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Mark Williams, Asia: Why we are maintaining our holdings in Thailand

 Political events have evolved swiftly in Thailand, as the army’s imposition of martial law – initially accompanied by assurances that it was not a coup – was swiftly superseded by a fully-blown coup. While political developments have had a greater negative impact on the economy than we would have predicted a year ago, we do not feel minded to reduce our current holdings in the country. At a forward PE ratio of 12.1, the market is trading marginally above its historical average but in line with the region, and we believe that the companies we hold will continue to provide dividends with long term growth prospects.

Thailand has relatively low debt, with public debt:GDP at 46% and general government debt:GDP of 30%, allowing for fiscal stimulus to be easily implemented when an interim government does take control. We feel that the current military intervention is likely to be a step towards resolution of the situation, even though this will continue to be a slow process. To provide some context, this marks the 19th coup since 1932, the last occurring in 2006 when Thaksin Shinawatra was ousted from power.

John Husselbee, Multi-Asset: He ain't heavy, he's my fund manager

John Husselbee: Do you see what I see?

I am often inspired to write a blog by some event or observation outside of the investment industry, and this occasion is no different. Travelling recently to a race meeting, I read a copy of Berkshire Hathaway's annual shareholder report written by the legendary investor, Warren Buffett. He shared with shareholders the instructions given in his will for his wife to invest her inheritance. In simple terms he has advised her that the majority of cash should be invested in a cheap passive index tracker, going so far to name Vanguard as the right choice. This advice hardly seems to be a vote of confidence in active management, but I am not so sure that I totally agree with his advice when applied to investing in the UK.


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