An eventful year coming to an end.

Selective profit taking has been advocated for a while.

Reflecting back on a turbulent year 2009, where it paid handsomely to remain invested as here stated all along.  I viewed taking some profits in the past couple of months.  The SET index topped out right around 750 on October 13 '09.

A few days ago I posted in our member lounge to take profits on TNDT, a stock favorably mentioned in the recent past which then suddenly rocketed up some 30%.   I mentioned that I like QLT better as a medium term hold which is up some 50% since favorably viewed here. Yesterday I wrote in our lounge that I took profits on STA in the model portfolio at 20.40, this after a nice 30% + run up, since early October even while the SET stalled.  I just a few days ago mentioned STPI as a new likely good idea to consider,  but I prefer to visit this company first in person, before getting overly/more exited. 

Still and until then I can see STPI as having investment merit at the current prices of around 14.20 after a 10% price correction.  (I since then visited STPI and wrote a long report for members)

A few weeks ago I wrote to take profits on LVT, a favored selection here which did well for us this year, even while it much frustrated me with their continued odd shareholder behavior -which I sense might well continue.  Many members were over weighted this prime choice due to my continued focus and upbeat comments, especially in the first few months of this year.

UMS, UEC and TRC I have removed for the reasons stated.  TRC was a clear cut loss and I am sorry for that one.  On the other hand, in 2008 we did very well with TRC!  UMS worked out OK, evenwhile I was gone to soon due to negative comments on its earnings continuity.   Little did I know it would be bought out by cash rich TTA.   SGP, I viewed with a stop-loss at 7.90 so taking a small loss.  But only to then buy it back at lower levels (around 7.10),  all as mentioned here and in the current model posted.

HANA as well as ROJNA (and the others as explained in ongoing footnotes in the current model) remain newer choices which I am just holding on, regardless of SET volatility!  Same with CRANE, TRT and the others -where I just remain patient.

This morning I posted the following in our member lounge:

With SALEE (3) having just sold off far more then its big special dividend, I like this company again around now 3 Baht, as I sense an earnings recovery is taking hold there.  I am not pounding on the table on SALEE, but can see it being a quality choice in a diversified  port. of smaller cap growth stocks, with likely high dividends.

As the SET was moving towards 700 in the 3 Q. I stated a few times to be more cautious and nail down some profits for the year.   My sense was things would get stalled a bit SET wise, for the balance of this year, and so it likely would be wise to raise a bit of cash by realizing some profits.  Similar story with TTCL and CPALL, where we did very well.  CPALL and TTCL were 2 larger cap stocks I mentioned in an upbeat way. 

Maybe I have missed something,  if so kindly point this out. As always, comments are welcome. Please I prefer not getting into any kind of fine tuning/view points as this is beyond the membership and the time I have here.   I simply cannot reflect here with all my thoughts on the market pulse.  (For example just now TKT allot firmer (as of 2:40 PM) and you can see my picture with TKT's son of the founder, at the front page currently (second one down).  J 

SAT, TKT and CITY where long ago choices before the financial crisis broke out and just kept them all along, even while I don’t have the time here to post all my thoughts, all the time.  Dividend adjusted these did rather well, and next year looks even better. 

MBAX and TIES were the turned bad choices, which I warned investors a year ago, if more of you wrote a letter to the MAI on these companies’ behavior maybe it would get more regulatory attention?   One has to cut losses, ever so often, and move on.  Nobody only picks winners.

Here is how one seasoned renewing member just wrote me:

“Thanks for all your hard work through the year, please know that the site and your existence highly valued by us, we are always learning.....  Your enthusiasm and steadying presence especially valued when markets are really down, as most us tend to become nervous nellies - even if we don't sell out! The site is fantastic and please never think of stopping!

For the occasional duds through the year like MBAX, and disappointments of LVT (despite profitability) in my view this confirms the difficulties of the Thai market, and how much harder it would be for the individual investor by ourselves without the back-up of your service, as another tool for our investing."

As a seasoned investor told me long ago:  “realize that if you never have any losers, you are likely not trying hard enough.”  I realize, sometimes it’s a fine line between a looser and just a laggard.    And with LVT I showed members and later all followers here, how even a less then good corporate governance company can produce above average returns.

In general in the 4Q. I turned a bit more cautious and with a profit taking mood, even while I remain Thai stocks bullish going into next year.  Depending on so many factors now perhaps its too optimistic to believe the SET can pass 900 next year?  Yet my view remains politics may be getting better for reasons stated in a recent member article.   

Either way, returns here in 2010 should continue to be respectable, regardless of what the final % return it will turn out to be, as in all likelihood we are seeing an economic recovery lead by Asia and to some extend Australia.

My long stated investor objective is medium term, and in that sense I remain convinced and so cautiously bullish going into year 2010;  yes, despite all the bad politics, royal succession worries or  negative press talk on this or that.   

Clearly China, India, Brazil, SE Asia along with Thailand  are leading the global recession out of its mess and Thai stocks on average remain the least valued in the region and so have already discounted many if not most concerns.  And in any event will likely overall keep up their good dividend payments, along with solid balance sheets which means low or no debt. 

And we must ask yourselves: what if there are new yet not fully appreciated undercurrents in that things are getting better in general, not worse?  So the market can keep climbing the wall of worry as it seems to want to.   But the timing as always is impossible to predict…so in the meantime its good to have some cash, i.e. profits taken along the way which has been my viewpoint of late.  That is, while always looking for new ideas or confirmation on the merrits on holding-on to old favorites.

Best Regards to all Members,

Paul Renaud.

www.thaistocks.com