3Q 2019 passive income: Numbers.

It has been a while since my last blog and I hope everyone is doing well.

So, now that 3Q 2019 has ended, an update on what I did in the quarter is due.

Well, in terms of my investments, apart from collecting dividends, regular readers know that I sold quite a big chunk of my portfolio earlier in July.

See:
Sell into the rally...

And for what it was worth, I also provided an update on the largest investments in my portfolio.

See:
Largest investments...






Then, after that, I was mostly just adventuring in Neverwinter and taking it easy in RL (which stands for "real life"), collecting dividends from my RL investments.

Although readers should hopefully be used to the rather long breaks from blogging I have been taking as I spend more time on other activities, I would like to reiterate that this is the new normal.

If you leave comments in my blog and expect a timely response, you could and very likely be disappointed.






In fact, for the whole month of October, Neverwinter will be running the Neverember Recruitment Event which will reward the leveling of any new character created during the event.

This is not only a perfect opportunity for anyone who wants to give Neverwinter a try, it is also great for veterans to create new characters (up to a maximum of two) to get their hands on the rewards which are very generous, rewards which would have cost RL money to buy otherwise.

The Level Cap in Neverwinter is 80 but to get all the rewards from the event, we only have to hit Level 59, if I understand the event correctly.

So, I will be extra busy in Neverwinter as I will level two new characters to Level 59 and still be adventuring with the three Level 80 characters I have now.

Neverwinter is free to play (F2P) and lots of fun for anyone who enjoys the High Fantasy genre and is "giam siap" (not offering a translation for this) like AK.

Can barely see the word "Shift" and the letter "W" on my keyboard. 
Bad AK! Bad AK! ;-p

Anyway, total passive income from my investments in REITs and non-REITs in 3Q 2019:

S$ 31,789.91

This amount would have been much higher if I did not reduce my investments and rather significantly too in SingTel, Wilmar and ComfortDelgro back in July.

I say this as a matter of fact to explain why the amount is smaller than what some might be expecting and not because I regret my decision to realise gains, reducing investment exposure pretty significantly in the process.

After all, the capital gains from reducing exposure to the businesses mentioned were much more than what I would have received from them in dividends otherwise.








Also, it is almost never a bad thing to have more cash as it gives us options which include the ability to pounce on opportunities when they present themselves.

As it turned out, opportunities knocked in the following months as stock prices experienced a correction.

I added to my investments in a few businesses such as:

1. DBS

2. OCBC

3. ComfortDelgro (CDG)

The list doesn't end here, of course. 





As Centurion's stock price and Accordia Golf Trust's (AGT) unit price languished, I also added to my investments in these entities as my investment theses are unchanged.

I believe that they are undervalued and it doesn't matter to me that if their share or unit price continue to move sideways as long as they keep generating meaningful income for me.

In 3Q 2019, I also took part in CRCT's rights issue, taking up my entitlement and applying for excess rights at $1.44 a unit.

This bumps up my investment in the REIT but not by much as it is a relatively small rights issue.

Finally, I substantially increased my investment in IREIT Global as its unit price declined rather significantly.





I shall not explain my decisions to increase my investments in DBS, OCBC, CDG, Centurion or AGT again.

Anyone who is interested to find out more or in having a refresher can refer to my earlier blogs on these entities.

As for CRCT, I blogged about why I thought it was a well run REIT with a relatively attractive yield before.

See:
CRCT added in Jan 2017.

My view has not changed and there is no reason why I wouldn't take part in its relatively small rights issue to help expand its AUM.





I have also blogged about IREIT Global before and why I avoided its IPO.

This was back in 2015.

See:
IREIT: What is a more realistic distribution yield?



Of course, all investments are good at the right price and I invested in IREIT later on when its unit price declined sharply.

Adding to my investment in IREIT Global in 3Q 2019 meant paying a higher price than what I paid before, however.






Still, I chose to increase my investment in IREIT Global and I will share the reasons why in my next blog as this blog has become a bit too long.

I will try to do this within the next 24 hours because if I don't, I fear I might not do it once I seriously start to power up my two new characters in Neverwinter.

Yes, I know.

Bad AK! Bad AK!




For now, I will say that I am reasonably confident that all that I did to my investment portfolio in 3Q 2019 will better reward me in future.

What I did was consistent with my belief that investing for income is enriching and, so far, it has been the case for me.

Remember, if we do the right thing, everyone's life can be and should be better.

Investing for income can help us achieve financial security and, eventually, financial freedom.

If AK can do it, so can you!




You might also want to read:
1. Retirement adequacy 101.
2. Start with a plan to retire early.

Insider buying in APTT and Lu Fang Ming.

This blog is in reply to a comment from a reader regarding insider buying in APTT: HERE.

There is usually only one reason why insiders would increase their stakes especially if they should do so in a big way.

After all, no matter how rich we become, rationally, we don't want to lose money.

Personally, I believe that APTT is undervalued.

Otherwise, I would not have bought more as Mr. Market went into a depression.

See:

Gobbling APTT.

and

4Q 2018 and APTT.

It is good that insiders of APTT seem to think the same way.





This video is only about 2 years old.

When Mr. Market was more optimistic about APTT, some thought that the target price should be 64 cents.

Pretty mind boggling.

Some might also say it was irrational.

APTT's business really hasn't changed much.

The big change is that APTT no longer has leveraged income distributions for its investors.

That was what caused its unit price to plunge which, as I have explained in an earlier blog post, isn't rational either.






Of course, Mr. Market can stay irrational longer than we can stay solvent.

Always do our own due diligence and don't ride on other people's coattails. 

Remember, no one cares more about our money than we do.

Don't ask barbers if we need a haircut.






From an investing for income perspective, APTT's much higher income distribution to its shareholders in the past was unsustainable and I said so before too.

However, after being reduced drastically, its income distribution is probably more sustainable now.

Having said this, if the business remains very challenged and if its income continues to dip, income distribution should have to be trimmed, reasonably.

Investing in broadband infrastructure is the key to maintaining an edge that could compensate for the continuing weakness in its pay TV business.

Not paying an unrealistic dividend means that APTT has the internal resources to fund its broadband investment in order to stay competitive.




APTT's insiders should know more than we do and insider buying probably signals some confidence.

However, unless insiders have a very substantial stake or unless their purchase is a very significant percentage, insider buying might not be as meaningful.

This is the difference between insider buying in APTT versus insider buying in Centurion.

Insiders bought APTT's management from the Australians but, if I remember correctly, they don't hold a large stake in APTT itself.




Finally, APTT is in a business that is disrupted and there is a fog of war here.

So, telling myself that it is never wrong to book a gain, doing the novice TA that I do, that was what I did recently in the rally.

I booked a gain and took money off the table.

If APTT's unit price were to fall drastically, all else remaining equal, I could buy in again.

Remember what I said about speculative positions and how to size them: HERE.





Lu Fang Ming is very wealthy and if he were to lose half a million dollars, he might feel it like a pin prick but, for me, it would be like chopping off one of my arms.

Insider buying gives investors (and speculators) some measure of confidence but, still, we should be aware of our own capacity for pain and not throw caution to the wind.





Related post:
Sell into the rally and stay invested.