[Vnbiz] Stock price continues to rise
Tran Dinh Hoanh
tdhoanh at gmail.com
Fri Jun 27 07:24:51 PDT 2008
Dear brother Phong & CACC,
Thanks for the note, Brother Phong.
If we look at the whole domestic and international picture, there is no
surprise in the horizon that may adversely affect the Vietnamese stock
market. Food crisis is over. Oil price increase would not affect
Vietnamese stock. The only other surprise may be a big war somewhere, but
the possibility for that is small (although the possibility for localized
war is big in many parts of the world).
Domestically, if every thing is going the way it goes (i.e., government is
doing what it is doing or planning to do, and there is no major surprised
catastrophe like an earthquake), then inflation will continue to go down,
export and foreign investment continue to increase, import continue to
decrease, the economy continue to be on the way up.
That means (1) interest rate will go down several months from now, (2) the
VND will gain strength against the USA in relatively short time (may be it
already start to gain strength against the USD today but we don't really see
the impact yet), (3) inflation will rate lower.
All the stock investors in and outside this forum who are reading me will
agree with me that the key in playing stock is reading the dynamics of the
economy correctly--meaning, reading the future changes in every major
element of the economy. Brother Phong is assuming a 20% interest rate.
But that is the current interest rate and a bit down-sliding (now can be
around 18% at some banks). However, if the economy is going up the way it
goes now, that rate will be lowered in a couple of months.
Forget about the YOY inflation rates. If you look at the future inflation
between July 1, 2008 and July 1, 2009, what would you think the inflation
rate will be? People are talking about 22% all the time, but that is the
prediction for January 1, 2008n to Dec. 31, 2008, which contains 7 months of
the past. Stock investors have to see the future accurately. If you don't,
you may go bankrupt. This is not cheap talk; for stock investors, cheap
talks with incorrect vision can be deadly. So what is your prediction of
the inflation rate between July 1, 2008 to July 1, 2009. I would say
between 12% and 15%. And I count more on 12%, 15% is the pessimistic
number).
If that kind of inflation, with both the VN economy and the USD on the way
up, the possibility for the USD to gain more strength against the VND is
small. There is a much higher possibility for the VND to gain strength
against the USD, because (1) the VND is already very low at the free market
price now, (2) the pace of recovery of Vietnam economy will be must faster
than the US economy, and (3) the predicted growth of Vietnam economy is much
higher than the US (VN 7%, US less than 1% per Greenspan). To be sure, my
prediction of 12%-15% inflation rate will hurt the value of the VND, but all
other factors will add strength to the VND. On the whole, maybe we will see
a wash, meaning, one year from now the rate of exchange will stay where it
is today. If I have to bet, I will say one year from now, that VND will
gain strength against the USD, say, 1 USD equal to 17.000 VND).
(Forget about the rumor of 40% devaluation of the VND thrown around a while
ago by some speculators. That is so farfetched in the current picture that
it is simply laughable).
Now, the above is theory. Here is the proof: You guys (stock investors,
especially foreign investors) already see what I see and already start
buying since last week. What else can I say? With the current
not-very-good economic conditions, stock investors already start buying. A
month from now, as the conditions are a bit better, there will be stronger
buying. Imagine 3 months from now, how strong wuld that be? The reason for
all the buying is clear: Among all the long-term investment now (1 year or
more), stock beats everything else--not USD, not Gold, not bank saving, not
government bonds.
You guys realize that I say "stock price" in the generic sense. I have
never talked about stock of any specific company. And I mean exactly that;
The general price of the entire stock market will continue to rise from
now. If you simply "ride the wave," meaning just buying stock without
really knowing much about what company stock to buy, you still have a great
chance to make money. (Of cource, if you are really good and you focus on
the right company you will make much more).
Have a great day. Good luck making money. And please remember, if you make
money on my hint, buy me a cup of coffee at Metropole with live Jazz band
whenever I visit Hanoi. (Trust me, I don't just talk because it is cheap.
I know talks can make or kill investors' fortune).
Have a great day!
Hoanh
2008/6/27 <Hong-Phong_Pho at ita.doc.gov>:
> [ Vietnam Business Forum ]
>
>
> Brother Hoanh is at his two-point graph linear projection again!
> A few sessions up and he is ready to declare "mission accomplished".
> "Everyone in the world knows that the inflation crisis' causes were not
> internal"?
> Show me any independent analyst saying this. The best I've seen is that
> there were external shocks that precipitated the crisis, but the economic
> condition, the high growth, the credit expansion cannot be blamed on
> external factors.
> Let's assume that the stock market does gets to 600 points in two years.
>
> That means that for every VND 1 million invested today, you'll get back VND
> 1.5 million in two years.
> With 20% per year interest rate, you would earn almost as much without the
> risk.
> But if the VND depreciates against the dollar by nearly 40% to VND 22,000
> in just a year, as indicated by some analysts in the currency future market,
> all your gains will likely be wiped out.
> So there are still compelling reasons for people to buy the USD.
> Net foreign purchase of stock, while still slightly positive, is on a steep
> downward slope while net foreign purpose of bonds is deeply in the negative
> range.
> There are multiple factors involved. One dimensional analysis does not
> work.
> Here is a dilemma. Interest must come down for the stockmarket to fo up.
> But interest must go up for inflation to go down.
>
> Anh Hoanh is right in one thing. You can make money in the stock market
> over the long run. But to do so, you must have good information about the
> company's stock you are buying into.
>
>
>
>
> -----vnbiz-bounces at mail.saigon.com wrote: -----
>
> To: vnbiz at vietlinks.net
> From: "Tran Dinh Hoanh" <tdhoanh at gmail.com>
> Sent by: vnbiz-bounces at mail.saigon.com
> Date: 06/27/2008 01:58AM
> Subject: [Vnbiz] Stock price continues to rise
>
> [ Vietnam Business Forum ]
>
> Dear CACC,
>
> Stock price continue to rise, since last week.
>
> On June 18 I said the stock would rise continuously until it reach around
> 600 (which could take 1 year, or max 2 yrs in case of unexpected bad things
> that I can't see now). I have attached my June 18 message here for you
> stock investors to read again if you wish.
>
> Please note that foreign investors have been buying much more than selling,
> as I said in the June 18 message.
>
> I don't see any reason for the stock to fall. Even if the oil
> price increases, that should not adversely affect Vietnamese stock much. All
> economic indicators show things on the way up and I can't see anything to
> really make the economy worse. Not very good yet, yes. Still bad, yes.
> But on the way up; this is the key. For stock investors, bad or good is not
> important; "on the way up" is important. Say, if your economy is good
> (compared with other economies) but it is on the way down, stock price will
> go down. If your economy is bad but on the way up, stock price will be up.
>
> If you want to make good money, now is the time to buy stock. Forget about
> USD or gold, for the span of one year, they cannot compete with stock.
> (Note: I am talking about at least one-year-long strategy. If you buy
> stock today and sell tomorrow, you still can lose money, because there will
> be some days the stock price will go down. And if you buy USD today and
> sell tomorrow, sometimes you still make money. But for a one-year span,
> true and big profit will be in stock; and you many lose money if you invest
> in USD or gold.
>
> That is my prediction. And I give it an 80-percent chance of being
> correct.
>
> Have a great day!
>
> Hoanh
> ____________________
>
> http://www.vnexpress.net/GL/Kinh-doanh/Chung-khoan/2008/06/3BA03D07/
>
> Chứng khoán lại 'suýt' đảo chiều
>
> Giảm nhẹ ở đợt đầu, nhưng Vn-Index hôm nay dần lấy lại từng điểm đã mất và
> kết thúc một tuần chỉ đi lên khi tăng thêm 6,13 điểm (1,58%), chốt ở 392,61
> điểm.
> > Vn-Index thoát được phiên giảm điểm
> <http://www.vnexpress.net/GL/Kinh-doanh/Chung-khoan/2008/06/3BA03CAE/>
>
> Tuy không có những mã chứng khoán gây sự chú ý cho thị trường với lượng bán
> ra áp đảo, nhưng đa số cổ phiếu đều trong trạng thái bán ra mạnh hơn mua
> vào. Các mã xanh trên hàn thử biểu giảm dần, xuất hiện nhiều mũi tên đi
> xuống.
>
> Nỗ lực duy trì đà tăng điểm hôm qua của Vn-Index đã thể hiện sự đuối sức
> ngay từ đầu phiên giao dịch, kịch bản đi xuống sau vài phiên đi lên của
> Vn-Index tưởng như lặp lại. Chứng khoán sàn HOSE chính thức vơi 1,27 điểm
> sau đợt 1, khối lượng giao dịch chỉ đạt 2,647 triệu đơn vị, trị giá 72,265
> tỷ đồng.
> Trọn tuần cuối cùng của tháng 6, Vn-Index duy nhất một chiều đi lên, dù
> có lúc đã "đuối sức" và suýt đảo chiều. Ảnh: *Hồng Phúc*.
>
> Tuy nhiên, lượng mua được tung ra dần, ở mức ngang ngửa và sau đó áp đảo số
> lượng bán ra, đã giúp Vn-Index thoát được bàn thua trông thấy. SSI vét sạch
> dư bán, STB, FPT, REE, SAM... đã kịp "lên tiếng" cứu nguy chỉ số chứng
> khoán. Không những lấy lại số điểm đã mất, Vn-Index nhích lên từng bước một
> và ấn định chiến thắng với mức tăng 6,26 điểm sau khi kết thúc đợt 2, khối
> lượng giao dịch được nâng lên 7,156 triệu đơn vị, trị giá 202 tỷ đồng.
>
> Một số nhà đầu tư sàn chứng khoán Cao Su lo lắng dự đoán, Vn-Index không
> vượt dốc nổi sau 4 phiên tăng điểm liền kề, kịch bản giảm điểm của những
> tuần trước lại tái hiện. Tuy nhiên, khi Vn-Index giảm nhẹ, lập tức có lượng
> cầu đáp ứng ngay. Người bán nhiều nhưng người mua cũng không ít, nhà đầu tư
> đã nhận thấy mức giá hợp lý ở hầu hết các mã chứng khoán, và đây là cơ hội
> tốt để đầu tư.
>
> Kết phiên, chỉ số chứng khoán sàn TP HCM thoát được một phiên giảm điểm
> trong gang tấc với mức tăng khá ấn tượng 6,13 điểm, làm nên trọn một tuần
> Vn-Index tăng liên tục, với hơn 70 mã chứng khoán lên điểm. Khối lượng giao
> dịch thông qua khớp lệnh đạt khoảng 8 triệu đơn vị, với giá trị 232 tỷ đồng.
>
> Cổ phiếu STB khớp lệnh nhiều nhất phiên với 1,55 triệu đơn vị, trong khi
> đây là mã giảm điểm ngay từ đầu phiên giao dịch. Không ít nhà đầu tư đã nhận
> thấy cơ hội ở cổ phiếu này nên nhanh chóng đặt lệnh mua vào, khiến khối
> lượng khớp tăng cao, đồng thời góp phần "cứu nguy" cho Vn-Index. Trong khi
> đó, SSI dù khối lượng dư mua luôn dẫn đầu thị trường, nhưng chỉ có 38.360 cổ
> phiếu được khớp do bên bán quyết ghìm hàng lại, chờ mức giá cải thiện thêm
> vài phiên nữa.
>
> Nhà đầu tư nước ngoài hôm nay mua vào 1,077 triệu cổ phiếu và chứng chỉ
> quỹ, gấp đôi so với lượng bán ra. Cổ phiếu DPM được khối ngoại chọn mua
> nhiều nhất với 214.340 đơn vị.
>
> *Trên sàn Hà Nội, Hastc-Index sau nhiều phen giằng co quyết liệt đã có mức
> tăng nhẹ 0,76 điểm (0,68%), chốt 112,68 điểm. Tổng khối lượng giao dịch toàn
> thị trường đạt khoảng 5,57 triệu đơn vị, tương ứng giá trị 117 tỷ đồng.*
>
> *Bạch Hường*
>
> On Wed, Jun 18, 2008 at 1:31 PM, Tran Dinh Hoanh <tdhoanh at gmail.com>
> wrote:
>
>> Dear Brother Hao,
>>
>> Thanks for the question.
>>
>> A lot of factors are at work here. First, there is a renewed optimism on
>> Vietnam's economy. Vietnam's economic structure is relatively strong.
>> Everyone in the world knows that the inflation crisis' causes were not
>> internal: It is the combination of the stock crash (from over investment,
>> driven by foreign investors) and the oil and food price crises. (The fiscal
>> deficit and trade deficit help the crisis and make it harder to solve the
>> crisis, but not really are the immediate causes). Now the worst is over,
>> and everything is on the way up. The government responses coupled with the
>> natural order of things (i.e., stock crash effects dissipated over time,
>> food price going up to market price, etc.) are bringing things up steadily.
>> In addition, the USD is gaining a bit of strength in the international
>> market and will continue to gain strength because neither political party of
>> the US can afford to let it slide further. This, coupled with the VN free
>> market's working to keep the USD at its true value, will strengthen Vietnam
>> export and production and reduce import, which will help reduce the trade
>> deficit, which in turn will increase investors' confidence. That is the
>> general background.
>>
>> The stock price now is very low, if you buy now, the price will go up, you
>> will make money. And with an optimistic future in the horizon, why not
>> buying now? And if the USD is high and you buy stock in VND, you can buy
>> more stock for the same amount of USD if you can exchange your USD at the
>> free market price. This kind of behavior will drive the stock market.
>> Please note, domestic stock investors usually take the hint from
>> international investors.
>>
>> Now, about interest rate, if the interest rate is too high, it will hurt
>> the stock market. The current interst rate is high enough to attract some
>> investment in VND. But brother Hao is right, a lot of VND still stays
>> outside bank saving accounts and a lot of it will go to USD because the USD
>> is increasing in value. But (1) foreign stock investors don't care
>> about storing money in USD. They care about using the high USD value to buy
>> a lot of stock now at its low end, aiming for profit soon. (Please note,
>> regardless how you look at it, the stock price is very low now. The chance
>> for it to increase in price and value is more than 90%). If foreign
>> investors see the opportunity, many domestic investors will follow suit.
>> But I also believe that many domestic investors see the potential
>> themselves.
>>
>> (2) The USD price will not rise as high as the stock price. I think that
>> the stock price within 1 year (or 2 years is the most) may rise up to 600
>> point on VNINDEX. The chance for the USD to double value in the next 5
>> years is about zero. And if Vietnam's economy gains back strength (which it
>> will), then the USD may lose value versus the VND. So for middle-term
>> strategy (1 or 2 years), investing in stock will give you much more profit
>> in investing in the USD.
>>
>> (3) There is still a chance that USD will lose value suddenly if oil price
>> increases suddenly. I don't think international oil price will have
>> anything to do with the VN stock market (or it it does have some effect, the
>> effect would be minimal).
>>
>> Hope this helps.
>>
>> Oh, about eceonmic growth, well, the worst prediction from anyone on VN is
>> around 7%, that is very high compared with other countries around the
>> world. Nothing to worry about.
>>
>> Have a great day!
>> Hoanh
>> __________________
>>
>>
> --
> Tran Dinh Hoanh, Esq., LLB, JD
> Washington DC _______________________________________________
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--
Tran Dinh Hoanh, Esq., LLB, JD
Washington DC
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