Cory Diary : All in Our Minds

There are many times I am asked to take profits. Reason being people has the conception that cash is the safe harbor. A rest point before we venture out again. This mindset is not wrong when one trades for a living especially speculative short trade.

Post today is I hope to share how Cory thinks from another perspective. Often we hear people make so and so $Xx,xxx but then lose it all or worst in negative. The angle I do is to treat profit earned as part of base capital in every new year.

Let's say I started with $500k in 2018 and ended with $580k. That's 80k profits. In Year 2019, I will treat $580k as my new cost structure (or base capital) thereby zero-out my profit. Why we do this is to overcome the human weakness of "Feeling Rich" and lose them back to the market.

When we do this long enough, for some reason cutting loss is more a mechanic nature rather than a pain-in-the-heart. Interestingly, we could also sell a stock at say $1.50 near end of Year 2018 but buy them back in Jan 2019 at much higher price sold earlier. Is like hyped on a Jan market trend trading mechanism. Fortunately, I do't this often ! Cory aren't crazy but it does happen sometimes .... ... ...

Since Cory Portfolio is ignited on every first day of new year, safe harbor has no meaning from previous year trades. Therefore, Cory result is often Year-to-date (YTD) meaning is the measure of Profit or Loss  from 1st Jan base to current date figure. This keeps Cory on toes and not feeling rich. Historical past year trades are just for "Glorification" use only, nothing else.

If Cory feels the market going to crash like 2008 GFC, he can relieve all his counters as he wanted but that's not because he has make enough profits. There is no relevancy between getting out-of-market and having make or loss enough.

Is all in our minds.


Cory

2019-1008

Cory Diary : Reits Comparison

Often we have a list of Reits in our radar. The more savvy one may probably just choose one. To mitigate risk, I tend to have them with different proportions. The question will be how do we apportion them. 

Here today I have 4 of them to think about. Namely, Ascendas Reit,  Mapletree Ind Trust, Frasers Com Trust & iReit Global.  As usual my investment decision is agar-agar. They are all quality reits in my opinion.

There are few key notes in my head. Singapore is near recession whereas US market are still relatively strong.  AR has weakening AUD earning - Australia exposure. MINT recently has rather good bargain on US Data Centers in-addition to what they have. Stronger USD helps too. Ascendas has future earning from Grab building and recent Australia acquisition. AR is largest locally. MINT may have impact from HP Inc downsizing concern as this maybe a risk depending on their BTS lease term with the company.

Overall, I would think MINT yield should be lower (correction) due to better quality earning. And I will be ok to pay more than A Reit. This thinking could change with time though.

How about Frasers Com Trust ? There is some concern in the market whether they can maintain their DPU. However their major was resolved with space able to be rented out to google. There is still risks from Microsoft. Overall the risk is reflected in their higher 6% yield compared to AR and MINT.

With recent blogged iReit in the limelight by famous blogger, the market was moved by it due to low trading volume. There are also other bloggers who are not so positive about it. Nevertheless at 7.6% yield there is some market concern. Is pure Germany play and rather concentrated in a tenant. I have 2.5% allocation currently.

Maybe ratio of AR 12%  :  MINT 9% :  FCOT 6% : iReit Global 3%. This will stagger my yields and risks in REITs.

Make sense ? Now wait for some correction to drive towards the percentage. Those that exceed probably I will put a hold instead.

Cory
2019-1006

Cory Diary: Importance of staying invested 2019-1005

Importance of staying invested to beat inflation is a psychological battle after GFC 2008. People tend to wait for the next major crisis or at least a correction. This is especially so when we have many headline news or risks and worries. 

While the concept is possible in theory, the timing or execution is not easy reason being because of the opportunity costs. Reits yield over the years have climbs down from double digits to 5% range. However, the cumulative capital gains and dividends are of considerable size. (See table)

The Gratification comes in when we go beyond inflation beating to actually profiteering from our investment. And to see our portfolio continuously growing in good years while mute in down. Overall, we just need to see more ups than downs to win the game.


Recession Fear as we are on our 11 years of economic growths since Year 2008. 2020 could be mute or small increase in profitability. What I could do is to continuously apportion my portfolio to more "Fixed returns" by percentage while in absolute number can still be larger in non-fixed investment. This could protect my down side while continuously to have larger growth in portfolio size through re-balancing. That's the strategy.

Cory

2019-1005