FAQs
Categories
Recent FAQs
Question
Answer
Q. Is your service free?
Some past articles are free for all to registered users to view but the best & timeliest along with the model porfolio's and our member forum are only for members. We deliver regular added value independent analysis and expertise - and unlike most other sites we fully disclose whom and what and where we are -along with our full address. Mr. Renaud has an 11 year documented track record here and some 30 year professional background. His Thai stock ideas often outperform the local SET benchmark index. For example Ticon was a stock Paul much "pounded the table on" in late October of 2005 and all along since then. This key selection has well more then trippled in value as of late May 2007. Last year he pointed out TRC which more then double in price since. Of course not all his picks work out, stocks do fluctuate in value, and he always advises to diversify any stock portfolio.
Q. What is the local Thai brokerage commission?
0.25% of the principal money amount of stock bought, or a total of 0.5% for the round trip on a buy and then sell. (Plus 7% VAT). Sometimes there is a minimum commission on small orders. Beware that Thai stocks bought outside Thailand often have much higher broker commissions. If you trade on line with a Thai broker the commission can be as low as 0.15%, per transaction.
Q. Are there any other expenses?
A. No, unless you want a bank to act as your stock custodian for holding your shares. But we do not believe this is required nor necessary for individual investors. If you chose an online trading account the commission is only 0.15% per transaction.
Q. Is there a language barrier for placing orders or speaking to a Thai Broker in English?
A. No. Most Bangkok brokers, here called "Marketing Officers", assigned to you speak OK to good English besides generally have a University Business Degree. Their Research Reports, Monthly Broker Statements, and Annual Reports, are often published in fairly clear English but this varies much from broker to broker. Any instructions to buy or sell shares can be given via fax, phone, or in some cases e-mail. Some brokers offer on-line trading. But you best first test their system to see if you like & understand it. As everywhere, its prudent to enter every buy/sell order very clearly so to avoid any mistakes.
Q. Why not now focus on the Thai big blue chip stocks?
A. Because these are too often in the often over-rated service sector like Banks & Energy; not exports, tourism or domestic consumption and manufacturing which Thailand is most competitive at. Most larger capitalized stocks are relatively expensively valued and pay little dividends. However since year 2001 we have pointed out a few select large capitalized stocks as well. As example we picked Banpu at around 18, its worth 12 times more now. Recently CPN and PS were featured. However, we prefer select smaller cap shares as they are often undervalued, have faster the average growing earnings and pay high dividends. Why should smaller capitalize Thai growth companies sell at the discount to the market p/e? Even while they pay higher dividends.
Q. Are smaller or mid sized Thai stocks not often illiquid, thus making them difficult to buy or sell?
A. True, all good things come with some effort and skill and at time inconvenience. Depending on your investing appetite, you may have to bid-up some of them to a higher price, so to get a larger size or be patient by just nibbling away to accumulate a position.
Once the stock is discovered, the trading volume often soars! Recently, many previously dormant stocks have woken-up. If you are patient and can be happy to collect the high dividend, selling them later is rarely a problem. When buying a few smaller value shares consider this as one position. That way you have diversified the so called unsystematic risk. Members quickly see from our reports & company visits how truly undervalued many still are and how well overall they have performed over the past years.
Only about 100 companies out of over 440 listed are followed by the brokerage research community. Some 300 are totally neglected and some are true "diamonds in the rough". If you are obsessed with valuations and earnings growth as we here are, you will want to look beyond the top 50 SET stocks.
Q. Why do you call these smaller "jewels," "low risk and high potential return?" Aren't smaller stocks usually riskier?
A. Usually this is true, but in Thailand these mid-size and smaller sized (mostly desirable manufacturers & exporters of basic products, domestic consumption), are trading at a still low valuation despite strong earnings growth prospects and/or being the leader in their industry. This mostly is due to dogma 'top down' institutional investing which has created an artificial and huge, mis-pricings.
Lower market correlation and very high current cash dividends are additional factors reducing the level of risk to any rational global investor. As a group these have combined outperformed the SET and even the USA indexes for years. Yes, even in USA Dollars as recently the Thai Baht has been a strong currency.! For some more on this topic see past performance link External Research.
Q. If these smaller 'jewels' are so cheap why aren't the smart Global institutions buying them?
A. Because institutions have strict mandates (rules) which prohibit them to invest in any stock, unless they its trades US$ 1-3 million worth of its shares per day. This often means if a Thai stock does not trade 1-3 million US$ per day, it is not even considered. This is an enormous restriction in an emerging market like Thailand and so virtually creates a "hand-cuff" enviroment on the best values. Hence most institutions do not own few of the true values in SE Asia stock markets. I have often called this "behavioral mispricings".
Q. But are mutual funds not always best suited for smaller individual investors?
A. In some ways yes. But in SE Asia, these restricitive factors have created a distorted local stock market and progressively so, for a decade. The hard-working mutual fund investor/clients, mistakenly believe they are getting an ownership in hard-working and industrious Asia. Instead, due to severe fund investment restrictions, the millions of mutual fund clients are buying indirectly only the very largest capitalized firms - the old fallen angels, with still lower expected growth in year 2004 then many secondary choices. Hence, it pays to be more investor pro-active and through Thaistocks.com, you can find many value stocks in leading industries.
Q. Is it not time now to start at least nibbling at some oversold larger cap. shares?
A. We selectively have pointed out larger stocks as well. We wrote about three winning selections already since August/September in year 2000.
We have for long observed the saga of the spoiled big Asian companies versus the smaller more industrious ones. Global individuals are investing their dire savings in often less efficent large Asian companies with high valuations and little annual dividends, this through stock funds. Good folks, unsuspectingly through their mutual funds, invest in most of the "wrong" things here in Thailand and are not even aware of this. SE Asia's success is mostly about manufacturing, tourism and exporting....
For cultural reasons well explored in a book called "Trust," by Francis Fukuyama, in Asia its often the smaller companies which excel. This is due, in part, to culture and history; just the opposite of what is mostly owned and chased around by the big global mega (size constrained) insitutional investors.
Q. Why did you stop the paying membership service?
We stopped accepting new members from January 1 2005 to September 2005, so Paul Renaud could focus on building our a new research office. Now this is completed. All during this brake time he "pounded the table on Ticon Industrial, a key selection which more trippled in value since. Other winning selections gave members a winning start in early 2007.
After a 9 month break, in September 2005 we re-introduced the member service with an upgraded publishing version, all better then ever before. Paul regularly visit companies in person in Bangkok and then reports on investor research findings & opinions, for members only. Some older reports are then made available later for all visitors to see.
What can you say regarding Thai stock ideas which you have brought to your members attention with company visits recently and so far in 2007?
DEMCO, UEC, SAT, UMS, TICON, TRC all selections advocated with "strong buy" views. As of end of August 2007 these have combined increased over 40%, even while the SET index is only up some 6% since during the same time.
TRC, SVI and TVO are two recent selections which reported strong earnings since mentioning them favorably to members. TOG and CITY have been lagging stocks due to the strong Baht currency. I just recently found a few select larger cap choices, rated "buy". They have combined done well. A turnaround stock called LVT (1.70) was viewed as "buy now" at the then price of 1.40, or some 30% below the current one.
A disappointment to date has been AJ and TSC, its prices are some 20% below and seems sleeping there. But I clearly all along stated I liked SAT much better in the auto parts sector.
Overall 2007 has shown substantial returns for our members, far in excess of the SET averages.
