A lot of friends and colleagues have been asking us over the weekend “What do we do now?” My answer to most of them, much to their chagrin is “Well its a bit late for asking.”

Unfortunately when investing, days like the past few come along when the SET will drop -7% to 958.16 because of a global fear, a liquidity crisis or as the case normally with Thailand is, a political event.

But these are risks one should be aware of when investing, not just this year, but constantly. We did warn that the issue with Greece isn’t that it would initially lead to a global/euro/us recession but that it would lead to a massive liquidity crisis if Greece were to default, and in the weeks leading up to the the recent equity market drops there were plenty of news reports talking about how the US money markets were withdrawing funding from Europe, that the ECB has to pump in liquidity into the banking markets in Europe, that Socgen is overexposed, etc etc etc…

AND we know politicians are slow to get anything done so when all of this information is in plain sight it is a bit late to be asking “What do we do now?”

Regardless, on Friday we decided to take very small positions back into the market, given the large amount of cash we have for clients, specifically in IVL and LPN, why these two? We monitored the foreign holdings in both stocks and note that there is little positions for them to sell off, LPN offers us a nearly double digit dividend yield and its earnings are secured for the next 12 months. IVL, its liquid, minimal foreign holdings today, nearly mid single digits PE and still growing a monstrous 20-30% a year for a company its size (mkt cap Bt 149bn/US$5 bn, ranked #12 in Thailand on mkt cap rankings). And we assumed that given the drops globally that some plan will be announced (and it looks like it will http://tgr.ph/qDoUgl) resulting in a pop next week.

Lets see what happens..