Cory Diary : Hallmarks of a Good Reit

If one has been investing in Reits for years, we know not all the same. Some will grow their DPU with times. This mean regardless of new issuance of shares, the original share holders still get more dividends after per share (Holy grail of passive investors).  Some will give dividends on par,  some with some capital loss. Some tricky ones required you to do "average down" with risks. Some are mismanaged. Some are crooks. For those who are on the lasts, remember their management. Any company they touch is something you may want to know.

Hallmark of a Good Reit Chart

We like to make sure we are vested in the first two camps. As they are the true ones that gives us peace of mind and support our retirements. For those that mismanaged or crook categories, timing matters. This is no fun. You need to be good at it. Maybe even have to be an insider.


Negative Experiences

This is some thing I seen that we need to be careful on. They dump weak sponsor properties into their Reit. They do misleading income support. Hardly AEIs. Consistent negative rental reversion. Weak portfolio. High borrowing costs. Keeps issuing rights from retailers. Large discounts of issue.

1. Never invest based on yield solely. This could likely be due to falling stock prices. And there are reasons why stock price falls. And the capital loss outweigh the distribution.

2. Inherent Risks of some Reits on high valuation
Some Reits give good DPU or Yield but the valuation is high based on NAV. Nothing wrong if they can continue to provide consistently. However market sentiments and ability of the Reit to maintain in the future can be a concern. And once they strike, you may suffer significant capital lose that negate many years of dividend returns.

3. Spiral down
When Reits are on down trend in stock prices from market, this can mean something is not right. DPU do not lie. A good Reit is able to attract Private Placement. So constant tapping on retailer for money is an indication something may not be right or doesn't add up.

4. Valuation
Reits properties are their earning tools. If the property able to consistently get better valuation, this mean something on top of rentals. Do be careful on this one as I have doubt on their trustworthiness if they cannot get better rents or able to find tenants. Nevertheless is one of indication.


Positive Experiences
Management is proactive and innovative. They typically stays ahead of the game to make sure they do not spiral down. Keep their cost in-checks. Keep working on their portfolio and tenants.

1. Low borrowing costs
Significant Saving. This give management in strong advantage.

2. Strong command of rental income
Support growing DPU and AEI.

3. Growing portfolio valuation
Just by selling a piece of their property could allow rejuvenation of their DPU for long time after paying off the loans.

4. Yield
Need not be in 6% to 10% ranges. If we can find one that meet many positive experiences, is a gem. Good reits and trusts have low yield for a reason. Because they are Good.

5. Scales
Size matters. They can do AEIs without large impact to DPU.

6. Seldom needs to tap on retailers for money to grow. Private placements are enough most of the time. Usually they can also do AEIs or property swap.

7. High Stock Price Valuation
Some of this good Reits have high valuation. Nothing wrong if they can give you a future of growing DPU. 

8. Growing DPU with Good Consistency
Hallmark of a good Reit if can be done long term. Need to make sure is not property dumped at high price with income support that could see a net decrease in value.


Cheers

Cory
2019-0306

Cory Diary : US Stocks enjoying nice rebound

Last year is bad for US stock investors. This year for the first 2 months have seen strong rebound. Hopefully it stays. Below table is the YTD returns of US stocks that I am tracking.

One thing realised is that if there is nothing fundamental change in the company, US stock can swing like crazy. Therefore, ability to hold seems key. On the other hand, if I have average down, returns would have been awesome. Indeed land of opportunity.


Cory
2019-0303

Cory Diary : Performance 2019 Feb result

Cory
2019-0301

Cory Diary : Revisiting Thought Process - Portfolio

Decision Making

Back to Radar View to conceptualize my thinking .... on my investment size in each counter.

There are 3 scale markers in the chart with 0%, 5% and 10%.

For those who find it hard to read, the radar view display my investment size for each counter with those in the center has the larger allocation. Sitting on the most outer ring has zero investment now eg. HRnetGroup, PrkwayLfie Reit and Mapletree com Tr.

This year return so far hits XIRR 6.5% today which is pretty close to 6.4% profit year to date. Thanks to Reits/Trusts and the US stocks rebounding which I suffered from last year

 I still find amazing how far CMT has run. Even at this price or yield, I would not sell because with so much cash in the system is quite hard to find one that can give me 5% dividends with possible growths. Ascendas still has good yield in it despite the run up. If I have a chance I would acquire more but since it has hits 11% level, I need to be prudent despite my confidence.

Overall, the colours proportion is probably where I wanted with the blue dots growth/speculative occupying lower percentages and Red dots moving up slowly. I did not do fund injection this year yet as I moved some fund to up my SSB. I would be working to up a little more cash to fill it up to 50K dividend level plan.

Below is my thought process on why I do changes in my portfolio.

First Decision : Remove HRnetGroup(CHZ.SI)

Never could remember which is cap in the name ... (joking on the remove reason but is real I could not remember). I was finding option to reduce my counters and this came up. I like the story of the company but the stock just refuse to move (see link is at bottom of bubble) . Soon I realize this is not my type of stock. Another reason i could squeeze myself to think of just to make myself happy is that is buying up companies the right option for their type of businesses. Will they have moat and withholding power of their clients ? I could be wrong and stock shoot up after but I can live with it.

Second Decision : Remove Mapletree Com Tr(N2IU.SI)

The yield comes down to low 5%. There are no catalyst coming. I got enough capital gains. With CMT, FCT and Mapletree NAC Tr, I don't see a need for another Mall-like reit taking another spot in my portfolio.

Third Decision : Add Sheng Siong(OV8.SI)

This SS has been with me in and out for at least 5 years. Always bring me good luck kopi money. This supermarket player is simply well-managed at least on reporting front. The boss has the passion in him. I miss this counter so much after last sold at lower price than I I bought back some recently. Yes in love with it but I aren't irrational. So I come in again at smaller amount. If there is a SME counter to occupy a place, I want SS. China play seems minor so far. I will need to understand better but this won't my decision.

Fourth Decision : Add UOB(U11.SI)

I got enough exposure to OCBC and STI Index. Regardless every time Index move up, my performance still lag behind. One fix is to add more financial stock so I choose UOB. Sadly, DBS could have been better from recent reporting events. Nevertheless, the size is testing water. I have the understanding that DBS is higher up due to deliberate higher dividends given which could suffer if there is a change for lower later whereas OCBC and UOB have been a little conservative. Hope they do us proud....

5th Decision : Add more Ascendas-hTrust(Q1P.SI)

Got good gains from earlier investment. I still feel it has some more legs to go else if it go much lower I could consider to acquire bigger amount. Since it go higher, I decided to average up a little. The yield is pretty decent for seems like good acquisition by the management. I would be surprise to see poor results for next few reporting but we never can guaranteed therefore I demand better yield which it has. The market seems to have undervalue it.

Cory

2019-0226

Cory Diary : Royal Flush, Cory Bubbles

Is like a Royal Flush bubble picture. Looks like everyone is above the zero line. Technically the new entrants aren't due to transaction cost. If we look at the chart closely, STI ETF aren't the tallest but in percentage term it does relatively well against my portfolio. 5 of the stocks registered double digits gains. 

Feb is another good month and I do not want to wait for it to end to blog. Dividend stocks driving more profitability. Took the opportunity to buy a little UOB today after Sheng Siong this week. I have been controlling my shooting.... . Mapletree Com Tr is out as it hits my profitability on yield which do not much complement my portfolio now. Realized 6.2% gains from it.

Naturally the bigger bubble has higher absolute profitability and risen the most as in the chart when prices go up. The good news are they have risen further. There are some laggards. HRnetGroup and  OCBC are in so so state. If one is to do a quick look, the drivers are Trust and Reits. Portfolio XIRR 6.2%. I am smiling this month. Hope it lasts !!!


Cory
2019-0222

Cory Diary : Intelligence comes with responsibility

The Saga of Hyflux has been burning for quite some period of time. As usual when something like such in trouble, investor community especially retirees will be affected. Unlike HPH Tr, Sabana Reit, Noble or S-Chips, listed Hyflux do produces Power other than Water to the Public both tied to basic essentials for our Island State survivals.

However every time when I hear someone vested in Hyflux Preference Shares or Stocks they have the mentality that Ah Gong will not let it fails and that due to it's necessity, the investment will not go wrong. And this is where most investors could precisely get it wrong. Being essential does not mean it can't go bust as a listed company.

When I Invest in Hyflux Preference shares previously, I do stress out that it can go bust. In the end, I decided to cut loss to de-risk myself from it. Fortunately, manage to do it with really minimal impact of kopi size money. And this has been my strategy consistently. For historical view, I have avoided big or limited impacts from Sabana, Hyflux PS, Design Studio, Ouhua, Koda, MTQ, MunSiong, QAF, Starhub, SoilbuildBiz Reit, and the lists go on. Most successfully with just a few 5 digits losses.

How does all this got to do with my Diary you may say ?

Here's the article from BT.

https://www.businesstimes.com.sg/energy-commodities/power-generation-sector-crushed-by-massive-overcapacity

Not surprisingly, people starts questioning why our electricity prices did not comes down over the years ? And then we hear anti-government rhetoric starting out. Firstly of all we need to understand that this is written by journalist and with all well intention, could never be able to consider every angle of public opinions. They are humans not robots. And is up to the maturity of the public to derive their own perspective after reading it which we will surprise ourselves too that being highly educated, investment savvy and professionally experienced, we could get into wrong conclusion. And that's the power of media.

Here's the table of USEP prices.

If we care to look into the detail, the peak is even higher at 263. Interesting 2005 and 2018 are at the lower ends generally. This is across 13 years ! So trying to derive from BT reporting and link it to why we are not paying lower price is not that straight forward. The general average is around 140 so who is paying for them when the prices are high in 2007, 2009 to 2013 ? And if we consider inflation and cost to manage the overall, how will this works out ? 

I would expect prices to go higher with inflation but it doesn't ! One thing for sure there is some mechanism and buffering in-place to keep them as stable as possible but don't kid ourselves in that if the suppliers have not face stiff competitions, our electrical prices would not have rocketed to the moon. Hyflux probably has done a huge national service but I am not sure everyone appreciate Olivia works. In national level perspective, is certainly safer to be on over supply to lower our living cost. 

Before I sign off. Intelligence comes with responsibility. Not to throw oil into fire. Investors in Hyflux suffers enough so don't aggravated their suffering longer. Teach them to realize their mistake and how to invest better would certainly help. Be a part of the change.

Cory

2019-0216

Cory Diary : Misses

There are always a list of hot stocks, speculative pennies, blue chips and investible in most people radar scope who are familiar with the markets. Often one of them will spikes or dives, and chances are the stocks were once in your investment considerations.

As we grow older, the misses get more. Don't be disheartened ! Is natural as we come to know more stocks. The last thing we want is to start frantic actions to spot the next to avoid misses. We can never be able to catch most of them but likely slips into oblivion trying to do so .... 

Draw a plan and try to stick to it.

1. Dividend Strategy, Growth, and with Sufficient diversification ie. constant lookout
2. Assess Risk for each of them and target dividend amount ie. follow news, read report ...
3. Maintain with care, small pool of growth/speculative stock to keep our blood warm enough with the market. Even then there should be fundamental business behind it and which report we can likely depend on.

Misses will not affects our returns. Wild ride will. We should ignore those noises and spend more quality time with family like with baby. (change nappy time ... :P )



Cory
2019-0215

Cory Diary : Using End Date for XIRR for Annual Returns

Have been constantly seeing usage of Annual XIRR with current date. This is quite "misleading" as it will provides explosive growth for positive returns of portfolio in the early part of the year.

For my portfolio for using current date for XIRR YTD will be 57% for 2019. This is quite shocking number considering my absolute YTD returns are just over 5.6%.

To provide a more balance picture, using XIRR End Date 31 Dec 2019, my XIRR YTD will be 5.8% which reflects closely to the absolute YTD returns of 5.6%.



Cheers

Cory
2019-0215

Cory Diary : NetLink NBN Trust Q3 is out !

Have been keenly anticipating for this quarterly report. Here's the interesting part for the same News by Shentonwire and BT respectively..

SW : NetLink NBN Trust reports fiscal 3Q net profit of S$19.6 million, above IPO forecasts

BT : NetLink NBN Trust Q3 net profit down by 9.4% as costs mount


One is as expected due to investments. The other see it negatively as rising costs.
Who is right ?

We can confirm at the end of tomorrow's trading day for market sentiment but long term I support SW report of-course (vested).


Cory
2019-0213

Cory Diary : Diminishing Power of Dividend Play

Like any business, leverage allows us to increase our income provided what we earned is more than the cost we borrowed. However this is subjected to lender conditions. When the bank refused to lend you more (weakness), this tell something. If you could borrow cheaper than what the bank willingness to lend you, this says something too (strength).

For a start, for non-believable of Reits ... read  Here . Over the years, stable and strong REITS have registered significant capital gains on top of dividends. This started with multiple QEs follow by tapering and rising rates. This also resulted Reits getting more expensive. Let's take one of my favorite REIT Capitamall Tr (CMT). 

I have blogged countless time why I invested in CMT. Below 3 of my earliest articles.

Cory Diary : CAPITALAND MALL TRUST 4Q16

Cory Diary : CAPITALAND MALL TRUST 1Q17 ( CMT )

Cory Diary : CAPITALAND MALL TRUST 2Q17 ( CMT )

Each time with increasing Stock Price, the yields get lower. Now, with current 5% yield would we buy ? Before we able to answer this we need to consider a few points.

1. Singapore economy has been performing relatively well. We have strong currency and unemployment is relatively low. Cash get accumulated in saving banks.

2. Property curbs have driven away many investors

3. Interests rate despite increasing is still a low rate.

4. Singapore Saving Bond = 2.5% ( 10 yrs ) capped by recent ceiling of 200k.

5. World is on low growth path

This implied there is a large reservoir of cash seeking for opportunities that can beat SSB dividends and long term dividend returns and growth will be bonus. This money aren't expecting Best World type of stocks for those who do, many fails. Which non-REIT stocks can beat CMT on that ? 

Now to the last comment for our thought. With lowering yield in CMT. Would we buy. This is back to the fear of anchoring that one should avoid. With 5% yield, how many options out there that can give us relatively safe and constant 5% dividends with some growth ?

Final note, this need not be CMT. It can be Ascendas. It can be Maple family. But a well managed Reits take out a big chunk from public listed company mindset of owner that "This entire company is mine mentality".

So did we see a peak in Reits recently ? Your guess is as good as mine. But long term, whatever fluctuation in prices, your dividends will catch up to cover. The important point is, how long. 

Got your answer ?


Cheers

Cory
2019-0209

Cory Diary : Net Worth 20190205

Net Worth

The last time I blogged about Net Worth is in 2018 May. (see link). It  has since increased by about 5.3% to date. A hint of size, my equity net worth just crossed a hallmark with recent market run up in Jan'19. My last year dividend is roughly 47k. For definition on Net Worth to me, read #1 and read #2. Basically in essence is net present value if I am to sell off everything including my home and adding Pension/CPF to it since I could not sell them.

Saving

I thought of reducing my saving but interestingly it went up significantly to 16% which kind of a surprise me. Maybe few percentage due to recent share sales.( updated: Good bonus from last year, baby cost me probably 20k ). My goal is to reduce it as mentioned earlier (read here ) ... but ..execution is a problem as I don't go by target number forcibly. The investment injection is about 4.9% which pretty align to Net Worth 5.3% growth. Another possible reason is because of hit on ceiling in my SSB contribution, and with the increase of limits to 200k, I could do some improvement this year.

Insurance

With the amount of cash in hand, there is no strong reason to surrender Insurance policy. I would just let my endowment continue to roll. I have not think much about my Life Policy as well but I guess it will be in  procrastination mode for the better.


Why am I doing this on first day of CNY ? ... Enjoying my Babysitting experience ... ... ...
Happy Chinese New Year !

Cheers

Cory 2019-0205

Cory Diary : Liquid Asset 2019-0202

Equity takes up 50% of my liquid asset. With Bond/Pref, that will be 59%. If I am to add Gov securities, that's 68%. This group is making money to work category.

I was working on the above points and then realize is really a bad plan to lower my saving by 12 points for much higher equity allocation. Is inward looking of personal finance furthermore I am already vested with 50% Equity. Prefer good buffer for emergency, housing and family so I aren't putting them to risk.

Maybe growing the equity pie by 10% will helps. That will boost (updated for privacy) dividend after 2019 and will takes 3 years of good market to achieve. If I am to do some income injection and some modest capital adjustments of the 21% Cash saving, probably 2 years. That's sound more forward looking.

And if the market goes bad. Wait it out ...


Cory

2019-0202

Cory Diary : Updates on Jan'19 Trades

Last Friday Cory Equity Portfolio crosses a key milestone in size excluding bank cash, treasuries and SSB. I have to make sure the crossing is not deliberate but something I am comfortable with the market. This is on the back of YTD over 5% returns. As most people would suspects, Fed finally tone down in their message. However if the market goes crazy again, Fed may shoot in a surprise hike .... sigh ! Hopefully market stays calm for the week.


A quick summary on all my recent trades.

PARKWAYLIFE REIT - Sold all my shares for 4.6% profit YTD. That's like 1 year dividend in a month work except that it went further up 3% after, due mainly to rising market ... ( you can't win all ). The move is to improve my reit yield and able to consolidate my counters.

ASCENDAS REIT - Did some quick trading on a portion of my stock before and after results. Manage to get some kopi money. My broker a bit busy and not able to execute my queue in time else I would have doubled my earning.

CAPITAMALL TRUST - I also did a quick trade on a portion of my stock. Good gains but I think is more due to rising market again. Investment size is now 7.8% of my portfolio but with 5.1% yield, I think am good with this level. That's doubled SSB returns.

MAPLETREE COM TR - Up a little as I find my exposure insufficient for my effort. So this gives me more punch for the buck. At 5.11% investment size now, I think is max on this one. Fortunately, able to catch most of the rising ride. 

FRASERS COM TR - For same reason as Mapletree Com Tr, I up some as well. And happen to ride the market.

Trading expenses hit nearly $600. Moving on I will have to make sure more diligence before I do a trade. The expense is slightly high, and I am expecting after special rebate will be $450 region.  That's probably 1% of my Profit this month but this can explode if the market comes down quickly so I need to get a handle on this.

Mean time ride the market ! Sign off for Jan '19.


Cory
2019-0131

Cory Diary : Cory Bubble - 2019-0129

With minor tweaking on the axis and with recent market strength, I am too eager to show this.
Yes, my portfolio is bubbling !

One counter missing. ParkwayLife Reit. Sold it yesterday. Cheers.

Cory
2019-0129

Cory Diary : Market Performance - 20 Years

Have you thought what does it looks like after 20 years in the Market as a Retail Investor with zero financial knowledge when he started ?

To add, never blame economy, blame SARs, blame GFC, blame Tapering, blame Greece crisis or blame trump. ;) Nothing is impossible but if you don't look out for your own, no one will. At the end of the day, only ourselves to blame.


Cory
2019-0127

Cory Diary: Scams keep revolving around

https://www.channelnewsasia.com/news/singapore/the-gold-label-investment-scam-arrested-for-multi-million-dollar-11166428

This time is back to Gold again ... 2000 investors. How the heck the trio managed to get so many investors to invest ? As someone (TTI) said is Darwinism at work again and their genes don't get to proliferate hopefully.  Probably it is. Maybe we should give national awards to this trio for helping to improve our gene pool.

Joke aside, no amount of regulation and government intervention will help this group of people. We do not need to be smart to survive in this world. Just don't be stupid.


Cory

2019-0126

Cory Diary : NetLink NBN Tr

Have been doing some investigations into 5G Technology. This is the biggest concern on whether is overall plus or negative to NetLink NBN Tr in regard to Home Network.

5G can run hundred of times faster than current 4G. If is just for Video, 4G is enough today. So it has to offer more than that such as latency, VR, Iot and remote services. It can also put less  reliant on cable to remote places which will be costly to lay.

For Singapore which is heavily built up, Home Fibre Optics connection is almost everywhere. So will 5G replace fibre optics home network ? A few consideration comes to my mind.

1. 5G tech runs on MilliWaves. What this means literally is that even trees can block your transmission signal. So walls is no no. With condo and HDB everywhere, transmission is tough.
2. High dense cells network needed and they have to run on infra backbone.
3. Is fast, very fast. The package probably has to be on unlimited data plan.
4. Stability of connections. It could be fragile and would need layers of support.
5. Safety and dependency on use.

All the above means High Cost to implement and subscribe. This will also impact Service Provider profitability selling data plans.


Possible Options

1. Tap existing home fibre network for 5G routers. Fast and cheap.

2. Unsightly installation of base cells everywhere. Not all homes will have access.
High amount of maintenance and installation complexity on every home each with unique conditions.

3. 5G not needed for most home application. Not needed. Maybe 7-10 years later when VR is a big hit and very mature. By then, Fibre Optics may have catch up in speed.

4. Mobile plan hot spot is too expensive and will be years later. And due to mobility, home appliances will be without network service when away.

With Option 1, is pretty obvious NetLink NBN Tr is here to stay.



Cory
2019-0122

Cory Diary : LION-PHILLIP S-REIT

Doing my home work looking through ETF - LION-PHILLIP S-REIT.

Found following information.

Then I check the last of trades done. Big players are selling down and we have some retailers seem itchy fingers.

.

The yield 3.43% is quite low. I remember being "marketed" for 5.2% yield. I would accept 4.5% What has gone wrong ? Even Parkway-life Reit easily beats this. I would avoid such trades.

Cory

2019-0120

Cory Diary : Quick Re-balance 2019-0119

The Portfolio Chart is nicely bubbling upwards. I could see some easing up on the congestion. With the recent run-up of some counters, some actions are done to re-balance to reduce risk and assess dividends.

See LINK here for earlier published bubble chart.

1. Reduced Netlink Tr. : Large part of my holding. I would prefer investment size to be between 5% to 8%.

2. Expanded FCOT : Mid Tier Size - This is longer term haul. Low gearing. Strong history of not issuing rights which is my personal preference. With the recent run-up, able to scope some more when it go lower before result announcement. The DPU result is flat which is neutral. I like to see how Singapore properties perform. Hope they can secure a smallish strong acquisition  to relieve the distribution support from capital gains.

3. Expanded CMT  : Range trading. A large part of my holding. This ship is steady. Looking forward to Funan contribution for future assessment.

4. Reduced Ascendas Reit : Did some range trading. Large part of my holding. What to look for is growth as it went below 6% yield before deciding next move needs.


Cory
2019-0119

Cory Diary : Investment Tracker 2019 - 0116

If we could recall, Year 2018 is where Cory Portfolio was mostly in the negative territory. See link here. The first two weeks of 2019 is quite amazing. Losses in 2018 has all but recovered.

This is one reason why staying invested in Market is important for people who long. From the above chart we can see how strongly STI ETF bounced back overtaking Cory PF line. However, I am happy. Are you ?

Strictly speaking, we hope to target additional 10% from this point onward. Why ? For the two years of dividends.


Cory
2019-0116