Ah those commodity bulls..
At 11 this morning the SET is actually up a bit, just as the tanks are rolling into Bangkok, vs another red day in Europe, Hong Kong and in the US markets.
Of late year after year the un-conventional wisdom was to get out of US Dollars, as surely it would sink..but Gold and oil would rise, so they told us. Jim Robers, Marc Faber, Peter Schiff, (perhaps all somebody's heros?) all told us this with so much vigor day after day. I remember I was there.
Well, to date they were all wrong. I guess, like the weather, if you keep predicting something sooner or later you might be right? And what makes so many think think a global demise will benefit commodities? Likely, "au contraire" as it will collapse economic growth and so the need for many of those commodities.
Fact is the US$ rose of late and the EU tanked this year! I wonder what would happen to me today if I too, got rid of Bahts and moved into EU currency? Today a Brit or EU based person is 20 to 40% poorer in Baht here, as compared to a couple of years ago. Even against the now stronger dollar, the Baht is up of late.
But remember, back then, and for so many years, so many expert and expats wrote/said how the Baht would drop on on going political troubles, it has not. Last year Morgan Stanley again and again wrote to its clients how the Baht would fall. They were wrong.
Last year they all told us how Gold and Oil would rocket up. It did not...and now its dropping. Oil today is below 70 US$ a barrel, so moved just in the opposite direction of what those commodity gurus told us again and again at nausum. Gold, a no-income asset, hardly held its own relatively in US$ terms, as it did not move up much last and this year, this as compared to stocks which recovered massively, post the financial crisis.
And today we see the US$ stronger, the EU weaker and commodities dropping again. Yet, more and more are talking/thinking this way of "commodities galore". I for one am glad I don't own any gold (just an average performer) or Oil which is half the price of just a couple of years ago. And said so here many times. I remember a few months ago all those commodity bulls told us how it would almost certainly move up to past 100$ in a few months. But actually smart firms like Goldman Sachs shorted Oil this year, even while they wrote bullish reports on it.
STPI stock, a favored model portfolio Thai stock selection here, actually increased 40% since the riots started in mid March. And last year my model port increased 102%! All documented here....but you might not know about this if you are not a member here.
And at 11 AM this morning the SET is actually up a touch, just as the tanks are rolling into Bangkok, vs another red day in Europe, Hong Kong and in the US markets.
I keep owning the mostly the undervalued Thai smaller cap growth shares with their near double digit dividend yields, as I know them.
Best Regards,
Paul Renaud.
