We all are surprised at the sudden coup. Not that we did not see problems in Thailand's politics: everyone has, as they have in Korea, in Taiwan, and even somewhat in Malaysia. But nobody foresaw a coup.
Thoughts on the coup:
* Power play. It seems to me as if the King's authority was being challenged too much - so he re-asserted control. Our take is that he is in charge: the people always have backed the King loyally. No reason to see this change. So now, at least someone has re-assumed power: the King.
* The South. Surprisingly, the army was in today's Bangkok Post admitting how little it knows who is behind the attacks in the South. At least this now has been acknowledged. So now, at least the problem in the South will be given serious attention, which of course suggests that a workable solution will present itself at some point.
* The Economic Time. For many months our Economic Clock has signaled a "Strong sell/sell" on Thailand. Coup or no coup, this view has not changed hitherto. We will keep an eye on Central Bank policy So now, if the Central Bank reacts to the political uncertainties by turning on the monetary spigots, that might offer short-term relief to the market. That could alter Thailand's Economic Time from an excess demand for money to an excess supply of money. But, if that does not alleviate Thailand's excess supply of goods, profits cannot grow.
Investment implications: Buy on coup-induced weaknesses, expecting a bounce once political stabilisatio has set in. Exit on the bounce until Thailand's Economic Time has improved. In particular, avoid tourism plays.