My investor theme during these dire times.
In the US one gets around 4-5% in savings' accounts in their Banks, slightly more if you save in a Money Market fund. In the US you get around 1- 2.5% in dividends from stocks (yes, more on Oil stocks and selective property funds, but that is another story). In Thailand bank savings accounts yield only around 0.45%, and there are no money mkt. funds as an alternative....hah, but long established value stocks pay close to 7% or even slightly more next year, and the Baht currency is far from a weak currency. That is the core difference!
These select companies, as I know how to pick them with long experience, are removed from any US/EU or other global crisis....example is Union Auction, which is by far the leading on-line auctioneer of cars/motorbikes and condo's in Thailand. Much benefiting in fact from any economic downturns....as less people here now buy new cars -yet still need to drive, so buy/trade/dispose of used cars. The used car mkt. is a huge biz. in Thailand! AUCT (9.50) is hence a pure domestic and defensive company, with no debt and a long good history...not least. the dominant one here with over 40% mkt. share. Its growing very fast and pay a near 7% dividend! But because it does not trade in millions of shares per day, all bloated institutions must ignore it. There are other very solid defensive choices here, today I just point out one of my favorite one.
Here is my last post, just days after AUCT reported yet another record Q. profit: AUCT (9.50) after the mkt closed on Aug. 15th reported outstanding earnings, yet again.:
"2 Q. earnings were up 27.8% to 0.15 Baht per share, vs. 0.12 Baht the same 2nd Q last year. (Remember 4th Q's are seasonably its strongest). AUCT has been firing on all cylinders for some years...and along with this strong earnings announcement just declared a 0.35 Baht interim dividend, or an increase of 36% as compared to last years 0.26 Baht. The total 2024 dividend so is 0.35 + 0.37 = 0.72 Baht, or for a current dividend yield of 7.5%. Hence one of the SET highest dividend payer. AUCT will likely net profit some 400 mill. Baht this year, (0.80 Baht per share) a doubling from 4-5 years ago when I first here table pounded on it, at half the current mkt price. :) Its 2024 year p/e is so barely around 12-13. My own long :Buy view: -and then some- so maintained. Buy view -and then some- so maintained."
I think an investment which pays 7% in annual dividends, will double in value in less then 7 years. This assuming the dividend does not increase (or decrease). Vs. Gold for example which pays nothing. That is the rational investor dilemma and reality, to Gold lovers.
Best Regards, Paul Renaud. Beyond Thaistocks.com