Thailand's New Laws Could Spur ETF Panic

None of this should come as a huge surprise for experienced investors in the region. You can usually make money in Asia by investing in the middle of a panic, as in 1998 and 2001-2003, and selling during a boom. The sector has been too popular for too long.

The funds to watch next are the closed-end ones. Because they have only a fixed number of shares, they don't normally have to deal with redemptions. People who want out just sell their shares to someone who wants in.

As of Monday night, the (TTF Quote)Thai Fund and the (TF Quote)Thai Capital Fund both traded at very large premiums to their net assets. In other words, U.S. investors were so eager to get in that they were willing to pay as much as $115 for every $100 of assets in the fund.

That is usually a good sign you should sell anyway. But if this panic turns into a total rout, those premiums should turn into discounts -- that means people would be so eager to get out that they will sell you $100 of investments for less than $100. That will be the time to buy again. Stay tuned.