Jeremy Grantham latest investment letter

Jeremy Grantham, GMO’s Chief investment strategist, recently released his 4Q 2011 newsletter and its quite the read at 14 pages. He covers his thoughts on investing in general, capitalism today and investment observations for 2012

Some brief points to take away from it:

  • Overpricing exists in debt markets such as the US and UK
  • Stocks aren’t cheap nor are they expensive based upon their internal models
  • For investing in stocks to work during an inflationary period, one has to have a several-year horizon as earnings always catch up.
  • If there is less bad weather, agriculture prices could fall a lot.

Go to here to read the full paper:

http://www.gmo.com/websitecontent/JGLetter_LongestLetterEver_4Q11.pdf

Thailand ranked 2nd best emerging mkt for investors by Bloomberg

The article covers all the points that we’ve been writing here, that despite all the rubbish this country has gone through, it still recovers strongly each time. Enjoy reading.

In a Bloomberg Markets ranking, Thailand is second only to China among the world’s best emerging markets for investors. The ranking looks at a series of measures such as market transparency and prospects for growth over the next four years.

Source: http://www.bloomberg.com/news/2012-02-22/thailand-proving-best-after-china-among-global-emerging-markets.html

Charts – Weekly – USD/THB, SET

Latest thoughts from our resident chartist Ploy.

The US dollar index almost gave us a heart attack when it breached above the barrier at 79.54 last week. However, it couldn’t breach above another key barrier at 80.50: it turned around and head downward, with support at 78.50-78.30. If it falls below 78.30, it may head down to 77.20-77. I maintain my view that the US dollar index will become a threat to the global equity markets on its breakout above 80.50.

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Continue reading Charts – Weekly – USD/THB, SET

Floods knock 4Q11 Thai GDP down -9%

So the flooding back in Thailand had a far worse impact on GDP versus what all analysts and economy agencies expected. The National Economics and Social Development Board (NESDB) reported the Thai 4Q11 GDP slumped -9.0% yoy, to the lowest in the past 53 quarters and much below the market estimate of -5.0% yoy. Compared to last quarter, the GDP fell over 10.7% qoq pressured by the severe 70 year flood crisis that caused damage to all sectors of the economy, especially production, services and transportation.

So what now…going forward everyone is likely to increase their GDP forecasts for 2012 given that 2011’s GDP grew only 0.05%, far lower than their estimates, so its simply a factor of a lower base for 2011. We still think that the economy will do far better in 2012 than what most people expect, we still see government spending, increasing traffic at the airports, industrial estates in the eastern region performing extremely well (hence more FDI) plus several other factors likely to push GDP upwards.

Source: www.chartingthailandeconomy.com

Articles on Thai Politics, the army and …

Two articles from the Asia Times Online recently came across my desk in the past week and if you’re interested in Thailand, investments here or just love reading about political war room stories then these articles would definitely be of interest.

We have several thoughts about this…but for obvious reasons, would prefer not to comment publicly.

New battlelines in Thailand 
By John Cole and Steve Sciacchitano 

A major reshuffle of Prime Minister Yingluck Shinawatra’s cabinet this month threatens to put her government on a new collision course with the powerful and emboldened military. 

While much of the commentary on the new lineup has focused on the ruling Puea Thai party’s bid to restore its sagging popularity after last year’s flooding disaster, the significance of the appointment of the new defense minister, Air Chief Marshal (ACM) Sukampon Suwannathat, has not been properly weighed.

http://www.atimes.com/atimes/Southeast_Asia/NA27Ae01.html

Thailand’s Thaksin prepares for war
By John Cole and Steve Sciacchitano 

Newly appointed Thai Minister of Defense Air Chief Marshal Sukampon Suwannathat is quietly planning to activate a new “war room”, or secretive unofficial command center, to direct mass pro-government “red-shirt” demonstrations planned for the coming months, according to senior Thai military sources familiar with the situation. 

The war room, created at the direction of fugitive former premier Thaksin Shinawatra, will become operational by June, the same sources say. The senior military sources say that Thaksin, who lives in self-exile in the United Arab Emirates, ordered that Prime Minister Yingluck Shinawatra, his younger sister, be kept in the dark about the war room’s creation so that she may honestly deny its existence if questioned by the press. 

http://atimes.com/atimes/Southeast_Asia/NB18Ae03.html

Industry update – Weekly

The first two months of the year are all about the recovery of businesses affected from the flooding, specifically the Industrial’s sector. Both Amata and Hemraj have benefited tremendously from the flood crisis as their industrial estates were not affected at all, also Ticon has begun to recover as the impact on their rental factory business is proving to be minimal.

Continue reading Industry update – Weekly