A quality Member Lounge

I don"t know if it was the season, the black cats, the half full moon or all the pressures & commotion in getting our new web site up, but on Thursday early AM I woke up with serious market jitters and stated here so.

It seems now all a bit overdone, overstretched were the chances of a sharp pullback may well outweigh the chances of a further 10% advance. On Friday the bank stocks finally caught-up and in the past this was a reliable sell signal. Even the vocal AJ skeptics got a chance to dump their shares at a huge profit when it price soared on high volume to 9.90 recently.

We have been here before where I dare give you a short term market warning which is what I feel now.

One stock which has been relatively dormant lately is Thai Airways. THAI is the big beneficiary to any tourism boom now in the making again.
Since market price of 28, I indicated I this large cap stock. Despite short term guarded, I still like THAI at current price of 51. There are risks with owing an Airline stock in these times more even then in past, but I feel any setback probably just means a delay to eventual increased profits. I believe THAI stock will not weaken much even if the SET corrects some of its current excesses.

THAI has a very high ROE in the mid 20’s, a decent anticipated dividend of nearly 3% for year 2004 and is one of the 5 founding partners in the world’s largest Airline alliance names "Star Alliance". It’s above average growth in the next 2-3 years will come from the anticipated China and India expansion. The p/e is only around 7, or cheaper then other quality airlines in the region. THAI has falling debt and besides its cost of capital at a low 4%.

If things go well I think, institutional investors will ever more fall in love with THAI (51). I understand a private offering is in the marking soon as well where a new chunk of shares are offered to most large institutional investors. This will increase the float and following and should be viewed postitively in my view.