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Thursday, December 26, 2019

Frustrated with the lack of growth

My portfolio has been stuck at the same level for a good 4-5 months now. Which is frustrating to say the least.

Notwithstanding weakness in the market, the cash payment on my home purchase really set me back . That is one of the reasons why I had put off a home purchase for the longest time. I didn't want my FI goals to be adversely affected.

Damn you stamp duty! Big props again to the G for profiteering off the efforts of private developers and the hard-earned capital of home owners. 

Investment-wise, I have hit a rut. No new ideas. No inspiration. So much so I am toying with the idea of robo-investors, except I am really put off by the idea of management fees.

I spent a good amount of time scouring the financial blogosphere for inspiration but to no avail. Lately, the market seems to be rather muted as though Madam Market herself has switched off and gone on holiday.  There is consolation to be had in that dreariness. The Singapore market may be predictably dull (if you invest prudently), but in exchange, you do get to keep your sanity (mostly) when there is a downturn (and there will always be one).

My year 2019 has been characterized by strokes of good fortune, which are in turn counteracted by whims of careless spending.

Buying a car (Feb) and an apartment (Nov) in the same year has reduced my investible ammo by a staggering $75k.  Yet somehow, through a combination of dumb luck and patience, I managed to end the year with a 1.4M portfolio or up 27% (around 300k) from Dec 2018

This is in no small part due to the trend of REIT consolidation this year, which provided me with nice gains in Ascendas HTrust and Frasers Commercial Trust. 

Dividend income wise, my 2019 performance has been lacklustre. Not exactly an unmitigated disaster the scale of the movie Cats (lol). But certainly quite far off the goal I had set for myself 12 months before.  I started the year with a portfolio size of 1.1M, and I had set, what I then considered to be an achievable goal of 77k passive income (7% yield on starting capital). Alas, even with capital injections along the way, my total 2019 dividend income was a disappointing 69k.

Time to look forward and do better in 2020.

With a starting portfolio value of 1.4M, the goal is to surpass a 100k per annum passive income mark.  A six-digit annual passive income would be a welcome milestone. A basic safety level in the barometer for retirement readiness.

I hope I would be able to end 2020 achieving, in substance, FI.  Any additional number of years worked thereafter would simply be a bonus + buffer.

2020 Objectives:
1.65M in portfolio value
100k in passive income

Onward to FI my friends.

Tuesday, November 19, 2019

Wounded by the Eagle

I currently hold about 55k EHT shares at an average price of 0.64.

DID SOMEONE SAY BURNT?

I was briefly down 10K USD. Then the stock price rallied to settle around 0.53 - 0.54 range, narrowing my losses.

Suffice to say, my track record on bargain hunting is not that erm illustrious.  To put it mildly. 

I remain hopeful on EHT.  The SSH selling appears to have stopped (for now).  It is clear that retail investors remain apprehensive on EHT.  And who could blame them? 

And I might have been deeper in the hole, had it not been for the fact that I recently bought a home, which necessitated having liquid cash on hand.  It is time to say goodbye to renting.  I am done paying someone else's mortgage. Well technically, the expected TOP is 2023. So there would be a few more years of renting.

All in all, it has been an eventful month. I re-entered HKLand at 5.46 and re-sold 5.69, booking another small gain of 800 USD.  I also sold off Keppel entirely at 6.92 netting a S$2.1k gain including dividends (annualized return of about 6.3%). 

I am going to have to burn some cash for stamp duty and the 25% downpayment.  So although I have in mind a couple of seemingly juicy targets to acquire in this market, it appears that these purchases would have to wait. 

SIGH. Totally not looking forward to get back into debt. Part of me thinks that a resale HDB would have been the more finanically prudent choice.  But then again, the other part thinks what's the point of slogging so miserably for FI if I can't even reward myself with a quality of life at the lower end of the middle class spectrum?

No prizes for guessing which part of me won the debate.  So here I come years and years of mortgage debt!  BRING IT ON.

Nothing makes you love your job more than a sudden mountain of debt foisted upon your shoulders.

Onwards to FI friends!


















Wednesday, October 23, 2019

Bad week for AIMS APAC and Eagle HTrust

When it rains it pours, as the cliche goes.

AIMS APAC REIT (AA REIT) suffered a correction earlier this month when its Manager (AIMS Financial) decided to unload shares amounting to around 10% of the float via private placement.

The private placement was done at 1.35, which is a significant discount from the last traded price 1.48 prior to the placement.

The reason given by the Manager was ostensibly to increase the liquidity of the share.  Seems more like a blatant cash grab to me.  Perhaps investors should have foresaw this cash grab when AIMS acquired the AA REIT shares from AMP Capital earlier this year, and became the sole sponsor. 

Expectedly, the market reacted by selling down the stock, and it is now hovering pitifully around the 1.35-1.37 mark, wiping out a good 30k off my AUM.

If there is a silver lining, it would be that this divestment is not the same as a rights issue. The total number of shares remain the same.  It is merely the Manager reducing its ownership in the REIT which it manages.  So, all else being equal, i.e., assuming DPU is consistent, you could say that this correction presents an opportunity to load more AA REIT shares at a discount.

What should be of concern, and rightfully so, is whether the manager's reduction in alignment with AA REIT would adversely impact the REIT's future performance.  IMO, too early to tell. 

For now, I am still keeping my faith. And may buy small chunks at the "right price" to average down.


Eagle HTrust has also seen some downward pressure on hits share price. Its intraday low today was 0.635.  Unlike AA REIT, my research yielded no answers as to the potential reasons for the sell down. Based on Eagle's last report, its earnings came in modestly better than forecasted.  See: https://www.businesstimes.com.sg/companies-markets/eagle-hospitality-trusts-maiden-dpu-beats-forecast

At current price, its expected yield is near 10%.

But it would appear that Madam Market knows something that I do not yet know. 

My view is that this share might be unpopular amongst investors due to its lack of big name institutional investors, and such sentiment may also be driven partly by investor short-termism (Eagle is not distributing any income until Q1 next year). 

Again, I am going to keep the shares for now. My position in Eagle is small relative to my portfolio and that allows me to tolerate a bit more risk. 

No pain, no gain.

Onward to FI friends!















Monday, October 14, 2019

On finding purpose

There was a sincere and introspective post on A Millennial's Attempt at Adulting recently.

The post explored the writer's inner thoughts on the purpose of her job (life?) and invoked the oft-cited Japanese concept of ikigai,  which may be summarized as doing something, which you love, which you are good at, which is useful to society, and which pays you.

Ikigai seems to be the elusive holy grail that many are seeking. I do not pretend that I understand why this is so.

"Purpose" is itself a rather loaded word in my opinion. Is purpose a mantle you choose to wear on your shoulders; is purpose foisted upon you by others; or is purpose simply a malleable thing which is constantly shaped and reshapened by what you think others expect of you?  I suspect the answer lies somewhere inbetween, ironically, not unlike the famous ikigai Venn diagram.

I have never felt that there was any purpose in what I do. But more importantly, I have never felt compelled to seek out purpose.  What would be the point I wonder? Perhaps I am quite happy to not be particularly skilled in something. Perhaps there is insufficient altruism in me to want to do things for the greater good.  Perhaps I have no great lasting love for any chore. Or perhaps I am just a plain old hedonist. 

Hedonism, I feel, is a much maligned way of life.  I shall not attempt to explore whether hedonism can be a moral philosophy to live life by. I generally do not think that people should have to justify their outlook on life to others.  After all, was it not Epicurus who said that the greatest good is to seek sustainable pleasure in a tranquil life that is free of fear.  To me, that alone, is a persuasive justification for being. No metaphysical explanations required. No need to sprain any brain muscles.  If it is good enough for one of the greatest Greek minds ever to walk the planet, I suppose, it would do just fine for me.

Indeed, I feel like the whole FI movement is predicated on Hedonism or, if you want to split hairs, Epicureanism. Why do I say that?  You would find that each tenet central to Epicureanism finds a parallel in a FI philosophy:

Sustainable pleasure - Nothing says sustainable pleasure more than a constant, recurring stream of passive income.

Tranquil life - No bosses, no clients, no deadlines, no politicking colleagues. Does it get more tranquil than that?

Free of fear - You know what I fear the most, the thought that I might be trapped forever in a job I detest just because of the need for survival.  No other solution comes close to resolving or removing this fear than becoming FI.  Furthermore, he who has FI-ed fears neither competition, retrenchment, nor retirement. I would argue that this is true freedom from fear indeed. 

So to all those who might be suffering from a bout of mid-life crisis, or who suddenly feel like their life is devoid of purpose or meaning, verily I say to you: Abandon your false prophets, and disabuse yourself of vacuous notions like ikigai.

To seek happiness, through whatever is applicable to you, is what counts. If that means waking up at 11 AM every morning with no where to be, and nothing to do, so be it. 

Onwards to FI my friends!






Wednesday, October 2, 2019

Added Cromwell REIT

The BUY

72000 shares @ 0.500 EUR a share

Expected yield: 8.2% based on last half yearly payout


Accordingly, this investment may yield around SGD 4,300 a year in dividends, or around SGD 360 a month.  Yet another step towards breaking 100k a year passive in 2020.

Why?

Diversification

Wanted some geographical diversification.  I currently have exposure to Singapore, UK, and Australia (AA REIT +  FCOT + Starhill), China  (CRCT), US (Eagle HTrust), ID (First REIT).

Ultimately, it was a toss up between IREIT and Cromwell.  Overall, I preferred Cromwell REIT because I feel there is less tenant concentration risk compared to IREIT.


ECB money printing quantitative easing bond purchases

This is a double edged sword.

On the one hand, low interest rates is always a boon for REITs. It provides cheap financing for the REIT to acquire new assets, and further boosts the NAV of the underlying assets.  Cromwell REIT is already trading at a discount to NAV.  Any further boosts to the NAV would make the share price more attractive.

On the other hand, for Singapore-based investors who receive their dividends in SGD, any signficant devaluation of the EUR would adversely impact the dividend income.

With ECB tiered rate cuts expected in October, it is any one's guess what the future holds. I can't imagine the Fed or Trump not responding to this.

Strong Sponsor

The Sponsor, Cromwell Property Group, has 3.7B Euros of assets under management in Europe alone. Sponsors with a ready pool of assets are always good since it represents a pipeline for future injection.

Reasonable Yield 

As long as the DPU is sustained, I am not expecting the share price to perform phenomenally. DBS has a TP of 0.59 on this share.  I am happy for it to trade side ways while collecting a 8% payout.

IMHO, it makes far more sense to put money in this than a recently IPO-ed, (basically 1 Orchard mall) REIT with a forecasted 5.8% yield (and this is at 100% payout mind you), and where one of its top 10 tenants by Gross Rental Income  (Forever 21) just declared bankruptcy.

Struggled to understand why it was 14 times, sorry, 14.5 times oversubscribed. I mean, have you ever been to Somerset 313 and went: wow, this place is dope. Not me.

Furthermore, the WALE of Someret 313 is a pitiful 1.8 years, and 35% of its leases by GRI is expiring in 2020. Awesome. It almost feels like Sky Italia was injected so that the overall WALE looks more palatable to investors. 

Perhaps I am missing something. Who knows. After all, so many people, can't all be wrong right.

DYODD.

Onward to FI friends!




Monday, September 30, 2019

2019 Q3 Dividends and Portfolio

It is time again to take stock of FI progress.

Portfolio Q3 2019


September 2019Shares heldLast tradedValue
AIMSAMP Cap Reit2574001.45$373,230.00
Cache Log Trust136000.735$9,996.00
CapitaR China Trust431001.53$65,943.00
DBS200024.87$49,740.00
Ezion195000.044$858.00
First Reit 500001.04$52,000.00
FCOT2340001.61$376,740.00
Eagle HTrust 420000.655 (US$)$37,688.70
Keppel Corp50006.02$30,100.00
OCBC500010.84$54,200.00
$0.00
SingTel480003.13$150,240.00
StarhillGbl Reit900000.75$67,500.00
redacted76118.76$64,005.47
Warchest $117,000.00
Total Porfolio Size$1,449,241.17

Q3 was characterized by general weakness across the market, with blue chips stocks DBS, OCBC, Singtel and Keppel all falling below their July peaks.  REITs experienced some downward pressures but have largely remained resilient, possibly due to expectations of interest rate cuts.

Warchest got a healthy boost from dividends and salary bonus pay out. Will be looking to add to DBS at below 24, OCBC at below 10. I also have some REIT targets in mind which are hovering close to my target entry price.

Recently doubled my holdings of Eagle Htrust @US$0.650 a share. At this price, the forecast yield is approx. 10%.  This was a bit of an uneasy buy for me.  Conventional wisdom dictates that one should not be a yield pig. If the yield is that high, there is usually something wrong with the company (looking at you Lippo Mall Trust).

If something is too good to be true, it usually is.  That said, apart from the Queen Mary issue, I struggled to find other compelling reason(s) for the severe pessimism inflicted on this REIT.  Since Madam Market wants to give a discount, I shall do a small deal with Her.  Word of caution, one rarely comes out on top trying to outsmart Madam Market, but you know... no risk = no rewards.  Just play with money you can afford to lose.

Looking forward to deploying the remainder of the warchest before the end of December.

Portfolio now stands at 1.449M, which is up 27% from 1.141M a year ago.

Q3 Dividends

Total dividends received for Q3 2019:  $19,864

Big thank you to the following hardworking employees:
FCOT - $5616
SINGTEL - $5167
Starhill - $990
First REIT - $1075
AA REIT - $3035
DBS - $300
Keppel Corp - $400
Cache Log Trust - $180
CRCT - $2205.10
(Redacted) - $900

Compared to Q3 2018 which netted me $8,315 in dividends, this represents an increase of 139%.

I am pleased to report that FI remains on track.  Cheers to breaking more milestones in the months to come.

Onward to FI friends.





Thursday, September 19, 2019

I love Septembers

I love Septembers.

It is my birthday month.

My bonuses get paid this month.

It marks the end of Q3 of the calender year. Yet another stretch completed in the arduous journey toward FI.  I shall be tabulating the Q3 dividend earnings and overall portfolio in a separate post at the end of September.

It is also the month where a fair number of companies pay out yummy dividends, including First REIT and AIMSAPAC REIT. Together with my bonuses, the war chest gets a pretty healthy boost. 

What's not to like?

As icing on the cake, I also sold all my HKLand shares at 5.98 on 4 Sep, booking a small gain of 1.7k.  This was never meant to be a long term trade anyway. 

Currently on the look out for more deals in the market. 


Recent news concerning the strike on Saudi's oil facilities brought about a brief spike in oil prices. Keppel recovered briefly above the 6.2 mark but the momemtum was regrettably not sustained. I believe Keppel continues to be a defensive play due to its diversified income streams, and remains best-positioned to ride any O&M recovery wave.  I am cautiously optimistic.


The other counter I have been looking at is Eagle Htrust. After buying in at US$0.685, the share price has retreated further albeit slightly, and now hovers around the 0.66 - 0.67 range. The weakness is likely due to recent institutional sell downs of the share.  I remain contrarian on this counter. While the concerns regarding its Queen Mary hotel are not entirely unfounded, it is also notable that the the alarmist "ship at risk of sinking without repair" news have been erm, floating around, since 2017, and well,  the hotel remains erm afloat. 

Probutterfly actually did a pretty balanced write-up on this REIT here. Feel free to have a read. In summary, I believe the current share price provides a fair valuation and good yield, taking into account the REIT's potential asset and FX risk. But certainly not recommended for the risk-averse. 

Vested. DYODD.

Onward to FI!




Tuesday, September 3, 2019

New Quest: Breaking 100k passive in 2020

Recently went on another shopping spree with the capital recycled from the Ascendas Htrust sale.

I kept saying pace yourself, pace yourself dude, don't spend it all in one place. But when the market is offering a ton of discounts, it is hard to say no.

I have decided the year 2020 should be that year when i finally breach the 6-digit passive income benchmark.  

Sometimes I picture myself hopping into a time machine and going back to say hello to the 25-year-old me in 2007. Fresh out of Uni, with a massive $800 to my name sitting in a POSB Savings Account, and about to embark on a 12-year long journey in a hellish, soul-crushing, and perspective-altering career.

What would I say to him? Would he believe me if I told him, thanks to me, he would be able to sit on his ass and do absolutely fuck all, and still make 100k a year in 2020?

The 25-year-old me would probably see it as a ticket out of employment. Poor sod, I might have to break the sorrowful news that even District 1, 99-year condos cost above 3k psf now.  And therefore, despite a 6 digit passive, a job remains necessary, for the time being.  Would have loved to see that jaw drop. LOL.

Back to reality. To even have a remote chance of breaking 100k passive next year, there is a ton of tough work to be done. And it begins now in September 2019:

Summary of purchases


AMMO
Passive Income
AIMS APAC
-195k
+13.9k
CRCT
-11k
+0.8k
HK Land
-27k
+0.9k
DBS
-24k
+1.2k
TOTAL
-257k
 +16.8k (around 6.5% yield)


Overall in August, I added a total of 136,000 shares of AIMS APAC @ an average price of 1.42, increasing my total AIMS APAC holdings to 257,400 shares. It remains my second largest holding after FCOT, but only trailing slightly.  But because AIMS provides a higher yield than FCOT, it is expected to be my biggest passive income contributor for 2020. The estimated passive income from AIMS APAC alone is about 26k per annum. This amount is also notable because it actually exceeds my first year take home pay.   Eat that 25-year-old me.



Subscribed to CRCT preferential shares and applied for excess. Received a total of 8100 shares @1.44. Increased my holdings from 35000 shares to 43100 shares.



Bought 3,500 shares of HongkongLand @ US$5.57.  I know right. Ouch. But cautiously optimistic. I believe in the pragmatism of HK-ers to resume the business of making a living. Don't agree with violence but I can empathize with the bleeding heart idealism. We were all young once.



Added 1000 shares of DBS @ 23.98. It is D-Bloody-S with a 5% yield. It is self fucking explanatory. This is consistent with my investment philosophy of accumulating blue chip bank shares at 5% yields. I now hold 2000 DBS shares. I am usually reluctant to add more because DBS does not exactly align with the objective of an income investor.  But at 5%, it is foolhardy to pass up. The idea is to constantly accumulate blue chip bank shares at acceptable yields and gradually increase its weightage in my portfolio as I grow older (when portfolio survivability in a black swan economic event becomes increasingly important).


So far quite pleased with my purchases.


Of course I kept a chunk dry ammo. And September is typically a good month for me in terms of reinforcements.  Bonus is coming in and it is also a traditionally strong month for dividends.  More FIREpower!!!! Hah.

Onward to FI brethren.





Monday, August 19, 2019

Is now a good time to enter the Property Market?

It is a question I ponder repeatedly.

Property seminars routinely pop up on my facebook feed with catching captions like - "how to turn 1 property into 4 on a median income salary."

I tend to take investment advice from property agents with a (huge) pinch of salt. As AK loves to say, Never ask a barber whether you need a haircut.




Property agents will always tell you that the "only way the market moves is up". "The developer will never reduce price."  If the development they are selling is large, they will say how the large number of future transactions will prop up your property price. If the development is small, they will wax lyrical about the ease to rent or sell due to no competition.

For would-be property investors/prospective home owners, I suggest you disregard all the noise and judge for yourself the merits of any property currently on the market.

Here are a number of questions I find helpful when looking at property:

i. Are any adjacent/surrounding plots of land marked for development? 

One of the many reasons why the response to One Pearl Bank was lukewarm could be that its adjacent plot of land (white plot) was designated for an integrated development with a comparable, if not higher, plot ratio. Nothing shits in your face more than having a later development erected a stone's throw from your balcony.  Alternatively, it could have been its rather ambitious pricing (starting from 2300?psf) for a Leasehold project.

When in doubt, always consult the URA Masterplan - https://www.ura.gov.sg/maps/

ii. How does its PSF pricing compare with nearby developments having the same / diff land tenure? 

A lot of property agents may try to sell you on an absolute quantum pricing. A 800k 1BR apartment may look "affordable" at first glance, but the correction question is whether it is "value for money"? What if it is only 400 sqft in size, i.e., you would be paying 2k psf.

I visited Daintree Residences showflat about a year ago when it first launched. And they were trying to sell 1 bedders close to 1900 psf. I found it ridiculous, considering that it was a leasehold development. Even more confoundedly, less than 20 metres across the road sat a 999-year (practically FH) development Terrene @ Bukit Timah, which was going for 1400-1500 psf. The agent / tagger was not impressed by my analysis and stated confidently that the developer will not drop price.  You can go find out for yourself what Daintree is currently going for.  Lesson learnt - follow your gut feel.If you feel ripped off, you probably are despite the agent's protestations.


iii. How does its PSF pricing compare with developments in other districts? 


For example, Gazania, a FH development in Bartley is pricing its 1BR units at almost 2200 psf. On the other hand, you have (much) more central FH developments e.g., Arena Residences (16xx-17xx psf), and Lattice One (17xx psf).  Probably does not take a genius to figure out why the take up on Gazania has been, to put it kindly, dismal.


iv. Are you financially comfortable with staying vested for more than 3 years? 

Why more than three years? Cause that is when you can sell your unit without the SSD penalty (Seller's Stamp Duty). Furthermore, if you are taking up a variable rate loan, you must be prepared for the interest rate to move against you. If you are already hitting close to the TDSR ceiling (which is calculated using a 3.5% interest rate), then any large moves in interest rates, or sudden retrenchment, is going to result in you potentially losing your home to the bank.

So, as you can see, when it comes to property as an investment vehicle, I am as cautious as it gets. Which was why I was pleasantly surprised last weekend, when i chanced upon a new development in Clementi - Parc Clematis.  




It has been a long time since we had a condo launch in Clementi. The density of condos in this district is almost criminally low, especially when you compare it to condo-galore districts like D15, with their ever-blossoming "cosy", "20-30 total units" developments erected at some cul-de-sac of some dinghy, two-lane, bi-directional road. You know what I am talking about.

I have always had a soft spot for Clementi. It was the estate I grew up in and spent most of my formative years. Who could ever forget the old Empress cinema and MacDonalds at the MRT station.

Sentiment aside, what struck me first about Parc Clematis is the price. At 15xx psf (indicative pricing), the developer Sing Haiyi is clearly pricing this condo for mass market selling. Nothing wrong with that. What is particularly striking for me is that, despite being a new launch, Parc Clematis is being priced comparably to Trilinq which was launched in 2013 (nearly 6 years ago)!  Eat that, inflation monster.



Value for money - paying 15-16xx psf for Clementi - an extremely under-served, popular, relatively central, mature estate passes my "value for money" bar.  Indeed, you might have heard that some resale HDB transactions (on top of Clementi mall) already went for above 1M.   A+

Stack/Unit layout - I was quite enamored by the facing of all the building stacks (N-S). Not a single stack would have afternoon/evening sun issues. You can always rely on a Chinese developer to prioritize εΊ§εŒ—ζœε—.  What was less impressive is the dated design of some of the 3BR and 4BR units, which still utilize a long corridor for accessing the bedrooms, which results in a massive waste of space (unless you were looking for a makeshift home made bowling alley). However, it is noteworthy that some stacks do offer dumb-bell layouts and these are certainly worth looking at.  A

Surroundings - The good: Parc Clematis is situated adjacent to a landed estate enclave. The bad: It is also close to the AYE. The good/bad: It is within 500 meters of ultra popular school Nan Hua Primary. Good if you are a parent, or prospective landlord. Bad if you hate children (kidding) and school bells.  A-

MRT/Mega-Mall - Parc Clematis is also marketed at being 500 meters from the MRT/Clementi Mall (owned by SPH REIT by the way). I think that is a bit misleading to be honest. 500 meters measures a direct displacement. You do have to get across a bridge and at least one covered walkway to reach the mall/train.  I estimate it would be at least a 8-12 mins walk depending on your pace. But if you drive, then you are literally a stone's throw from JEM, Jurong Gateway, and the future Jurong Lake District / CBD.  A-  

All in all, I must say I am very tempted. I have been out of the property market since I sold Visioncrest in mid-2018.  Perhaps it is time to get back in.

If any reader is interested to have an obligation-free tour of the showroom, please feel free to reach out to the chio lady in the sticker below.

(This is not a sponsored post!)











Tuesday, August 13, 2019

Keeping my faith with AIMS APAC REIT

Used about half my proceeds from the Ascendas Htrust sale and added 100 lots of AIMS to my portfolio when it went XD @ 1.44.

In hindsight, could have waited a bit longer. The next day, it went as low as 1.41/1.42. Then again, thousand gold cannot buy early know.

I continue to be quite optimistic on AIMS.

Compared to ESR REIT, AIMS is arguably a safer play due to its comparatively lower gearing (33% vs 39% of ESR REIT). 

Furthermore, there is a lot of untapped GFA for AIMS properties.  One DBS Treasures report puts it as 600,000 square feet of untapped gross floor area.  This coupled with its substantial debt headroom makes AIMS attractive since it would have some flexibility to use debt to finance AEI or repurpose some of its assets to improve its NPI.

The other thing going for AIMS is that it is a relatively small cap player, with market cap of slightly less than 1B.  For perspective, Ascendas REIT market cap is 9.5B, Mapletree Ind is 4.5B and ESR is 1.7B. There is a distinct, and not entirely remote, possibility that AIMS may get acquired by a larger player, further unlocking value for shareholders. I would prefer that not to happen, because it would mean I have to find another 7% yielding investment, which is difficult in today's environment.


AIMS is now my second largest investment at 320k, only slightly lesser than my FCOT investment at 380k.  So I am unlikely to add even more unless there is a very compelling share price correction.

I have some funds left over from the Ascendas sale. Hopefully the present correction provides additional opportunities to buy discounted assets.

Onward to FI friends! 








Tuesday, August 6, 2019

Market on sale again - what are you buying?

Feeling a bit like Moses every morning when I log into my trading account and review my watchlist.

Huge sea of red.

Only difference being, I cannot part a road through it with a wave of my staff.

Ascendas HTrust

I sold all of my ascendas htrust on 25 July @ 1.05.  Happy to take the money off the table basically. And certainly, did not think that Ascott BT REIT is worth the 1.30 issue price. I was up about 53k on capital gains alone, not including dividends received since 2017. So I am rather pleased with the outcome.

As a result, I am looking at the red sea with a tiny bit of cheer. Well at least I may not have a problem finding a new home for the recycled capital.

Eagle HTrust

Just days before my sale of AHT, I also initiated a small position in Eagle Htrust. Just so I still retain some hospitality-related REIT in my portfolio. Being a new REIT with no track record, I am careful to size my position appropriately.  Bought about 21 lots at USD 0.685. So far so good. Holding up. I thought the dumping was a bit overdone and 0.685 entry gave me a margin of safety (and close to 8% yield if the forecast in the prospectus is worth the paper it was printed on).

CRCT

CRCT intends to raise funds for buying three new properties via a private placement and a preferential offering to existing shareholders. The preferential offering is a 87 shares per 1000 shares held, priced at 1.42-1.44.  A bit non-plussed to be honest. With CRCT trading at 1.52 right now, it is barely any discount. Unless I cannot find other places to park my funds, I do not think I will apply for any excess beyond my allotment.


I am now on the prowl for good deals. The usual suspects are the three banks, although i have a preference for DBS and OCBC.  Both offer >4% yields now and may be considered defensive plays. I am just hoping there is more depth to the current correction (GO DONALD AND XI!) and hopefully I can pick DBS up below 24 or OCBC below 10.


All the REITs still look very richly priced to me at this time, except one or two which I am monitoring very closely. Heh. Better not disclose which REITs these are until I manage to lay my hands on them. HAHA.

Onward to FI my friends.




Monday, July 22, 2019

The Infantilisation of the Poor

Over the weekend, I became vilified on Facebook. For the crime of daring to own an opinion.

A respected friend of mine had posted a link to a book published by Liyana Dhamirah, Homeless.

This book is basically a feel-good, comeback story, about someone who overcame great odds, to re-plant her feet firmly on the ground.

In an interview with Mothership, the author recounts being pregnant with her first at age 16, and tolerated a repeatedly infidel husband. Both her and husband were eventually cast out by her mother-in-law on Hari Raya no less, and ended up on Sembawang Beach. By that time, she was already pregnant with her third child.  Bizarrely, she also quit her job at around the same time. Her story goes on to detail the bureaucratic hoops she had to jump through to qualify for public shelters.

A few questions immediately burned in my mind.

1) Is it not irresponsible to bring a child to this world at a tender age of 17 when you can barely fend for yourself?

2) Is it not irresponsible to get married despite being unable to afford a home together with your spouse.

3) Is it wise to have three kids no less under the above described circumstances?

4 Is it wise to continue having kids with a husband whom you already know to be undependable?

5) Is it not irresponsible to quit your job under such dire financial circumstances?


While we can certainly laud the author for eventually turning her life around, I pointed out that she should take some responsibility for making not one, but several, questionable life choices.

The SJW response was swift. Within a day, my comment had attracted a number of replies. Some measured. Some snide. Some abusive. I was even called a meme. I still have no idea whether that was intended to be an insult.

I thought my comment was rather fair. Resources to aid homeless people are ultimately publicly funded by taxpayers who, you know, make the effort and hold down a job. It is only logical that such aid cannot be doled out willy nilly, much less to those who decided that having three kids and then quitting her job in the middle of a pregnancy was a prudent and responsible thing to do.

I am sorry for her predicament but at some point we need to ask, when does personal responsibility kick in? Do taxpayers have an unconditional obligation to help all destitute people get back on their feet regardless of how they ended up so? Is it society's fault if these people never make it out of their rut?


The problem with the SJWs and people like Teo You Yenn is that they tend to infantilise the poor. They absolve the poor of their terrible decision making, simply by excusing it as a "product of their circumstances".  Some SJWs go even further to say that these actions are entirely reasonable and do not constitute terrible decision making.

Whatever it is, it is becoming clear that we are fast becoming a society of hypersensitive, and easily triggered children.  God forbid a person holds a different opinion from you, no matter how reasoned his/her position was.  Let's resort to ad hominem attacks where logic is deficient.

Well call me a cold-hearted internet meme, but at least i contributed income taxes close to an average worker's annual salary last year to aid nation building.  I slog 50-60 hour weeks at a fast-paced high stress job so that I can become self reliant, and financially independent.  I don't sit around blaming everyone else but myself for the poor choices I made.  I take responsibility knowing that ultimately I have to sleep in the bed I made, whether it be a plush mattress in an air-conditioned bed room, or an air mattress on Sembawang beach.

Onward to FI my friends.







Wednesday, July 3, 2019

Ascott Residence Trust (ART) buys Ascendas Htrust (AHT) for S$1.0868 per share

AHT last traded at 0.975.

My average entry was 0.82 for 235,000 units.

The purchase price of 1.0868 represents about a 32.5% gain over what i paid for the shares, excluding dividends received.

Including dividends, the XIRR rate of return would be about 26.7% - possibly one of my best performance in 4.5 years of investing.


Value
Date
BUY
-141432.15
07-Sep-17
Div
4641
12-Dec-17
BUY
-51492
06-Apr-18
Div
7356
19-Jun-18
Div
6603
07-Dec-18
Div
7567
18-Jun-19
cash out
255398
03-Jul-19

XIRR
0.267298812


The low down

The purchase would be paid in both cash and Ascott units. I would have preferred an all cash deal.  ART's units are severely over-valued and AHT holders are being shortchanged by being paid in ART shares, which appear to have been artificially inflated, in preparation for this merger arrangement.

The proposal 

Each AHT unit = 0.0543 in cash and 0.7942 Ascott Reit-BT units issued at a price of S$1.30 (its all time high since 2014 - yuck much?)

The new entity will be named Ascott Reit-BT. 



Post-merger DPU for ARBT (at $1.30)

This proforma DPU for ART would have been 7.34 cents per share, or a 5.5% yield at $1.3.
Erm, I'll pass. Thanks.

Looking at the above, it would probably be better for me to sell all my AHT shares in the open market once the TH is lifted. Hopefully i would be able to sell at the proposed purchase price.

 DYODD.

Onward to FI friends.