Low beta stocks have their merrits.
Low Beta Stocks have their Merrits.
Allot on this site is for free to all registered users, but the timely articles and our active lounge etc..(where members can pose questions and so get additional insights is for members only).
While I can't give specific on going investor advise, much at our site is value added insights all with the long professional and objective viewpoints. I can also answer short questions or help you if you are confused. Over 95% of our members ask to renew their membership as its viewed as high added value, so more like a good investment. I also publish for members a model portfolio. :)
Postings to our Member forum, here shared as an example to all registered users:
On a day like today with the SET market down nearly 4%, 45 minutes into the opening, it shows, yet again, how important it is to have 0, or negative Beta stocks in a rational investment portfolio, as they often move to a different drum!
A stocks' beta is the level of correlation this stock has, as compared to the general market. A negative beta would mean it moves up, on average, even if the market moves down and vis versa. In portfolio theory and practice one can show that such low or even negative beta's lower the portfolio risk, and so increases returns.
The point is often well made that many such value stocks "don't move much", but they also don't move down as much, when something bad happens. This too many forget to balance out :) As we can see today, yet again. Yet over time they can and have produced substantial returns.
Simply put: negative or low beta stocks are a real positive to any rational investor port. whose objective is more then just day trading. Yet, the institutions can't partake in this as these choices are often too small for their plate, so they have no interest elaborating on this.
Reply Posting by member "clearpath" :
Thanks for that info Paul !
You most welcome clearpath and all members,... here is some more to diggest:
I for one dare to predict that I will continue to get the investor strategy right, that is from an individual investor standpoint. As if the Thai turmoil goes on, I will be happy to collect almost triple the dividend averages as compared to the SET (paid now in late April and May), or close/around 8%, this along sitting in a group of stocks which are removed from the Macro turmoil/news/institutions.
And with now a good chance that they will pick-up a quiet and likely undereported new leadership, as they are so undervalued to begin...more investors will realize these are just a good place to ride this storm out. Which will pass, you will see.
Compare this to the institutional investors, their funds or ETF's owners, or punters, which now have no idea what to next; evenwhile their owned stocks, by far, just dropped the most.
Remember, you don't have to have an outright negative beta for this theme to work, that would be the icing on the cake, what you do have to have is high current income along with being removed a few beta notches from those expensive large cap.s, high debts and macro & prickly institutional ownerhsip. All of my picks are still up in value as say compared to the turn of the new year, and now they are mostly holding their own due to high cash dividends and not least, because so few bought them to begin with. :)
As to politics, and who will be the next prime minister etc..I have no idea, nor does anybody else. The nice thing about value investing in smaller cap's here, is it does not really matter. Unless, there is civil war here, in which case none of us should be here. I am not selling out anything.
I/we have been through many such crisis here, again and again, coup's, Asian & Western financial crisis, Tsunami etc...and more. Each time I was blessed in my strong belief in just mostly holding on with my investor theme. It worked out everytime.
Also, at least in Thailand we do not have a defunct/dysfunctional banking system which had to be rescued not once, but twice (Switzerland and USA and I think England, Iceland etc.. too).
Paul A. Renaud
Reply Posting by member "M...B..." :
"Dear Paul thanks for your incisive comments. The above somewhat sensationalist article was posted at a respected business site in Australia (free registration required.) I couldnt help responding see below. I used the pseudonym MK.
Regards Ben
http://www.busi…5&start=16
[quote It's not unusual TOPIC : Politics
Over the last few decades such strife isn't unusual in Thailand. (See The riots bleeding Thailand dry, April 12).
Also, there is usually flight of funds repatriated out of Thailand at these times.
Many still believe in the positives in the Thai economy long term.
For tourists, if one stays away from specific areas, no problems. We were in Bangkok over the weekend and the truth is unless we consulted the news we wouldn't know anything was going on. Of course we avoided the areas where conflict occurred. Experienced very heavy traffic to the north-east when leaving Bangkok on Sunday.
Tourist areas like Pattaya, Phuket, Chiang Mai haven't been involved, traffic to Bangkok's airport is unimpeded.
Final comment, any significant drops in Thai stock market could be a good entry point. Small capitalisation Thai shares are still very attractively priced (you can research these at www.thaistocks.com where we are subscribers but have no ownership interest).
We hope the situation resolves peacefully from here on."
Renaud & Associates Ltd.
Unbiased Thai Equity Research.
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Paul A. Renaud.
- from Morgan Stanley, USA - to over 20 years on location analyzing the Thai Stock Market.
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www.thaistocks.com
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E-mail: paulren@thaistocks.com or, paularen@gmail.com
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