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Investing with some common sense for peace of mind.

Wednesday, September 22, 2021

This blog is in reply to a comment by a reader who wants to know my opinion on what he thinks are "poor governance and regulatory oversight by MAS, DBS (its sole bookrunner) and SGX" in the case Eagle Hospitality Trust. 

Read his full comment: HERE.

Hi HH Low, 

Unfortunately, we cannot always be right and I have been wrong more than a few times myself. 

With Eagle Hospitality Trust (EHT), I was probably in the minority in sounding the alarm as many investment bloggers and analysts were saying the Trust was severely undervalued as its unit price declined. 

Many bought into the Trust and many more followed. 

The importance of not riding on coattails and to do our own due diligence really cannot be overemphasized.

Also, it pays to remember that: 

"We might have different requirements and certainly different circumstances. 

"So, it is probably not a good idea to ride on someone else's coattails, no matter how famous that someone is." 

For example, many have been buying into Alibaba since its stock price went into a tailspin and this has lasted many months.

There is a saying that stock prices flow down a river of hope and it certainly has been the case for Alibaba.

Low can go lower and if we do not have deep pockets like Charlie Munger and have to borrow money to invest in Alibaba, we might be in for many sleepless nights. 

Regular readers know where I stand on such matters. 

Not many have the stomach for volatility and fewer still have the stomach for constantly declining stock prices with no bottom in sight. 

It might be a better idea to wait for prices to bottom before buying and that was what I did in the bear market last year. 

I might miss out on some gains but I would have spared myself quite a bit of mental agony.

For example, see: 

Anyway, I digress. 

In the case of Eagle Hospitality Trust, for better or for worse, like always, I stuck to my views and it turned out I was right about EHT. 

The lesson? 

We have to remember that there is no free lunch in this world and nobody cares more about our money than we do.

Although I think that people who have done wrong should be punished, in the real world, evil is not always punished while the good and the innocent often pay heavy prices. 

So, instead of depending on regulators and experts to do a good job, it is probably a good idea for us to be a bit cynical and if something is too good to be true, take a closer look because it could indeed be so.

I am not the smartest person around but I like to think that I have some common sense which I believe is common enough that most people have it. 

I just happen to use my common sense a bit more, maybe. 

For anyone who might be interested, these are some of my past blogs on Eagle Hospitality Trust: 


Toby said...

Can talk to yourself on AA Reit as it plunged lately....thanks

AK71 said...

Hi Unknown,

You might want to refer to this blog and the comments section as I don't have anything new to say:
AIMS APAC REIT and perpetual bonds.

ClassicMed said...

Hi AK, great to read your always useful writing. Hope you can talk to yourself about the 3 banks, Comfort, and IREITS with some drop in current SG mkt. Thanks, Dan

AK71 said...

Hi Dan,

Don't have anything new to say, really.

The 3 local banks are well capitalised, well run and pay good dividends.

Higher dividends...

ComfortDelgro will take time to recover, just like all public transport companies but at least it isn't burning cash like SIA or GRAB.

Investment in ComfortDelgro...

IREIT Global continues to be a rather resilient investment for income.

IREIT Global: 214 for 1000 rights issue.

So, at lower prices, all else being equal, these will become better investments for income.

laurence said...

Always believe AK, our Oracle of Dividend Stocks and Reits.
We can distrust anyone including analysts fm investment firms; but never ever distrust AK !!!!
The only One that can and must be trusted is AK !!
No one else but AK !! ;)

AK71 said...

Hi Laurence,

I appreciate the vote of confidence but don't take everything I say as the Gospel truth. ;)

Time and time again, it has been shown that AK is not infallible. -.-"

YJ said...

Hi ASSI, can talk to yourself on CapitaLand Investment (CLI) pls?

AK71 said...

Hi YJ,

CapitaLand Investment (CLI) is more interesting for income investors because it takes the more stable and consistent income generating businesses from the old CapitaLand while leaving out the property development business which has lumpy earnings.

There is plenty of interest in CLI and it is now trading at a hefty premium to NAV which makes it less interesting to me.

"Most people get interested in stocks when everyone else is. The time to get interested is when no one else is." Warren Buffett

I am in no hurry.

YJ said...

Thanks for sharing AK, appreciate it:)
Keep those blog post coming

AK71 said...

Hi YJ,

I cannot promise more frequent blogs but once every three months is doable. ;)

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