Set Index And Thai Mutual Funds

[ExpatJ]

Blah blah blah.....

Everyone is an expert in a bull market.

Here is a little test for Fletch and the other self proclaimed financial experts posting on this thread.

If you can answer all of the following three questions correctly, I will endorse you as actually having some knowledge about investing Thailand, rather than just having the dumb luck of being in the right place at the right time.

Question one

Which Thai bank has developed an algorithm driven bot to trade the SET, and through one of its wholly own subsidiaries, uses it to "automatically" trade with funds from the accounts of subscribed high net worth investors?

Question two

What is the minimum required investment deposit to qualify for access to the above mentioned trading bot?

Question three

What firm will be floating a SET reverse ETF later this year?

Mmm surprise surprise...no takers on my LITTLE challenge...

Agree with your point that everyone is a financial guru in bull markets!

Also very interested to hear the answers to your questions- especially the minimum amount- i want to invest in it!

[fletchsmile]

Blah blah blah.....

Everyone is an expert in a bull market.

Here is a little test for Fletch and the other self proclaimed financial experts posting on this thread.

If you can answer all of the following three questions correctly, I will endorse you as actually having some knowledge about investing Thailand, rather than just having the dumb luck of being in the right place at the right time.

Question one

Which Thai bank has developed an algorithm driven bot to trade the SET, and through one of its wholly own subsidiaries, uses it to "automatically" trade with funds from the accounts of subscribed high net worth investors?

Question two

What is the minimum required investment deposit to qualify for access to the above mentioned trading bot?

Question three

What firm will be floating a SET reverse ETF later this year?

Mmm surprise surprise...no takers on my LITTLE challenge...

PCA posted something about it. Apart from that it seems no-one was particularly interested in algorithimic bot trading to bother finding out - a reasonable reflection of the Thai market.

Might be something to drop into casual conversation with ex-banking colleagues if the topic came up - but not something to rush off and telephone everyone you know because someone you've never met on an internet forum is excited and thinks it's important

I'd be the first to admit I don't know everything about everything in banking and investment in Thailand. That's why it's interesting to share different thought and experiences on different threads on forums.

I measure my knowledge by what I don't know, which many mature people do . It seems you measure yours by what you know in a very narrow field in arriving at being an "expert". I guess we'll all have to make the most of life without your "endorsements"

Congratulations on being a self declared expert in your own "little" field. You must be very proud

With all that in mind feel free to share something constructive...

Fletch

Edited May 22, 2013 by fletchsmile

[yoslim]

Yeah sure the bank setup the first quant trading system that makes guaranteed returns year over year, oh no wait the first one was Madoff

[fletchsmile]

For those interested in the SET, KGI's recent strategy note may be of interest. They've revised their year end target to 1,800, which is around 10% up on today's close. Some of the justifications are earnings beating expectations - something I raised as an issue if expectations aren't met, and here they're saying exceeded so good news. They're also basing it on a forward P/E of 14 to 15. That's sort of my historic benchmark, so above in today's terms, but may be in line by y/e.

http://research.kgieworld.co.th/recom.nsf/0/8203045BB6F1A6CB47257B72000435A3/$file/Daily+Story_Strategy_2013_05_21_e_th.pdf

I mentioned mining and energy being beat up. I've been adding a little to these via KTAM's funds for the kids future, so 10 years+ down the line, I think people will look back and see it as cheap. Below is another view on this sector. Also says they beat up, some maybe time to consider, but they give a couple of words of caution why being contrarian may not be a good idea:

http://www.moneyweek.com/investments/commodities/miners-are-detested-by-investors-is-it-time-to-buy-64000

Cheers

Fletch

Thanks again Fletch. Are KGI generally considered conservative in their predictions or usually more on the bullish side?

I'd say overall they're more on the bullish side. I like their opinions, but always bear in mind they make their money in encouraging people to trade.

Cheers

Fletch

[up-country_sinclair]

Thanks for taking the time to post all of this information, Fletchsmile. I know that many of it find it useful to read the opinions of someone who has been investing in these markets for an extended period.

I'm sort of kicking myself these days because I opened an Aberdeen account a couple of months ago when their growth fund was at 110, but I only deposited the minimum investment because I thought the market was too frothy and a sell off was around the corner. My plan was to put in a sizeable (for me) sum after a 10-15% correction, but now the growth fund is up to around 120.

I really need to start dollar cost averaging and just take the hit if a correction comes.

[Phronesis]

Blah blah blah.....

Everyone is an expert in a bull market.

Here is a little test for Fletch and the other self proclaimed financial experts posting on this thread.

If you can answer all of the following three questions correctly, I will endorse you as actually having some knowledge about investing Thailand, rather than just having the dumb luck of being in the right place at the right time.

Question one

Which Thai bank has developed an algorithm driven bot to trade the SET, and through one of its wholly own subsidiaries, uses it to "automatically" trade with funds from the accounts of subscribed high net worth investors?

Question two

What is the minimum required investment deposit to qualify for access to the above mentioned trading bot?

Question three

What firm will be floating a SET reverse ETF later this year?

Mmm surprise surprise...no takers on my LITTLE challenge...

PCA posted something about it. Apart from that it seems no-one was particularly interested in algorithimic bot trading to bother finding out - a reasonable reflection of the Thai market.

Might be something to drop into casual conversation with ex-banking colleagues if the topic came up - but not something to rush off and telephone everyone you know because someone you've never met on an internet forum is excited and thinks it's important

I'd be the first to admit I don't know everything about everything in banking and investment in Thailand. That's why it's interesting to share different thought and experiences on different threads on forums.

I measure my knowledge by what I don't know, which many mature people do . It seems you measure yours by what you know in a very narrow field in arriving at being an "expert". I guess we'll all have to make the most of life without your "endorsements"

Congratulations on being a self declared expert in your own "little" field. You must be very proud

With all that in mind feel free to share something constructive...

Fletch

And what is constructive about your contributions, which, in their entirety can be summarised as follows:

1. I bought Aberdeen growth fund more than a decade ago.

2. In that time the SET has rallied.

3. I am now selling off a little of my Aberdeen holding to realise some of the paper profit and to hedge against a correction in the SET moving forward.

WOW...pure genius...

[ExpatJ]

fletchsmile, on 22 May 2013 - 14:40, said:

Phronesis, on 22 May 2013 - 12:44, said:

Phronesis, on 20 May 2013 - 14:45, said:

Blah blah blah.....

Everyone is an expert in a bull market.

Here is a little test for Fletch and the other self proclaimed financial experts posting on this thread.

If you can answer all of the following three questions correctly, I will endorse you as actually having some knowledge about investing Thailand, rather than just having the dumb luck of being in the right place at the right time.

Question one

Which Thai bank has developed an algorithm driven bot to trade the SET, and through one of its wholly own subsidiaries, uses it to "automatically" trade with funds from the accounts of subscribed high net worth investors?

Question two

What is the minimum required investment deposit to qualify for access to the above mentioned trading bot?

Question three

What firm will be floating a SET reverse ETF later this year?

Mmm surprise surprise...no takers on my LITTLE challenge...

PCA posted something about it. Apart from that it seems no-one was particularly interested in algorithimic bot trading to bother finding out - a reasonable reflection of the Thai market.

Might be something to drop into casual conversation with ex-banking colleagues if the topic came up - but not something to rush off and telephone everyone you know because someone you've never met on an internet forum is excited and thinks it's important

I'd be the first to admit I don't know everything about everything in banking and investment in Thailand. That's why it's interesting to share different thought and experiences on different threads on forums.

I measure my knowledge by what I don't know, which many mature people do . It seems you measure yours by what you know in a very narrow field in arriving at being an "expert". I guess we'll all have to make the most of life without your "endorsements"

Congratulations on being a self declared expert in your own "little" field. You must be very proud

With all that in mind feel free to share something constructive...

Fletch

Regarding alogorithm model- I know a handful of people with cash to burn who would be extremely interested in a high entry trading system such as this- but its certainly not set up to interest the average thaivisa investor.

He -phronesis- posted valid questions, questions which a real insider /knowledgeable Thailand equities investor might reasonably be expected to know (certainly if i had a professional financial adviser for Thailand and he didn't know the answers to these questions, id be firing his sorry ass). The way he expressed himself was unfriendly, though.

[PCA]

fletchsmile, on 22 May 2013 - 14:40, said:

Phronesis, on 22 May 2013 - 12:44, said:

Phronesis, on 20 May 2013 - 14:45, said:

Blah blah blah.....

Everyone is an expert in a bull market.

Here is a little test for Fletch and the other self proclaimed financial experts posting on this thread.

If you can answer all of the following three questions correctly, I will endorse you as actually having some knowledge about investing Thailand, rather than just having the dumb luck of being in the right place at the right time.

Question one

Which Thai bank has developed an algorithm driven bot to trade the SET, and through one of its wholly own subsidiaries, uses it to "automatically" trade with funds from the accounts of subscribed high net worth investors?

Question two

What is the minimum required investment deposit to qualify for access to the above mentioned trading bot?

Question three

What firm will be floating a SET reverse ETF later this year?

Mmm surprise surprise...no takers on my LITTLE challenge...

PCA posted something about it. Apart from that it seems no-one was particularly interested in algorithimic bot trading to bother finding out - a reasonable reflection of the Thai market.

Might be something to drop into casual conversation with ex-banking colleagues if the topic came up - but not something to rush off and telephone everyone you know because someone you've never met on an internet forum is excited and thinks it's important

I'd be the first to admit I don't know everything about everything in banking and investment in Thailand. That's why it's interesting to share different thought and experiences on different threads on forums.

I measure my knowledge by what I don't know, which many mature people do . It seems you measure yours by what you know in a very narrow field in arriving at being an "expert". I guess we'll all have to make the most of life without your "endorsements"

Congratulations on being a self declared expert in your own "little" field. You must be very proud

With all that in mind feel free to share something constructive...

Fletch

Regarding alogorithm model- I know a handful of people with cash to burn who would be extremely interested in a high entry trading system such as this- but its certainly not set up to interest the average thaivisa investor.

He -phronesis- posted valid questions, questions which a real insider /knowledgeable Thailand equities investor might reasonably be expected to know (certainly if i had a professional financial adviser for Thailand and he didn't know the answers to these questions, id be firing his sorry ass). The way he expressed himself was unfriendly, though.

you probably mean people who want to gamble when you say cash to burn. To make use of HFT and Algo is very easy and simple. If you want to play small you still can see the points on every chart and if you want to play it big you need 2 things: prime bokerage and blackbox; when you have those it is simple again and easy to make the bigger bucks. Reading charts correctly did not change and remains the dominating root of changes in price.

[kblaze]

Blah blah blah.....

Everyone is an expert in a bull market.

Here is a little test for Fletch and the other self proclaimed financial experts posting on this thread.

If you can answer all of the following three questions correctly, I will endorse you as actually having some knowledge about investing Thailand, rather than just having the dumb luck of being in the right place at the right time.

Question one

Which Thai bank has developed an algorithm driven bot to trade the SET, and through one of its wholly own subsidiaries, uses it to "automatically" trade with funds from the accounts of subscribed high net worth investors?

Question two

What is the minimum required investment deposit to qualify for access to the above mentioned trading bot?

Question three

What firm will be floating a SET reverse ETF later this year?

What are you talking about? Algo tradings been here for a while...

http://www.aseanaffairs.com/thailand_news/capital_markets/algorithmic_trading_arrives_in_thailand

[Phronesis]

To make use of HFT and Algo is very easy and simple.

Easy and simple...

Ok...answer my three questions....anyone....anyone....?

[PCA]

To make use of HFT and Algo is very easy and simple.

Easy and simple...

Ok...answer my three questions....anyone....anyone....?

if you want to have answers to the one-two-three questions quoted in other posts then I cannot answer them. Clear enough that you do not qualify as a client (high networth) otherwise you'd have contacted the banks directly and not Thaivisa.

An additional clue is that Thailand is good in copying things without understanding much (also in banking) so even if you load the cash boat and walk in an institute here that doesn't mean that you'll make money with them.

Edited May 22, 2013 by PCA

[Phronesis]

To make use of HFT and Algo is very easy and simple.

Easy and simple...

Ok...answer my three questions....anyone....anyone....?

if you want to have answers to the one-two-three questions quoted in other posts then I cannot answer them. Clear enough that you do not qualify as a client (high networth) otherwise you'd have contacted the banks directly and not Thaivisa.

An additional clue is that Thailand is good in copying things without understanding much (also in banking) so even if you load the cash boat and walk in an institute here that doesn't mean that you'll make money with them.

I already know the answers...the questions were posed to Fletch and the others on this thread (you can include yourself in that group) who claim to have knowledge about investing in Thailand.

To date all of that collective knowledge posted on this thread consists of buy and hold mutual funds, then sell them off a little when the market is a bit toppy...pure genius...

Oh and my contribution to this thread is protecting other TV members from listening to the financial advice of members who cant even answer the 3 simple test questions that I posed...

I would have thought that was a very worthwhile contribution...

[PCA]

To make use of HFT and Algo is very easy and simple.

Easy and simple...

Ok...answer my three questions....anyone....anyone....?

if you want to have answers to the one-two-three questions quoted in other posts then I cannot answer them. Clear enough that you do not qualify as a client (high networth) otherwise you'd have contacted the banks directly and not Thaivisa.

An additional clue is that Thailand is good in copying things without understanding much (also in banking) so even if you load the cash boat and walk in an institute here that doesn't mean that you'll make money with them.

I already know the answers...the questions were posed to Fletch and the others on this thread (you can include yourself in that group) who claim to have knowledge about investing in Thailand.

To date all of that collective knowledge posted on this thread consists of buy and hold mutual funds, then sell them off a little when the market is a bit toppy...pure genius...

Oh and my contribution to this thread is protecting other TV members from listening to the financial advice of members who cant even answer the 3 simple test questions that I posed...

I would have thought that was a very worthwhile contribution...

hehehe, yeah therewith you qualified yourself as the board clown ot the day. Enjoy laughing I am with you there ...

[daboyz1]

Sometimes I think computers should be equipped with a breathalyzer. Either that, or you should be over 18 to post on TVF.

[ExpatJ]

fletchsmile, on 22 May 2013 - 14:40, said:

PCA said "you probably mean people who want to gamble when you say cash to burn. To make use of HFT and Algo is very easy and simple. If you want to play small you still can see the points on every chart and if you want to play it big you need 2 things: prime bokerage and blackbox; when you have those it is simple again and easy to make the bigger bucks. Reading charts correctly did not change and remains the dominating root of changes in price."

Im a big chartist myself, use them all the time to inform my trades- but many people cant be bothered/dont have time and are happy to handover big bucks to the institutions who use algos- but as you can see from the reaction of some, the concept is extremely alien to average retail (thaivisa) investors.

Edited May 22, 2013 by ExpatJ

[fletchsmile]

fletchsmile, on 22 May 2013 - 14:40, said:

Phronesis, on 22 May 2013 - 12:44, said:

Phronesis, on 20 May 2013 - 14:45, said:

Blah blah blah.....

Everyone is an expert in a bull market.

Here is a little test for Fletch and the other self proclaimed financial experts posting on this thread.

If you can answer all of the following three questions correctly, I will endorse you as actually having some knowledge about investing Thailand, rather than just having the dumb luck of being in the right place at the right time.

Question one

Which Thai bank has developed an algorithm driven bot to trade the SET, and through one of its wholly own subsidiaries, uses it to "automatically" trade with funds from the accounts of subscribed high net worth investors?

Question two

What is the minimum required investment deposit to qualify for access to the above mentioned trading bot?

Question three

What firm will be floating a SET reverse ETF later this year?

Mmm surprise surprise...no takers on my LITTLE challenge...

PCA posted something about it. Apart from that it seems no-one was particularly interested in algorithimic bot trading to bother finding out - a reasonable reflection of the Thai market.

Might be something to drop into casual conversation with ex-banking colleagues if the topic came up - but not something to rush off and telephone everyone you know because someone you've never met on an internet forum is excited and thinks it's important

I'd be the first to admit I don't know everything about everything in banking and investment in Thailand. That's why it's interesting to share different thought and experiences on different threads on forums.

I measure my knowledge by what I don't know, which many mature people do . It seems you measure yours by what you know in a very narrow field in arriving at being an "expert". I guess we'll all have to make the most of life without your "endorsements"

Congratulations on being a self declared expert in your own "little" field. You must be very proud

With all that in mind feel free to share something constructive...

Fletch

Regarding alogorithm model- I know a handful of people with cash to burn who would be extremely interested in a high entry trading system such as this- but its certainly not set up to interest the average thaivisa investor.

He -phronesis- posted valid questions, questions which a real insider /knowledgeable Thailand equities investor might reasonably be expected to know (certainly if i had a professional financial adviser for Thailand and he didn't know the answers to these questions, id be firing his sorry ass). The way he expressed himself was unfriendly, though.

Not really. I stated early on I was talking about long term investing rather than short term trading. You consider yourself a trader and a chartist. So you should realise the opposite end of the scale.

What you find is that mature people say they don't cover a subject and move on. Look at Naam's post, a very experienced fixed income trader, but asked about a specific bond he's not aware of he has the maturity to say he doesn't know it and move on. It's the least experienced traders/ investors who come out with BS or pretend to be knowledgeable on everything. If you look on TV Naam is interested in fixed income, Midas gold, Paulo trading, Ray23 used to like individual Thai stocks - not sure what happened to him - and again he had the maturity to say where he was in the scheme of things, Sonic Dragon used to be good on economic analysis, Thailand Investment Guide for a general overview in Thailand etc etc

Look at the number of times you see an analyst being interviewed about a particular stock, who simply says he doesn't cover that sector or stock and moves on. Doesn't mean he's not a decent equity analyst. Watch the number of times a fundamentalist will decline a question on the activities of technical traders in the market. The list is endless.

On the algo trading. I've no interest. Not my style at all - in fact the complete opposite. You're right though if someone wanted some real help and was polite I might well find out for them though. Why would I disturb my contacts for someone like that.

BTW I don't use a financial advisor at all. I use execution only services. Though from time to time I ask the banker/broker or whoever on different things. So I've also no need to fire anyone

Think also why would someone who is heavily long Thai equity mutual funds and strongly believes in active fund management would be particularly interest in ETFs to short the index? As I'm heavily long the Thai market in funds if I feel a need to hedge I'd use leveraged exchange traded products on TFEX, such as selling calls or buying puts on the SET 50. For trading in Thailand I actually prefer trading futures and options to trading individual equities.

I don't trade much on individual Thai stocks. My reasons for that are well stated elsewhere. I do however trade Singapore, Australian, US and UK equities, and TFEX. But no I don't use algos for those either.

Good opportunity to raise the subject of who people might or not want to listen to though:)

Cheers

Fletch

[Naam]

It's the least experienced traders/ investors who come out with BS or pretend to be knowledgeable on everything.

[ThailandInvestmentGuide]

Fletch, agree with your comments above. I don't see the info you have shared in this thread as you spruiking yourself as an expert, as has been suggested. I can well understand others reluctance to follow suit due to the predictable carping responses, ie. my thingie is bigger than your thingie, if you are so brilliant then you wouldn't be spending time on thaivisa, so just how much money have you made anyway? so on and so forth.

With investments, and investment advice, it's horses for courses. And there is no one perfect investment for all. The Thaivisa membership ranges from investment novices (the majority) to those working in (or retired from) the finance sector. People need situation-relevant advice and encouragement to make their way up the many steps to the financial Valhalla inhabited by the likes of Phronesis. Alas, to suggest that someone who is not fully across algorithmic trading is incapable of offering meaningful assistance to the hoi polloi is just plain batty.

I am but a humble scribe. Like many others here I appreciate, and benefit from, reading of the investment triumphs and tragedies of fellow expats. I happily defer to the superior sector-specific experience and expertise of a number of notable contributors here on Thaivisa. Similarly, I look forward to sharing any knowledge that might be imparted from the member from Phuket ... just as soon as someone devises an algorithm to remove a broomstick.

And now I'm going fishing. Seriously.

[PCA]

Fletch, agree with your comments above. I don't see the info you have shared in this thread as you spruiking yourself as an expert, as has been suggested. I can well understand others reluctance to follow suit due to the predictable carping responses, ie. my thingie is bigger than your thingie, if you are so brilliant then you wouldn't be spending time on thaivisa, so just how much money have you made anyway? so on and so forth.

With investments, and investment advice, it's horses for courses. And there is no one perfect investment for all. The Thaivisa membership ranges from investment novices (the majority) to those working in (or retired from) the finance sector. People need situation-relevant advice and encouragement to make their way up the many steps to the financial Valhalla inhabited by the likes of Phronesis. Alas, to suggest that someone who is not fully across algorithmic trading is incapable of offering meaningful assistance to the hoi polloi is just plain batty.

I am but a humble scribe. Like many others here I appreciate, and benefit from, reading of the investment triumphs and tragedies of fellow expats. I happily defer to the superior sector-specific experience and expertise of a number of notable contributors here on Thaivisa. Similarly, I look forward to sharing any knowledge that might be imparted from the member from Phuket ... just as soon as someone devises an algorithm to remove a broomstick.

And now I'm going fishing. Seriously.

Petri Heil

[ThailandInvestmentGuide]

fortunatus est, quod sicut amici mei habeo Google

Petri Heil

[fletchsmile]

Thanks for taking the time to post all of this information, Fletchsmile. I know that many of it find it useful to read the opinions of someone who has been investing in these markets for an extended period.

I'm sort of kicking myself these days because I opened an Aberdeen account a couple of months ago when their growth fund was at 110, but I only deposited the minimum investment because I thought the market was too frothy and a sell off was around the corner. My plan was to put in a sizeable (for me) sum after a 10-15% correction, but now the growth fund is up to around 120.

I really need to start dollar cost averaging and just take the hit if a correction comes.

Thanks up-country Sinclair,

I read an article yesterday, which fits in very well with your issue, and actually this thread as a whole. It's not as some have suggested about picking one fund and doing well, it's about investment approach/ style and what works for some people, past present and future. Over the years I've found timing markets tough, although my fundamentals are sound.

Timing Thailand in particular is even tougher given its habit of shooting itself in the foot - but I've been a strong believer in the economic story for around 15 years - even if not the politics and some other aspects of life here. Thailand's economy has a good habit of longer term carrying on regardless of all these temporary blips.

The article below was referring to Japan, but has many parallels to Thailand in terms of what they are proposing. Thailand has been and remains one of my favourite markets - a bit less so than previously but still there. I don't like the long term Japan story ... and it's not one of my favourite markets at all... I do see the merit in their style though...

".........Trouble is, timing the market is very tough. Most investors are terrible at it, as countless studies have shown. So, as I’ve noted on several occasions this year, I think the most sensible way to invest in these markets is to drip-feed money in to your favourite sectors.

That way, you don’t have to try to time the highs or the lows. Bear in mind that you should be investing for ten years or more – you don’t have to worry about catching the ‘best’ day of 2013 for putting all your money in the market.

And of course, don’t put all your eggs in one basket. As my colleague .... pointed out yesterday, you shouldn’t be betting the house on a single outcome. You should have a diversified portfolio....

For more on the principles of building one, you can ....."

(Source: http://www.moneyweek.com/investments/stock-markets/asia-and-japan/is-this-the-end-of-japan-bull-market-64124 )

Note: They go on to other services and emails people can apply for.... In case anyone asks, no I'm not connected with them in any way...

Cheers

Fletch

Edited May 25, 2013 by fletchsmile

[fletchsmile]

Until a year ago my thinking was the same. but now i'm convinced that the chaps

I've around 7% of my investment portfolio in fixed income now - compared

to next to zero a few years back. I'd like to add to it, but with interest rates so low,

I think there'll be better opportunities ahead.

in charge will play their low interest game for years to come

except for two sovereign or quasi-sovereign debtors who's yields are double digits

one has to gamble with 'yuckish' debtors to achieve >10% p.a. an alternative are

subordinates with the attached risk of being called at par or government intervention

(SNS, Netherlands) expropriating shareholders and bondholders.

sold recently subs of Lloyds and Royal Bank of Scotland because of potential calls

and inspite of reasonably high yields. "A" rated subs of sound financial institutions

without possibility of call still yield 6-7% which is infinitely more than i am getting

on cash USD, GBP or €UR where my yield is zero.

Slightly off from fletch's topic so i hope he will forgive me this off piste moment

Any view Naam on the Co Ops bonds (now definitely not A rated?)

http://www.telegraph.co.uk/finance/personalfinance/consumertips/banking/10064958/Should-you-buy-a-17pc-Co-op-bond.html

sorry Topt, i can't comment on bonds, in this case perpetual subordinates, without going through the bond prospectus and the balance sheet of the company. "Co Op" has never been on my radar and i must admit i have no idea.

topt

the following article may be of interest:

http://www.moneyweek.com/investment-advice/how-to-invest/strategies/right-side-co-op-great-bond-for-the-brave-63913

I'd also thought of it, but haven't had time to explore it. The author believes that the parent company will support the bank and is 99.9% certain of it. That's the key risk on this one. I'd say there's a very good chance but less optmistic. Generally in the banking world there's a big focus on capital, and companies generally for that matter. There's a greater tendency than there's ever been to sell of non-core assets, so while a very good chance, not 99.9% in my view.

Regards

Fletch:)

Just as an update on the Co-op situation. I did some more reading then looked at some of the choices:

9.25% Perpetual Non-Cum Pref Shares

5.555% Perp Sub Bonds

13% Perp Sub Bonds

As a few notes, Moody's downgraded to Ba3, just below investment grade so "high risk" if you consider anything below investment grade as risky. That's around BB- on S&P, which happen's to be Vietnam's Sovereign rating, where I am at the moment. On some of the models I look at, BB- maps to a probability of default average of around 2%. Not to say that is an accurate estimate or not, just another way of looking at things. With parental backing of Co-op Group which has around 80bio in assets, the mooted shortfalls in capital needed of 600mio to 1.8bio look small. That's not to say the government or anyone else couldn't intervene and cause issues, which may cause debt restructuring.

In short they're speculative. Anyone buying should view them as risky, but as part of a larger portfolio for people who can risk capital they may be of interest.

I bought some of the 13% perpetual subordinate bonds for a yield of just under 15%. I freed up some funds in my UK ISA to do so, which is also nice from a tax aspect, given the high yield.

As mentioned above I was looking to increase my fixed income holdings when opportunities arise. So that's in my view a nice long term yield locked in hopefully if:

1) They don't default or get restructured along the way

2) The UK government can try and make sure the pound is worth something over the coming years

Cheers

Fletch

Edit: BTW I also manage my mum's money and investments since my father passed away a few years back. I also thought about adding some to her portfolio for her, to generate some extra income. I decided it wasn't worth the risk to her capital as I wouldn't forgive myself if.... Hope that gives another perspective.

Edited May 28, 2013 by fletchsmile

[fletchsmile]

Good thread by the way- but would be now useful if people were suggesting and providing supporting info on products to invest in NOW not flagging a fund that the poster bought 15 years ago that went up a 1000%- interesting , but not great guidance for investing now :-)

I'd say the same strategy is still valid today for many people, so is still worth it NOW, with the caveats I added, about perhaps reducing though for a while.

If you're interested in shorter trading strategies, as opposed to long investment, I put on a few more June SET50 options trades today. Bought puts at 1075, and sold puts at 1050 to partially fund it. I already had open calls which I wrote at 1075 and 1100 to generate some extra income, which I have also used partly to buy a smaller number of calls at 1050 and then hedge my downside a little by buying calls at 1125. The net effect suits my short term view:

- Make money if SET50 remains below 1110 (doesn't move more than about 4% up by June)

- Sweetspot if it remains in the 1050-1100 range (not up more than 3%, not down more than 2%)

- Start Losing money if it ends above 1125 (up 5% or more)

- Then again if the SET50 is well above 1125 I'll be happy that my long term "boring" mutual funds investments will be nicely up.

So still heavily long THB Thai equity funds as longer term investments, with a short term trade for a little extra income. Would welcome any views on SET50 short term - or long term for that matter:)

Cheers

Fletch

Edited May 28, 2013 by fletchsmile

[topt]

Just as an update on the Co-op situation. I did some more reading then looked at some of the choices:

9.25% Perpetual Non-Cum Pref Shares

5.555% Perp Sub Bonds

13% Perp Sub Bonds

As a few notes, Moody's downgraded to Ba3, just below investment grade so "high risk" if you consider anything below investment grade as risky. That's around BB- on S&P, which happen's to be Vietnam's Sovereign rating, where I am at the moment. On some of the models I look at, BB- maps to a probability of default average of around 2%. Not to say that is an accurate estimate or not, just another way of looking at things. With parental backing of Co-op Group which has around 80bio in assets, the mooted shortfalls in capital needed of 600mio to 1.8bio look small. That's not to say the government or anyone else couldn't intervene and cause issues, which may cause debt restructuring.

In short they're speculative. Anyone buying should view them as risky, but as part of a larger portfolio for people who can risk capital they may be of interest.

I bought some of the 13% perpetual subordinate bonds for a yield of just under 15%. I freed up some funds in my UK ISA to do so, which is also nice from a tax aspect, given the high yield.

As mentioned above I was looking to increase my fixed income holdings when opportunities arise. So that's in my view a nice long term yield locked in hopefully if:

1) They don't default or get restructured along the way

2) The UK government can try and make sure the pound is worth something over the coming years

Cheers

Fletch

Edit: BTW I also manage my mum's money and investments since my father passed away a few years back. I also thought about adding some to her portfolio for her, to generate some extra income. I decided it wasn't worth the risk to her capital as I wouldn't forgive myself if.... Hope that gives another perspective.

Thanks for the follow up, it is much appreciated. Yes your point 1 is the big concern. I read this comment at the weekend - "Second would be for the mutuals bondholders to take some form of a hair cut. One source said it is difficult to see a solution that doesnt involve the bondholders. from http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10080929/New-Co-op-chief-to-tackle-banking-issues-with-board.html

Although I did not see any other "reporting" suggsting this it was enough to make me back away at the moment. There are a number of informed posters on the banking board of TMF who think the price may well drop lower as well.

I will keep my fingers crossed for you.....and see if there is still an opportunity when the situation may be a little less opaque

Cheers

[BlackJack]

moving to vietnam http://www.bangkokpost.com/business/news/352936/big-finnish-fund-shifts-from-thailand-to-vietnam

[Naam]

I bought some of the 13% perpetual subordinate bonds for a yield of just
under 15%. I freed up some funds in my UK ISA to do so, which is also
nice from a tax aspect, given the high yield.

when is the next call of that sub Fletch?

[Naam]

10:02PM BST 01 Jun 2013

Thousands of pensioners and high-net-worth investors are at risk of losing a

vital income stream under a rescue being prepared for the strickenCo-operative Bank.

excerpts:

The supermarkets-to-funerals mutual is preparing an emergency rescue plan for
its financial subsidiary that is expected to include losses for holders of
the bank’s junior debt, including £310m of permanent interest bearing shares
(PIBS) issued by Britannia Building Society before it was taken over by the
Co-op, and £60m of preference shares.

Of the £370m of bonds, which pay annual interest of between 5.55pc and 13pc,
some £30m is held by members of the public. Any rescue would almost
certainly see the coupon cut or cancelled, costing retail investors about
£3m a year.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10093790/Pensioners-at-risk-in-Co-op-crisis.html

[seasia]

re. the Co -op bonds, there is an article here, about 2 weeks old

http://www.fixedincomeinvestments.org.uk/fixed-interest-blog/troubleattheco-op

I have no holding, nor real interest in it, just posting in case there is any info of use.

[fletchsmile]

I bought some of the 13% perpetual subordinate bonds for a yield of just

under 15%. I freed up some funds in my UK ISA to do so, which is also

nice from a tax aspect, given the high yield.

when is the next call of that sub Fletch?

The 13% perp subs are non-callable, and have a somewhat simple structure

http://www.fixedincomeinvestor.co.uk/x/mem_waterhouse/analysis.html?cat=Analysis%20%26%20Comment&type=Bond%20of%20the%20Week&aid=712

The 5.555% are callable in Dec2015

Both prospectus

http://www.fixedincomeinvestor.co.uk/article/2012-02/712-64/Co-op%2013.pdf

[Naam]

13% perpetual subordinate

ouch!