AIMS APAC REIT investment is larger now.

When I blogged about AIMS APAC REIT (AA REIT), formerly AIMS AMP Capital Industrial REIT, last month in April, I said:

"I have not done anything to my investment in AIMS APAC REIT for many years."

Well, I can't say that now because I just added to my investment in AA REIT.

I spent a few hours in the last few days reading, crunching some numbers and looking at the chart before deciding to buy some.

The dust seems to have settled for AA REIT at least for now.

Volatility has reduced tremendously and the unit price seems to have found a floor at about $1.15 a unit.

Looking at the chart, the rising 20 days moving average (20d MA) provides immediate support at $1.14 a unit.

However, the 50 days moving average (50d MA) is still declining and is currently at about $1.16 a unit.





The 50d MA has been providing resistance which has kept a lid on the unit price.

It is the proverbial tug of war between the bulls and the bears.

One side is unwilling to pay a higher price while the other side is unwilling to sell at a lower price.

The result is a reduction in price volatility and we see some kind of an equilibrium or stalemate as neither party is able to claim victory.

The rising 20d MA and the declining 50d MA are just about to form a bullish crossover, a golden cross, which the textbooks would say is a bullish signal.

The way things look now, the golden cross might happen in the next two or three sessions but, of course, if AA REIT's unit price suddenly plunges, it might not happen.

Of course, I always say there is no certainty in such things, only probability.

I am inclined to think that, at the moment, the only certainty we have is that things are looking relatively more settled now.

Any unwinding of such a situation could see unit price move either way and sometimes quite violently too.

Which direction?

Your guess is as good as mine.






Now, a bit of FA to provide some padding for TA is in order.

At $1.15 a unit and a DPU of 10 cents, we are looking at a distribution yield of about 8.7% which is a big increase over a distribution yield of about 6.9% when AA REIT was trading at about $1.45 a unit before the crash caused by the COVID-19 crisis.

The distribution yield looks relatively attractive but how realistic is it?

I always say that AA REIT is one of the better run industrial properties REITs in Singapore and I still think it is the case.

Of course, no matter how well run a business is, if it is up against an insurmountable external crisis, it is still toast which was why I kept saying it was better to err on the side of caution and wait for the dust to settle before deciding whether to buy more.

Very early into the crisis when the air was very dusty and the visibility was very poor, a friend decided to buy shares of SIA when it fell to $8 a share because he thought the blue chip was already very cheap at that price.

That blue chip is now a blue black chip.

Together with Temasek Holdings, my friend is performing National Service as he chips in to save the blue chip.

He is coughing (probably because of all the dust he inhaled) up more money to keep SIA alive while he has to live with the very real possibility of getting zero income from the investment for the next many years.






Anyway, back to AA REIT.

With gearing level at 35% and an interest cover ratio of more than 5x, AA REIT will probably be able to weather this storm pretty well now that we have a better idea how the COVID-19 situation might evolve and also how we could keep it better under control until a safe and effective vaccine becomes available to the world.

Of course, to be sure, there is always the possibility things could go awry.

In my blog on my largest investments in REITs last month, I said that if the crisis were to drag on for much longer, then, we could see tenants defaulting on rents.

For sure, it is possible that we could see a 10% or even a 20% reduction in AA REIT's income if the bad situation the world is in now were to worsen.

So, trading at $1.15 a unit which is about a 20% reduction from $1.45 a unit before the crash shows that Mr. Market is cognizant of the risks AA REIT must face.

Talking about this has a mildly speculative flavor, of course, but I remind myself not to be overly optimistic thinking that 8.7% yield is a definite thing as I could be setting myself up for disappointment.

We should be prepared for the possibility of bad news from AA REIT when they release results and maybe provide guidance next week.

Don't throw in everything including the kitchen sink.

I don't know about you but I need my sink in the kitchen.






While we are on the subject of speculation, it is also interesting to note that ESR Cayman and ESR HK have both been increasing their investments in AA REIT.

Their most recent purchase happened earlier this year in March and that was worth more than $2 million, if I remember correctly.

Of course, there has been talk about ESR harboring thoughts of a takeover of AA REIT for some time now.

Although I hope it isn't the case and it doesn't happen, it is a definite possibility.

If you are interested in this possibility, I blogged about it initially in 2018:

2Q 2018 passive income from S-REITs.

At that time, DBS said AA REIT "could be a target for takeover and suggested a target price of $1.55 to $1.65 per unit."

More recently, there were articles in The Business Times (November 2019):

ESR Cayman Ltd (ESR) acquired 26,827,400 units in AIMS APAC Reit (AA Reit) for a consideration of S$37,290,086 at S$1.39 per unit.

and also The EDGE (December 2019):

3 potential S-REIT mergers to watch out for.






Previously, when AA REIT's unit price was averaging $1.45 a unit which was a premium to its NAV, a takeover might have been seen as too demanding or too pricey.

With unit price now at $1.15 a unit which is a discount to its NAV, a takeover is probably more palatable and also more feasible.

To me, ESR accumulating units at $1.30+ a unit continually and in pretty large chunks up until middle of March this year tells me what ESR was thinking about AA REIT as a value for money investment at that price level.

What will their next move be?

You tell me.

Yes, I know.

Bad AK! Bad AK!

I will stop here.

Time for me to move from this world of imagination to another world of imagination.

Till my next blog, be socially responsible and do the right things.

We are #SGUnited.

You might be interested in the following video on AA REIT's portfolio of properties:





Related post:
Largest REIT investments updated.

Market sways between hope and worry while AK plays games.

This is the 19th day of Singapore's "Circuit Breaker" also known as "Lockdown" or "Partial Lockdown".

It is what it is.

All these fancy names.

Lawrence Wong says "Lockdown" means different things to different people.

"Circuit Breaker" also means different things to different people.

To me, "Circuit Breaker" is "Lockdown".

Semantics.

We can go on and on.

Beautiful.

Anyway, I have not blogged for more than 2 weeks which isn't too bad.

I did say I was going to blog only once every 3 months not too many moons ago.

What have I been up to?

If you have to ask, you must be new to my blog.

I am busy adventuring in another world, of course.






"Neverwinter" currently has an event called "Tales of Old" that rewards adventurers with powerful artifacts if they run old dungeons with increasingly challenging debuffs.

There are four artifacts to be collected and, over a few days, I have completed enough runs to get the artifact which I feel is most useful to my wizard.

I might collect another artifact just for the fun of it because the event is fun.

This is what retirement should be, right?

Do stuff for fun.

More recently, I decided to learn how to play "Magic the Gathering".

I have always been amazed by people who would spend boatloads of money buying these little packs of playing cards.

I see school children huddling around tables outside shops which sell them, competing against one another.

Most of them looked skinny.

Saved all their recess money to buy cards, maybe.

I was curious but when I saw how much I had to pay for those packs of cards and how it was a never ending story, my curiosity fizzled out quickly.

Well, that was a long time ago.

Back then, it would be unimaginable to have a fantasy RPG for the PC like "Neverwinter" be 100% free to play.

Well, I found out a few days ago that I could play "Magic the Gathering" for free online too!

Being a card game, it is very different from "Neverwinter" but they did a really good job with the animations when the cards are played.

Basically, build a deck and play to unlock more cards and gain points to purchase packs of cards.

These packs of cards are like boxes of chocolates.

You don't know what are the cards you will get which is why people buy with real world money (as opposed to virtual world money) pack after pack of cards in the hope that they will get those cards they want.

It is really another form of lottery.

Anyway, the full name of the online game I am playing is "Magic the Gathering: Arena".

The "Circuit Breaker" has been extended till 1 June 2020.

So, if you are feeling bored at home, you might want to explore this free to play game.






Although I have not blogged for more than 2 weeks, I have tried to check the comments section of my blogs regularly because I know there is still plenty of "excitement".

Of course, many spam comments too which, fortunately, are filtered out.

Those which are not filtered out, I will delete.

The section is for "comments" and not for "advertisements" nor "advertisements pretending to be comments".

Wolves in sheepskin.

You know who you are.

Anyway, if you don't see any updates in my blog for a while, you might want to check the comments sections of the more recent blogs.

The last 3 updates, for example, have many comments from readers and my replies to them.

Another reason why I have not published any update is because there isn't anything new that I want to say.

Some expect the COVID-19 crisis to "magically disappear" like a "miracle".

Some think that the COVID-19 crisis is going to sink the world into another "Great Depression".

With all that noise going on, my strategy has remained unchanged.

I will not be overly optimistic nor will I be overly pessimistic.

I will stay pragmatic.

I am staying invested because I believe that most of the businesses I am invested in will still be around as the COVID-19 crisis is resolved over time.

I will buy more stocks when I have greater clarity.

Like I said in earlier updates, I have nibbled at some stocks but I will wait for greater clarity before buying much more.

If you are new to my blog or cannot remember what I said, read my more recent updates.






Technically, the upward movement in stock prices was not supported by much higher volume and I think I said that in one of my updates.

Volume is the fuel that drives rallies and if we do not have volume, any upward movement in price will not last.

As long as volume is missing, the prospect of a V shape recovery dims.

Remember, I said on 7 April that:

"Today, the stock prices of DBS, OCBC and UOB all broke the resistance provided by their declining 20 days moving averages (20d MA).

"What this says to me is that they broke their downtrends."

That was when I bought some.

However, I didn't throw in everything including the kitchen sink.

I said in that update that as the 20d MA turns up:

"Basically, we want to see any retreat in stock prices bouncing off the 20d MA then."

Well, that bounce didn't happen.

Of course, technical analysts can talk about rising wedge patterns and how it was all a bull trap now.

I will just stick to my plan.

Be patient.

Wait for clarity.






In a U shape recovery, the bottoming process is likely to be bumpy as Mr. Market sways between hope and worry.

It will take time.

What if it is a L shape recovery?

Well, that is when those of us who have an emergency fund would do better than those who don't as the economy becomes stuck in the doldrums.

It will take even more time then.

What if it is a delayed or mutated V shape recovery?

Hurrah!

Celebrate!

We should buy even at higher prices if we see huge volume buying up stocks.

That would be a sure sign that the bull is back.

That is when high can go higher.






OK, that is all I want to say in this update.

I really want to go back to adventuring in "Neverwinter" and testing my new deck of cards in "Magic the Gathering: Arena".

In the meantime, be socially responsible and stay safe.

The health of all depends on each one of us.

We are #SGUnited.

You might want to read these and also the comments and my replies:
1. Stock market correction...
2. Buying DBS, OCBC, UOB and IREIT...
3. Largest REIT investments...
4. 1Q 2020 passive income...

Buying DBS, OCBC, UOB and cheering for IREIT Global.

The title of this blog pretty much says it all, doesn't it?

OK, end of blog.

Ouch!

Who threw a shoe at me?

Anyway, I nibbled at DBS, OCBC and UOB earlier in the day.

Why did I nibble at DBS, OCBC and UOB?

Well, fundamentally, we want to buy into stocks with strong balance sheets and which are good dividend payers.

More so during a time of crisis.

So, tell me why didn't AK think of investing in SIA instead?

Hey, AK is mental but not that mental.

Ahem.






If DBS, OCBC and UOB have strong balance sheets and are good dividend payers, why didn't AK buy 2 weeks ago when prices were about 10% lower?

Well, AK is growing older and as he grows older, he becomes more timid.

This is the honest truth.

Basically, I didn't know if stock prices were going to move much lower from there

I was waiting for the dust to settle.

So, has the dust settled now?

I am not sure that the dust has settled but I think the dust is settling.

What do I mean by that?

It means that the bottoming process seems to have started.

I wouldn't say that things are bullish and that everything will be fine and dandy from now.

However, I will say that things are looking less bearish for now.

Prices have risen from the lows formed on 23 March and have been moving sideways for a while.






Today, the stock prices of DBS, OCBC and UOB all broke the resistance provided by their declining 20 days moving averages (20d MA).

What this says to me is that they broke their downtrends.

It doesn't really say anything else to me.

For sure, it isn't saying that stock prices will only go higher from here.

Personally, I feel that there is probably more downside in the weeks or even months to come.

However, Mr. Market doesn't care what I think and how I feel.

So, I just do whatever the plan which I drew out at the start of this crisis tells me to do.

For clues as to what I am talking about, read this blog:

COVID-19 defeated by Mr. Market in 2021 or so...

Remember, have a plan, our own plan and stick to it.

What is acceptable to me might not be so for you and vice versa.

Just remember that I am only talking to myself here in ASSI about my plan or, sometimes, plans.





What is going to happen next?

That is an easy question to answer.

The market will either move higher or move lower.

Yes, I know.

Bad AK! Bad AK!

What does my plan say?

Well, if DBS, OCBC and UOB see their stock prices move higher or just move sideways in the near future, we should see their 20d MA turning up in due course.

A rising 20d MA will provide some support and I would buy more at supports.

Basically, we want to see any retreat in stock prices bouncing off the 20d MA then.

If this is just a relief rally and if DBS, OCBC and UOB should see their stock prices plunging once more, then, we could see the lows of 23 March again.

Indeed, stock prices could go even lower than those lows which would be consistent with the view that the COVID-19 crisis is as bad as the Global Financial Crisis or even worse.

In such an instance, I would have to see a positive divergence formed with a momentum oscillator, the MACD, before buying more.

That is the plan.

Just have to wait and see how things pan out.

Mr. Market cannot be rushed.

Neither am I in a rush.

Stay calm and play Neverwinter!





Before I end this blog, I just want to share a bit of good news with fellow IREIT Global unitholders.

If you don't already know, IREIT Global is seeing a huge spike in its unit price today.

It is up 20% right now as I am typing this!

Now, I wish I had bought a lot more when I did at 42c a unit.

50% capital gain!

If only I had a working crystal ball, right?

"Tikehau Capital raised its stake to 29.2 per cent from 16.64 per cent while CDL increased its stake to 20.87 per cent from 12.52 per cent.

"This brings their aggregate shareholding to over 50 per cent.

"Meanwhile, new investor AT Investments has also acquired a 5.5 per cent stake in the Reit"

Source: The Business Times.
"Tikehau Capital, CDL raise their stakes in IReit Global as strategic partners."




In closing, today is the first day of stricter measures that will last for a whole month to combat COVID-19 in Singapore.

Remember, be socially responsible.

We are #SGUnited.


References:
1. Have a plan, your own plan.
2. COVID-19 defeated already?
3. Largest REIT investments updated.

COVID-19 defeated by Mr. Market already?

This blog is in response to a reader's comment: HERE.

AK says:

Hi D,

Well, like you said, Mr. Market can stay irrational for a very long time.

I always say that there is no accounting for Mr. Market's mood swings. ;p

As for what some might think of as a stock market recovery in the last few days, I think it is too early to call it that.

It will be more accurate to call it a strong rebound from a drastic and rapid plunge.

Technically, at least for the stocks which I am monitoring, the downtrends are still intact.

Also, I do not see any significant increase in volume as those stock prices rose in the last few days.






Having said this, I am not saying that it is definitely a trap for the buy and hold investors.

TA is about probability after all and not certainty.

For sure, more competent traders would have made some money in this instance.

I don't trade very much anymore as my energy is mostly spent elsewhere in another world.

Even so, I have nibbled at some stocks and increased my investments in some businesses which I am sure will continue to generate a meaningful income for me.






However, I have not unlocked my war chests to buy a lot more. 

PM Lee said that this COVID-19 crisis is going to be worse than SARS and possibly even the Global Financial Crisis.

I believe that this is the case.

I am looking at the situation and also the charts not in terms of days but more in terms of weeks and months.

Of course, I hope the crisis won't last a year or two.

Heavens forbid.

If this is going to be worse than SARS and the Global Financial Crisis, then, there is a high chance that we have not seen Mr. Market in the depths of his depression yet.

Of course, it is important to remember that AK is just talking to himself here in ASSI.

Everyone should have his or her own plan.





If you have not done so, watch this video from the Prime Minister's Office which was released earlier today.

If you are only interested in when and how PM Lee thinks Singapore's economy is going to recover, fast forward to 7:15 in the video.



"... the waves will take many, many months or more than a year or two to settle..." PM Lee.

Remember, wash our hands more frequently, practice social distancing and behave in a responsible manner.

We are #SGUnited.





Related post:
COVID-19 defeated by Mr. Market in 2021 or so the IMF says.

COVID-19 defeated by Mr. Market in 2021 or so the IMF says.

I blogged about Mr. Market coughing blood from COVID-19 slightly more than a week ago.

On 13 March, the STI Index was at 2,665.

Yesterday, the STI Index was at 2,223.

That's a decline of almost 20%.

Today, it is experiencing a bit of a bounce.

So, what have I been doing in the stock market?

What will I do in the coming days, weeks and months?

So far, I have only been nibbling at stocks.

They are stocks of businesses which I believe will continue to generate meaningful income in spite of the COVID-19 crisis.

Although I am tempted to buy a lot more, I remind myself that the bear market is very much still in its early days.

There could be more shocks in the days, weeks or even months ahead.

Shock waves are hitting the American economy right now:






So, my war chests which are several relatively large Singapore Dollar fixed deposits and my CPF-OA savings, the size of which is public information, remain locked.

Some might ask where is the money I have been using to nibble at stocks coming from?

I do keep a float which is money I can access easily at any time.

This float is money in all my savings accounts and current account.

When am I going to deploy money from my war chests?

I said in the blog about Mr. Market coughing blood:

"There could be some rebounds in stock prices as, in a bear market, prices go down a river of hope.

"However, until I see signs of the downtrend breaking or, better still, a trend reversal, my war chests stay locked."

We have seen this happening.

Prices go down.

Prices rebound.

Prices continue to go down.

Prices rebound.

Prices go down somemore.

This is what is meant by prices going down a river of hope.






Fundamentally, many stocks look really attractively priced right now.

However, the fear of the unknown is crushing prices.

After all, we can only say that these stocks look attractive right now because of past information that we have.

Do we really know everything there is to know about the COVID-19?

There is much talk about the Spanish Flu and how long it lasted.

The Spanish Flu killed millions and it came in three waves.

Just when everyone thought it was over, it hit again and again.

Will COVID-19 be like the Spanish Flu?

Are we only seeing wave one now?

Nobody knows.

That is the truth.

So, what are investors to do?

I cannot tell you what you should do, of course.

I can only share what I am doing or not doing.






There is no doubt that we will survive the COVID-19.

There is no doubt that Mr. Market will survive the COVID-19.

If we don't, the human race will be extinct, anyway.

So, what is the point of having or making money then?

Stiff upper lip and soldier on, as the British would say.

Be brave and ignore the doomsayers.

So, I will buy a lot more at some point.

When is that?

Like I said before, I will wait for the dust to settle.

When that happens, we should see prices trying to find a floor if there is to be a bottoming process.

The bottoming process should see prices break their declining trendlines eventually.

Bottoming doesn't always happen this way, of course.

In case we have a V-shaped recovery, we should see prices breaking their downtrends on high volume.

I might miss plenty of upside in such an instance but I remind myself that money not made is not the same as money lost.

We could also see a double or triple bottom pattern forming.

Prices rebound, hit resistance, retraces to a support band, rebound and if it breaks resistance on high volume, that's a buy signal.






Like I said, it is still early days but these are the things I will look out for.

What about the Momentum Oscillators?

At the moment, all I can say is that the Relative Strength Index (RSI) for many of the stocks I am monitoring has formed higher lows.

What this tells me is that the rate of decline in prices has slowed.

It does not tell me that prices are going to recover in a sustained manner.

Another momentum oscillator which I look at is the Moving Average Convergence Divergence (MACD).

The buy signal here for me would be a positive divergence where the MACD forms higher lows even as share prices form lower lows.






Although I have tried to make this information as accessible as possible, I know this might sound gibberish to some people.

Some might even wonder if this is English.

Well, if you think that way, perhaps it is time to pick up some Technical Analysis (TA).

Yes, I know.

Bad AK! Bad AK!

OK, this might not be perfect but if you have absolutely "no time" to learn TA, just take note of the news and stock prices.

If stock prices stop declining and simply move sideways even as we are bombarded with bad news, possibly, the worst is behind us.

Indeed, if stock prices keep moving higher even as we are bombarded with bad news, prices might have truly bottomed.

TA is about probability and not certainty, I always say.

Without looking at charts and just taking note of news and stock prices will make it even more so.

However, it is something everyone can do.

Till the next blog, take courage, stay safe and watch the following video from the IMF ("COVID-19 Economic Outlook Negative, But Rebound in 2021").





Recently published:
Eagle Hospitality Trust: In danger of extinction?

Related posts:
1. Mr. Market is coughing blood...
2. Books on Technical Analysis...

Wilmar: "Target reacquired" and target prices.

Regular readers know that I have been a Wilmar shareholder for many years.

It is difficult not to find Wilmar impressive as a business entity with its breadth and depth of activities.

Many years of Mr. Market's pessimism towards Wilmar gave believers a big window of opportunity to build their exposure.

In the last two years or more, I have been accumulating shares of Wilmar until 3Q 2018 when I decided to sell into the rally, reducing my investment significantly while keeping a core position.

See:
Largest investments (3Q 2019).

It is a strategy that regular readers should be familiar with.

It is so that I would still stand to gain in case the bull had legs.

Some might call it a hedge as, always, I don't know everything.

Well, as it turned out, the bull grew tired and needed a break.






If you are new to my blog or if you are rather forgetful, to understand why I was building a relatively significant long position in Wilmar,

See:
Accumulating Wilmar on price weakness.

You will see how I did temporal comparative analysis in that August 2017 blog.

To understand why did I buy more when Wilmar's share price went under $3.00 a share instead of cutting losses,

See:
3Q 2018 passive income: Wilmar.

Conviction.

Good reasons make it stronger.

Of course, being paid while I waited made patience more affordable.






I watched the latest Terminator movie recently and Arnold Schwarzenegger (aka Carl) in one scene said:

"Target reacquired."

A man of few words, as always.

OK, no spoilers in case you have not watched the movie.

Anyway, Wilmar was still an investment target for me after the partial divestment exercise to lock in gains earlier this year.

Using my limited knowledge of technical analysis (TA), I waited for what I thought could be the right time to increase exposure again.

Over time, as its share price retreated, I thought Wilmar's chart could form either a falling wedge or a cup and handle pattern.





If it was a cup and handle pattern, share price should find a floor at approximately $3.50 a share (i.e. the lowest point of the handle).

Could be a few cents lower or higher. 

I was also keeping an eye on the rising 200 days moving average (200dMA).

Being a long term moving average and a rising one at that, it should provide a stronger support.

By the time I decided to increase exposure again in a big way, the 200dMA was at $3.54 or so which tied in nicely with the approximate low (of the handle) in a probable cup and handle pattern.

I started buying at $3.60 and bought more as it did eventually hit $3.54.

Wilmar became one of the largest investments in my portfolio once more after that. 

If you do not remember reading about this in my blog, you might want to see related post #1 at the end of this blog.








As usual, I scribbled all my TA on a scrap of paper and, unfortunately, I cannot find that paper scrap now.

However, I remember the measurements I took from charting.

Measurements?

Yes, the measured target prices.

Prices?

Yes, that is not a typo.

In the plural.

If Wilmar's share price were to move higher after forming a falling wedge, the measured upside target would approximate $4.50 a share.

If Wilmar's share price were to move higher after forming a cup and handle pattern, the measured upside target would approximate $5.00 a share.






Take my TA with a pinch of salt because I am an amateur, after all.

I know some of you do not believe me but I am just being honest.

Well, amateur or not, if things pan out like I think they might, I would stand to book a pretty handsome capital gain.

If things don't pan out like I think they might, all else remaining equal, I would still stay invested as I am comfortable with my level of exposure in a business that provides me with both elements of income and growth.

Now, who says we cannot be an investor and a trader at the same time?

Older readers would remember this masterpiece of a pyramid drawing by AK the artist:

See:
Investing for income and dividend yields.

and also:

Motivations and methods in investing.

The former was a blog from March 2017 while the latter was a blog from July 2013. 

Newer readers who wish 

1. to know what the pyramid drawing is about 

and 

2. to understand my investment style 

should find the blogs useful.






Newer readers might also want to read related post #2 at the end of this blog. 

Why do I invest the way I do?

You tell me.

Related posts:
1. Largest investments updated (4Q 2019).
2. Peace of mind as an investor.

Sell into the rally and stay invested.

A reader left me a comment recently:

"Many AK shares like CDG and APTT have gone up. I hope AK didn't dispose them."

Why would I sell them before?

I like being paid while I wait.

This is something I have said many times before.

Therefore, regular readers would find this quite familiar.






We buy undervalued income producing assets, receive dividends while waiting for Mr. Market to turn realistic.

We could even buy good income producing assets at fairer values, receive dividends while waiting for Mr. Market to turn optimistic.

When Mr. Market is greedy, the wait is over.






Having said this, regular readers would also be familiar with the phrase "trading around a core position".

Although I will sometimes sell into a market rally to lock in some gains, I always stay invested for income, retaining a core position.

I am an income investor at heart and more so now as a retiree but there is also no accounting for Mr. Market's moods which means staying invested is probably sensible.






Despite the fact that there are negative divergences aplenty, the bull might have legs and market euphoria could last longer.

Some readers who attended "Evening with AK and friends" might remember the way I explained what a negative divergence was.

An example is as the share price goes higher, trading volume dwindles.

Volume is the fuel that drives rallies.

If volume dwindles, the rally could be ending.






There are potential double tops as well.

We see this when the share price, having retreated from a high, tries to go higher but fails.

As prices retest recent highs, we want to see higher highs forming on the momentum oscillators such as the MACD.

If we see lower highs in such instances, we have a negative divergence.





Mr. Market's euphoria could be sputtering.

I have trimmed my investment portfolio by some 25% to 30% since my last blog post.

So, as you can see, it is not an overly big reduction.

I have sold into the rally but I am staying invested.






The rally is also a good opportunity to sell stocks which are more speculative like APTT.

APTT was really too cheap to ignore and regular readers know I was gobbling as its unit price plunged.

At one stage, it went under 13c a unit and, of course, I bought more.

The market rally has allowed me to book a gain on my investment in APTT which, I won't deny, is a pretty speculative position, whichever way we cut it.






A couple of stocks which received greater attention were SingTel and Wilmar, which I bought more of as their share prices plunged in the last one year or more.

Like APTT, they have paid me dividends while I waited.

I decided to reduce my positions in SingTel and Wilmar heavily because, to me, their charts show obvious negative divergences.

Could we see $3.00 to $3.10 a share for SingTel and Wilmar again in the next few months?

It is a rhetorical question, of course.






Certainly, we cannot predict but we can prepare.

There is no better way to be prepared than to have a full war chest.

AK's war chest says:

"Burp. Pardon me."

So, what do I do now?

I go back to being paid while waiting (and playing Neverwinter).

I am just talking to myself, of course.




Related posts:
1. Wilmar.
2. SingTel and CDG.
3. 2018 passive income and APTT.
4. Make investing easy with 3 things.

Recently published:
Ascendas Hospitality Trust.