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Published on March 15, 2008

Some might say he wouldn't invest in the Thai market because there are too many uncertainties. That might be so, but we don't need to rely on Buffett himself to speculate about his possible picks.

Let's ask Thai followers of the "Sage of Omaha" what they think their guru would buy, according to the "Buffetology" method.

Vigrom Kasemvhudi, vice president of Thai Investor Association and a long-time follower of Buffett's investment style, recently said by adopting the classical criteria Buffett uses, Siam Cement should be a top pick.

"The criteria he uses would suggest that SCC was a perfect stock to invest in for the long term. All of its businesses are easy to understand, though there are five business divisions in all," Vigrom said.

The firm possesses transparency in management, easy-to-understand operations, high earnings, good dividend yields, and returns on investment as high as 36 per cent, he said.

However, he warned that the petrochemical industry, which is one of SCC's five businesses, appeared to be peaking after an eight-year cycle and may be in for a correction.

Vigrom has made a fortune from SCC stock, whose par value was Bt100 and shares priced Bt167 30 years ago.

Now, the price is above Bt200 with a par value of Bt1 a share.

He also mentioned President Bakery, which makes sliced bread under the Farmhouse brand, as another top pick.

Another big Buffett fan is Dr Nives Hemvachirakorn, who calls himself a value investor.

He has written many articles and books that cover Buffett's investment method, lifestyle and philosophy.

Nives also admires the works of Buffett's mentor, Ben Graham, who was the author of four editions of the masterful treatise on investing called "Security Analysis".

No doubt, Nives's investment methods have built him a fortune as well. From 1997 to 2005, his annual return on stocks was 37.8 per cent on average, compared to the market's average of 8.2 per cent.

In one of his books, he said Buffett claimed his investment style was as slow as a sloth. Nives's own speed is like that of a tortoise, which isn't much faster.

A tortoise may be slow, he said, but it is strong, patient and lives a long life.

He calls his picks "tortoise" stocks, which must be stable, growing businesses. They should have steady growth and be protected by a strong shield against competition and hostile forces.

A stock that carries high risks, which can affect its returns, is not for him. Nives's stocks must generate minimum returns of 7-8 per cent a year and he expects them to offer a return of 15-20 per cent over five years.

He said he would avoid stocks that claim they can grow 30-40 per cent over three years, as they carry too much risk.

Nives once said if MK Restaurant, the sukiyaki chain, listed on the stock market, he would not be in a hurry to buy its shares.

Jiwamol Kanoksilp

The Nation