Local Press Bewilderment.
Some things never cease to amaze. On occasion when I read the local daily newspaper in addition to all else. I often come away in awe on the daily dose of SET related confusing nonsense reported and tolerated by the local business press. Here I show just two recent examples.
On March 10 of the Bangkok Business Post, on page 2, there was a short article called "Market has room to grow -says SET chief". The article starts out saying that good "fundamental stocks will be the main driver of growth for this year", so far so good and I much agree.
Two thirds down it quotes Ms. Wiriya Labpromorat, research head at Kiatnakin Securities, she predicts "large cap stocks will lead the market higher". For sure and how revealing I am thinking, as the SET benchmark index and the SET50 index are most only large cap benchmarks. So what else will lead the SET index higher? Not much wisdom or innovation there, I conclude. Surely the sleeping beauty's' smaller cap shares won't lead anything, as there is no index at all representative of these! Why?
But then it quickly goes downhill, when this article concludes: "Interest in small cap stocks however was expected to fall as securities regulators impose new controls aimed at curbing speculative trading". This is disaster reasoning! Rampant speculation is most often only confined to bad fundamental big cap stocks, or very liquid mid sized stocks. (And the SEC is imposing new trading rules on stocks with p/e's above 100 or whose trading volume exceeds its total shares outstanding in any given week, as I understand it).
Rarely if ever does this occur in smaller cap value shares, which overall command the best fundamentals -besides the highest cash dividends on the whole SET exchange!
Nuntawun Polkuamdee, the writer of this article, goes smack against informing the reader -by confusing the issue on 2 fronts. Or if not that, then by quoting Ms. Wiriya Labpromorat, who disturbs the less SET informed; the silent majority who keep staying out of the SET because of this very confusing nonsense.
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Then there is the gallant no doubt very polite Khun Nikhil Srinivasan who writes a weekly column called "Second Thoughts", published every Tuesday in the Bangkok Post Bus. section. Recently he padded himself on the back, by calling for a new trading range on the SET index of around 690 to 750; good as seems what is happening now and I agree.
With the SET currently near the bottom of his trading range, he deviates on in his latest weekly titled "It never hurts to be prudent". He there praises an investor for selling out as "the market is no longer exiting". He agrees. Yet, at the end of the article he notes "the SET index itself is right on support". Am I missing something or is he really taking both positions?
Khun Nikhil so takes no real side and besides fails to differentiate from short to longer term. Trader vs. Investor. He confuses the two. If the SET tumbles below, he will praise himself by telling us how he agreed with his quoted investor -whom sold out. If the Thai market bounces back, as I still think it will, will he remind us so?
This same Gentlemen in an article 2 weeks ago advocated something like: if you are not going to trade stocks you should invest in a fund. I ask: Khun Nikhil, what ever happened to long term investing in value shares, is that not yet another viable option? Or is it trading and speculating galore the only right way -or forget it? Further writings back, he reveals that he is rather stock graph oriented -when in his last article he praises looking for good fundamentals by advocating to look for accelerated earnings, expanding margins etc... This man is all things to all people in all seasons. His column should be called "Confusing Thoughts".
Paul A. Renaud.
