Bought Hyflux and AIMS AMP Capital Industrial REIT.

My overnight buy order for Hyflux at $1.20 was filled. Looking at the daily chart, it is immediately clear why I put in a buy order at that level. It is support. Even with a confirmation of a reversal signal, we want to buy as close to support as possible. Of course, luck plays a part because in very bullish circumstances, price could have gapped up and gone higher.

A white hammer was formed again today as price moved marginally higher on the back of lower volume. It was a weak white candle day. Bulls seemed to be rather cautious as the weekend is always a wild card. If nothing untoward happens this weekend, price could resume its upward climb. Immediate resistance is at $1.28 in such an instance.

It would be interesting to see if price could rise as high as $1.39 which is where the declining 50dMA is approximating. Of course, in another few sessions, the 50dMA would be lower and a gap filling at $1.365 could prove to be a rather strong resistance.

Today, I also bought more AIMS AMP Capital Industrial REIT at 95c. This means a pre-consolidation price of 19c per unit. For long time unitholders, it would immediately look cheap. At that price, we are looking at a distribution yield of 10.5%. The fundamentals of the REIT have not deteriorated. Well, not that I know of. So, the weakness provided me a chance to increase exposure to the REIT.

Regular readers might remember that I divested a significant portion of my investment in this REIT and moved the funds to Sabana REIT to have equal weightage in these two industrial properties S-REITs. The only way to entice me to increase my investment in this REIT once more is to offer a meaningfully higher distribution yield, everything else remaining equal, and that happened today. So, you would see me accumulating on further weakness. 90c next?

Technnically, despite a spike in volume as price gapped down today, all that was formed at the end of the day was a doji. To me, that is an encouraging sign for long holders.

Julius Baer downgrades Hyflux to hold and cut its target price to $1.30 from $2.30. “We believe that Hyflux will face challenges in winning projects to catalyse its share price due to its current stretched balance sheet,” Julius Baer said in a report.

Friday, 02 December 2011

© 2011 - The Edge Singapore

Hyflux and Sound Global.

Regular readers know that I invested heavily in Hyflux Water Trust during the last crisis. I was drawn towards its very high distribution yield of some 17% and zero gearing at one stage as well as its very stable businesses. The Trust helped to grow my wealth significantly.

I continue to like the water business and believe that the world will continue to need solutions to water problems. In an earlier blog post, I said I would like to become an investor in Sound Global (the former E-pure) once again. Of course, I would also be interested in Hyflux. It is just a matter of finding an entry price I would be comfortable with.

If we look at Hyflux's chart, the downtrend is definitely intact. What interests me is the higher low on the MACD as its price formed a lower low. Yes, we have a positive divergence which is a reversal signal. What got me even more interested is that the white hammer formed yesterday was confirmed today as price opened and closed higher on the back of much greater volume.

I certainly do not know if Hyflux's share price has bottomed. It might be bottoming but we cannot call a bottom until it has formed. However, I might initiate a long position as a hedge and will not add to this initial position unless a clearer picture is seen.

Sound Global, on the other hand, is exhibiting more strength although it has come up against a significant resistance, it would seem.

As its downtrend is arguably intact, I am wary about initiating a long position when price looks like it could be testing the immediate resistance. So, for Sound Global, I will wait a bit more.

How did AK71 overcome his losses and grow his portfolio?

I get quite a few comments in my blog and some comments require more detailed replies than others. I have decided that for more detailed replies, I should put them up as blog posts from now. This one is in reply to Ray's comment here.

Hi Ray,

Actually, when I finally fully divested from CitySpring, I did not lose money.

See: CitySpring Infrastructure Trust: Thoughts on divestment.

I was also spared the subsequent rights issue.

See: CitySpring Infrastructure Trust: Rights issue.

Up till now, for me, the trusts which I count as heavy losses are MPSF and FSL Trust. For REITs, I lost on FCOT (the former Allco REIT) and Saizen REIT but these were not heavy losses if I take into consideration dividends received and trading gains, if any. I would consider 5 figure losses as heavy losses. That's just me.

All other REITs I am vested in are in the black. Many, like AIMS AMP Capital Industrial REIT, were in the red but recognising the improving fundamentals, I used the weakness in the last crisis to add to my investments. Such decisions have been rewarding and I am likely to repeat such decisions if history should repeat itself.

The value of my stocks investment portfolio practically doubled as we emerged from the last crisis. Many investments were divested as I moved most of my funds into high yielding REITs resulting in what I have now.

The divested investments were growth stocks mostly. The one which was not was Hyflux Water Trust and that was privatised. So, it was a forced divestment but at a premium of 150% to my purchase price, I couldn't complain.

See: Hyflux Water Trust: Privatisation.

Overall for me, in the last three years, trading gains outweigh trading losses 3 to 1 but in the last one year, all the gains to my portfolio of stocks were from the hefty dividends received as circumstances did not and still do not favour long investors. Honestly, I booked some paper losses trying to trade the market in recent months. The decision to focus more on investing for income, however, paid off.

Dr. Marc Faber said the last crisis was a once in a lifetime opportunity to make a lot of money in the stock market. Is it likely to be repeated in the near future? I do not know and, hence, my current strategy of being partially invested.

Generally, how did I grow and manage my wealth? I have shared my thoughts here in my blog but I have left out the specifics because I care about my privacy and I believe it to be extremely unlikely that two unrelated persons would have the exact same path anyway. For anyone who might be interested, the relevant blog posts are in the right sidebar under the headings of "Passive Income Journey" and "Wealth Creation".

There are many roads to wealth creation and each of us should choose our own path. Some well known bloggers like Musicwhiz and Createwealth do not invest in properties, for example, and they are doing well following their own paths.

Personally, I invested in properties and their recent divestments gave me some handsome gains which are now in my warchest awaiting deployment.

Know what we want. Know ourselves and what we can deal with given our circumstances. Finally, strategise and work towards a target.

It is the toughest at the beginning and this I can say for sure. However, whichever school we decide to follow, it gets easier with time. So, do not lose heart. There is no short cut but do not cut short your journey towards financial freedom.

The Muppets movie!

Jim Henson created the Muppets in the mid-1950s and The Muppet Show ran from 1976-1981.

The Muppets have long been known for their big musical numbers and Disney’s The Muppets movie not only maintains the tradition but also takes it to new levels with original songs, audience favorites and signature classic covers.

This is the first Muppets movie in 12 years and throughout the whole filming process, the Henson family has been on board together with the cast and crew.

Find out more about the movie which will hit the big screen on 8 December:
http://sg.churpchurp.com/AK71SG/share/muppets

Enjoy the movie!