APTT: 1 for 4 rights issue at 12.8c a unit.

I am taking some time off from "Legends of Runeterra" which is a free to play game recommended by a reader, Azrael, in order to blog about APTT.

As a new player in both "Legends of Runeterra" and "Magic the Gathering: Arena", I find the former to have a better free to play model.

So, a shout out to Azrael for the recommendation.

Here is a short video on one of the regions in game:



OK, onward to victory, er, I mean APTT.

In late 2018, I increased my investment in APTT substantially as its unit price plunged.

A little more than half a year later, I sold those units as the stock market rallied, making some pocket money in the process.

I am still holding on to a legacy position in APTT which is largely free of cost by now.

At today's market price, this legacy position is a really small percentage of my portfolio.

How small?

Off the top of my head, probably less than 1% or maybe even less than 0.5% of my portfolio.

As this legacy position is largely free of cost, I am quite happy to simply hold and collect whatever money the Trust decides to distribute to me regularly.

The DPU was last fixed at 1.2 cents per annum which means a yield of 9.37% based on a unit price of 12.8 cents.

Of course, as my investment is largely free of cost, whatever income distribution I get is almost like getting free money and the yield is pretty much infinite.






Now, the proposed rights issue.

As an investor for income, the first thing I ask is what happens to the DPU after the rights issue?

With the proposed 1 for 4 rights issue, the immediate guidance is for a reduced DPU of 1 cent per annum.

This reduced DPU means a yield of 7.81% based on a unit price of 12.8 cents.

For my legacy position, I will just hold on because, like I said, it is almost like getting free money.

The question is whether should I take part in the rights issue?

Regular readers know that I like rights issues more than private placements.

I always get the option to participate in rights issues but I don't ever get invited to private placements.

Rights issues allow small investors like me to participate in the equity fund raising exercises of our businesses.

Some readers might remember my series of blogs on REITs and rights issues.

If you are new to my blog or don't remember, here are a couple of blogs from 2011 on the subject:

1. REITs and rights issues: A Singaporean tale.

2. REITs and rights issues: Dilutive or not?

Of course, to be fair, rights issues can also mean an invitation to throw good money after the bad.

So, what do I think of APTT's proposed rights issue?

Would I take part in the rights issue?






Rights issues are good if the funds raised will go towards efforts to generate more income and hopefully that means higher DPU for the investors for income like me.

Generally, I do not like rights issues which raise funds to pare down debt or to strengthen the balance sheet as it is not rewarding for me as an investor for income.

After this proposed rights issue, to reiterate, APTT's DPU will reduce to 1 cent per annum from 1.2 cent per annum.

We want to take note that this would be achieved on the back of increasing the distribution payout by 4.2% too.

Income is not increasing.

The payout is increasing.

We also want to take note that there is also no guarantee that DPU will stay at a minimum of 1 cent per annum.

Could we see further reductions in DPU in future?

It is a pertinent question.

There is a chance it could happen.





The big reduction in DPU in 2018 was necessary so that APTT would be distributing only a percentage of its earnings to their investors which allowed APTT to fund their transformation strategy without having to take on more debt.

Prior to that, APTT was funding distributions by taking on more debt.

Apparently, that big reduction in DPU in 2018 was not enough for them to pare down debt fast enough.

The management say a key focus of their strategy is to pare down debt.

So, another reduction in DPU in future is not improbable.






It is interesting to see that if no one else is interested in the rights issue, some insiders will buy all the rights units available.

It is said that it is a vote of confidence by the insiders because even the super rich would not want to lose money.

Peter Lynch would say that these insiders are buying probably because they think they will make money.

Well, to be fair, the rights issue will raise about $46 million which is a drop in the ocean for the super rich insiders like Mr. Lu Fang Ming, Mr. Hsiao Han Shen and Mr Dai Yung Huei.

When we have a lot of money, we can also be less calculative when it comes to money.

We can also afford to be more adventurous.





From all that I have said, it should be obvious that I will pass on this rights issue.

What?

My equity participation in APTT will weaken?

So be it.

I will still get free money from my legacy investment in APTT and I will keep it that way.

Simply from a distribution yield perspective, a prospective 7.8% yield isn't all that attractive when I can get a similar yield from IREIT Global which has greater clarity when it comes to income generation and it is also financially a stronger outfit, for example.

APTT could grow to be a very good investment in future and if that should be the case, I would still benefit from my existing investment.

Not participating in the proposed 1 for 4 rights issue is not going to make a big difference to me.





Till my next blog, be socially responsible and stay safe.

Things might get worse before it gets better.

When I went to the neighborhood supermarket last evening, I saw a group of elderly people lounging and chatting in public.

They were either not wearing masks or using them only to cover their chins.

In the supermarket, there was a family of four shopping.

The youngest in the family, a girl, was rollerblading in the supermarket.

Sigh.

There will always be irresponsible people amongst us.

We should stay united and do the right things.

We should be #SGUnited.

Related post:
Insider buying in APTT and Lu Fang Ming.
"The Monetary Authority of Singapore (MAS) added that the recession ahead is likely to be deeper than first thought."

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...

Stock market correction, Facebook and #SGUnited!

Happy Good Friday!

Happy public holiday!

Happy long weekend!

Of course, with the partial lockdown Singapore is in now, it really doesn't make any difference to many, if not most, people here.

It definitely does not make any difference to AK since my life is one super duper long weekend.

What?

Cannot call it a lockdown?

Must say "circuit breaker"?

OK, whatever floats your boat.

Anyway, I wasn't thinking of blogging this weekend.

Having too much fun in Neverwinter, you know.

However, I got two comments in my blog from readers and the blogging bug bit me.






First comment was about me "betting (on) another correction."

Alamak.

When did I bet there will be another correction?

I have shared my strategy a few times in recent weeks and it has always been to wait for the dust to settle.

The latest update was just a few days ago on 7 April 2020:
Buying DBS, OCBC, UOB and cheering for IREIT Global.

Readers who have been following my blog for a long time will know that I do not believe in being overly pessimistic or overly optimistic.

I believe in being pragmatic.

That's also why I always say we should stay invested but have a war chest (or two) ready and not be too extreme.

"On one end, there are people who are almost 100% in cash. I think they are doing a Chicken Little.

"On the other end, there are people who don't like to see money sitting in their bank accounts. They imagine the money is rotting away."

Source:
Sit with all that cash and do nothing?

I should not try to predict what Mr. Market will do.

However, I can certainly prepare.

What I do very much depends on what Mr. Market does.

If you have yet to read what my plan is or if you cannot remember what it is, you might want to read my last update which was the blog before this one.






Anyway, on to another reader's comment.

It is about Facebook.

More specifically, it is about my Facebook account.

Many readers will remember that Facebook did a terrible thing to AK about a year ago.

So hurtful.

If you cannot remember, read this blog:

Financially free and Facebook free!

Well, apparently, things are back to normal now.

The reader said:

"Just to let you know that your Facebook is back to normal now.

"We can see your post and everything."

OK.

Hmm.

That's nice.

What does that mean?

Facebook realised their mistake?

I don't know the reason behind their change of heart.






Anyway, I did not try to log in to my Facebook account after reading the comment.

I just didn't feel any urge to do so.

After being Facebook free for slightly more than a year, I don't miss it.

Not even a tiny bit.

If this had happened a couple of months after I became Facebook free, I would probably have gone back to using Facebook.

However, to be honest, I rather like being Facebook free now.

OK, like I said, I did not log in to Facebook to verify if Facebook restored the links to my blog both in my page as well as on my wall.

I am just blogging based on what I was told.

Readers who are not Facebook free like I am could have a look see, if you like.

Maybe, try posting a link to this blog on your Facebook page or wall and see if the link works.






It is the 4th day of the "circuit breaker" here in Singapore.

Although I know there will be irresponsible people who do not follow the rules, it still upsets me to see them.

I saw a few of them just yesterday when I went out to the nearby supermarket to buy eggs and to take away my dinner at the "kopitiam".

For example, I saw a young couple and their two children at the playground playing before they went into the supermarket.

Alamak, understand the rules or not?

They even cordoned off the playground and you still bring your children there?

What kind of message you sending to your children?

Grow up to be irresponsible like daddy and mommy?

Go supermarket must whole family go, is it?

Husband goes to supermarket and wife stays at home with the children, can or not?

Or if the wife has a louder voice, then husband stays at home with the children lah.

Use your brain!

Really lor.

Suka suka like that?

KNS!

Makes my blood boil.

Be socially responsible and hope that this "circuit breaker" will not be extended beyond a month, can or not?

We are #SGUnited.





Related post:
Largest REIT investments updated.

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.

Largest REIT investments updated: COVID-19 meltdown (April 2020).

This started as a reply to a reader's comment: HERE.

I actually spent more than an hour typing the reply and it became quite long.

So, I decided to publish the reply as a blog instead so that more get to hear me talking to myself.

Here is my reply to Unknown:

There are quite a number of REITs in my portfolio, as you probably know.

In 4Q 2019, three of them made it to my list of largest investments which were investments each with a market value of $100,000 or more.

The three were:

1. AIMS APAC REIT. (formerly AIMS AMP Cap. Ind. REIT.)

2. IREIT Global.

3. Ascendas Hospitality Trust. (now Ascott REIT-BT.)

In the last few weeks, the market values of the trio have plunged, of course.

I will look at each of them briefly.






1. AIMS APAC REIT.

This has always been a well run industrial S-REIT.

Being a landlord of industrial properties and business parks, the REIT is probably better insulated from the negative economic impacts of the COVID-19 crisis compared to retail and hospitality REITs.

However, if the crisis drags on for a year or two, then, we could see tenants default becoming a major problem.

Even so, industrial REITs usually collect many months of rent in advance and this provides some insurance.

Long time readers of my blog know the story of my investment in AIMS APAC REIT.

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

I thought my investment in the REIT would have fallen below $350,000 in market value by now but even with the big plunge in unit price, it remains above this number.

Pleasantly surprised.

Reference:
AA REIT and free money for me.






2. IREIT Global.

I increased my investment in IREIT Global very significantly only a few months ago.

Only belatedly, I realised that after I blogged about it, the unit price rose significantly.

I like to think that Mr. Market is always right and my decision to increase my investment in IREIT Global significantly when I did was probably a good one.

However, as the COVID-19 global pandemic moved to infect Europe, IREIT Global was not spared the wrath of the bear either.

Spain is now the most infected country in Europe, surpassing Italy.

Of course, unfortunately, IREIT Global very recently bought some properties in Spain.

Having said this, I believe most of IREIT Global's income is safe.

In a reply to another reader, I said:

"Deutsche Telekom and Europe’s largest pension fund, Deutsche Rentenversicherung (DRV) account for about 77% of IREIT Global's rental income.

"Even if all the other tenants go bust, these two won't.

"I am very simple minded and use this as the worst case scenario."

This knowledge gave me the confidence to add to my investment in IREIT Global as its unit price declined.

The lowest price I paid Mr. Market for this was 42 cents a unit.

In fact, I nibbled so much that together the nibbles might be considered a gobble.

Due to these nibbles, my investment in IREIT Global remains above $200,000 in market value.

Reference:
IREIT Global is going to Spain.






3. Ascott REIT-BT.

Of the three, the most vulnerable to the economic recession that will be created by the COVID-19 crisis is probably Ascott REIT-BT.

The airlines and hospitality industries are the first to feel the heat and will continue to feel the heat for some time to come.

Even after the COVID-19 crisis has abated, it is possible that people might take a while to warm up to the idea of travelling again.

I watched a documentary on the Spanish Flu and it was said that people who survived that global pandemic were so scarred that they did not even want to leave their homes unless they had to.

That went on for a long time after the crisis was over.

So, compared to industrial and commercial S-REITs or even retail S-REITs, hospitality S-REITs could take a longer time to recover from the COVID-19 crisis.

Due purely to the plunge in its unit price, the market value of my investment in Ascott REIT-BT is now much lower than $100,000.

Reference:
Ascendas Hospitality Trust getting a bad deal?






I said in a recent blog that we have to be prepared for a reduction or even a suspension of dividend payout in some instances.

This is true for investors of these REITs too as their incomes could be compromised.

In closing, tougher measures will be implemented in Singapore for a whole month starting next Tuesday, 7 April 2020, in the fight against COVID-19.

Let us all be socially responsible and remind each other to do the right things.

We owe it to ourselves, our family and friends, to do our part in the fight against COVID-19.

We are #SGUnited.

For a summary of the stricter measures, watch this 10 minutes video:






Together with this blog post, I am trying out a mobile version of ASSI.

So, for those of you who read ASSI using mobile phones, you will notice a difference.

With this new look on mobile, several things will be lost.

The disclaimer at the end of the blog is not visible on the mobile version and this has been my main reason for not having a mobile version of ASSI for the longest time.

Tags or labels at the end of each blog are also missing which means that if I acknowledge that a blog is an advertorial it would not show which was another reason for resisting the new mobile version.

With this new mobile version, there are no left and right sidebars which might be a big disadvantage to new readers and an inconvenience to old readers who might want to read older blogs or have access to resources and comments listed in those sidebars.

Readers who want to access whatever is lost in the mobile version will have to click on the "View web version" option at the end of the page.


Anyway, let me know what you think and I will see whether to keep this or to go back to the old way.

Further reading:
1. Largest investments updated.
2. 1Q 2020 passive income: COVID-19 crisis.
3. Survivability and opportunity in times of distress.

1Q 2020 passive income: COVID-19 disaster.

Unless new to my blog, everybody knows that AK is investing for income.

What this means is that AK is more concerned with the ability of his investments to generate income for him on a regular basis than the price movements of those investments in the stock market.

Of course, for this strategy to work, first, we have to ensure that a potential investment is a bona fide income generating asset and not a scam.

For an example of a scam, see:

$71,000 alternative or bogus investment?

Many people are calling Eagle Hospitality Trust a scam now as well. 

The other important thing with investing for income is to determine whether the entity has the ability and the willingness to generate income and share this income with investors.

If we are not investing with borrowed money or money we need for some other purposes down the road, whether in a bull or a bear market, if we invest in good income generating businesses, everything else being equal, most likely, our financial health will improve over time.

This is very important to remember because we do not want to have to liquidate our investments during a time of crisis like now.

This is very important to remember because investing for income is mostly not about getting rich quickly and is more about getting rich slowly but surely.

I know that many people are hurting financially now because of this COVID-19 disaster and many are looking for advice.

However, remember, I don't give advice here in ASSI.

I am just talking to myself here.

Now, although I feel certain that we will overcome the COVID-19 crisis like we did with SARS 17 years ago, we should take the warning signs seriously.

The COVID-19 crisis is similar to the SARS crisis but it is not the SARS crisis.

Same, same but different.

The COVID-19 crisis could take a much longer time to run its course compared to the SARS crisis.

There is no doubt by now that this crisis is going to create a global recession.

The consensus is that this global recession will be even more severe than the recession caused by the Global Financial Crisis (GFC).

So, although there is a chance of a V shape recovery, it is more likely that we will get a U shape recovery.

Pray that we do not get a L shape recovery which PM Lee mentioned in a recent interview as that would be more like an economic depression than a recession.

Let this sink in for a moment.

Deep breaths.

What are we to do in response?

I believe that how we behave should depend on whether we have the following:

1. Emergency fund

and 

2. War chest.

I know that there are people who do not believe in having an emergency fund but we all know that many people lose their jobs in a recession.

If we do not have an emergency fund, we should not be thinking about investing in the stock market even in times like this.

More so in times like this.

Banks are fair weather friends, whatever their advertisements might say to the contrary.

We could well see a credit crunch when, for fear of losing money, banks sharply curtail the lending of money.

It could happen and, of course, it has happened before.

People who do not believe in having an emergency fund, good luck to them.

People who do not believe in having an emergency fund and conduct courses to teach others not to have one, shame on them.

So, how much money should we have in an emergency fund?

See:
How big an emergency fund?

As for those of us who have an emergency fund but who do not have a war chest, think twice about using the emergency fund to invest in the stock market.

Heard of bull traps?

No, I am not thinking of big holes in the ground dug by some hunters in the Stone Age.

Anyway, if we fall into this category, in fact, we should take some time to look at whether our emergency fund is sufficient for what might come.

I can almost hear some people going:

"Oh, but we might make money if we use the emergency fund to invest with?"

Remember, money not made is not the same as money lost.

If we need the money and it is not there, we might lose more than just money.

I say peace of mind is priceless.

What is the price tag of sanity?

"Never risk what we have and need for what we don't have and don't need." - Warren Buffett

See:
I do not believe in emergency funds.






If you are new to my blog or if you don't know or if you don't remember, you might want to read this blog:

Survivability and opportunity in times of distress. ("E-book")

Some might think it is too late for them.

Well, what's done is done or, for some, what's not done is done.

Choose whether to start doing the right things right now or to do nothing.

We have a choice.

Choose carefully.

Right?

I know that most of you are here for the numbers but I just had to get all of that off my chest.

I feel that it is important enough to do so.

OK, now that I have done it, the numbers.

My 1Q 2020 passive income:

S$ 24,668.56






Although it seems like I have a robust passive income stream, the COVID-19 crisis will very likely compromise the income generating ability of my investments.

The longer the crisis lasts, the more severe the impact will be.

We should be prepared for a reduction or a suspension of dividend payout in some instances.

Some might remember my explanation as to why despite having the passive income that I have, I still maintain an emergency fund.

Armageddon is not just the name of a movie.

People who are marginally financially free and who have retired from employment might have to go back to work.

In an environment where unemployment is most likely to be elevated, it won't be easy.





If we do get a U shape recovery, the bottoming process in the stock market is likely to be a bumpy one that might go on for several months.

We could be seeing the start of this bottoming process now although it would not surprise me to see prices going lower from here.

I have been nibbling at stocks and might continue to do so.

However, I won't be buying in a big way until I have greater clarity.

To be sure, we must be prepared for more turbulence to come.

If we are heavily leveraged, beware.

"We never want to count on the kindness of strangers in order to meet tomorrow’s obligations." -Warren Buffett

Till the next blog, be socially responsible and help keep us all safe.

We are #SGUnited.


Watch PM Lee's interview with CNN on the battle against COVID-19:






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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.