Where to invest for modest but relatively safe returns

[simon43]

Since you mentioned you get paid in US Dollars, I will assume you are a US citizen

 

No, I'm British. I am paid in USD because the local Kyat currency is rather unstable and very difficult to exchange into other currencies outside of Myanmar.  (3 months ago there were about 1,260 kyat = $1 USD, now it is 1,370 kyat = $1 USD).

 

I do have a local currency account in Myanmar because USD are no longer accepted by most shops for general buying, (years ago, these same shops only wanted payment in USD, but unless you're a foreign tourist staying in an upmarket hotel, now you have to pay in Kyat).

 

I prefer not to keep the bulk of my salary in a local bank account, but hand carry it to Bangkok every time I do a visa run (every 70-90 days), and then drop it into my Thai bank account (which is still in THB, but I should open a USD account to avoid any FX issues).

 

Another idea that I had was to buy gems!  Myanmar is well-known as a source of high quality rubies and other coloured gemstones.  I'm well aware that the inexperienced can be sold fake or low quality gems.  I think most foreigners who seek to buy gems in Myanmar are looking to make a fast profit, assuming that they can buy cheap in Myanmar and sell overseas at a higher profit.

 

That's not what I would be doing with gems.  Rather, I would be looking at investing in unmounted gems as a source of long-term investment.

 

Consider this scenario:

 

In Myanmar, there are several respected gemstone traders who have a very good reputation for offering high quality gems, together with a Gemstone Identification Report.  Being close to the 'source' of these gems, one can usually purchase them at a modest discount over the street price from overseas gem traders.

 

Now look at the historical price charts for a gemstone such as Spinel, which is sourced in Myanmar.

 

Spinel Historical Data

 

Between 2005 - 2016, the price of Spinel has steadily risen from a base price of 100 up to 354

 

Even with my naive brain, it seems to be that if one purchases good quality Spinel gems within Myanmar, and sticks them under the mattress, one could sell them in 10 years or so to achieve a very good profit, especially as the supply of such good gemstones is likely to decrease as the mine is exhausted.

 

Note that I emphasise 'good quality' gem stones.  Buying cheaper 'junk' stones will result in trying to sell 'junk' stones.

 

Or am I missing something here?

 

One reason why I homed in on Spinel is because unlike Rubies, it is apparently rather difficult to fake or to modify (by heating or injecting etc).  It is what it is.

 

I'd appreciate comments about this idea - to buy quality Spinel gemstones (or similar Myanmar stones that exhibit good price rise over the last 10 years), from a trader in Myanmar who is known to trade in genuine, quality stones, (and overseas gem websites do list several such dealers - I'm not intending to go up to the mine to buy them myself!).

[Oxx]

3 minutes ago, simon43 said:

I'd appreciate comments about this idea - to buy quality Spinel gemstones (or similar Myanmar stones that exhibit good price rise over the last 10 years),

 

(1) Your source of price information on the price of spinel is rather partisan.  Do you have independent verification of the price rise?

 

(2) What impact do you think synthetic spinel (see https://en.wikipedia.org/wiki/Spinel#Synthetic_spinel) will have upon the price? 

 

The arguments against gemstones as an investment are the same as those against gold:  (a) it's only worth what someone will pay for it (i.e. there's no intrinsic value), and (b) it provides no income to underpin its value.

 

Also, you shouldn't be putting all your eggs in one basket.  Diversification is key to investment success.  (Though I don't actually classify gold or gemstones as an investment - they are simply speculation.)

 

[gk10002000]

OK.  You are not an American so my post which is very conservative is moot.   I have zero experience with Myanmar except my lovely dental hygienist here in Rancho Bernardo, California who is from there originally.   Off the top of my head,  I would imagine there are some Brits out there that are a little more plugged into Myanmar things investment wise and maybe are pooling monies and investing in some things?  Perhaps buying a piece of a hotel, land development (hopefully not a swindle and con), or some other business ventures.  I suspect some sort of business investment might be better be a safer choice than buying some equities.  No idea how to research this sort of international investing.  Try the Myanmar forum for suggestions?

[simon43]

Perhaps buying a piece of a hotel, land development (hopefully not a swindle and con), or some other business ventures

 

I have absolutely zero interest in doing any sort of investment venture with anyone else!

 

My track record over the years has been success when I go alone and 'hassles' when I invest with others or share the business with someone else, (notably wives and drug dealers).

 

I did investigate building a hotel in Myanmar many years ago, but the law is still rather fluid and I simply do not know enough about Myanmar law.

 

What impact do you think synthetic spinel will have upon the price? 

 

Probably bugger all :)  I am talking about buying high quality spinel or other gemstones, not some 'plastic' version.  Do you think a jeweller trading in expensive gemstones would be the slightest bit interested in buying synthetic gemstones?

 

In any case, you are correct that this would be speculation, and diversification is the best approach.

 

 

[Bulldozer Dawn]

Hmmm.

 

I look at the above gold price graph and see 15 years of extreme volatility.  Noting that one can of course create both long and short positions in gold, why is it such a terrible investment?

[Bulldozer Dawn]

15 hours ago, simon43 said:

 

 

 

No, I'm British. I am paid in USD because the local Kyat currency is rather unstable and very difficult to exchange into other currencies outside of Myanmar.  (3 months ago there were about 1,260 kyat = $1 USD, now it is 1,370 kyat = $1 USD).

 

I do have a local currency account in Myanmar because USD are no longer accepted by most shops for general buying, (years ago, these same shops only wanted payment in USD, but unless you're a foreign tourist staying in an upmarket hotel, now you have to pay in Kyat).

 

I prefer not to keep the bulk of my salary in a local bank account, but hand carry it to Bangkok every time I do a visa run (every 70-90 days), and then drop it into my Thai bank account (which is still in THB, but I should open a USD account to avoid any FX issues).

 

Another idea that I had was to buy gems!  Myanmar is well-known as a source of high quality rubies and other coloured gemstones.  I'm well aware that the inexperienced can be sold fake or low quality gems.  I think most foreigners who seek to buy gems in Myanmar are looking to make a fast profit, assuming that they can buy cheap in Myanmar and sell overseas at a higher profit.

 

That's not what I would be doing with gems.  Rather, I would be looking at investing in unmounted gems as a source of long-term investment.

 

Consider this scenario:

 

In Myanmar, there are several respected gemstone traders who have a very good reputation for offering high quality gems, together with a Gemstone Identification Report.  Being close to the 'source' of these gems, one can usually purchase them at a modest discount over the street price from overseas gem traders.

 

Now look at the historical price charts for a gemstone such as Spinel, which is sourced in Myanmar.

 

Spinel Historical Data

 

Between 2005 - 2016, the price of Spinel has steadily risen from a base price of 100 up to 354

 

Even with my naive brain, it seems to be that if one purchases good quality Spinel gems within Myanmar, and sticks them under the mattress, one could sell them in 10 years or so to achieve a very good profit, especially as the supply of such good gemstones is likely to decrease as the mine is exhausted.

 

Note that I emphasise 'good quality' gem stones.  Buying cheaper 'junk' stones will result in trying to sell 'junk' stones.

 

Or am I missing something here?

 

One reason why I homed in on Spinel is because unlike Rubies, it is apparently rather difficult to fake or to modify (by heating or injecting etc).  It is what it is.

 

I'd appreciate comments about this idea - to buy quality Spinel gemstones (or similar Myanmar stones that exhibit good price rise over the last 10 years), from a trader in Myanmar who is known to trade in genuine, quality stones, (and overseas gem websites do list several such dealers - I'm not intending to go up to the mine to buy them myself!).

 

I have a massive collection of gemstones which are now worth considerable more than my retirement fund.  I first got interested in them because when I started my early career in engineering I worked with an older guy who was born and bred in Lightening Ridge.  He was a diesel mechanic.  When we had holidays off work we would head out to stay with his mates at the Ridge to go shooting, fishing for cod in the Barwon, catching yabbies, and drinking a good deal of rum.  All of his friends in the Ridge where opal miners.  Back in those days they ventilated the mine shafts with "blowers", basically a broken arsed truck with a huge diesel engine driven fan on the back.  The things were always breaking down and the problem was usually diesel or electrical related.  So whenever we showed up our first few days were filled with fixing blowers.  I would never accept payment so the blokes would always give me some stones. 

At that young age I never thought for a second about investment, but I fell in love with lightning ridge opal.  It is just so beautiful.  The other thing that I love about gemstones is that they are forever.  You hold a beautiful stone in your hand and can't help to think that it will be around for generations to come, perhaps eternity...and well after you are worm bait. 

I started collecting Australian gemstones and then later when I started travelling started collecting stuff from abroad.  Before I retired to Thailand I had a few of my red on black, and blue and green lightning ridge stones valued.  One of the red on blacks came in at 26,000 AUD.  It was given to me for a few hours work on a generator.  I have hundreds of these stones sitting in a bank safety deposit box in Oz.  I have not even seen or opened it for over 9 years.  I hope it is still there...

Since I got those valuations (a decade ago) the price of Ridge opal has skyrocketed because they have dug it all up.  And God aint making any more...

I also have a lot of high quality Australia Sapphires and Emeralds (and some WA diamonds).  They were appreciating nicely early on, and then the crooks perfected the technique of "baking" sapphires and emeralds.  In simple terms the crooks buy colorless gems that are worthless.  Then they get a flawed but beautifully colored stone such as a cornflour blue sapphire and grind it up into powder.  The colorless stone is then covered with this powder and baked at ultra high temperatures.  The result is a brilliantly colored and flawless stone that has the same density as a real stone (because it is real and not synthetic).  The only way you can tell a fake stone like this is to cut it in half.  After these types of stones came into the market the price of sapphires and emeralds started to drop.

You can definitely make money on gemstones as a long term investment.  Research carefully what can be easily copied and what cant.  Opal can be copied synthetically, but it is easily picked because it never looks quiet right.

My suggestion would be to source quality Amber (fossilized tree sap) that has insects in it.  There still a good deal of it available in Mynamar.  Amber was very fashionable a while ago and it will rotate back into fashion again.  Gems are like that.

Edited December 30, 2016 by Bulldozer Dawn

[verito]

No wine , no stones or art...Only  equities.To buy Thai  shares for 2017 can give same as  US shares and sometimes even more profits ,right?

[Bulldozer Dawn]

Just now, verito said:

No wine , no stones or art...Only  equities.To buy Thai  shares for 2017 can give same as  US shares and sometimes even more profits ,right?

 

The following article provides a number of valid points on why you are better off trading Thai shares and not the US stock market:

 

Trade Thai Shares

 

[Oxx]

6 minutes ago, Bulldozer Dawn said:

The following article provides a number of valid points on why you are better off trading Thai shares and not the US stock market:

 

No it doesn't.

 

(1) It's an extremely partisan source.

 

(2) It doesn't compare Thai shares and the US stock market, but Thai shares and US penny stocks - quite a different beast.

[Bulldozer Dawn]

Just now, Oxx said:

 

No it doesn't.

 

(1) It's an extremely partisan source.

 

(2) It doesn't compare Thai shares and the US stock market, but Thai shares and US penny stocks - quite a different beast.

 

The article highlights the fact that the US market now so overpriced that stocks that sell for $10 are now commonly referred to as penny stocks.  With a few exceptions, $10 US will buy you most any of the "blue chip" shares listed on the Stock Exchange of Thailand.

 

The following is a direct quote from the article:

 

Quote

They also forget to tell you that American penny stocks have become very expensive. The term penny stock is an anachronism. It was coined back when one might indeed buy stock in a U.S company for a penny a share. But those times are long gone. The SEC defines a penny stock as a small company that trades for under $5 per share, but now days a company can be trading for close to $10 a share and still be referred to as a penny stock. Especially if it is operating in a speculative sector. For someone with a modest amount of trading capital, American penny stocks no longer provide much leverage. Two or three thousand dollars does not buy a trader a lot of shares when they cost $5 (or more) a pop.

 

 

[Bulldozer Dawn]

Simon

 

Before you start buying gemstones you should get yourself one of these pens to check density.  The following is a link so that you get the idea.  I am not suggesting you buy this crappy item:

 

Check gemstone density pen

 

PLEASE NOTE:  The pen will help you to identify synthetic copies, but it will not identify cooked stones like the sapphire example I referred to above.

Edited December 30, 2016 by Bulldozer Dawn

[Oxx]

24 minutes ago, Bulldozer Dawn said:

 

The article highlights the fact that the US market now so overpriced that stocks that sell for $10 are now commonly referred to as penny stocks.  With a few exceptions, $10 US will buy you most any of the "blue chip" shares listed on the Stock Exchange of Thailand.

 

The following is a direct quote from the article:

 

(1) You are still missing the point that the article is about US penny stocks, not the broader US market.

 

(2) The term "penny stock" is meaningless.  It makes not a ha'p'orth of difference* whether for a guinea one can buy 252 shares at 1d each, or 21 shares at a shilling each, or 1 share for a guinea.  One still gets the same fractional ownership of the company concerned in each case.  Companies often reorganise their shares to consolidate or split.

 

 

* Unless you're desperately poor, in which case you shouldn't be buying shares at all and be saving up to buy a pot to piss in.

[verito]

Trade Thai Shares is not the sole and exclusive research information comparing Thai-US shares. If to compare shares without considering this research what is your opinion :to buy Thai or not to buy?

[simon43]

Bulldozer Dawn, your suggestions are very helpful!

 

As I mentioned, I have no intention of investing all my hard-earned $$$ in local gemstones.  But it would be interesting to spend perhaps $500 USD in purchasing local stones of high quality each month.

 

I have done some initial research about the many pitfalls ans certainly intend to buy some tools of the trade, such as that density pen and a spectroscope etc.

 

My plan would be to buy a few stones that are sold by a listed dealer, and then to use my new knowledge and tools to carefully examine those stones, to improvement my understanding of their characteristics, flaws etc, and whether they are actually fake or low quality.  Then I'll pop over to a respected gem dealer in Bangkok and get them valued, to get the view of an independent dealer, and to compare this with my purchase price.

 

Many articles say that newbies in gemstone purchase make the mistake of trying to buy direct from the large mines, assuming that this guarantees the validity of the gemstone.  But what I might do is to seek out some of the small, family mines in the Mogok region of Myanmar, buy some gems direct from them, analyse them, and get them valued in Bangkok.

 

Probably during the water festival (March/April) I'll ride my motorbike up to the main mining region of Mogok and take a look around. 

 

But first, I need to research this further....

[Bulldozer Dawn]

Simon

 

I sent you a PM

[William Osborne]

have a look here http://www.thaifundstoday.com/en or https://www.scbam.com/en/home/

 

I am with SCB who have a good online platform to link your investment acc to current/savings..( BKK bank must have same ?)...think i have about 12 funds which are mostly index funds , some tied to SET, with a couple having a good dividend...but also have funds linked to Euro, Korea, India, Japan & US  markets.... as well as having a few mutual & fixed deposit type funds there...

 

Obviously timing is everything and with the SET & S&P at recent highs maybe not  the best option....but plenty of other options there..

[Bulldozer Dawn]

Just now, William Osborne said:

have a look here http://www.thaifundstoday.com/en or https://www.scbam.com/en/home/

 

I am with SCB who have a good online platform to link your investment acc to current/savings..( BKK bank must have same ?)...think i have about 12 funds which are mostly index funds , some tied to SET, with a couple having a good dividend...but also have funds linked to Euro, Korea, India, Japan & US  markets.... as well as having a few mutual & fixed deposit type funds there...

 

Obviously timing is everything and with the SET & S&P at recent highs maybe not  the best option....but plenty of other options there..

 

If you think that the SET is too high then you can open a position to short it:

 

How To Short Sell the Thai Stock Market

[Bulldozer Dawn]

Simon

 

You mentioned in your OP that you might want to invest in gold.  There are couple of Thai Exchange Traded Funds that would enable you to do that (and from Myanmar) via your Thai online trading account. 

 

Here is a recently published guide to Thai ETFs:

 

Guide to Exchange Traded Funds in Thailand

 

 

[TheLairdofCockPen]

Have you tried Maybank?

 

They advise me on buying Thai stock, through their account.