The Crisis Bargain Bin
Taking the Long-Term View in the Aftermath of a Crisis
Within just a few months of the start of the Thai crisis, Thailand showed some measurable improvement in a couple of key areas. An irate citizenship forced government changes so that a new, more forceful administration came in. The new government administrators who took over were praised by everyone we spoke to. They generally agreed that they were the most talented group to run the country in a long time. That alone gave me hope for growth.
Tough times bring leaders to the fore. An apt analogy would be Franklin Roosevelt’s famous first 100 days, when the New Deal was ushered in to help rescue the country from collapse.
Only in times of crisis will people change their destructive behavior patterns. Only when there’s a consensus that something is broken will anyone take the trouble to see that it gets fixed.
Many Bangkok blue chips enjoyed pride of place in our portfolio as jewels in our crown and, at the right price, deserved a larger place. It was time to focus on those bargains and winnow out those companies that could not survive and prosper in the new environment. It was time to buy some stocks and sell some stocks, reasonably, rationally, prudently and cautiously. Someone asked me how I was purchasing Thai stocks. My reply: “Like porcupines make love . . . with great care!”
No Pain, No Gain
Looking at the macro picture for the near term, things could not have been much worse. However, ...