Connect with us


Finance: What is a contrarian investor to do these days?

Legacy Phuket Gazette



PHUKET: If you read my columns regularly, you know that I like to try to approach investing from a contrarian viewpoint. This basically means going against the crowd and the current trend, or essentially buying things when they are beaten and battered down and selling when everyone else loves them and thinks the run will last forever. So what does this mean in today’s market?

A lot of people are asking if China is a good bet; as a whole, it could stand a whole lot more battering before it could really be considered a value buy, without much risk to the downside remaining. If you look at the index as a whole in the chart above, you can see we are pretty much in the middle of the range for the last decade. The middle of the range is generally not a great place to enter a market, although it is far better than buying near the top.

Individual stocks can be good value buys if you have the risk tolerance for making individual plays, which is not for most of you out there. However, a friend of mine recently put me on to HSBC shares in Hong Kong – these represent good value, trading at a Price to Earnings (P/E) ratio of about 9, and paying out a gross dividend yield of about 8.5 per cent at the moment.

Some other banks, such as Goldman Sachs, are also at decent valuations. They are trading at around 8.5 times earnings, but in their case they only pay a meager dividend of 1.65 per cent. However, unless you expect the illuminati to fall, both of these stocks are most likely going to be sticking around for the long term.

Steel has taken a beating recently and pundits are calling the recent rally a dead cat bounce. However some stocks,such as US Steel (ticker symbol X), are trading at such lows that it is tough to imagine them not being significantly higher in the next bull market. At the moment, there is no P/E ratio – as they are losing money. So, this play would not be for someone faint of heart, as they also pay a dividend of only about one per cent.

Obviously another contrarian play one could make off of the low steel price would be to build on any empty land you have, since steel is one of the most important cost factors in the overall price of building. Of course not everyone has a bunch of empty building plots sitting around, but if you do, now might be a good time think about converting it into an income-generating property. You obviously need to factor in conditions in the local market; a big cause of the steel drop is that many markets have gotten way ahead of themselves in new construction. This is not always the best time to build, if you are worried about short term returns.

Generally speaking I don’t think we are in the environment yet where contrarian plays are found in abundance, but if you have money that you really want to get working, there are things you can do if you can handle the risk. For those of you with low risk tolerance, I would still conserve your cash for a proper crash. It will be coming – in the long run, patience always pays off. Rushing for a return now may significantly lower your overall returns in the future.

David Mayes MBA resides in Phuket and provides wealth management services to expatriates around the globe, focusing on UK pension transfers. He can be reached at or 085-335 8573. Faramond UK is regulated by the FCA and provides advice on pensions and taxation.

— David Mayes


Get more from The Thaiger

📱 Download our app on Android or iOS
👋 Have your say on our Thailand forums
🔔 Subscribe to our daily email newsletter
📺 Subscribe / Join YouTube for daily shows
👍 Like/Follow us on Facebook
🐦 FOLLOW us on Twitter
📷 FOLLOW us on Instagram


Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Indonesia2 hours ago

Man with Covid-19 disguised as his wife to board flight

Hua Hin4 hours ago

Kitchen raiding elephant breaks same wall in house for more food

Thailand5 hours ago

1st Taekwondo Olympic gold as Panipak wins for Thailand

Welcome back to Thailand!

Thaiger is getting behind local businesses for the restart of tourism in Thailand - up to 50% discounts across all advertising packages!

Coronavirus (Covid-19)6 hours ago

AstraZeneca Thailand writes open letter to people of Thailand

Koh Samui10 hours ago

Surat Thani announces new Covid-19 measures for Samui Plus

Thailand13 hours ago

His Majesty the King donates 2.8 billion baht in Covid-19 aid

Join the conversation on the Thaiger Talk forums today!
Coronavirus (Covid-19)14 hours ago

Covid UPDATE Provinces: 14,260 new infections, 119 deaths

Coronavirus (Covid-19)14 hours ago

Vaccination registration open for foreign residents over 60 in Bangkok

Coronavirus (Covid-19)16 hours ago

Autopsy results for woman who died after mixing vaccines

Coronavirus (Covid-19)20 hours ago

Covid UPDATE Saturday: 14,260 new infections, news briefs

Thailand1 day ago

Department head predicts Covid-19 could last up to another year

World1 day ago

Swedish prison hostage situation resolved with pizza

Thailand1 day ago

Minister: Foreigners, migrant workers are cared for amid Covid-19

Coronavirus (Covid-19)1 day ago

“Withhold Intubation” for certain older Thammasat Hospital patients

Coronavirus (Covid-19)1 day ago

Bang Sue vaccination centre open for expats 60+, under must wait

Thailand5 months ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism5 months ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket5 months ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism5 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand5 months ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism5 months ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand6 months ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand6 months ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand6 months ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand6 months ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand6 months ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand6 months ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand6 months ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand6 months ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Thailand7 months ago

Thailand News Today | Southern floods, Face mask fines, Thai Air Asia woes | January 8