Frequently Asked Questions
Company visits are an essential part on getting in person, on location qualitative insights vs. quantitative analysis from afar. Company visits in person allow for the personal connection and evaluation on how conservative or not, the firm is. This along with other nuances impossible to asses by phone or through research. With my US/EU/ASIA long multicultural background I can also attempt to assess the likelihood of legitimacy, integrity and more around the company and its management. But it would be a mistake to conclude that "the more visits the better", as one only needs a few good ideas a year to make a big investor performance difference...too many visits can dilute or even confuse all this. Also, sometimes a company which is not so good but getting better can be a good choice discovered through a visit, vs. a great company (at high valuation) which may be loosing part of its allure can be a less attractive investor choice. Lately as an example Apple Computer seems to be at this stage, loosing near 30% of its value over the past year. (May '15 to May '16).
Sometimes a visit can result in the wrong impression or outright being mislead...or getting too close. A risk I have found over the years to be a delicate balance requiring long experience. I mention at the outset to any visit always conducted in English that I operate on an international standard and will point out at my website any misleading statement...as I do and have in the past.
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Many past articles are free to all registered users but the best & timeliest along with the model portfolios' and the member-forum is available only to contributing members. We do not offer a paying membership access here. Feel free to contact me directly at firstname.lastname@example.org.
It's 0.25% of the amount of stock bought or sold in Baht, or a total of 0.5% for the round trip on a buy/sell transaction. (Plus the 7% VAT tax on that commission). Sometimes there is a minimum commission on smallest orders. If you trade on line with a Thai broker, the transaction commission can be as low as 0.15%. Beware that Thai stocks bought/sold outside of Thailand often have much higher broker transactions costs. (Commissions).
No, unless you want a bank to act as your stock custodian for holding your shares. But we do not believe this is required nor necessary for individual investors. All your shares are held by the Thai Deposit Center, not the broker (TSD). If you chose an online trading account the commission is only 0.15% per transaction.
No. Brokers here are called "Marketing Officers". You should be assigned a OK to good English speaking person, and often have a University Business Degree. Their Research Reports, Monthly Broker Statements, and Annual Reports, are published in fairly clear English but this varies much from broker to broker. Any instructions to buy/sell shares can be given via fax, phone, or in some cases e-mail or even e services like What'sApp. Most all brokers have on-line trading. You best test their system to see if you like & understand it. As everywhere, its always most important to enter every buy/sell order very carefully & clearly so to avoid any mistakes.
Because these are often in the often over-rated service sector like Telecom, Banks & Energy; not exports, tourism or domestic consumption and manufacturing which Thailand is competitive at. Most larger capitalized stocks are relatively expensively valued and pay lower dividends. However since year 2001 we have pointed out a few select large capitalized stocks as well, or recent for example PTTGC one of the highest dividend stocks on the SET. However overall, I prefer select smaller cap shares as they are often undervalued, have faster growing earnings and pay higher dividends. Why should smaller capitalize Thai growth companies sell at the discount to the market p/e? Even while many pay higher then SET averaged dividends and have stronger long term growth rates. Since 2016 however smaller and mid cap stocks have underperformed the SET this is in large part due to Thai retail investors less participation.
True, most good things come with some effort and skill and sometimes inconvenience. Depending on your investing appetite, you may have to bid-up some stocks to a higher market price, just so to get a larger size. Or alternatively be patient by just nibbling away to accumulate a good position, or sell out an existing one. Yet for most individual investors here liquidity is not really a big issue. Again, you don't have to buy/sell all at once.
Time and time again we see how once a a stock is discovered trading volume (liquidity) often soars! If you are patient and can be happy to collect a dividend while you wait, selling later at some point is rarely a problem. When buying a few smaller value shares consider this as one position. That way you have diversified the so called unsystematic risk. Members quickly see from my reports & company visits how truly many interesting companies there are here. And how well overall over time they have performed so well. Only about 70-90 companies out of over 500 listed companies here are followed by the brokerage research community. Some 320 or moe are totally neglected and some are true "diamonds in the rough". If you are obsessed with reasonable valuations and future above average earnings growth, as we here are, you will want to look well beyond the "top 50 SET" stocks!
For many years smaller cap Thai stocks performed rather well. They were under-priced, under-followed and mostly ignored by the institutions and brokers alike. The individual investor with some know how and experience could beat the SET index, as I did here for many years. But from 2016 on this started to change...individual retails investors started abandoning Thai stocks as a savings vehicle, while punters and speculators, index funds and so called trigger funds increasingly took over. Not least, the controversial derivative warrants (DW) market. As here amply pointed out of late: individual investors at present make up barely 40% of total SET volume vs. some 60-70% in years past. The SET and brokers alike should ask themselves why are individual investors shying the Thai stock market like never before? I have my own views on this and it has allot to do with the behavior of the Thai brokerage industry.
The result is, smaller cap stocks have been in the doldrums for some time, many dropping 50% or more and the MAI index graph looks like its " going to hell in a hand basked". To be fair many reported disappointing earnings and so their p/e ratio's became overstretched, this is one reason not to turn over positive on the sector, just yet. Further, its becoming increasingly difficult to get any added value research information by any means, as most as these companies have been put on alert by the SET/SEC to be ultra careful in disclosure. Hence company responsible visits with management have become for the most part, a waste of time. Why has the new SET president has not addressed the dire issue of retail investors abandoning the Thai SET? As for me and our members here, I have recently made very strong positive comments on one of the largest cap stocks, namely PTTGC which post its sell off to the low 70's in early July 2018, demanded a very strong buy in my view, stated again and again of late here. When things change, so do I...and for now its best to hide out in a quality large(est) cap stock with high dividends, then to swim against the river...when the river's flow changed.
Because institutions have strict mandates (rules) which prohibit them to invest in any stock, unless they its shares trade US$ 1-3 million per day. This often means if a Thai stock does not trade 1-3 million US$ per day, it's not even considered. This is an enormous restriction in an emerging market like Thailand and so virtually creates a "hand-cuff" enviroment on the best values. Hence most institutions do not own the true values in SE Asia stock markets. I have often called this "behavioral mispricings".
Sometimes yes. Its a more lazy way to invest. But in SE Asia, restricitive factors have created a distorted local stock market and progressively so for over a decade. The hard-working mutual fund investor/clients, mistakenly believe they are getting an ownership in hard-working and industrious Asia. Instead, due to severe fund investment restrictions on liquidity, fund clients/investors are buying indirectly only the very largest capitalized firms too often ignored faster smaller capitlized companies. Hence to many it pays to be more investor pro-active and through Thaistocks.com, you can find and learn about many value stocks in leading industries which pay dividends all along. But you got to go beyond the brokers, the funds and most biz news!
Yes, since late October 2017 I have been viewing to favor large cap stocks as well, notably PTTGC (79)
During the year 2017, I only visited in person and wrote up at length PPS (1.84), a stock pick which has done very well and in my view will continue to move up next year 2018.