:

[ray23]

Foreign investor return that is an interesting question I did a search the most recent information I could find was in May and people were shooting one another, talked about them leaving. Nothing about them returning I would think that would be a real shot in the arm for the SET.

Maybe someone else can find better information.

[Abrak]

Imagine this investment case

One country has

1. strong growth

2. C/A surplus

3. small fiscal deficit

4. No debt (inc forex reserves)

Another country

1. Almost no growth

2. C/A deficit

3. Massive fiscal deficit

4. Policy maker trying to depreciate his currency

5. Printing money

Now the first country doesnt want its currency to rise....

1. It shorts its own currency and goes long the other one US$70bn (loses US$10bn)

2. Speculators see them do it and burst out laughing

Then the first country worried a little about how good it is ....

1. Raises interest rates to make its currency even more attractive

And Ray, we have practically had a civil war here, the markets up. Forget all the 'Mitsubishi are building a hybrid car factory here or Japanese are delaying investments.' Watch the net buys/net sells, watch the money supply, hope like me we get a consolidation and be wary about selling stuff too early if the locals continue buying because they like to have fun.

[ray23]

Really is amazing isn't it. Will do thanks for the heads up.

[ray23]

I thought this was interesting it's from the SET. I;m not exactly sure how they qaulify foreign investors here.

June showed Forieign investors up, July local are diving it.

Transaction by Investor Group in The Stock Exchange of Thailand (SET)

Daily as of 16 Jul 2010

Unit: M.Baht

Investor Type Buy Sell Net

Value % Value % Value %

Local Institutions 2,688.15 7.32 2,710.77 7.39 -22.62 -

Proprietary Trading 3,628.25 9.89 3,518.83 9.59 109.42 -

Foreign Investors 4,582.41 12.49 3,817.35 10.40 765.06 -

Local Individuals 25,801.35 70.30 26,653.20 72.62 -851.85 -

Monthly Cumulative between 1 - 16 Jul 2010

Unit: M.Baht

Investor Type Buy Sell Net

Value % Value % Value %

Local Institutions 22,798.04 7.76 22,292.83 7.59 505.21 -

Proprietary Trading 28,042.75 9.55 29,387.17 10.01 -1,344.42 -

Foreign Investors 44,174.33 15.04 44,275.30 15.08 -100.97 -

Local Individuals 198,601.98 67.64 197,661.79 67.32 940.18 -

Yearly Cumulative since 1 Jan 2010 - 16 Jul 2010

Unit: M.Baht

Investor Type Buy Sell Net

Value % Value % Value %

Local Institutions 210,868.33 7.57 210,995.56 7.57 -127.24 -

Proprietary Trading 373,285.90 13.39 373,986.27 13.42 -700.38 -

Foreign Investors 589,213.29 21.14 606,641.64 21.76 -17,428.36 -

Local Individuals 1,614,027.36 57.90 1,595,771.40 57.25 18,255.97 -

[Abrak]

Yes I have been checking the figures. For the most part they show a normal pattern. Locals picking up stock as the market comes down during April. They arent really buyers but they dont like to sell at a loss. Mid May June foreigners return and locals take profit as the market moves up. You can see this sort of pattern 98 days out of 100.

What is very surprising is the net buying by locals towards new highs in July. Fridays' trading was exceptionally unusual. The Hang Seng was a bit weak on Thursday, flat Friday and the SET up a bit both days on local buying and at very high levels. It is only two days but this has only been a feature of the market on two occasions in the last 17 years and both times the market moved up 100%. When I say 'feature', it happened consistently for 3 months, not small volumes over two days. So worth keeping an eye on. With very low deposit rates market is primed for a liquidity driven rally especially as loosening monetary policy looks preferable to allowing the baht to appreciate further. As you say its better than 1%.

[ray23]

Will do.

[Abrak]

Well not wrong to be cautious but definitely watch out for a liquidity driven rally.

Last 3 days trading have averaged Bt17bn from the locals against Bt10bn in May and June. If things start to happen you will probably see Bt30bn+ from locals alone.

Money Supply M1 is 14.4% YOY in May which is well in excess of P x Q.

Inflation is down at 2.0% on a 12 month MVA. So a little bit of an asset bubble could well suit. Boosts C and I takes pressure of the baht through P and M and allows the Government to spend money on something useful. Once the Yuan revalues they will tighten. Property prices are where they were 15 years ago in dollar terms (maybe up a bit). Certainly makes sense to boost domestic demand than run huge surpluses that you lend back to the US.

And liquidity bubbles often happen in slowing economies because noone wants to invest in productive assets. 1993 EPS ex-financials were down 21%. Still it is very much a figment of my imagination now rather than a reality.

[ray23]

May be shaping up like a good Q-3. But I agree watch for a bit. My targets for accumulation more then likely won't change. Thanks for the help. Might see 849 on the SET yet.

[Abrak]

May be shaping up like a good Q-3. But I agree watch for a bit. My targets for accumulation more then likely won't change. Thanks for the help. Might see 849 on the SET yet.

You might take a look at a broker. Often these are trading near cash and below book, so your downside is limited. If things went bananas and volumes increased to Bt40bn a day, these sort of stocks can treble. Only buy them at around BV though. It is a pretty crap business but their trading profits shoot up too.

Just took a look at KEST. No idea where it ranks in terms of value but it isnt expensive at this level. Trading 11.2 (was 13 last December), BV Bt9, cash per share Bt5, EPS Q1 0.24. Now in a whizz bang quarter that could treble if volumes doubled. Havent looked at it properly. Got up to Bt80 5 years ago. Always useful to have one of these in your pocket.

[ray23]

Thanks Asian Market opened lower this morning, now lets see if the SET continues to buck the trend.

Looks like an interesting week shaping up. As you have pointed out finding those monster bottom feeders, may be a more difficult now. So I will be working on my biggest weakness patience

[ray23]

Thanks Asian Market opened lower this morning, now lets see if the SET continues to buck the trend.

Looks like an interesting week shaping up. As you have pointed out finding those monster bottom feeders, may be a more difficult now. So I will be working on my biggest weakness patience

Mid day it's holding it's own. I watched an interview on TAN's Invetment beat, this morning. They had an exceutive from Asiaplus who confirmed it was local investor's driving the market, not foreigners

[ray23]

Well Set finished above 830 today, that is supposed to be the resistence point. It again bucked the trend most Asian stocks were down today.

Edited July 19, 2010 by ray23

[ray23]

I think we just saw a heavy correction opened at 843 this morning at 821 now. I moved get heavy into cash for the next buys and Kept my core model, Cost me all of 2K baht and I have 60k in the buy account now.

The key for me when the next buy cycle starts I will go in with a 100K not 15K

[ray23]

Typing oops that should read 834 not 843

I sold out specific stock that were laggards. Everything else weathered the storm just fine. I searched the news yesterday afternoon to see if I could find a trigger. The only thing I could find in that time frame was an article that all the Asian region should stop spending stimilus monies.

Later in the afternoon it went back to 824.

People may have have simply been taking profits. I had a plan in place I just acted on it. I still hold eight stocks from the model portfolio. I could have actually done it anytime but I wanted to ride this a little further.

Keep in mind I'm working with 15K a month. I still have 117K at work and 90 K in the buy account.

There is a good possibility that things will return at the same level again, hope so. We will see what happen today.

Please don't do what I do I'm struggling to understand I'm simply to new. I felt comfortable with this, I've held these lagards since the first of April they never got out of the red.

Well I feel better this morning SET At 827, my laggards are still laggards the ones I kept have put me at 10K profit again

[ray23]

BACK to 830 go figure

[thaibutty]

I guess the reason for the loss yesterday was the reaction to the lower than expected earnings figures of some major US companies and the subsequent drop of the Dow Jones. Asian markets react a lot to the news from the US. Today Apple, Morgan Stanley and Wells Fargo all came out with good results and the markets were on the rise again. Should be quite normal during earnings season.

I think don't pay to much attention on the short term gains and losses, caused by bad news one day and good news the next.

[ray23]

Good Point. Bloomberg finally mentioned Thailand today, three major tire companies moving here.

[ray23]

Ok Guys am I nuts or what.

I had two stocks that in the beginning I bought at their peak, not realizing what I was doing. I held them till the dividends were paid. Sold them At their high.

Bid them low today and picked them back up by bidding at a much lower price, now they are earning money again.

You know sometimes at my stage you just have to punt, this one worked out nicely but not sure I want to try it again. I think getting them at the lower price in the first place is much better.

[humbug]

if ray you are still holding demco you must be more than happy today up 15%, are your warrants due 10 august or something then all around a good hold for you and looking good

alot of the small-mid caps are flourishing as leaders etc at the moment as abrak has noted when the retail investors come in these stocks do very well, anyone notice the dive in slc and slc-w1 maybe it was a margin call having to sell, or could be some news that is in thai that we dont know, either way there is a risk following thai retail investors on small caps, when those margins come calling those stocks can tank for 1-2 or even 3 days

[Abrak]

Either way there is a risk following thai retail investors on small caps, when those margins come calling those stocks can tank for 1-2 or even 3 days

I think that 'following' retail investors is a guaranteed way to lose money. You buy small caps when there is no volume and sell after the retail investors have piled in.

Now one thing we can guarantee is that brokers are making a lot of money. KEST had Bt20.4m of brokerage commissions today on stocks alone and their costs for their entire business are Bt6m. Now they havent moved because the volumes are too low. But liquidity bubbles are about stockmarkets and property.

When a market turns into a casino, it seems sensible to bet on the casino.

[ray23]

July 30Th

[ray23]

Set at 840 today.

Last week I ended with the value of my portfolio is now 185.608, There was an OOPs folks it should have read, 181606

This week 185,054

This is interesting as now I have now used the same money three different times, through taking profits and reinvesting. Out of my pocket right now is 115.000.

What I'm seeing the monies that I can invest with now is much higher therefore I have better gross returns.

Taking Profits I held STPI I had a 36% profit, got the signal from Paul to take profits at 26.70 Not bad I would say, today it's at 41

I learned to follow the my charts from ASP Liberty at certain points it will give buy and sell points. I don't follow it perfectly but I do take a look an see if I can milk a bit more out of it.

LA wasn't kidding even when you have a great adviser like Paul, he can find value stocks and then it's up to you. What does that mean checking charts, following business news on a international business. Although I know thaistocks check deligently what the company owes , what it's cash position , even down to a personal look at the facility and the management team. what it's future sales look like. I still double check for myself.

Why it is something you need to know and know how to do. Cause you have have trust in the company before you put money into it. So it's very good habit to develop.

I have found ,my weakness it's being impulsive. I really have to get on top of that, not sure how I will do that it's just a part of my nature.

Well guys I can't complain even with my mistakes I've done OK. Believe me I knew nothing about stocks. Still don't know much yet. But, I have tried give a honest and accurate description of exactly what I have done. So I have to give credit where credit is due, without Thaistocks and Paul I would never have been this successful. Let me add ExpatJ, Abvak and Zorro so many that I can't even think of them all now. Have taken the time to show me the ropes. I have learned a lot from you guys I'm truly grateful for that. It's a good person who can reach out to others, knowing there will be no return to them

Unless something goes crazy I will be over 200K next month. I stopped my Aberdeen mutual fund, it's great but not the right tool for someone who has five years to work with. I put 15K in it got 14 back, that is a high expense ratio, or maybe a better way to say loss. So that money and my dividends along with my normal monthly contribution will be 30K. So I'm pretty confident I will meet that goal.

My goal I sit for the year, ending next March for me is 250K. I'm confident I will hit that goal.

It was funny in reading LA's explanation of dollar averaging, wasn't what I was doing at all. So I will pay more attention to that in the future. Hey what can I say little devils just kept going up "( No I did have some that it would have worked on much better.

[badge]

I see the SET gapped open y'day, above the last possible 'profit-taking' level cited 4/5 months back.

'back-of-fag-packet' guess shows next possible hurdles at 858 and 870. I should add I dont really follow the SET

[ray23]

It's at 854 now 11:49 A/M I really didn't expect to see 850 till the end of the year. It moved enough that even Bloomberg mentioned first time since the blood in the streets. We get some of that foreign money back things might get real interesting.

[ray23]

This looks like a solid retail company to me what did I miss ?

Odd to see the SET in red at 853 went back to 854 again. Per Kelive foreigner's have been NET buyers for the past two days.

GLOBAL : SIAM GLOBAL HOUSE PUBLIC COMPANY LIMITED

Company Highlights (Table) | Company Highlights (Graph) | Financial Statment

(Unit: M.Baht)

Period

as of Y/E '09

31/12/2009 Q1 '10

31/03/2010

Financial Data

Assets 4,580.69 4,910.13

Liabilities 2,175.22 2,427.68

Equity 2,405.47 2,482.45

Paid-up Capital 960.00 960.00

Revenue 4,462.87 1,460.64

Net Profit 358.98 76.99

EPS (Baht) 0.45 0.08

Financial Ratio

ROA(%) 11.27 9.74

ROE(%) 14.92 12.41

Net Profit Margin(%) 8.04 5.27

Statistics as of 30/12/2009 27/07/2010

P/E 85.00 13.73

P/BV 1.05 2.20

Book Value per share (Baht) 2.47 2.59

Dvd. Yield(%) N.A. 2.28

Last Price(Baht) 2.60 5.70

Market Cap. 2,496.00 5,472.00

[ray23]

Dollar Cost averaging, from Paul

As to dollar cost averaging, there is also dollar cost averaging- out, this is when stocks run up and nobody knows where a top is, then you just slowly sell out. Its the opposite of buying in.

That sounds like a little thing but it' not wish I had did it with STPI and retained some of those stocks in the 40's now.

I nipped away at Global today and cut my loss by 50%, by bidding low.

Now here is the surprise to me Global in SET for just six months, Been here in Udon doing business for eight years that I know of. The stock pretty much doubled so the information I'm getting it is just adjusting at the moment.Of course I just sit around like an idiot watching it go up ><( Trust me guys I have been getting little lesson like this all along.

Hey I got more time them money that is for sure.

[ray23]

WEEKLY UPDATE:

Boy what week this was SET closed at 855 my portfolio is at 264,635 and I loss 20K, I suppose I could quit now my goal was 250K, Something wrong with that picture huh!

I posted about some warrants being issued, well the bugger went all the to 5.90 a share, The warrants could be converted at 2.70 warrants issuing at one to four ratio. Now me I wanted a big piece of that. So I borrowed a 100k from me. Took me to 28,000 shares, Hence I will get 7,000 warrants for conversion. I have 18 months to exercise these warrants, with the first opportunity in December as I understand it. This is really the only one keyed on as Paul says it’s in the money. So that was what I was shooting for.

I will also get an additional warrant 0ne to six ratio on the one I have 30 months one warrant will go at 5 baht, This it all depends on what the shares sell for in this period, if they are over five a good deal.

This stock was trading at 5.90 for a short period of them. When the warrants issue it drives the price down. Paul was estimating they would hit 4.70 and we would make a few baht. They close today at 4.84.

My average share price was 5.25, so even though I bought the additional shares I lost 20K for now. Thank goodness I was already told that would happen, or it would be 191 time and the WAMBULANCE.

The warrants can be sold off individually they are actually free, my goal is convert them and hold 35K shares, it pays great dividends and hopefully the shares will increase in value over the next three years.

So, on my book I show a minus 4,617.

I reality I have put 220K and actually still have a profit 44,635 baht. It’s all been reinvested so it back working.

I haven’t decided yet next month I might try some dollar averaging with it. I did that with another last week and it’s in the green again.

[humbug]

your above post ray is a little confusing so i will try and make it more confusing

if you have warrants then when they are issued on the market, i havnt seen demco's latest warrants yet, then the first few weeks of trading always offer good volumes and specualtion, especially on the first day of trade, the key here is to decide whether to sell the warrants at a high price and buy back later when people no longer view the new demco warrants as the latest fashion craze, if the exercise price is 2.70 and the equity price is 4.80 then maybe on the first day the warrants might hit 3-3.50 a share and then over the coming week might settle at around 2.50-2.80 a warrant, warrants are good for specualtion, if you think the equity has a chance to break again the 5 baht barrier and move up towards 6 and 7 baht, then hold on to the warrants because their worth will become 5-5.50 baht a warrant on the set, but because this is your said advisors recomendation, then better ask what price targets they have for demco over the next 12 months, if your advisors feel the demco price will move to 6-7 baht then keep the warrants, but if your advisors feel that the demco is stuck at these prices of 4-5 baht then look to sell the warrants

Edited July 30, 2010 by humbug