More financial scandals coming out of the West, now for months already. What is one to do?  Well here is what I am doing.

It started in the 3 Q. '07 and there seems no end. Or are we at the bottom now? I don't know. 

I remember reading in the Wall Street Journal in early October in New York that UBS and others are taking big write downs "so to get it all over with".  Today we know it was back then, just the start.How many more lies are there coming?  Whom if anybody has a handle on it all? Is in the originator of yet another financial crisis, USA, slipping back down to a developing country?

Today it is Society General's 8 billion US$, earlier this week it was the Bank of China reportedly to take a bigger then previous report hit from subprime loans.  These mega hits create fears which is hammering Asia. Its not paper losses, it losses on first tier capital to banks and indeed to the world's largest financial institutions.  Happy dinner time to the fat boys in Davos.

 Western investors, even the world over and the bigger the more so, are selling-out their solid stuff to plug the holes back home they shaky stuff.  We got a full blown financial fallout/crisis on our hands.  It was induced by the gnomes of the developed countries.  Be glad if you are overexposed here, as in time it will show to be a great defensive play.  But for now its bleeding time all over.

So what is one to do?  I keep hiding in the Demco's, the TRC's, SNC's, SAT's..  and just recently sold half the SNC around 11.30 at a loss, so to move that into on SEAFCO around 5...as I think the new Thai government is bound to spend big infrastructure money in '08, regardless of global events. (I was also at first thinking of ITD but my smaller cap bias tilted me toward SEAFCO. But I have no doubt ITD should be the new SET leader, no longer PTT,  when the Thai market recovers).

I am holding on to my value shares while also holding my breath.  April/MAY is not far away and that is dividend time, so "getting paid while wait".  All of our top holdings are bound to pay nice dividends, including SNC.  SNC will probably get some broker research updates soon and its now too late to sell I believe, that if you are a longer term investor.

Dont' forget LVT (2.08) it remains a buy and in my model portfolio. This was my last year turnaround selection and it moved up 50% since. At LVT the orders on hand, the back-log and earnings are soaring forward into 2008. I just interviewed the president and will update you shortly. Its very positive... The company is doing better then expected and earnings will/should double this year -from a formidable recovery in 2007.  For year 2007 I see some 85 mill. net profit or around 0.39 Baht per share. So its at a trailing p/e of 5.3 just now at 2.08.   With 2008 likely to see 150 mill. net profit, that is the guidance I was giving.  But there will be 1/3 dilution due to the warrants expiring in Feb. 2009. Still the company will get over 100 mill. in new equity from the warrants conversion, allowing their fast expansion.

You can see my original LVT write up at this link: http://www.thaistocks.com/index.php?name=News&file=article&sid=854

Anyway more on LVT re-visited shortly.  But wanted to mention it today, yes with a stronger buy view rating in an otherwise oversold SET, just now at 728.

Best Regards,

Paul A. Renaud.

www.thaistocks.com