Nobody is as smart as all of us -but not on the SET.

The wake-up call from the US which so few saw coming as they were too close or too biased for all the right or wrong reasons.

Members here know I called the US likely D. Trump victory pretty much since the start of this year. Not because I was a big Trump fan, far more because I sensed broad changes where in motion and these were under appreciated, mostly by the establishment and the liberal press.  If you travel to the US every few years you see allot more of what is going on -then living there in permanence. I am not going to take the time here to rehash all that except to say broad coming changes now solidified and likely -beware- to spread to other countries including some of Europe and Australia.  What these changes are all about is the topic of another discussion and not related to Thai stocks.  Yet many of us realize the US big event of this week in some ways already took place in Thailand some short years ago where the Democrats back then, also did not see/sense the rise of the masses around Thailand most notably in the North. ***

The law of averages not to be confused with the flaw of averages.

In a great theme called "The Law of Averages" it is well explained/documented what any University graduate knows or should know: an average difficult estimate by many, many different people is almost always more accurate than various individual estimates.  One reason for this is because extreme/wrong estimates cancel each other out and so the average of all tends to gravitate towards the best (average) estimate.  This can be demonstrated by asking many people to estimate how many marbles are in a big jar.  While impossible to estimate this correctly its been shown again and again that the average estimate of a vast number of people looking at it will almost always be far more accurate than individual estimates. 

Another way of stating this is wise saying "nobody is as smart as all of us".  This is why the US vote favoring Trump this week, must be taken with stride.  The people have spoken and collective opinion of all is likely the wisest/smartest/best choice or if not at least the fairest, its the very definition of democracy.  Please let's not regress posting various different opinions here on what is best, because by definition the people have spoken.  About the only thing we can add is "time will tell".

In a stock market many believe this is true as well due to their conviction in the efficient market theory which means all information is already factored into a stock price.  But here I beg to differ.  The "nobody is as smart as all of us" does not hold here.  Consider that 1 Baht or 1$ is the one vote, not one person so obviously millions count for more then thousands, hence voting is linearly skewed by size.  It can be assumed that 1 mill. US$ or Baht is smarter then 1000$, or Baht.  But and this is a big "but", as the stock market has many different investors/players/manipulators/short term traders/ETF funds/large cap. volume obsessed mutual funds, trigger funds etc...distorting all this far more then we think.  Not least, most institutions all but ignore smaller cap stocks -as here soo often pointed out.  Hence on the Thai SET, at least, there are discrepancies which deviate from the law of averages or the market efficiency doctrine as the market is far from perfectly “efficient”.  Call it the flaw of averages.  This can be proven through superior to SET index performance over time, which the press and the gnomes in high institutions want us to ignore or utterly fail to acknowledge…in some ways like we just all witnessed how the biased press with its mistaken polls go it totally wrong regarding the US presidential election.  They cynic would say these had an agenda and who is to argue otherwise.  In the US election the chips fell as they did and the hidden Trump vote is now shaking the world for all the right reasons as nobody is as smart as all of us.

Best Regards,