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.

In conversation with AK 2019 (Part 2).

Reader #1 says...
Do you feel that there’s a REIT in Singapore which we could buy and hold forever?

AK says...
I thought I could hold First REIT forever.

I changed my mind. 😜

Now, I wonder if I could hold AA REIT forever?

I think we have to be prepared for changes because they do happen.

Related post:
Largest investments updated (3Q 2019).

Reader #2 says...
I noticed that you hardly talked about Forex Trading.

May I know if you could share your thoughts on it?

Actually I’m asking this because one of my friends is doing it and he advertised it on his Facebook recently

AK says...
FOREX trading.

Hmm.

I dunno anything about trading in currencies.

It isn't something I can value.

I made a mention of this in my blogs on Bitcoin.

Bad AK! Bad AK! 😛


Related post:
My final word on Bitcoin and friends.





Reader #3 says...
Now lippo seems to hv "fixed" the mess.

U think for ppl like me who never get (First REIT), can consider?

Can heal?

AK says...
Bandaged :p

You see my blog on why I sold and you decide for yourself. 😉

Related post:
Sold First REIT.






Reader #4 says...
AK, I want to show my friend your $1m CPF meme but the link is gone. 
Send it to me ok?

AK says...
Sure. 
Hope you song song gao Jurong. ;p

See:
This guy has $800K in his CPF (AK responds to HWZ forum).




Been a while since I took a photo of my breakfast.

Two hard boiled eggs eaten with a sprinkling of salt and black pepper.

A glass of warm water infused with ginseng roots.

New readers might want to read:
You are not successful in Singapore unless you do this!

Largest investments updated (3Q 2019).

It has been almost a year since my last blog on the largest investments in my portfolio.

Since then, in the following months, I added to some of my investments such as 

1. OCBC at under $11.00 a share, 

2. ComfortDelgro at under $2.20 a share 

and 

3. SingTel at under $3.00 a share.





Not much activity on my part, really.

Most of the time, I was just collecting dividends while waiting for Mr. Market to recover from his depression.

When Mr. Market did recover, I waited to see how euphoric he could get.

(To be totally honest, mostly, I was adventuring in Neverwinter but you know that, of course.)

After my recent blog on selling into the rally while staying invested, a reader asked if I could do an update on my largest investments.

I suppose I could.





$500,000 or more:
CPF.

Do I hear laughter?

While the CPF is not an equity and isn't a bond in the purest form, I do consider it an essential part of my portfolio.

I consider it essential as it is the risk free and volatility free component of my investment portfolio which pays a relatively attractive coupon.

I decided to include my CPF savings to remind readers that I am able to take a bit of risk in the way I invest because my CPF savings is a very significant safety net.

Well, for me, it is very significant.

When we invest, remember, we have to take into consideration our personal financial circumstances and not simply ride on other's coattails.

I hope that you had a good laugh.

More importantly, I hope you are also aware that this isn't all a joke.







From $350,000 to $499,999:
AIMS APAC REIT
(formerly 
AIMS AMP Cap. Ind. REIT)

This should not come as a surprise, of course.

My investment in this REIT is already free of cost and there is no compelling reason for me to fiddle with something that has worked so well for so many years.

There has been talk of a takeover of this REIT and, to be honest, I hope it never happens.

Many good income producing investments in my portfolio have been taken away from me and it is difficult to find equivalent replacements.





From $200,000 to $349,999:
ComfortDelgro
Centurion Corporation Ltd.

From being unloved, ComfortDelgro has become much desired by Mr. Market.

I like ComfortDelgro too. 

Even after trimming my investment in this rally by more than 20%, ComfortDegro still stays in the same bracket because the market value of my investment has gone up by more than 30%.

As an investment for income, ComfortDelgro is probably more reliable than Wilmar and its dividend is probably more sustainable than SingTel's.

Having said this, if Mr. Market should have a feverish desire to pay a much higher price for ComfortDelgro, everything else remaining equal, I would probably accept the offer.





Centurion Corporation Ltd. moved into the same bracket as ComfortDelgro because I added to my investment as its share price languished at about 40c a share.

Centurion Corporation Ltd. is undervalued and there continues to be persistent insider buying.

Peter Lynch said that there are many reasons why insiders sell but there is only one reason why they buy.

I like being paid while I wait and a dividend yield of almost 5% is not too shabby.





From $100,000 to $199,000:
Ascendas H-Trust
Accordia Golf Trust
Development Bank of Singapore
OCBC Bank

Ascendas H-Trust will probably be replaced by a new entity and I shared my view about the proposed combination with Ascott Residence Trust in two separate blog posts earlier this month.

As for Accordia Golf Trust, it still has the potential to increase DPU significantly in the next few years and I blogged about this before. 

I am quite happy to be paid while I wait, as usual.

Development Bank of Singapore is doing well and I would like to build a larger position if there is a meaningful correction in its share price.

New addition to the list is OCBC Bank.

This is the result of several rounds of accumulation at under $11.00 a share as I felt it offered relatively good value for money.





As for SingTel and Wilmar, after reducing my exposure significantly, my positions in SingTel and Wilmar are now worth less than $100,000 each.

Not part of my largest investments now, SingTel and Wilmar have been removed from the list here.

If Mr. Market should tempt me with better offers, I am likely to give in to temptation and sell what remains.

Remember, I am just doing what makes sense to me.

Remember, you have to do what makes sense to you.

Have a plan, your own plan.

"We must understand our motivations for investing in the stocks we are invested in.

"The tools we employ and the attitude we have must be appropriate to our motivations.

"That way, we will stand a good chance of doing better with a consistent strategy and this is so both financially and emotionally!"
From: 
Rules for investing in difficult times.




Recently published:
Sell into the rally and stay invested.

Related post:
Largest investments in 2018 (Part 2).

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.

Ascendas Hospitality Trust's investors getting a bad deal?

As a backgrounder, if you have not done so, you might want to read this blog:

Ascott Residence Trust and Ascendas Hospitality Trust to become one.

It was published on Wednesday, July 3rd, 2019.

The blog here is in reply to a reader's comment that it is a bad deal for AHT investors.




AK says...

While not fantastic, really, it isn't that bad a deal for AHT investors.

For every AHT unit, we will get almost 0.8 unit in the combined entity.

Priced at $1.30 per unit, the deal values AHT at almost $1.04 a unit.

AHT was trading at way below its NAV (of about $1.01) for too long.

See:
AHT Stock Fundamentals.




Also, priced at about $1.04 a unit, the yield of AHT would be about 5.76%.

At $1.30 a unit, the combined entity will provide us with a distribution yield of about 5.5% which is pretty close to this 5.76%.

After taking into consideration the cash payment of 5+ cents per unit which AHT investors will get (and this is close to one year's worth of income distribution), I believe that this is a fair deal.




We should not compare AHT with the new combined entity by looking at yield numbers only.

We might see the tree but not the forest.

I am willing to accept a slightly lower distribution yield from what I think should be a stronger and more resilient business entity.

The new business entity will also have a much lower level of concentration risk which was a negative about AHT.




Of course, if we are pretty sure we are able to secure a much higher yield in a similar investment with a similar risk profile elsewhere, we should move our money to where it will be treated better.

Or if we wish to lock in the capital gains, there is nothing wrong with taking profit by selling our units to Mr. Market either.

As I do not have an alternative investment in mind, I am quite happy to stay put. :)




Recently published:
2Q 2019 passive income.

Is AK blogging about Neverwinter?

In response to a reader's comment: HERE.

Hi Samuel,

Unfortunately, Neverwinter doesn't have a big following here in Asia, it seems.

The guild I belong to is mostly made up of adventurers from North America and a handful are from Europe.

If you decide that you want to switch guilds anyway, you are welcome to apply to the guild I am in: 

Neverwinter SOLO Alliance.

We are a group of solo players that got together to form a guild so that we can enjoy the benefits a guild brings to adventurers.

There is a strict clean language rule and we avoid politics and religion in chat.

Otherwise, we are pretty easy going.

If you do join SOLO, please don't actively look for me in the guild chat.

I like to stay low profile in the virtual world too. ;)





As for making Astral Diamonds, we have to remember that we are only allowed to refine 100K Rough AD a day and if we want more AD, staying F2P, we have to think of getting them from other players.

To make AD from other players, we have to make use of the Auction House (AH) to sell things which other players need or want.

Warren Buffett said that the stock market is a place where money is transferred from the impatient to the patient.

Well, the Neverwinter AH is a place where AD is transferred from the impatient to the patient. ;p





For example, people are always in a rush to refine their gear and enchantments.

So, sell the unbound RP items (black pearls etc.) to them.

I always take my time and only use bound RP (bound to account or bound to character) for my refinement needs.

You can get bound RP from daily invocations and by having 

1. Dragon's Hoard Enchantment (from Tyranny of Dragons campaign), 

2. Fey Blessing Enchantment (from Sharandar Campaign) and 

3. Quartermaster's Enchantment (from the Siege of Neverwinter event which happens a couple of times a year) 

in the utility slots in your gear.





This is just one idea.

Go watch some Youtube videos on the topic.

There are so many videos but the older ones might have ideas which are no longer feasible.

Here is a recent video from a very established Neverwinter content creator, Kali Gold, on how to farm gold and how to convert that into AD, for example:









I think most of ASSI's readers are not interested in Neverwinter but I have decided to give your suggestion a go and publish this reply to you as a blog to see the response, if any. ;)

Recently published:
1. Ascott Residence Trust and Ascendas Hospitality Trust to become one.
2. 2Q 2019 passive income.

Ascott Residence Trust and Ascendas Hospitality Trust to become one.

In reply to a reader's comment: HERE.

Ascendas Hospitality Trust (AHT) has been a good investment for income over the years.

AHT has also been rather undervalued by Mr. Market for most of those years.

This deal shows the true value of AHT.

"ART will acquire all AHT stapled units at $1.0868 each, comprising $0.0543 in cash and 0.7942 ART-BT stapled units issued at a price of $1.30."

Source: 
Yahoo!Finance.




I first invested in AHT in 2014 and paid a price of 72c a unit.

See:
AHT: A nibble.

Over the years, I accumulated at prices lower than my initial purchase price, sometimes significantly lower, whenever Mr. Market felt depressed about AHT.

Of course, AHT became a relatively substantial part of my portfolio.

AHT has been generating meaningful passive income for me regularly.




In 2017, I said AHT should continue to deliver.

"Not too concerned with the fluctuation in unit price. As long as the trust continues to do well enough to pay me an income that makes sense, I am happy."

See:
AHT should do well.




I am glad to see that I will receive some cash payment and also receive units in the enlarged entity.

This means that I will continue to enjoy income distributions after the deal is done.

I like to think that patience will be rewarded.

In my experience, it has mostly been the case.

Congratulations, fellow AHT investors.




Recently published:
2Q 2019 passive income.
(With contribution from AHT)

2Q 2019 passive income.

It has been almost three months since my last blog and I hope everyone is doing well.

1. Update

So, what have I been doing?

OK, I will tell you and, maybe, there is a message for everyone in this somewhere too.

I have been having a blast in Neverwinter!

Many things have changed with the new expansion (Module 16: Undermountain) and I love the game even more now.

In fact, I enjoy Neverwinter so much that I created a third character just a few days ago.

This time, I created a wizard.





Neverwinter is a free to play (F2P) MMORPG and although we could use real money to buy game currency, we don't have to do it.

Everything in the game could bought by earning game currencies while playing the game.

There will always be adventurers who are impatient and want to get everything faster, of course.

I have met quite a few impatient adventurers in Neverwinter and they are the ones who have spent hundreds or even thousands of dollars on the game.

Thanks to them, AK has a free MMORPG to play.

As for me, after taking some time to understand Neverwinter's economy and how to make Astral Diamonds (i.e. the most important in-game currency), I have become quite wealthy in Neverwinter and, like in real life, having wealth in the virtual world makes life more comfortable.





I no longer have to run random dungeons with pick up groups (PUGs), which basically means groups of strangers, just to earn some Astral Diamonds.

I used to have to do it everyday as a newbie in the game, of course, and it is just like exchanging our time for money as an employee in real life except that it is more fun.

Just like in real life, being AK, I tried to get to a point where I didn't have to do that and, now, I don't have to.

I am a Neverwinter multi-millionaire.

I am enjoying Neverwinter without having to worry about not having enough Astral Diamonds.

It is like enjoying real life without having to worry about money.

Anyway, did I say there could be a message for everyone here?

I wonder what that message is?





2. Blogging

I have not been blogging and will probably not be blogging much in the future either.

I am tempted to say that I won't be blogging anymore and that this is my last blog, seeing how much time I am spending on gaming, but never say never.

Gaming is like how blogging was for me until recently.

I first discovered blogging 10 years ago and blogging took up more and more time until a point when it became a full time activity.

So, I apologise for my tardy replies to readers who have left comments here in my blog and I also apologise in advance to readers who might leave comments for me henceforth.

It is probably a good idea not to leave comments which require timely replies from me.




3. Facebook

I am unable to log in to Facebook anymore.

I don't know why and after they removed all the links to my blog from my page, to be honest, I don't really care about Facebook now.

After all, quite obviously, they don't care about me.

See:
Financially free and Facebook free.

It has been almost three months since I last logged into Facebook.

So, there are probably many messages from readers there which I won't be able to read or reply to now.

If you are one of the affected readers and would like to reach me, please leave a comment in this blog instead.

Apologies for my tardy reply in advance and, again, if it is something that requires a timely response, it might be better not to write as you would most likely be disappointed.





4. Passive income

Now, that we have addressed the important stuff, the numbers.

How much did AK receive in passive income in 2Q 2019?

S$ 60,906.39

Not a lot to the very rich but it is a meaningful sum of money to me.





Some investments that generated more than $2000 in passive income for me in 2Q 2019:

1. AA REIT
2. Accordia Golf Trust
3. Comfort Delgro
4. Wilmar
5. VICOM
6. Frasers Logistics Trust
7. AHT
8. OCBC
9. DBS
10. Ho Bee Land

Readers who have been following my blog will know that what I have achieved did not happen overnight, of course.

See:
How did AK create a 6 digits annual passive income?





5. Plan.

People might ask me what is my plan now with all the economic uncertainties.

I like to think that what I have now is strong enough to weather any financial shock.

I have a meaningful income generating investment portfolio.

So, I have been receiving passive income and that has been beefing up my war chest.

This will probably go on.

See:
Wait to pick durians.





I have a sizable emergency fund for if things should go terribly wrong.

I would like to remind everyone not to ever think that credit is always easy to obtain.

When things go terribly wrong like they sometimes do, credit could easily dry up as even existing lines of credit could get chopped.

Having money we can easily get our hands on when we need it fast with no strings attached means we are our own masters.

See:
Emergency fund.





I will continue to fully contribute to my CPF as I treat it as the risk free and volatility free investment grade bond component of my investment portfolio.

If I have to, I will be able to withdraw money from my CPF when I turn 55 which is only 7 years from now.

Otherwise, I will continue to use my CPF as a savings account.

I hope nothing so financially disastrous happens that I would have to tap on my CPF savings in future.

See:
$1.5 million in CPF savings.






6. Mantra

Always remember this.


If AK can do it, so can you!

I believe it and so should you!

Keep doing the right things and the right things will most likely happen for you.

Gambatte!


See:
Is AK a rags to riches story?






Related posts:
1. 1Q 2019 passive income.
2. Financial freedom and a break.
3. AK is a full time gamer.

1Q 2019 passive income.

Sometimes, I hear people say that time slows to a crawl once they are retired.

I find that strange because time flies faster than ever for me in my retirement.

Again, 3 months have gone past me in the blink of an eye.

Again, I am reminded that time is too precious for us to simply keep exchanging it for money.

See:
Why did I want an early retirement?

Yes, some people say that time is money.

For me, I say time is more precious than money.

Don't be a wage slave but also don't be in a situation where we have too much money and not enough time.

See:
Financial freedom and not enough time.





Now that the philosophical moment is over, how much did I receive in 1Q 2019?

S$ 71,052.90

Sounds like a lot of money, doesn't it?

It sounds like a lot to me, anyway.

It is this much because of RHT Health Trust's bumper income distribution which is not going to be repeated.

If we disregard RHT Health Trust, my largest passive income contributors in 1Q 2019 are:

1. SingTel

2. AA REIT

3. IREIT 

For most of us, investing for income will most likely make a meaningful difference to our financial health.

I believe that patience will be rewarded and it is often so for me.

If AK can do it, so can you!

Believe it.

Believe in yourself.

Related posts:
1. 2018 passive income.

2. Income tax payable 2019.