# Buying opportunity in Vietnam fund?



## thomsk (4 Jun 2008)

Vietnam's economy, as some people may know, has took a huge knock recently. I am wondering whether anyone on AAM views on the Vietnamese fund VOF? It has fallen in price by about 35-40% in one month alone! 
I am tempted to buy at this cheap price, as a long term investment- but am not sure whether it has strong enough credentials. All I know is that Vietnam has big inflation problems ( and I heard something about a dam being faulty?).
Does anyone have much knowledge on Vietnam markets, or bought this fund?


http://uk.finance.yahoo.com/q?s=VOF.L


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## tribal (5 Jun 2008)

and I heard something about a dam being faulty?).

what does this have to do with anything?


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## thomsk (5 Jun 2008)

A big hydroelectric dam was built to provide electricity to thailand, I think. From what I can gather, it was built by Russians who are said to have cut corners.
The dam gates were kept closed for weeks, when they were due to open. There has been an investigation ongoing into the water in the river being contaminated, and making locals become ill.
Vietnam's economy is heavily reliant on fish exports. Cos the dam was closed - no fish to catch = no money!
I am not definite of all of this - the snippets of news I can gather seem to be like the water ( mirky ).
Food prices/ overheating economy have been causing big inflation problems - of that I'm pretty sure.
However, for many economists say Vietnams LONG TERM future prospects are very good. Large, young educated workforce who are grafters and work for less wages than the Chinese.


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## ClubMan (5 Jun 2008)

Fair play to you. You are doing some great background analysis/research on this investment anyway.


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## thomsk (5 Jun 2008)

Here are some other pointers. Worth watching the fund - thing is when to buy?? It's dropping like dead flies! Is this pure panic, I wonder. If so, could pay off as a great buy, as it says in the report "asian markets oversold!"



and some discussion on the fund...

http://www.iii.co.uk/investment/detail?code=cotn:VOF.L&display=discussion&it=le

Oh, and one further article....( explains the potential offered in Vietnam )

http://www.telegraph.co.uk/money/ma...008/06/04/cnviet104.xml&DCMP=EMC-mcn_04062008


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## tribal (5 Jun 2008)

have you any investments already?


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## thomsk (5 Jun 2008)

No - not yet. But it looks like $2 may be the level for adjustment/ resistance. Don't usually like catching a falling knife but 40 % off in a month definitely seems oversold. 
I suspect there has been major panic going on - and as Warren Buffet says... buy when others panic !! 
Miss the boat otherwise.
I think I'll drip - feed a few quid in over coming months/ weeks and forget about it for 10 years..


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## Dave Vanian (6 Jun 2008)

tribal said:


> have you any investments already?


 


thomsk said:


> No - not yet.


 
Thomsk - you quote Warren Buffett in your post above.  Buffett has also said the following...



> I have 2 views on diversification. If you are a professional and have confidence, then I would advocate lots of concentration. For everyone else, if it’s not your game, participate in total diversification. The economy will do fine over time. Make sure you don’t buy at the wrong price or the wrong time. That’s what most people should do, buy a cheap index fund and slowly dollar cost average into it. If you try to be just a little bit smart, spending an hour a week investing, you’re liable to be really dumb.


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## tribal (6 Jun 2008)

markets can keep falling a lot longer than we can remain solvent. dont assume a 40% selloff is over done. vietnam has terrible inflation and lots of other economic problems. to be honest if its your first investment then i would start with a diversified global equity fund, rather than just focusing on one very unstable country.


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## thomsk (6 Jun 2008)

Guys - I know about diversification being the name of the game, and I do diversify.
Only, I do not own anything substantial in the way of volume in Vietnam shares. This would be another way to diversify ( not my lifesavings, understand !)
I simply view it as a long-term punt, and if it shows some evidence re-pricing around $2 ( which again, today, it seems to be doing ) then I will start buying into this fund pretty soon.
Only a few years ago, if someone said they were going to invest in the BRIC countries, many others would have said " Oooohhhh! They're risky, they are. Inflation/ poor economies/ corruption/ communist..etc,etc. Ooohh, no - stay away from them and invest in uk and Irish banks ( much safer bet - listen to me !)". Ha.


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## tribal (6 Jun 2008)

how do you diversify if you dont have any investments already?


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## thomsk (6 Jun 2008)

I thought you were referring to vietnam investments.


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## ClubMan (6 Jun 2008)

thomsk said:


> Guys - I know about diversification being the name of the game, and I do diversify.
> Only, I do not own anything substantial in the way of volume in Vietnam shares. This would be another way to diversify ( not my lifesavings, understand !)
> I simply view it as a long-term punt, and if it shows some evidence re-pricing around $2 ( which again, today, it seems to be doing ) then I will start buying into this fund pretty soon.
> Only a few years ago, if someone said they were going to invest in the BRIC countries, many others would have said " Oooohhhh! They're risky, they are. Inflation/ poor economies/ corruption/ communist..etc,etc. Ooohh, no - stay away from them and invest in uk and Irish banks ( much safer bet - listen to me !)". Ha.


No offence but judging by your posting history in  you seem to be perpetually in search of the next big get rich quick opportunity!


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## thomsk (6 Jun 2008)

Ha - yes guilty of that to some extent. Must admit, it does seem I'm like that - but I keep the more adventurous postings to this site !

Don't really see the point in asking " has anyone considered investing in Mcdonald's/ Gillette/ Rio Tinto/ Microsoft, etc "  which are the safer  options.

Still, I am in no rush for Vietnam. But, will still go for it....soon !

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=alYVk7yW0GEc


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## tribal (10 Jun 2008)

vietnam increased interest rates today to the highest in asia and let their currency fall. not a good time at all to be investing there


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## ClubMan (10 Jun 2008)

tribal said:


> vietnam increased interest rates today to the highest in asia and let their currency fall. not a good time at all to be investing there



Maybe it's time to grab the _Dong _before it shoots up again?


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## PMU (10 Jun 2008)

thomsk said:


> and as Warren Buffet says... buy when others panic !!


Then you should invest in Israel: http://www.nytimes.com/2008/06/08/o...13675200&en=06413738764dfa0e&ei=5070&emc=eta1


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## tribal (10 Jun 2008)

what a comment

Ahmadinejad declared on Monday that Israel “has reached its final phase and will soon be wiped out from the geographic scene.”


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## Dave Vanian (10 Jun 2008)

ClubMan said:


> Maybe it's time to grab the _Dong _before it shoots up again?


 
Snap - I only asked Mrs. V to do just that last night.


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## ClubMan (10 Jun 2008)

Dave Vanian said:


> Snap - I only asked Mrs. V to do just that last night.


Snap!? Maybe you should put it in a splint?


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## dunkamania (11 Jun 2008)

Dont forget the currency aspect to this trade.

If you want exposure to emerging markets take a broader view like the emerging markets ETF, you dont know enough about the economics for this to be anything other then a punt.

Inflation increased to 25.2% in May, the currency is dangerously unstable, central bank hiking rates has not been able to slow inflation growth, and Vietnam will probably need an IMF intervention/currency devaluation in the coming months.

Read an article recently where the writer made a strong arguement that the decline in Vietnamese share prices is a bellweather for Asian markets in general.


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## tribal (11 Jun 2008)

i would argue that the 50% drop in the shanghai composite is far more of a bellweather for the asian markets and not vietnam


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## dunkamania (11 Jun 2008)

I would tend to look at the Shanghai B share Index, which is only off 42% from its peak .

Generally, the article waqs implying there more negative economic news flow coming from Asia, with Vietnam being the most vulnerable.


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## thomsk (18 Jun 2008)

The fund has increased again, up 18% in about a  week. I wonder if those who sold are not in panic stations anymore ( not thinking that vietnam is doomed forever ) and bought back again?
Seems strange to see a share dive so steeply, so quickly, then bounce up so fast.
I wouldn't have thought Vietnam's problems could be sorted in 2 weeks !


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## lorraine27 (18 Jun 2008)

yes


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## jimbob1234 (18 Jun 2008)

its just being its usual volatile self. you will have to be prepared to live with this if you buy into it


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