Unit 9: Nine Reasons Why Thai Many Mid and Smaller Capitalized Shares will Keep Being Successful in the Future as in the Past - Part I

Unit 9: Nine Reasons Why Thai Many Mid and Smaller Capitalized Shares will Keep Being a successful asset class in the Future as in the Past - Part I

Some newer and older reasons why I believe smaller and medium sized shares will keep performing overall well over time.  As mid-sized and smaller Thai company shares are still too often "artificially" ignored.   Leading smart value investors to re-discover the "real" Thailand.

• Smaller and mid sized stocks remain often neglected in Thailand.  Institutions have their "radar screens" screens turned off on these.   Mosf Thai individuals themselves want to day trade large more liquid companies.
• While this may be to the benefit of Thai brokers in the short run;  but it is not what most investors should be dominantly active in.  It at best produces marginal returns over the long run, with lots of time spent.
• In more regulated US, a brokerage firm will simply not allow a client to "just day-trade" their entire stock account around a few large-cap's, or rumor driven stocks irrespective of good fundamentals, as this is considered irresponsible.
• It too often "churns and burn" into losses over time. A bad recipe.
• Due to a variety of reasons,  a small astute retail investment crowd developed in Thailand even while this starting to change now post Covit-19.  Beware, speculators and traders still reign here but can be an investor advantage. 
• Years of imposed ignorance on values and high dividends, which persisted during the previous booms and busts, have resulted in more and more smaller "jewels" being or remain under-priced.  While earnings are growing faster then the overall averages.  Sooner or later they must catch-up and this has been happening again since early 2020.  As shown here at this web site since 1997, returns on smaller cap value shares have been well above average, over time. 
• While not exclusively so, I trend to favor those and know many well, as I have been following this niche for 3 decades.
• In many cases, current dividend yields on smaller shares are higher as compared to the larger cap stocks.  In 10 to 15 years these growing annual dividends could pay back the whole value of today's stock price.
• Assuming a diversified portfolio, one can almost count on getting 5-7 times more the prevailing bank interest rate in annual dividends!  While some have had fabulous price runs since early 2020, many now are back in being
• under-valued as of end of January 2022.
• Interest rates remain very low compared to the past; high dividend yields so look desirable.  In the old days, high yields on stocks meant less.  This change makes a meaningful difference to pay attention to dividends where smaller choices often excel.
• Smaller cap stocks here routinely pay higher dividends than the average SET large cap stocks.  A stock is only really worth the discounted sum of all its expected future dividends,  and this discounted back at a current relevant discount rate (Cost of capital).  This is called the present value of a stock.
• Since the prevalent interest rates remain at historical lows, high dividend paying stocks should witness increased share prices.  
• Example, in mid year 2021, the ten year Thai government Bond yield remains at a relatively low 2%.
• Not many investors or borkers know much about these better individual investor values.  Thai brokers are slow to seek these out. As brokers are forever trading oriented and need to spend resources on large stock which the institutions
• demand.  Thaistocks.com's intense focused strategic position on unearthing these real values, combined with on-location research company visits in bringing these to light to our members.  Consider that over 400 companies of some 580 listed on the SET, have no broker research coverage at all.
• Value investing has been forced into vogue in SE Asia now, as the next generation demands it.  In the past, stock market participants did not focus on actually knowing or understanding what they invest in.   Ever since the 1997 Asian crisis which somewhat forced investors to understand better and place value and understanding on what shares they chose!  While slow to catch on it is ever more so as we see through the occasional investor seminars here, which seem packed by eager investors to learn. While the Thai economy remains a bit lethargic and barely recovering, there is a real and present boom in renewable energy besides infrastructure spending and exports, which is where I focus my selections on currently.

I advocate a mixture of both larger and smaller cap shares but you understand where my bias is -and remains.   I am obsessed with fair and good valuation, besides high cash dividend yields, not mega institutional share trading liquidity.  Thaistocks.com helps individual investors who do not have $3-5 million dollar minimums to invest per each company!  For 3 decades I have here shown how smaller and mid cap value stocks can and often are be the clear performance stars.  On top of paying higher dividend yields.

For sure it's more work and requires checking and looking beyond the newspapers and  for sure there are questionable firms who operate obscurely or are outright boring....when finding gold or precious stones, you got to go to work and get beyond the vast pebbles, dust and stones.  In Thailand there are select "diamonds in the rough" to be found in stocks.  They are "less filling and taste great".  I have researched many of these “jewels” through the past 30 years on-location, and am willing to do the hard work to find many through regularly visit to these companies and other means.  Then regularly report back to our members my pinpointed findings and preferences.

I can help you with Thai stock market value investing -as I have since 1997 stated my objective viewpoints here to contributing members through our regular insights conducted with professionalism, objectivity besides high integrity.  

"I know nothing about engines, for that I have my engineers".  Mr. Enzo Ferrari.