Take some profits on the latest price surge.
Extreme caution is now advised. After just telling you to hang on to all, we now think it is time to take some money off the table.
I am now thinking it is time to take some serious profits and stand back for a while. I still see further gains ahead later but as a disciplined value investor I now would stand back. Yes, I could be wrong but I sense over optimism which is dangerous.
Thaistocks.com told you to be select bullish on the SET for a long time. First our smaller value shares rocketed higher and lately this rally has broadened to property and finance, both sectors which I told you to have exposure in.
I am sorry I have not been able to send you directly an e-mail alerting you to this important update but the software is acting up and for now it will not work. I did insert a key bold phrase at the front page alerting all to my latest view.
Clearly, I advocated again and again that the Thai market would rocket higher -and it has. Now I would stand back and take some profits. Things are overheated!
Earlier in the week I thought some Thai market consolidation was in the making and a healthy development. But It did not last and so we are in overheated mode.
While this can last longer, I for one take the more cautionary stand and advocate pairing out of these super price movers, of late.
Just a few months ago I mentioned 3 property stocks. AP, LPN and GOLD besides STECON and ITD. STECON was firmly brought to your attention in January at the low Price of 22! Supali was also favorably mentioned here just 2 weeks ago around 16. On this massive current really I now would sell just about all of them and take a rest! Similar thinking is on CNS, KK and Seamico, finance stocks I mentioned which moved up rather massively since.
These SET stocks now appear overheated and fairly valued. Also overdone are AJ and TFI; after telling you to hang on for the big ride, here too I would now nail down profits with an eye of getting them back cheaper down the road. The surge yesterday was prompted by retail buying and is suspect. Often local retail clients are the last to enter "en masse" and often it signals a temporary top.
Another perfect contrary indicator is the US edition of the Wall Street Journal whom on June 4th had a long article as to "Unfamiliar Foreign Stocks are In". The focus was on Southeast Asia and it was the understatement of the year. When the news is out, it is time to sell.
I do recognize that there are strong global forces to re-enter SE Asia, as the consensus seems to finally understand that in the US there is stagnation besides many scandals. Yes, the global flow of funds are still favorable to Thailand and I am no new bear, I just now think it is high time for a much need market consolidation.
This is a dangerous call by me as if I am wrong we will all be sorry. Still at the very least, I now advocate highest caution.
I also fully recognize the food stocks have been dire laggards. CRESH, SSF and CPF have combined been left far behind -in this latest upward frenzy. Sorry about that. I think it is too late to sell and would just hold on. I would continue to rate these stocks accumulate buy on weakness. Some brokers are now telling us to sell these but I think they are too late.
OGC, a long choice of mine, has given up some of its gains lately. Part of that is the vigorous investor appetite now for finance and property stocks. Another part of is due to the Baht appreciation vs. the US Dollar lately. Baht strength is not a positive for OGC even while it is for foreign based investors. Here too, I would just hold on as I do not see the Baht/Dollar ratio dropping below 40. I view OGC capacity increase announcement and its use of cheap natural gas as a positive. Fundementally it remains a buy, in my view.
Also, if the bear market on US stocks picks up steam (and more scandals brake)it will sooner or later affect the super bull sentiment on the SET, at least for a while.
Best Regards to all members,
Paul A. Renaud.
