That is how the market appears to be taking the coup in Thailand. This chart shows the Thai baht getting hit as before the coup it took about 37.25 baht to buy a dollar. Then it took as many as 37.9 baht to buy a dollar and now it is back to around 37.4.As recently as January it took 41 baht to buy a dollar. It turns out that over the last 60 years Thailand has had about as many coups as the US government has had presidential elections. Well that is an exaggeration but in Thai history coups seem to be an accepted way to change government.
The stock market, the SET index bottomed out at its open with a 4% decline but closed the session down 0.6%, in the immediate aftermath of a coup, 0.6%? Fascinating.
I have written a few times in the past about how markets tend to snap back quickly (this is subjective of course) from scary external events. It took six weeks for the US to snap back from the September 11 attacks for example.
It is possible it took less than six hours for the SET to snap back. While there could be more selling to come the very muted reaction provides a good example of how the market does not fear what it knows and for Thailand, it knows coups.
4 comments:
The market looks safe and buoyant. Sure would like to put money to work. But, I am now discovering there have been stealth rallies going on, namely in tech and those dividend etfs. Up and away from the 50dma. I've been here before, feeling that I need to reduce cash. I look for what still looks like value. Problem is that they often stay value and go down almost as much as the leaders do when the first correction hits. I don't know whether I need patience or insight that now is actually better than later to pick an entry. I have a core already in the market, but I protected profits earlier in the year by raising cash. This is hard work, active management.
You are absoltely right that it is hard work but in a way it is not. The way it is not is if you stay reasonable diverisifed and really know you will be wrong every now and then, it is a little easier. If you don't have a lot of cash you should have caught a chunk of the lift but if you have too much cash you have something to learn from for the future.
Nothing wrong with patience though.
Some insight regarding the Thai Coup: Info from relatives in Bangkok who worked for the King indicates that the Coup is actually considered a "relief". Thaksin was a big headache and he is now gone. Should bode well for the Thai future, especially once elections are held. By the way, the General in charge is a Muslim which bodes well for a reconciliation with the southern Malay insurgency, indicating possible stability in the region.
your comment about relief is consistent with the coverage on CNBC Asia. i just find it fascinating that order has been maintained.
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