The Thai Stock Market overall remains a bear-market.

The Thai Stock Market remains overall in a bear-market. But with investor "diamonds in the rough", to be and I have found.

There are many reasons for this. Local analyst/reports Thai Biz. & politicians and more mostly blame outside forces -instead of looking inward.  As mentioned here often before  “pointing a finger, leaves 3 fingers pointing back”.  Thai culture has many positive attributes but confronting negative news or shortcomings and inward needing changes, may not one of them.  Here below I vacillate on just some examples to make a point:

--A Western vacuum cleaner sales person would say “don’t ever vacuum-up water as it will surely short the motor and the warranty will definitely not cover this!”  Leaving it so very clear.  A Thai sales person might say, “maybe you should consider not vacuuming water as not so good for the unit.”  

--A Western property sales person might say “do you have the money on hand/ready to make a property purchase now if you found the one you liked?”  A Thai property sales person might say to be perceived as cordial, “maybe you should buy a nice house”.   Very different statements bringing on very different responses. The Thai vacuum cleaning company will deeply disappoint the customer as some consumer may not have realized (or be told) how bad water truly is.  The property Thai sales person may get “dragged through the pond” as he/she did not ask the point-blank question.  Being over polite in stock markets advising surely also brings on disappointments, only due to indirect over promises or often on over-politeness.  Example, “You can play this stock as I think it will go up” , vs.:  investing in this stock may likely at some point show a paper-loss, but you will most probably get high dividends in the meantime and at some point the stock will be worth more I think, but there can be no guarantees.  Very different statements with different expectations. 

Unrealistic over promises or not stating the plus/minuses or being too vague or over-polite, often brings some perceived short-term harmony -but longer-term trouble.   

Here is another one. --A man promises a lady of stated high interest to call her back twice, but then does not.  She says “oh no problem you must have been busy”.  A more assertive Western woman just might say, “you promised, but did not, why?”  The first invites a vague response from that man, sans plus. The second demands a more responsible reason and sort of nails the disappointment.  In the first instance the women just do not get a good feeling what is really going on, in the second, she sort of does based on his answer.  “Saying something because we care”, is an old Western wise saying.

In all of these (just some examples) instances its short term harmony vs. long term disappointment, or outright anger.  Of course there are exceptions, like sometimes its best to just let the person be who they want to be without correcting and then seeing their true colors. True, sometimes it’s best not to say anything or tame it down, but surely not always!   But investing in stocks and stock market regulation of its industry and brokers is not one of those.

Not long ago a renter I heard of, complained a snake entered their unit.  The maid and owner saw this renter left their front door open all the time.  One Thai landlord might say, “oh maybe because your left the door open?” Which the renter then says “No I did not”.   So believing her own untruth. Another more direct landlord would say, “well, we saw you left the door open often, so that is why”.  Different responses leaving very different outcomes.  

Point being of all this is:  the Thai culture has many nice/desirable attributes of harmony and non-confrontational approaches; but then this can at times have dire longer term consequences -and in the stock market especially, these can be substantial over time.   Many novice investors here inherently are seduced to trade and play, which the “polite broker” refrains from frowning upon this speculative activity, not least because they want to earn more commissions. Then in time most loose and so the broker loses the client.  Many Thai brokers write stock research-up as something like “play of the day”, which indirectly induces such behavior.  Today the situation here is most traders lost their shirts and responsible investors have low trust.  Where trust is the most important thing when investing in stock markets.

Many, many years ago, the Thai SEC told me once how it’s difficult to prosecute illegal insider trading violations and other SET/SEC infringements:  mostly because it must be handled through the police channels which have no deep understanding of securities law etc, and other conflicts.  Lame duck.  And how “this must change”.  Here we are a decade and more later and its this is still lame situation remains the same; with the SEC chairperson recently quoted stating again how one day this must change.  Why has this not changed in over 30 years me partaking here?

Many smart foreign high net worth individual investors besides institutions, will just not invest in a market without strong insider-trading violation actual punishments.  And often this is the first thing they appraise before deciding to invest here. This is/remains a dire shortcoming.

Post all these many years (over 3 decades), I sort have come to the conclusion some time ago the stock market here, brokers, regulation and operating of such endeavors are just not something it excels on -for perhaps/likely cultural reasons?

Last but not least, this does not mean there are not some good to great stock investments to be found on location. Many companies to be discovered here operate with integrity, not because of regulations or fear of fines/sanctions, but because its whom they truly are at the core.  And because on top of this, these are so often ignored by brokers & institutions.  Even while paying high dividends all along, they are true formidable “diamonds in the rough…less filling while tasting great”.  This is why I have for months now mostly advocated my own 3 picked choices. While stating why the overall market is/remains bearish for some time…. That is until, along with a better economy, meaningful reforms take place along with a few heads which need to roll.  Mentioned on-going and with even some letters published in the Bangkok Postbag.  Every culture has its plus and shortcomings and I just pinpoint some here, while not comparing shortcomings in others which truly also exist -even while so very different.