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Phuket Finance: One rotten apple can spoil the whole barrel

Legacy Phuket Gazette

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Phuket Finance: One rotten apple can spoil the whole barrel | The Thaiger

PHUKET: As of the middle of June, the portfolios of many active managers of both mutual funds and hedge funds alike were badly under-performing the benchmark Standard & Poor’s 500 index. In fact, and despite a bull market that had seen the S&P index climb about 16% since the start of the year, over two-thirds of active managers were missing their benchmarks while active managers in general have had their worst performance since 1998. The major culprit? Apple.

Apple hit the US$700 level around the middle of September 2012 amid talk that shares would reach $1,000 by the end of the year or sooner. By the middle of June 2013, Apple had sunk to the $430 level and was sinking the performance of many active fund managers along with it because they were overweight in its shares.

Moreover, of the 30 most-owned stocks by hedge funds, Apple was the only one to have delivered a negative performance for the first quarter, and as of mid-June, it looked set to be one of only several to deliver a negative performance for the second quarter. Bedsides Apple, the hedge funds have also found themselves saddled with portfolios concentrated in low-returning discretionary and information technology stocks rather than cyclicals which started to perform better in late spring.

In other words, the “smart money” crowd bet too many chips on Apple as well as on the wrong sectors. While you or I can easily move in or out of investments, because we aren’t managing billion-dollar portfolios or positions, it’s very difficult for a big fund to add to or unload a sizable (e.g. one million share) position in the wrong stock or sector without seriously impacting share prices. This is another reason active fund managers are lagging and will probably continue to lag major indices for some months as they try to adjust their portfolios.

What are the lessons we can learn from the recent mistakes made by the smart money crowd? For starters, do no blindly follow the herd but don’t try and stand in front of it either. For example, any short seller who bet against the herd by shorting Apple before last September likely found themselves on the losing side of a “short-squeeze” while investors in funds that short the market have been consistently loosing money year after year since the market bottomed after the financial crisis.

Likewise, be very careful about buying into media or Wall Street hype surrounding any one particular stock, investment or sector, as the bulls can quickly turn into bears or vice versa. Case in point: do you remember all those bullish stories about Apple up until early autumn or so? When Apple’s share price was rising and kept rising, the media and much of the investment community kept singing the company’s praises and tended to attack its detractors, only to do a sudden u-turn when the stock or the company itself started to stumble.

However, unlike the managers of actively managed funds, the managers of exchange-traded funds (ETF) are not swayed one way or the other by hype because these funds are designed to track specific indices by having the same stock allocation as the indices they track. So instead of placing a bet on whether a manager of an actively managed fund can beat their index benchmarks, it makes much more sense to just invest in ETFs tracking indices.

With that said, there will still be a considerable amount of onus on you to have an investment portfolio with a properly diversified asset allocation between different types of investments (equities, bonds and cash) and sectors. This is much easier to do with ETFs or individual stocks or bonds than with actively managed funds. Why?

Consider this: If the managers of all the actively managed funds you own are overweight in Apple, plus you own shares, then you are overweight in Apple and your portfolio has probably been suffering since last September. In other words, you may have knowingly or unknowingly followed the herd and are now paying a price with diminished investment returns all because of one stock.

The image used in this article was provided courtesy of Björn Olsson. Please click here to view his gallery.

Don Freeman is president of Freeman Capital Management, a Registered Investment Advisor with the US Securities Exchange Commission (SEC), based in Phuket, Thailand. He has over 15 years experience and provides personal financial planning and wealth management to expatriates. Specializing in UK and US pension transfers. Call 089-970-5795 or email: freemancapital@gmail.com.

Keep checking the Gazette’s Business pages for the latest local and national business news updates affecting Phuket and Thailand. Alternatively, join our Facebook fan page or follow us on Twitter.

— Don Freeman

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

Thailand

Facebook removes “information-influencing” pages linked to Thai military

Maya Taylor

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Facebook removes “information-influencing” pages linked to Thai military | The Thaiger
PHOTO: Facebook

Facebook has confirmed the removal of 185 accounts run by the Thai military and allegedly involved in information-influencing. The social media giant says the accounts were deleted for engaging in what it calls, “coordinated inauthentic behaviour”. In total, 77 accounts, 72 pages, and 18 groups have been removed from the platform, in addition to 18 Instagram accounts. It’s the first time Facebook has taken such action against accounts linked to the Thai government.

The accounts were associated with the Thai military and were targeting people in the southern provinces, Facebook said its regular report on coordinated inauthentic behavior. The south of the country has been the scene of decades-long conflict, with insurgent groups in the majority-Muslim, Malay-speaking region calling for independence. To date, around 7,000 people have died in the ongoing struggle.

Facebook says the deleted accounts were most active last year and used both fake and real accounts to manage pages and groups, both openly military pages and pages that hid their links to the military. Some of the fake profiles pretended to be people from the southern provinces.

The report mentioned a post by the now-removed account named “comprehending the operation” in Thai. The page posted the logo for Amnesty International Thailand and wrote “The NGO never cares about ordinary citizens because they have no role in society. Normal people are not famous. Any case is not big news. They are not worth the investment of foreigners so they will not do anything to help. This is why we don’t see anything from the NGO.”

Facebook removes “information-influencing” pages linked to Thai military | News by The Thaiger

Image overlay translates to “The NGO never cares about ordinary citizens because they have no role nor money.”

On another now-removed account, named “truth about my home Pattani” in Thai, a post said “Muslim leader declares southern border is a peace zone. The southern separatists started a movement by spreading the idea that Thailand is under control by different believers so that people would come and fight for their religion. This was declared that the action clearly violates Islam faith.”

Facebook removes “information-influencing” pages linked to Thai military | News by The Thaiger

Image overlay translates to “Southern border is not Jihad zone.”

When contacted by Reuters, the military had no comment on the removal of the Facebook accounts, with a spokesman saying the organisation does not comment outside of official press conferences.

The head of Cybersecurity Policy at Facebook, Nathaniel Gleicher, has confirmed the reasons behind the platform’s decision.

“This is the first time that we’ve attributed one of our takedowns to links to the Thai military. We found clear links between this operation and the Internal Security Operations Command. We can see that all of these accounts and groups are tied together as part of this operation.”

He adds that the accounts had spent around US$350 on advertising on both Facebook and Instagram. One or more of the pages had about 700,000 followers and at least one of the groups had 100,000 members. Gleicher says the accounts were removed because of their misleading behaviour and not because of the content being posted. The content included support for the military and the monarchy, with allegations of violence and criticism of insurgent groups in the south.

It’s not the first time accounts linked to the Thai military have been removed by a social media platform. In October, Twitter removed 926 accounts it says had links to the army and posted pro-military and pro-government content. The Thai army has denied any involvement with the accounts in question. In November, Twitter also suspended an account posting pro-monarchy content that was found to have links to the palace and to thousands of other accounts posting similar content.

To read the February 2021 Coordinated Inauthentic Behavior Report, click HERE.

SOURCES: Reuters| Facebook

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Central Thailand

Airline executive arrested for failure to pay wages of 150 workers

Maya Taylor

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Airline executive arrested for failure to pay wages of 150 workers | The Thaiger
PHOTO: Wikimedia

An airline executive has been arrested in the central province of Samut Songkhram, after complaints from150 employees that they had not been paid. Chawengsak Noiprasan, who had a court warrant issued against him in October, was taken to Don Muang police station from a property in the Bang Khan Take sub-district. He is a board member of Siam Air Transport.

The airline began operations in October 2014 with services out of Don Mueang to Hong Kong, using 2 Boeing 737-300s. 2 Boeing 737-800s were added to its fleet in late 2015. It expanded by adding Zhengzhou and Guangzhou in China to its network in early 2015. In late 2015, the airline launched flights to Macau and Singapore. In 2017, the airline ceased all operations.

But according to an article in the Bangkok Post, the carrier operates a number of scheduled and charter flights from Bangkok’s Don Mueang Airport. The Post reports that, as Chawengsak signs the company’s legal paperwork, all legal matters concerning the airline fall to him.

The Metropolitan Police Bureau says the executive has admitted to ignoring a 30 day notice issued by the labour inspector and ordering the payment of wages to 150 workers. It’s understood he is also wanted in relation to 7 other cases.

The authorities sought Chawengsak’s arrest following complaints from employees who say they haven’t received their wages for 2 months. It’s understood the airline had previously deferred salary payments for over 8 months. 150 workers filed an official complaint with Don Mueang police and also approached media outlets, asking them to pressure the airline into paying the money owed.

SOURCE: Bangkok Post

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Business

Governments & old media versus social media – who will win? | VIDEO

The Thaiger

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Governments & old media versus social media – who will win? | VIDEO | The Thaiger

We look at the recent changes made by the Australian and Indian governments to except control over the world’s biggest social media platforms. India has issued strict new rules for Facebook, Twitter and other social media platforms just weeks after the Indian government attempted to pressure Twitter to take down social media accounts it deemed, well, anti social. There is now an open battle between the rise of social media platforms and the governments and ‘old’ media that have been able to maintain a certain level of control over the ‘message’ for the last century. Who will win?

The rules require any social media company to create three roles within India… a “compliance officer” who ensures they follow local laws; a “grievance officer” who addresses complaints from Indian social media users; and a “contact person” who can actually be contacted by lawyers and other aggrieved Indian parties… 24/7.

The democratisation of the news model, with social media as its catalyst, will continue to baffle traditional media and governments who used to enjoy a level of control over what stories get told. The battles of Google and Facebook, with the governments of India and Australia will be followed in plenty of other countries as well.

At the root of all discussions will be the difference between what governments THINK social media is all about and the reality about how quickly the media landscape has changed. You’ll get to read about it first, on a social media platform… probably on the screen you’re watching this news story right now.

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