Sep 28, 2018

Cory Diary : Reits 2018 Updates

Started writing on this last Friday night and then i broke off from my usual routine to finish it in one go. Too many things going on in my mind recently. One of them is work where we need to plan for mitigation plans due to tariff. Is sure going to be more costly for Americans but considering the significant amount of jobs created, looks like it could be a net plus for average folks. I will be expecting companies to start to move some of their production at least to other countries to reduce their cost from operating in China. Pace could speed up if the tariffs increases some more. From the looks of it, businesses in China will not look good as America is a Consumer Market of the world.

Another thing that keep me busy is Mew Two is now available in Raid. For those who is not familiar, is Pokemon Go game. Yup, I am still in it. The game keeps me busy with some exercise but just be careful on the roads. The other problem is if I am too near to garden or vegetation, there may be mosquitoes. Is still quite amazing that the game attracts a crowd. To take this Pokemon will need about 10 players and indeed a team effort until a lady came up with 4 phones at one go on the raid. Anyone need a new friend please message me. I need to complete a mission ....

Back to investment. I have shown my portfolio of equities previously. This time round I am writing about each of the reit/trusts as I can. My thoughts, fear, wish, dream ... whatever. Don't say what the hell this guy blogging on Friday night. I always could do and anytime whenever I feel the urge and when time permit. The first 2 Reits are the blood vines of Singapore and the other 3 are tapping E.Asia/Australia. As long the country and East Asia do well. So I do have a stake to ensure Singapore continue to prospers at least. In REIT investment I have the opinion that I do not have to max out my earning. I would prefer 有钱大家赚. So as long they perform well consistently, Management / Employees or private placement shareholders are welcome to earn form it.


This stocks have long history of dividends. If I can remember, there maybe some placements along the way. What I focus is the growing DPU. And that's what all matter isn't it ? I remember the former one hits 8% yield years ago. Now the yield has come down to 6% (give and take....) so there is nice capital gains on top of dividends. Is it attractive now ? Well, we can have some financial crisis and money got suck out of the system and stock price could drop to 6% price level. Will it really really happen? I dunno but I do know there is a lot of cash out there. A 2% yield drop could mean more than 20% reduction in stock value. Will take 3 years to recover if the stock continues to stay low. But I can wait while collecting the dividends. I would think is best to size my investment appropriately as there is some fluctuations over the years. I am not too worry if it goes lower. This is provided fundamentally the business has not changed to bad. If we have added up all the DPU and Capital gains over the years, the returns are in many times that we have invested.The thing is we need to have skin in it and forget about trying to time a perfect entry. The dpu would cover them over time.


This is another class of reits that is well managed so far. The hospitality sector has seen it's dynamics so able to grow consistently is not easy.  Industrial reit is not cheap I would say. But the growth is there. Maple family has been on growth path so there will be rights issue along the way. My wish is that they stay within private placement sphere. Able to attract this class of private money is like giving confidence to the companies. If we are to issue rights to existing shareholders, I am not sure is it because they have problem to raise money without giving significant discounts. And this may be worrying. I use such indication to reinforce my judgement. So I am ok to earn lesser as long the path is right and make the company more powerful. The Maple managed malls is recent addition. There seems good potential to provide strong DPU. The gearing is high though so I am only comfortable to add only some for now. This 3 reits performance are more dynamic than CMT and Ascendas in my opinion.


Both Medical Reits. They don't manage the hospital operations. Both if we are to use P/B to value them, will be relatively expensive. The reason I believe is the stable earning it provides at constant growth and the properties. Their moat is high. Really high. Let put it this way. If my wife is pregnant, and need to do NIPS test. And the facility recommends say NIPS+ and the cost increases from $2000 to $4000. The additional $2000 can detect down syndrome much more accurate from 90% to 99%. Will you pay ? Happily, I will. And if there is a invasive test which cost only $500 with 100% accuracy but there is 1% chance she will miscarriage, will you choose this option ? I think most will say no way ! That's how safe is Medical Reit as their tenants have wider ability to pay.

But not all reits are the same. I am always wary of First Reit sponsor. If you have been following this reit, the Sponsor has not been in strong financial position due to over expansion in other businesses. However there are still many hospitals along the pipeline and they have been able to maintain strong DPUs. Is pretty hard to fake giving out money if they aren't making money out of it. The recent event is a case to watch more closely as the sponsor find innovative way to raise money without losing control of the reit. That's how I read it. I don't get to be sleepless over but need to watch it. I feel is unlikely to be a "Sabana Event". I did reduces my exposure a little bit from it and as a result took some losses from it YTD since is reference to end of last year price. Some analysts are positive over the deals. I take it with pinch of salt. The dpu is still good for now.

As for ParkwayLife Reit, I have size it such that I can be relax on it. The 4+ dividends is low but I can accept it as it helps spread my exposure with stable returns long term.


Australia currency has not been doing well for couple of years. So I think it does has some impact on the returns. As long the DPU growth able to covers it, the Reit should be ok. They have freehold assets over there so this do make up for long term. They do has rental reversion but I feel it is not a surprise as there is clause within the contract that up the rental fee annually which can move it past the market rate.So not surprisingly when is up for renewal, there is reversion to mean at least. The European acquisition is something I do not really like as it draw away the future funding space so I sold all after. However the current yield is good and do not see reduction of it near term after rights issue. Another concern I have is that they aren't maple. I returned with smaller position nevertheless due to the strong yield.


This is not "HPH Trust" or many Trusts out there in my view. Their asset has long term value and good moat.
Singtel hold the max they could on this one which tell me something. The G5 future rest on even more Fibre optics. Down side is that charges are regulated from my read in the internet. The DPU will be stable but I will not be surprise to see fluctuation. Some people hope for deeper correction before they go in. I do not think this make sense. The annual dividends is about 5.8% yield from the top of my head. If we park the money temporarily in SSB is about 2% short term. Opportunity cost is 3.8% yield. The waiting time outside could be expensive.If I am to part my money in other equity, I lose my opportunity fund.

If the Trust is indeed stable even $0.90 to $1.0 is not expensive. Here's the growth I hope for. But then will I sell ? Not if I have enough stake in it to do partial. Will the price go lower and lower. I feel is unlikely to happen unless manhole get obsoleted. They have good profitability improvement from cost cutting. How much can this go without affecting the operation or future growth is unknown but there is limit. I hope to see management take some stakes from the market. So far yet seen.


Sep 20, 2018

Cory Diary : Radar Chart 2018-0920

There are currently 24 stocks in my portfolio. Reit/Tr allocation about 51%. They help to support the portfolio yield to 4.7% at least for now. Probably 5% if we includes the US stocks tracked here. Hardly need to monitor many of my stocks in the portfolio now. Primary focus or should I say most of my investment time spend is for new stock, and for the 9 Reit/Trusts for special announcements other than counting dividends received. haaaa

Keppel added. Sold ST Engineering on sudden spike. No longer vested in Sheng Siong. Has seen awesome returns for the pass few years.  Moving forward, I would probably find time to up my stakes in existing Reits/Trusts which has lower exposure but timing has to be right.

5% yield portfolio is nothing to shout about. There are room to improve with stability in mind. Capital gains are much harder for me. Well, maybe except Creative which I enjoy large gain in a day contra. I like to use this logic. If a stock able to give 4%-7% yield annually without much DPU reduction or maybe some increase, and there aren't fundamental deterioration in the business, stock price doesn't matters. I like to repeat to myself again ... STOCK PRICE doesn't matters !

Will I ever get it ?


Sep 9, 2018

Cory Diary : PRC Market Crash 2.0

Shanghai Composite Index closed 2702. The last time we see this level was in 2011. Trade War certainly takes it tolls on them while DJIA is at the opposite 26,000 high range. STI Index is impacted as well. The last time this happens  was in 2015 when PRC market crashed. So if PRC market decides to have major shake up next time, I should know what to do. Don't blur for the 3rd time ... well I dunno  :)

That's the risk of market. We just have to manage it. Now, if STI index is to pickup, where should I be in ? Banks I think. And what I should avoid ? Probably Property related counters. The curb this time is 一針見血.


Sep 8, 2018

Cory Diary : Update on Trades 2018-0908

Singapore Saving Bond

Plan to apply for another switch in Singapore Saving Bond ( SSB ). Can't help it as is more than 20% up from a year ago. As last time, I expect the switch to be quite straight forward. Recall the bond I want this month and applied for the coming one same time. Unless we see significant jump in interests from SSB, this should be the last batch near term.


Yes, it has been recalled. Vested in this for 7 years of varying amount. Total return is about 15k.
It will take some time for the capital to be returned to my account. Decided to replace some of the "Dividend Gap" with Ascendas Reit giving about 6% due to recent placement news. I thought is a good opportunity.
Price may go lower but I don't think it will affects much long term since it is a stable large reit.

My foray into US market is not smooth sailing this week. CEO was arrested on rape allegations. He was allowed to leave without bail. So I will hold on to it for now.

That's all I can quickly remember !


Sep 5, 2018

Cory Diary : Investment in Personal Time

One of my team member's father passed away yesterday in his office. We were in shock as his father is only 53. The primary cause speculated was Work Related Stress. While we strives for higher income or financial independence, first rule of investment probably should be to make sure we can take care of our family and ourselves well. And this kind of capped our limit on how much we can push our goals. However we must never lose sight of healthy lifestyle. Investment in our own personal time is equally important.

Just recently my team scored above 90% in Company survey in overall key score on employee feedback on favorable responses. This is 6% above from last year and about 20% ahead in company average. I am pleased because we are in Best-in-Class Category. There are many questions asked in the survey but not all is used to compute the key measurement score. That's do not mean those questions asked that do not have the weight-age in it is not important but more due to relevancy. One of such question asked is Work Life Balance. We hit 96% Positive and remaining 4% above average on this one.

Some people maybe skeptical on such survey but based on my experience this gives management a good indication on where the company and teams are heading. And what we should focus on in the future to direct it. Happy Employees Happy Profits. Over the years my management style has changed on reflection of such surveys as well. This is my 15th I think. Every-time I look at newly promoted manager, deep in my heart i know it will take him a decade probably to catch up without mentor / guidance in people management because I saw it all.



Sep 2, 2018

Cory Diary : A Chat with my Wife on financial planning

I have some chats with my wife on family financial planning. Here's how it goes.

Innocence Cory :
In 2 years time I would have (updated for privacy) passive income. That should be enough to cover our annual expenses without touching my principal. That's exclude yours as well (Hinting : I could quit anytime ... )

Stressed Wife :
Where got enough. How about your housing loan ? Baby how ? Parent allowance leh ?
I want to go Europe. I think our home is too small. My parents also need to be cared. (Hinting : what ?! )

Innocence Cory :
This amount is already above Median Income leh. As long we do not overspend that should be ok. You need to stop throwing away fruits that is not in perfect condition, finish up all the foods and less choosy in the place we can eat. The apartment is small but still bearable... (Hinting: Is you )

Stressed Wife :
Those sorted fruits i thrown out has cut or damaged.  Those restaurants known for roaches and hygiene problem. The apartment is too small for kid to grow. Get it ? But we can do away with the Aquariums. (Hinting: Here's your pain )

Innocence Cory : ... , ... ( Sweating )


Sep 1, 2018

Cory Diary : HDB Logics

Once I did a rough compounded computation of my parent HDB apartment if they were to sell it after interests payment. That's 5% compounded over 30 years excluding the saving from the occupancy. So to cut it short, HDB Singaporeans benefits significantly from it from financial standpoint. One of the best investment vehicle nation wide. Nevertheless is a social policy and there are restrictions. Regardless, the net benefit is much more else 80% would not have stayed in it. I have hear many opinions so far and Cory today is trying to decipher them.

1. What's the alternative ?
Most people have not much choice. HDB is affordable. Environment good. Personally HDB is an excellent choice and not out of no choice. I said that because this is from an angle that HDB is not an entitlement which Singaporeans think it has to be. In the real world, public housing is not given for most couples. In many countries they could only rent, buy expensive condo/apartments or cheaper old housing in the outskirts which are out of the way or of poor environment. In Taipei as I know, is the weak, disabled and real poor that has opportunity to rent public housing for a period only, and after that they are thrown back for another draw. You can't even own them.

2. Extended Lease ?
When we buy HDB, the contract clearly stated 99 years lease. Unlike Condo, HDB owner do not own the land underneath. So technically, we can't enblock and therefore works within the stricter guideline of HDB. The much more expensive Condo is on 99 years mainly as well. It would not make sense that Condo which is priced much higher are on same terms. The new HDB VERS scheme at 70 gives resident a choice to get out of it. But what is key is that people will start to put a more reasonable value on re-sale flat. It would have been better I feel if they could restrict aged HDB from young couple owning them. 

3. Legacy
HDB is a social housing program. That's mean we need to ensure continue supply of land and housing. If there is residue value after the owner pass on, good ! Else the property should return to the state for recycle. The last thing we want is for the rich children to hang on to it detrimental to the poor as the rich (sorry. I am not against rich. I hope to see more deserving ones) are in much better position to benefits from it. By having it recycled, we re-distribute the land with new housing as a baseline for everyone and that's mean our future generations to come. 99 year lease is a very long time. Most would have change for another apartment anyway. My parents switched to their 3rd HDB apartment in the past 40 years. New apartment every time as is cheaper.

4. Ownership
Should one own them ? Personally every young couple should. I would go for the biggest new apartment available if I could afford. But if we are still confuse whether is good for them, you have a choice. There is no regulatory requirement to own one. Sorry being sarcastic on this one but the alternative could be the worst financial decision to make not to buy one meant for masses. And the last thing to do is to influence our friends and relatives not to have one. Of-course those in ivory tower, you can afford to skip this section.

5. Can't Sell
Some mentioned higher HDB re-sale price will not help much as the replacement flat for similar conditions will be smaller in size. That's true but I can accept it for newer flat. I could have the options to downgrade to smaller apartment, rent out the apartment or room and help my expenses. Those who do well could also sell/rent it and stay in their Condo and that would be ideal for me. I know some will do it reverse and it works for them.

6. Future is not given
Some say we will not see similar gains from HDB in the future. I would say what's our alternatives and is it still attractive? And again I have a choice. Cannot predict the future but I have a stake to make it better. And hopefully logic minds prevail to keep the game going.