Added Centurion Corporation Limited to my portfolio.

I was introduced to Centurion Corporation Limited by a friend some time ago. He went in early, made his money, a lot of money, and scooted. Clever fellow.

AK is more of a plodder when it comes to investments. Investments which pay dividends consistently and meaningfully get his attention. A judicious amount of leverage is acceptable but too much leverage is scary especially now that interest rates are more likely to go up than not.

Anyway, sorting through piles of notes and cuttings in the last few days, I came across some scribbles I made about Centurion many moons ago. 

I took a quick look at the chart and it got me interested enough to do something more.

Centurion's share price was declining. It was clearly in a downtrend. 

Now, it looks like it has bottomed.

I always say that when there is blood on the street, I want to take a look. 




This time, I think that I am a little late since the share price broke resistance provided by the 200d moving average (MA) at 35c, came down a bit, not quite testing the 200d MA and moved back up.

The blood might have begun coagulating by now but, still, blood is blood.

For those who don't know, Centurion is in the business of running dormitories for workers and students. They are landlords. 

It is a business that is easy enough to understand, especially for those of us who like investing in REITs.

A taste of life in a dorm for workers.



So, what prevented me from investing in Centurion until now? A very high debt level and a weakening business environment.

There are many ways of looking at debt. I just look at their properties' valuations and what they owe to get a quick idea of the gearing level. 

They had about $700 million worth of debt against investment properties valued at about $940 million. 

Without taking anything else into consideration, that was a gearing level of about 74.5%.




I read that they have repaid $100 million since my scribbles and, so, their gearing level should be reduced to 64% or so. Still pretty high.

Having said this, some might remember that I said before (and most recently in a blog post on Croesus Retail Trust) that if a high debt level is matched by an ability to service the debt, it becomes less of a concern. So, interest expense must remain manageable.

In Centurion's case, there is a legitimate worry that a slow down in the economies in Singapore and Malaysia where its dormitories for workers are located would affect its business negatively.





Of course, Centurion has dormitories for students in Singapore, Australia and the UK too but the bulk of its business is still in dormitories for workers.

During bad times, highly leveraged businesses with reduced cash flow would find themselves in a pinch, to put it mildly. If interest expense goes up and cash flow goes down, the ship could be in danger of sinking.

Centurion has pretty strong cash flow and they have been able to cope with a high level of debt. Its operating cash flow is about 3.4x its interest expense. It isn't a fantastic interest cover ratio but it shows that interest expense is manageable.

However, if interest rate goes up, interest cover ratio will reduce if we do not see an improvement in cash flow, just like for REITs.




Assuming that cash flow and debt level stayed the same, in Centurion's case, based on $600 million worth of debt, a 1% increase in interest rate would mean $6 million more in interest expense. This would increase interest expense by 33% and reduce interest cover ratio to about 2.55x.

Of course, it would also put a dent in earnings. As investors for income, this is of interest to us because Centurion is not a REIT and it doesn't have to pay out 90% of its cash flow since it has no incentive to do so. However, Centurion does pay a percentage of its earnings as dividends to shareholders. Reduced earnings could mean reduced dividends.

Assuming an earnings per share (EPS) of 4.5c and number of issued shares at 740 million, a $6 million increase in interest expense would knock about 0.8c off EPS. This brings EPS to 3.7c.

Based on a possibly reduced EPS of 3.7c a year in future, paying a dividend per share (DPS) of 1.5c per year is still undemanding. This is assuming that business does not take a turn for the worse.

Paying 38c a share, I decided that a dividend yield of 3.95% is acceptable to me based on the above assumptions and a 40% payout ratio.

Centurion's share price seems to have bottomed although a retracement to the 200d MA which has started rising wouldn't surprise me. Prices climb a wall of worries.



Presentation (January 2017): HERE.
Factsheet: HERE.

My investment portfolio, market value and position sizing.

Tachikawa City, Tokyo, was ranked the third most desirable city to live in due to its easy access to central Tokyo. Croesus Tachikawa consists of three basement floors and eight floors above ground. 

I feel that I have been blogging a bit too much recently and it is probably a good idea for me to go offline for a few days.

So, it won't just be blogging that I am avoiding but everything else that requires me to go online to do as well. Hence, I won't be replying to comments and emails either.




Before I go offline in another few hours for the next few days, I should respond to a request from a reader.

Reader:
"I know you won't reveal your portfolio's details. You also won't tell us the size of your portfolio and the average yield."

Now, I know some bloggers share full details of their investment portfolios. I don't know their reasons for doing so. They probably feel comfortable with sharing in detail but I don't.

After some thought, I decided I am comfortable enough to share the sizes of my investments in bands just like how companies disclose remuneration of top executives in their annual reports.





Aqualine Golf Club in Tokyo, an AGT asset.

Based on current market value:

From $350,000 to $499,999:
AIMS AMP Cap Ind'l REIT

From $200,000 to $349,999:
ACCORDIA Golf Trust
CROESUS Retail Trust
FIRST REIT

From $100,000 to $199,999:
ASCENDAS H-Trust
QAF Limited
WILMAR Int'l

All other investments in my portfolio have market values of less than $100,000 each, with many of them being lower than $50,000 each.

Without revealing specifics, this gives an idea of the relative sizes of my investments.


Wilmar went into the sugar business in 2010.

Why did I decide to share in such a manner after refusing to reveal anything more specific for so many years?





I have said before that position sizing is important and how we size our investments should depend on our own circumstances and not someone else's. 

If someone we respect and trust invested $40,000 in a stock, it does not mean that we should too.

We should size our investments in such a way that if it should go wrong, it would not set us back too much. If we should get it wrong, it should not take us a very long time to recover.

So, for example, taken on its own, to most people, it might seem like I have a very big investment in Accordia Golf Trust. However, in relation to the size of my entire portfolio, it is actually not that big.






I have refused to share my portfolio in detail all along because I know some people might just replicate it but probably on a smaller scale. So, I still refuse to do it.

After all, apart from our circumstances, we should also size our investments based on our motivations and beliefs. 

My portfolio suits me. It might also suit some other people but it definitely doesn't suit everyone else.

So, why did I choose to share in such a manner after refusing to reveal anything more specific for so many years? You tell me.

Until my next blog, be good. Practice prudence, pragmatism and patience. Farewell for now.

Win and win again with SRS.

I blog about the SRS pretty often and how my SRS account is a war chest. 

I also said before that I don't mind having quite a bit of money idling and waiting for opportunities. 

When opportunities come knocking, I pounce!

 Chatting with a reader in FB.

I get to save on income tax and invest for higher returns. 

It is a win win situation with both winners being me! 

Greedy AK! 

Bad AK!




SRS money cannot be withdrawn until age 62 unless we are OK with incurring a penalty. 

So, it would be good to use the money to buy into businesses which we believe will still be around when we are 62. 

This might sound amusing but it is the truth.

Of course, the businesses should pay meaningful dividends and offer sustainable yields that at least mimic CPF interest rates.

In a nutshell, invest with our SRS money when the time is right. Don't speculate with it. 




SRS money is meant to be our second retirement nest egg, after the CPF. 

Don't play play.

Being unemployed, I will not be contributing to my SRS account anymore. 

So, any growth in my SRS account will be purely organic henceforth.





Why win once when we can win twice with the SRS? 

Win and win again with SRS?

I like.

Related posts:
1. SRS, CPF and rights issues.
2. SRS: e-book and analysis.
3. How AK uses his SRS money and why?

Investor psychology and beating our fears.

This blog is a follow up to an earlier blog titled:

Increased investment in Religare Health Trust by more than 150%.




This is in response to a request by Reader A.

READER A.

 We should expect volatility in prices. 

In fact, we should welcome it as investors. 

If we do not have the stomach for volatility, stocks could be a bad place for our money.

READER B.

In a situation like that, apart from having an idea of what is a decent price to pay, how do we prepare ourselves mentally to pull the trigger?

Ask: 

To what extent can we afford to be totally wrong?




After all, if we are totally wrong, we could lose all the money we invested. 

Can we stomach that?

It is all about having peace of mind as investors. 

If you have forgotten or have never read my blog on that before. 

Read it: HERE.




Remember:

1. Don't use borrowed funds.

2. Don't use funds earmarked for other purposes.

Use only money we can afford to lose and meant for investing for income.

Even though it is money we can afford to lose, ask: 

How much of it can we lose without losing our minds if things should go wrong?




Of course, we want to avoid being wrong. 

We try our best to get our facts and reasoning correct.  

However, despite our best effort, we could still be wrong.




We want to be greedy when others are fearful but we don't want to be so greedy that we throw prudence out the window.

The resulting monetary loss from being wrong must be something we can stomach easily.

Otherwise, don't be in doubt. 

We really should stay out.

Increased investment in Religare Health Trust (RHT) by more than 150%.

Religare Health Trust's (RHT) latest results missed expectations but yesterday's massive decline in its unit price was surprising and, I thought, excessive.

The sale of a 51% stake in FHTL impacted RHT's income. 

Distributing the proceeds as a special dividend also meant that its NAV per unit declined to 83.8c. 




DPU for the quarter ended 31 Dec 16 was 1.25c, a big year on year decline of almost 31% but most of it should be expected because of a reduced contribution from FHTL. 

Without accounting for this, however, DPU would still have reduced by a few percentage points (i.e. pretending that RHT did not sell a 51% stake in FHTL). 

Trying to figure out how much is a reasonable price to pay for RHT, I referred to my long time healthcare REIT investment, First REIT. 




At $1.27 per unit, First REIT offered a distribution yield of about 6.7%. 

RHT's gearing level is 26.6% while First REIT's gearing level is 31.1% (perpetual bonds lowered gearing ratio from 34.4% to 30.0% last year). 

So, First REIT should offer a higher yield since it is more highly geared.

Nonetheless, if we expect a quarterly DPU of 1.25c from RHT to be the norm from now (however unlikely), with an annual DPU of 5c, to get a 6.7% distribution yield or more, a unit price of 74.5c or lower is required.

Although surprised by the speed and depth of the plunge in unit price, as I already had an idea of what was probably a pretty reasonable price to pay, I simply acted and more than doubled my investment in RHT.

All else being equal, the additional investment I made in RHT will offer a distribution yield of about 6.9% which is probably quite decent for a healthcare REIT now.

One reason why I decided to invest in RHT was discovering how India was not doing enough to provide healthcare for her people. 




I found out from watching an interview with an Indian Nobel prize winner. 

My independent research since then tells me again and again that there is a lot of room for growth in India's health care sector. 

An example of my research:

Source: The Hindu, 13 Sep 16.

I believe that RHT's income would improve in the next couple of years not only because of increasing fees but also because almost 600 beds will be added by development projects to be completed as well as asset enhancement initiatives (AEI) in existing assets.





A child cannot throw a tantrum forever because the child will run out of energy, grow tired and stop. 

Mr. Market is no different.

Source: DBS Research, 7 Feb 17.

Read the companion blog on investor psychology: HERE. 
First REIT's presentation: HERE.
RHT's presentation: HERE.

Hock Lian Seng returns 100% and more!

One of the things that I like to do is to buy into what looks like a fundamentally sound business when insiders are accumulating. One such stock which has amply rewarded me over the years is Hock Lian Seng.

I already had a small position in Hock Lian Seng but decided to buy more in 2011 when I observed insiders buying. Back then, I paid 24c a share. 





Fully confident that the company would be able to continue with a dividend per share (DPS) of 1.5c, I was looking at a dividend yield of 6.25% back then. That was in October 2011. Read blog: here.

A few months later in February 2012, Hock Lian Seng declared a DPS of 2c which translated to a dividend yield of 8.33%! That it represented only 32.8% of earnings was pleasing. 





They were retaining earnings which increased the value of the stock. Read blog: here.

In both 2013 and 2014, Hock Lian Seng declared a DPS of 1.8c. In between, I had an opportunity to add to my investment, paying 26c a share in May 2013, confident that a DPS of 1.5c remained undemanding. Anything more would have been a bonus. I was not disappointed. Read blog: here.





Almost a year later in February 2014, Mr. Market gave me a chance to buy again cheaply. That time, I paid 25.5c a share. I would have liked to accumulate more later on but Hock Lian Seng received positive media coverage by end of 2014 and its share price quickly rose. Read blog: here.

In 2015, Hock Lian Seng declared a DPS of 4c! Mr. Market's exuberance went through the roof!

I cautioned that the 4c DPS was a one off event and unlikely to be recurring as Hock Lian Seng saw its share price rocketing. 





Too many analysts and investors were waving the 4c DPS around as if it was a regular event. 

I won't be surprised if there were many newly minted Hock Lian Seng investors that year. 

I did not add to my investment but, throughout the buzz, I held on to my investment and enjoyed a dividend yield of 15.38% to 16.66% that year. Read blog: here.





In 2016, Hock Lian Seng declared a more normalised DPS of 2.5c. Mr. Market wasn't enthused and its share price reflected the mood. However, its share price did not go below 30c. If it did, I would have bought more. 

Of course, it stands to reason that Hock Lian Seng should not trade at below 30c a share. It is a more valuable company today than it was in 2011 from retaining earnings for so many years.






Yes, on top of the dividends I have received over the years from Hock Lian Seng, my stake in the business has also appreciated in value. The total return has been more than satisfactory.

Hock Lian Seng's sound fundamentals might have caught the attention of Mr. Market and its share price recently went ballistic. 

I don't pretend to understand everything but I understand that selling about half of my investment in Hock Lian Seng would make my remaining investment free of cost. This is without taking into account the dividends received over the years too. 

I talked to myself, I listened and I acted accordingly. Spooky!






Hock Lian Seng could possibly announce a DPS of 2.5c sometime in the near future. Based on 52.5c per share, that would give a dividend yield of 4.76%. 

Based on my cost, however, I would get dividend yields of 9.6% to 10.4%.

Wait a minute, since my remaining stake in Hock Lian Seng is free of cost, what should my dividend yield on cost be? Alamak. How to calculate like that?






I shared in a blog many years ago that my investment in First REIT was for keeps. To be fair, there are a few other investments in my portfolio which I feel the same way about.

My blog is not very cerebral in nature because I am not a very intelligent person. I am not being modest here. I am being honest.

Not being very intelligent, I hope to be rewarded by simply staying prudent, pragmatic and patient. 





I believe we don't have to be smart to be rich. If AK can do it, so can you.

Related posts:
1. First REIT: This one is for keeps.
(In five and a half years, I would have recovered my capital. )
2. Don't have to be smart to be rich.
3. Robust order book at 3 year high.

Croesus Retail Trust 1H FY2017 Hong Bao.

This was from a recent conversation:

Reader:
"Croesus Retail Trust reported good results but an investor I know sold all his shares already."

AK;
"We have our reasons for buying or selling. If our facts are right and if our reasoning is sound, we should do OK. We could consider facts and reasons offered by other investors in reviewing our investment thesis but don't be influenced by their buying or selling."

Mallage Shobu, a CRT mall in Saitama.

That Croesus Retail Trust (CRT) has done well is something I should really celebrate twice because it was with the funds that I got from selling my rather big investment in Sabana REIT years ago that I invested in CRT. 

I should celebrate that I was lucky enough to get out of a terribly managed REIT with fairly decent gains and I should celebrate that I was lucky enough to build a good size position in CRT at fairly good prices.

CRT has announced a distribution per unit (DPU) of 3.6c for 1H FY2017. Based on a unit price of 87c, CRT currently offers an annualised distribution yield of 8.28%. 

Gross revenue went up. Net property income (NPI) went up. Distributable income went up. DPU went up. This is what we want to see. All is well.

Now, I want to share a couple of things. If we see distributable income up and DPU is down, how like that? If we see gross revenue down and NPI up, how like that? 

To me, these are a couple of things which might hold me back from making an investment or adding to an investment. I would have to investigate into the reasons and see if something was wrong and if the wrong was enduring.

If you don't understand what I am saying, never mind. I am just talking rubbish, as usual.

Mallage Saga, a CRT mall in Saga.

Anyway, back to CRT. I will make only a few points because the presentation slides are pretty self explanatory:

1. One of the benefits of having an internal manager is cost savings and the savings we saw in 1H FY2017 should be more pronounced in 2H FY2017. This is because the cost savings only started more than halfway into 1Q FY2017. CRT's DPU should have some support from this.

2. I said before that I like AIMS AMP Capital Industrial REIT because they engage in asset enhancement initiatives (AEIs) and redevelopment of existing assets. Doing something with our existing assets to enhance their income generating ability is always preferred and usually less costly compared to simply buying another asset. CRT is pursuing organic growth too. How to say I don't like?

3. The negative interest rates in Japan are not going away anytime soon. This is good news for domestically leveraged entities in Japan like CRT. USA's interest rate hikes will have no direct impact on CRT which is not the case for many S-REITs as Singapore imports her interest rates from the USA.

4. Although CRT's gearing ratio has gone up from 45.3% to 46.1%, the interest cover ratio has also gone up from 3.7x to 4.2x. Higher level of debt is not alarming if debt service ability has strengthened.

I like what I see and I will stay invested.

See press release: HERE.

See presentation slides: HERE.

An incomplete analysis of SingPost.

SingPost was a company I was looking at just a few months before Alibaba came into the picture. Thinking of adding it as an investment for income, I was waiting for the share price to go a bit lower before buying. 

However, Alibaba came in and bought a 10% stake at $1.42 a share and the share price went ballistic. 

This was in 1H 2014. I told myself I should be patient and wait. 




Then, Alibaba increased their stake late last year to more than 14%, paying $1.74 per share. 

Many people tell me SingPost is doing the right thing to embrace e-commerce and that the partnership with Alibaba is a good thing. 

Instinctively, I know that they are probably right. 

If an IT dinosaur like me buys things online, e-commerce is a success story that will continue to grow. 

Of course, I want to benefit from that story as an investor.

Source: HERE.

If you want to continue reading, please take note that I do not have the expertise to analyse SingPost completely. 

In fact, I do not have the expertise to analyse most businesses, including those I am invested in, completely. 

All I can do is to understand the big picture and use a bit of common sense. 

Hopefully, I get it approximately right most of the time.







BIG PICTURE

With SingPost, we know that its traditional mail business is in decline. 

The weakness is not seasonal nor cyclical. It is a structural issue which means the problem is here to stay and will likely get worse. 

SingPost is part of the old economy and to survive in the new economy, it must re-invent itself to stay relevant. 

Logistics and e-commerce are the drivers in this reinvention and they make for logical choices.





Having said this, transforming a business on such a large scale takes time. It is not going to happen overnight. It also means trying new things, taking on risks and spending, in some cases, a lot of money. 

Evidently, the transformation has not been an easy one for SingPost and it is still ongoing. They will surely get some things wrong. 

However, if they get things right more often than wrong, eventually, they should do well enough.



COMMON SENSE

Mr. Market was willing to pay as much as $2.06 a share for SingPost in January 2015. 

It didn't make any sense to me and I said as much on my Facebook wall. 

SingPost's net profit improved about 6%, year on year, and Alibaba paid $1.42 a share in 1H 2014 which was already more than 10% higher than what I was looking to pay that time. 

Pay 45% more for a 6% improvement in net profit? Unless we were sure that SingPost was going to deliver a 40% improvement in profit in the following year, why do it? 

Now, why did the share price go up as much as it did? 




Incidentally, SingPost delivered only a 7% improvement in net profit in the next year which was pretty decent but, of course, Mr. Market was disappointed.

In 2016, SingPost's capital expenditure (CAPEX) shot up, free cash flow went negative and its profit took a big hit. 

Of course, with a change in dividend policy, their status as a predictable dividend payer is also no more.

In better years, SingPost generated earnings per share (EPS) of more than 7c. Going by what we already know, SingPost's EPS should be much lower now. 

With a new dividend policy to pay 60% to 80% of earnings as dividends, even more realistic investors who are expecting a reduced dividend per share (DPS) of 4.2c to 5.6c a year could be disappointed. 




Those who still think they are going to be paid a DPS of 7c are delusional.




When SingPost registered a massive drop in quarterly EPS to 1.28c, we had to ask why? 

Ask if the reasons for the decline in earnings are enduring?

The reasons given were:
1. Higher expenses in e-commerce business.
2. Costs related to new logistics hub.
3. Loss of rental income at SPC Mall.
4. Decline in domestic mail volume.

To me, only item 4 is enduring in nature. 

Items 1 and 2 are probably CAPEX items which could happen again but are not permanently recurring in nature. 

Item 3 is definitely temporary in nature. 

So, things could look grim for a while more but they should start looking up given enough time. How much time? Years, maybe. I don't know.




Since I don't know, I don't want to be too optimistic. OK, I know I said before I should not be too pessimistic either. 

However, since I don't know, erring on the side of caution is probably a good idea. So, I am going to be more pessimistic this time and you will soon see that there is maybe a method in my madness.

Assuming all the reasons for the massive decline in EPS are enduring and that a quarterly EPS of 1.28c is the norm, we get an annual EPS of 5.12c. Remember that this is just an assumption as you continue reading this blog.






With the new dividend policy, we might get a DPS of between 3c to 4c, therefore, which is a big reduction from the more familiar 7c. 

Investors for income who want at least a 5% dividend yield and who are used to receiving 7c a share would only buy if share price were between 60c to 80c then. 

Did you ask how likely is this? Never say never.

SingPost is no longer an attractive investment for income at least for now although its management is still committed to paying a dividend. 

To invest in SingPost is to want to have a stake in the new economy. To invest in SingPost, we must be willing to accept a lower dividend yield while we wait for better days.

How much lower a dividend yield is acceptable in the meantime? This is pretty subjective but it is probably good to have an idea in order to make a decision on what are sensible entry prices. 




I feel that a 2.5% dividend yield is acceptable. 

I came up with this number by using an example. Mr. Kuok thinks Wilmar was cheap at $3.00 a share and Wilmar had a DPS of 7.5c.  Wilmar paid out about 50% of earnings as dividends.

I know SingPost and Wilmar are in different industries but they are both undergoing transformation, facing their own challenges. Shareholders should expect lower dividends.

You can disagree but don't bite my head off. I know that the comparison is not entirely appropriate but, on an intuitive level, it makes sense to me. I am a simple minded person and rely on stories I know.

Based on the above thinking (and the assumptions made earlier about SingPost's earnings), if we were to match Wilmar's 50% payout ratio to achieve 2.5% dividend yield, then, we should only buy SingPost at about $1.00 a share.

Since SingPost is going to pay at least 60% of earnings as dividend, we would get a 3% yield at $1.00 a share, using the assumption in this blog which gives us a DPS of about 3c.




I don't know if SingPost's share price would go lower and if it should go lower, how much lower might it go? 

I have been waiting for a while. I am used to waiting. So, I am going to wait and see.

SingPost shares hit by risk of impairment for US e-commerce acquisition

"TradeGlobal accounted for S$169 million in goodwill and S$43 million in customer relationships - an intangible asset - in SingPost's 2016 financial statements.

"But TradeGlobal incurred a significant loss instead of a projected profit in the third quarter peak season, and is expected to make a loss for the full year, SingPost said on Friday (Feb 10)."

More income from Ascendas Hospitality Trust expected.

Quite a few readers asked me about investing in hospitality trusts and they usually ask me about FEHT or CDL HT. 

This is not surprising because they have a stronger presence in Singapore.

I don't have a stake in either and with the oversupply of hotel rooms in Singapore, it is probably the case that hospitality trusts with a bigger exposure in Singapore will continue to struggle. 




Beyond this, I don't have anything more specific to say about the trusts.

Having said this, I do have a good size investment in a hospitality trust, namely, Ascendas Hospitality Trust (AHT). 

Newer readers might not know this but I first invested in AHT in 2014. 

I did not invest in AHT during its IPO as I found the financial engineering to boost DPU distasteful. You can read more about this in related post #1 at the end of this blog.

Back in 2014, I thought that Mr. Market offered me a pretty reasonable price to invest in AHT, a price which was about 20% lower than its IPO. 




With the effect of financial engineering expired, it was also clearer what my return on investment realistically was going to be. A distribution yield of 7.64% was attractive enough, I thought.

In August 2015, when AHT's unit price suffered from a severe bout of market pessimism, I was pleased to accept Mr. Market's offer to increase my investment in AHT. 

Purchases in that month grew my nibble of an investment in AHT in 2014 to a much more significant position, large enough to generate enough passive income to replace a month's worth of earned income (when I was still gainfully employed). 

My investment in August 2015 would receive a distribution yield of more than 9.5% based on the numbers I used for my purchase in 2014.




AHT has a portfolio of hotels in Australia, China, Japan and Singapore. However, its exposure to Singapore is limited to one hotel, Park Hotel Clarke Quay which was purchased in 2013. 

So, the effect of oversupply in hotel rooms here will have less negative impact on their results overall.

Most of AHT's assets are in Australia which contribute 56% of Net Property Income (NPI). Japan is the second largest contributor accounting for 24% of NPI. 

The much stronger performance by these assets more than compensate for poorer performance in Singapore.




Year on year, 3Q's DPU improved by 13.1% to 1.64c as a result. 

Gearing is at 33.3%. NAV/share 85c.

In 2014, I said that an appreciation in the A$ would benefit AHT. Together with the stronger JPY, I am hopeful that DPU for 4Q could similarly receive a boost.

The oversupply in hotel rooms in Singapore was already apparent in 2014 and AHT was probably a better choice than FEHT or CDL HT. I was lucky to make the right choice.

Source: SBR, 20 Mar 14.

Despite the oversupply of hotel rooms in Singapore, I expect AHT to be a better passive income generator for me this year.

Unit price declined 16.4% from
$1.645 (15 Sep 14) to $1.375 (10 Feb 17).

Unit price declined 27.6% from
81.5c (15 Sep 14) to 59c (10 Feb 17).

Unit price rose 3.4% from
73c (15 Sep 14) to 75.5c (10 Feb 17).

Download presentation slides: HERE.
Related posts:
1. AHT: A nibble.
2. 9M 2015 income from non-REITs.

$500K in gold and waiting for stock market crash.

Gold is not a productive asset.

Hi boss!

Like to ask you on a topic (precious metals) rarely mentioned on your blog. I love precious metals (gold and silver) and anything in gold I can wear. I liquidated all my shares in 2013 in anticipation of a market crash that didn't happen till date.

If I were to liquidate all my gold today, I will get back 500k. 

I like to ask should I continue to keep the metals waiting for the crash or should I divest (part or all) and return back to the share market. Should I practice patience (since 2013) and continue to wait for precious metals to go up 50-100%? Or return back to the stock market for dividend play?

Hope to hear you speak to yourself. 

Thanks boss!

Hi,

I don't know what is going to happen in the future.

I do know that:

1. Physical gold and silver do not generate income despite what some people might con-veniently claim. However, we can make or lose money trading gold and silver.

http://singaporeanstocksinvestor.blogspot.sg/2012/04/fraud-taking-money-from-some-adults-is.html

2. Physical gold and silver do have value and keeping some as an insurance is not a bad idea. They form a small percentage of my portfolio.
http://singaporeanstocksinvestor.blogspot.sg/2016/07/why-investors-for-income-buy-gold-and.html






If you have decided that you want to invest for income now, I would suggest that you sign up for Dividend Machines and learn the ropes first:
http://singaporeanstocksinvestor.blogspot.sg/2017/02/financial-freedom-through-building.html

It will help shorten your learning curve.
Best wishes,
AK