Messy Politics & Thai Stocks? Nothing New, Nothing To Worry

You’re invested in Thai stocks and have to run for your money. That’s nothing new. But well, you’ve chosen the wrong stocks. You went for the large caps. How about small & mid caps.

Even though Thailand is in turmoil and its stock market capitalization dwindling, there’s no reason to panic, assures Paul A. Renaud who runs ThaiStocks.com. No reason to panic.

New assurances for the fainthearted, as we had them in our Renaud interview Mastering the Thai stock market. Get yourself reassured, here are Renaud’s latest takes:

By Paul Renaud, Thai Stocks

Messy politics is nothing new here. In the 1990s Bangkok was one of the biggest stock bull markets in history just as Thai politics was at its messiest.

Today I really think they are starting to solve the problems by saying enough with crooks/politicians/businessmen who don’t operate honestly and with some integrity. Meanwhile in many Western cultures people have just begun recognizing these issues which are better disguised.

In the U.S. it’s “Wall Street which ate the US economy.”

And the Swiss bank dishonor unfolding is a major catastrophe, never seen before and all brought on by their own doing. Some of this has spilled over to Asia like a financial tsunami. It will not change much and relative to the world.

Company earnings growth/dividend rates here will keep growing
above global averages. Yet, growth companies in Thailand have just about zero effect by this fallout.

It’s not just USA’s Mr. Obama calling for change, and so riding on a hugely successful presidential ticket. In different corners of the world change will happen. Many good, honest, hard- working and above-average educated citizens of many nations are increasingly exhausted by the too many dirty dealings going on.

Citizens worldwide are disgusted with their politicians. And now private bankers are not far behind. They brought too much cheating, corruption, mismanagement, war, injustice, illicit big business benefits and lately “financial tsunamis.” Not just in the US but in Spain, England and other lands where you’ll now have a prolonged housing slump for years to come.

“Many people nowadays seriously want to help reduce global warming and pollution, to increase new alternative energy use and, accordingly, to demand more honest governemnt. This is happening in Thailand now.

There is a higher chance that UBS Bank goes “bankrupt” in
Switzerland than we here entering a civil war or even a major prolonged uprising. You may see stalling short-term of tourism and foreign investment. Problems exist here, but every country has problems these days. Here we also have fast-growing companies to invest in at currently absurd bargain prices.

There are occasional fall-outs when history has shown it’s extremely important that value investors not panic. We are in such an adjustment at present. I am glad to own growth companies which pay high dividends, rather then capital in Swiss banks with their “Ninja” housing bonds and so-called “accelerators.”

Thailand has a better recovery potential.

The demonstrators we see on TV are more like a peaceful carnival. This should turn into a positive over time and so a re-valuation of the SET.

Consider that a large rock concert or a football match, with 80% fewer people attending then are demonstrating in Bangkok now, has on average 3 times more violence then the 99% peaceful gathering here to date.

At this point it still looks likely that Thailand’s economy will be growing around 5%, or the second fastest growth rate in the region, after China’s. Tourism represent only 6-7% of GDP. Thai exports are doing well and are above expectation year-to-date.

One reason is that Thailand is a major food producer and basic manufacturing exporter benefiting from the oil-rich countries in the Middle East as well as from being the country between China and India.

The problem is that world investors nowadays do not want to own shares of any kind. Even though Oil and Gold are not the place to be of late they are not looking at Thai stocks.

Even though Chinese stock markets are down the most in the region this year, far more then Thailand, China gets far more praise and still has double the valuation compared to an average Thai stock.

To compare a bit, Mexico a large developing country with some oil/gas reserves in 2008 is expected to grow only 2%, and Australia only 1/2%. And there are many more countries like them, especially after the posted “sky high” oil prices seen at mid year.

So in comparison, Thailand’s GDP growth of +5% still looks impressive.Yet the valuation of the SET is at half the p/e ratios of those other markets. Isn’t that too much of a discount?

They talk about Baht weakness, but the Australian $ has lost a lot more then the Thai Baht when compared to the US $ lately! Marc Faber says Thailand is in a “recession” … and many others talk about currency weakness here, when it’s the Euro and Aussie $ which have truly weakened of late.

And where are all those former dollar-bears now? What are they saying? I keep listening and all the while I accumulate Thai value shares with high growth and large cash dividends.

Via RightSide




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September 5, 2008 | Filed Under Business & Economics, Property & Investment 

Comments

7 Responses to “Messy Politics & Thai Stocks? Nothing New, Nothing To Worry”

  1. ThaiCrisis on September 6th, 2008 12.04 am

    “Many people nowadays seriously want to help reduce global warming and pollution, to increase new alternative energy use and, accordingly, to demand more honest governemnt. This is happening in Thailand now.”

    This is happening in Thailand now?!

    This guy is great! I mean his whole article is surreal. But this quote more than others.

    ;-)

    Alternative energy and reducing pollution? … In Thailand? Ah ah ah ;-)

    Yes I think Paul is living in another country, starting maybe with the letter T but definitely not Thailand.

    Let be serious for a moment …

    And another big mistake of Paul: The political crisis.

    Same same before long time no problem cheap bargain okay?

    This is basically what he’s telling us (I paraphrase).

    No sir. You should read my blog. The political crisis today is TOTALLY DIFFERENT from the crisis before.

    I mean even the mainstream press starts to speak about it.

    As for the SET and the state of the Thai economy … well … here too Paul should look around better.

    There is one fundamental mistake that stocks pickers do over and over again: The rear mirror principle.

    When people cheer up because profits from companies listed on the SET went up during the first semester … And then, when those people calculate P/E ratios, according to these figures … I say: So what? This is the past. It’s irrelevant.

    It should be irrelevant.

    It has to be irrelevant.

    What is important is tomorrow.

    Now, if Paul dares to say that the perspectives for the Thai economy in the short and mid term are … very good, then well … I guess I would have to, my turn, “help reduce global warming and pollution, to increase new alternative energy use.”

    ;-)

  2. Peter Hall on September 6th, 2008 7.03 am

    Even monkeys know how to vote:

    The Roti Boy marketing scheme that had consumers queing up 200 meters on Sala Deang a few years back resonates of todays PAD’s propaganda hold on a part of the Thai phsyche; a fad only to be dropped a few weeks later, even when that genuinely intoxicating cinnamon waft still enticed. This was a true pollster’s lesson on Thai’s middle class in-consistence and faithlessness to anything that didnt reflect them or had a past due-date attached. Jumping ship had nothing to do with the quality, but simply a result of communal adhesion to peer acceptance. Back to the 5 baht mama noodles. Corruption and nepotism knows it’s noodles.

    Grand movements to stem democracy are afoot before a child-like nation realizes there is an alternative to patronage and slavery to corruption, and that the tools are called democratic instruments.

    They are using these tools in Angola today, those disenfranchised people; unfortunately, most Thais consider those people as monkeys … how sad it is that this superiority-induced limited vision is for the people who have yet to have a take on their own destiny …

  3. BangkokDan on September 6th, 2008 7.54 am

    Of course Renaud is preaching his own books and transparency is not truly his strength, otherwise statistics of his recommendations and portfolios would be available.

    “Give us a model stock portfolio Paul and I’ll buy anything!” … so to say.

    The hardest unknowns remain the cycles. Smaller caps and a healthy technical analysis – but unless you don’t subscribe to a hefty yearly membership Renaud doesn’t open any book.

    Why should he, it’s not less legalized gambling than trading in larger caps. Exact science anyone?

    Interesting take on the voting monkeys Peter Hall.

    Don’t wanna go into all the obvious hardcore racism issues, but that Roti Boy – got copied immediately.

    Got destroyed not only by a fading fad, but by its own success.

    Anything highflier in Thailand finds its floor again pretty soon.

    BangkokDan

  4. strbl2 on August 24th, 2009 3.08 am

    I agree with BangkokDan. As a former member of Thai Stocks I can say that in the past Renaud has given his recommendations for his portfolio and after the stock market has crashed he then chooses a strong buy portfolio and then bases his performance on these recommendations and doesn’t mention the original portfolio ever again.

  5. BangkokDan on September 16th, 2009 7.23 pm

    You may like to know that as of today, September 16th, 2009, Paul removed the “subscribe to” page from his site.

    Got this email from Paul:

    “The membership was for years 640 euros per year. No more. My professional viewpoints are now totally free for all. It’s time to give/share back on what has been a long success story here, investment-wise.”

    BangkokDan

  6. Fred on October 7th, 2009 12.39 am

    Paul R. seems to know a lot about Thailand.

    But has he bought into the “mai pen rai” means nevermind mentality too much?

    He is famous as the #1 investment guru around. But as a non-member I have no idea how to value his winning picks because I don’t have access to his portfolio and historicals.

    (BD: Fred check comment above, Paul grants free access since September ‘09.)

  7. TheFaber on December 21st, 2009 11.21 pm

    This Paul Renaud or “PR” is a dunkoffer who knows nothing about the Thai stock market. He keeps all his winning picks to himself. I would rather use one of the independent foreign brokers. Their research is better and more technical.

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