Dr. Dinh The Hien: the "lazy and greedy" cash flow

DNHN - Dr Dinh The Hien, an economist, calls the land and security cash flow "lazy and greedy." Laziness arises from the fact that cash flow is easy, does not need much effort, and does not demand significant expertise and collaboration as in business and manufacturing.

Getting greedy happens when investors want to make a lot of money quickly or quickly make a lot of money. When the pump-blowing forces are blocked, laziness and greedy cash flow may allow some knowledgeable people to earn great money, but it can also lead many inexperienced (F0) investors to lose money.

The government's practice of restricting real estate loans to regulate land prices has been met with criticism from Dr Hien. To save the financial and banking institutions, the government is limiting real estate financing. This is why land prices have fallen (if at all).

According to Dr Hien, if investors continue to pour money into the land to avert inflation, land values will neither decrease nor grow in 2022. However, if the three banks, securities companies, and real estate industries inflate the land price, the land price must decrease fairly. “Same for the stock market.”

Currently, the market is paradoxical, as firm stock prices rise despite no major changes. Investors seem prejudiced while questioning the 6% deposit rate. -7%, but prefer companies with P/E ratios above 20 for high profits. Vinamilk is a decent company with a solid brand, but prices have fallen in the previous year and the P/E ratio is below average.

That's enough to demonstrate that the stock market is dancing," Dr Hien added.

As a result of stimulus programs, real estate prices went up, and the stock market went up, too. The onset of the COVID-19 pandemic in 2020 and 2021 devastated production and commercial sectors, and people's earnings shrank.

However, because of two things: production problems caused by supply-demand bottlenecks and inflation, which makes people want to keep their money in assets like stocks, bonds, and real estate, this situation makes real estate and securities a very good way to make money.

Thus, during the last seven years, real estate has consistently been shown to be an excellent investment channel. However, according to Dr Dinh The Hien, the real estate "wave" in 2020–2021 will not be of the kind of profit from the production and commercial operations or the flow of large public investment funds in infrastructure.

This two-year real estate “boom” was fueled by private investors and bank loans. If that trend continues, it's time to freeze, since everyone wants the land (and borrows money from the bank to acquire it), so where can I get the money to buy it again?

“It's also difficult to sell at the price to others since everyone has a lot of lands but little money, because they don't invest capital in production and company but have earnings pulled to pour into the land,” Dr Hien said. Dr Hien delved further into the “wave” of land and asked.

"Where is the money for land to expand? The stock market has surged because companies and employees have had challenges in the last two years, and now they are still attempting to recover?". 

According to him, the arrest of Tan Hoang Minh Company revealed that over 10,000 billion VND in bond proceeds were redirected into the land, and 700 billion VND in recent corporate bonds were bought by banks, demonstrating that the cash flow into land has a rotation: banks, securities companies, and real estate companies (with the same investment group as "whales" assassin").

 Vĩnh Chi - VNF