More on Investor traps and other thoughts.

There are lots of investor traps along the way and it seems increasingly so in recent times.  Yet here we remain resilient.

Along with other recently related to this same "investor-beware" topic.  Below are further investor traps explored/explained/reviewed and other thoughts looking back and going forward.

We all fall for some investor traps -or if never- we are not trying hard enough investing -likely taking 0 risks and so loosing out as well, due to inflation.  All investments do have some to varying degrees risks and so we all make some mistakes over time, in hindsight.  The key question always is what do you do or learned about it?  Cutting losses -as well as nailing down profits is very much part of the successful investor undertaking.  Here today I name just some that come to mind which have been popular to various degrees, but many gone bad since.  

Take  AirBNB for example, many property lovers got-going on that -and for a while did rather well, even while with all the headaches along the way. (Bookings/ changes/check-in-out/cancelations/reviews-referrals/complaints/phone calls/damages etc..)  Now many such are saturated and so “holding the bag”.   Converted farmhouses, old refurbished houses, renovated apartments and much more all rushed and invested to list on AirBNB over say the past 8 years.   Then came Covit-19 and everything stood still for a couple of years.  Many lost over the months as their mortgage payment kept accumulating along with 0 income.  Since most mortgage payments have risen allot due to higher interest rates.   

Just post-covit there was a short rejuvenation but during this same time there was huge new supply along with (especially in the US/EU) fast upward moving interest rates.  A double whammy as many of these took out shorter term-loans which have expired since -and so monthly payments in many cases doubled!   Presently there is “a galore supply of AirBNB units” !  Hence the company is doing well but not most individuals whom over-extended and over saturated properties.  There has also been since a backlash of property owner-complaints by neighbors not wanting or asking to restrict short term AirBnb rentals.  Call it subleasing.  Of course there are always exceptions, but generally speaking in many, many locations this “home away from home” now has been saturated and visitors have plenty of choices.  A sort of cut-throat competition has set in among different offered short term AirBNB properties.  If one is stuck, its difficult to get out as property is always by definition illiquid.

Then, take the crypto crowd. Sorry for this generalization, but I think about all those often-tattooed crypto younger nerds who did well but then did not take profits.  “Have laptop will travel” was their motto -and anybody whom challenged their entrenched views was labeled  “an old fart which just did not get it”.   Yes, they did well for a while, but too few took profits!  Post its crash in late December of 2021 many thought it would invariably roar back -and so were in denial.  Over 1 ½ years later it has not, lately setting a new multiple month low (Bitcoin hoovering around 26,00, as I write this or 60% off its high price).  

Even while during this same time, select residential property in general (but not office-buildings nor shopping centers nor uber-Airbn's) have done well relatively.  As have broadly speaking US stocks which recovered nicely this year despite ongoing parlor of US recession fears.  I think broad US stock indexes are up some 15% this year.  But not Gold/Silver which in Thai Baht terms anyway just stood still, despite inflation, disappointing the Gold-bugs yet once more, so far anyway.

Here I dare to sidetrack so to beat my own horn, we did well of late, if you plowed in my favored picks and got rid of some laggards which I am hasty to add I had some for now and should have been more pro-active stating to prune them down. But well made up, due to my over enthuse for TOG/AUCT.  Still, if one emphasized the winners and was more cautious with the secondary choices it worked.   (Even speculative PPM of late seems to come back, at least its last 2Q earnings wise as just reported, was superb. SNC just reported poor 2Q as did FSMART both are down some for now, along with the SET, but both still remain longer term investor choices. (Members keep posted).

Again, here is the biggest reason why I think its fair to say we've done well, over many years done:  because unlike most investors I do view to nail down profits in this volatile world and always stated so at my web site, since 1997.  As well as cutting losses on proven laggards, like recent years example PPS/CHO.   TOG being a noble exception since 6 Baht were I first pounded the table on. As since earnings keep on surprising upwards and TOG remains undervalued at a p/e of 12.6, despite rocked up earnings….along with its 5-6% dividends. (XD for an interim dividend 0.20 Baht per share, on August 22).  Over the years this deviance of sort on dare taking profits on good performing stocks (+50%) has served my investor style very well, since Thaistocks.com inception.  Sorry, I just don’t believe in this "W. Buffet type theorem" on  “buy and hold forever and go to the beach”, especially in more volatile emerging markets like Thailand! 

I also long advocated to view “it’s a market of stocks, rather than a stock market” where even in lame duck and juvenile-political times one can find honest & undervalued high integrity companies.  Just like most everywhere there are some good people around, just as there are also good/reputable companies to be found.  

The other thing is nobody knows in advance what may work well over time just as nobody can predict much of the future and ever less in the world we now all live in.  My silver-buy choice of a few months ago is just sitting there +3%, some various stock choices of last year are down or poorly performing for now for all the reasons we know -and don’t.  But profits taken along the way, over the many years, say for property investments or cars or global trips, or health etc.. doing well, so are my key-core Thai stock choices for this and last year, just when the SET is the dismal performer in the region.  Its is rewarding and then some to have winners in a bear market this year.

EFT’s have been another big investor theme to say the least.  They attract trillions of investor Dollars with their cherished ultra-low fees and on their acclaim: “nobody can beat the market so you matter’s well just invest in our index funds".   I’ve written about this before and here will not revisit in length.  There are many different ETS’s which track different indexes, always with the seeming motto just “buy the index and get on with your life”.   Surely its appropriate for many and they have done well during the substantial US market rise last decade, up until Covit hit.   Since, its been a mixed bag as much of the US market fell last year and this year has been mostly confined to very big tech related stocks…which nevertheless, strictly due to their mega size, are over-owned by most plain vanilla ETF’s.

Yet the ETF proponents, owners and runners of such mega funds love to profess how investing is a patience game…how one should not try to outguess or time the market etc..  Of course, as its in their interest to profess this as they want the maximum bloated EFT funds fully invested forever, only so to keep reaping the annual mgt. fees. Yes, the (fees) are very low but they are tabulated on trillions$!   

So moving forward with the recently witnessed juvenile Thai political reality seeming in place;  its more important than ever to razor sharp focus on just a few very select companies which are removed from all the noise and much of the troubles...as the Thai economy remains on a macro basis, stuck in the middle income trap as here feared & voiced for some time and seemingly for now, entrenched.

Best Regards,