Daiwa House Logistics Trust: Good or not?

I woke up to not one, not two, not three but four comments from readers regarding Daiwa House Logistics Trust and I took that as a sign that I would have to take some time off from gaming to blog.

Daiwa House Logistics Trust's IPO ends this Wednesday (24th Nov.)

IPO? I usually avoid IPOs because they are usually priced well for the seller and not for the buyer.

IPO stands for "it's probably overpriced?"

Is it more of the same in this case?

Looking at the information available, as an investment for income, Daiwa House Logistics Trust is not overly attractive to me.

For someone who is new to investing for income and who is just starting to build a portfolio, this could have a place.

However, with a distribution yield of 6.3% to 6.5% which is similar to what my two largest investments in REITs, AIMS APAC REIT and IREIT Global, are offering, Daiwa House Logistics Trust just isn't that attractive to me.

If I do invest in Daiwa House Logistics Trust, it would probably be because I would like more diversification.

However, it would be just geographical diversification which is less meaningful than diversifying into non-REITs.

This is especially so since my wish is to build a more resilient income generating investment portfolio.

Increasing the size of my investments in the local banks, DBS, OCBC and UOB, I believe would be more meaningful and Singapore banks make decent investments for income too.

Bear in mind that the banks pay only a fraction of their earnings as dividends while REITs distribute 90% to 100% of their income to their investors.

In this light, we could even say that the banks are more attractive than Daiwa House Logistics Trust as investments for income as what would be their dividend yields if the banks were to pay 90% of their earnings as dividends? 

Banks also benefit from rising interest rates and while REITs can still perform well with higher interest rates when compared to bonds, they might experience some downward pressure.

Having said this, if Daiwa House Logistics Trust should see a significant decline in unit price, I might buy some.

The better investments I have made in REITs have almost always been post IPOs and that is saying something.

If I am wrong, it wouldn't be a tragedy as not making money is not the same as losing money.

Anyway, why am I not excited about this IPO other than the fact that I usually avoid IPOs?

After all, Daiwa House Logistics Trust is Japanese and some of my better investments were Saizen REIT, Croesus Retail Trust and Accordia Golf Trust.

The trio were all Japanese too and delisted subsequently, netting me some very nice gains.

I will continue to talk to myself.

1. Land lease.

Saizen REIT had only freehold Japanese residential buildings.

Croesus Retail Trust and Accordia Golf Trust had mostly freehold Japanese assets.

Daiwa House Logistics Trust will start with mostly leasehold Japanese assets.

Having more leasehold Japanese assets for their IPO helps to bump up their distribution yield as leasehold assets are usually cheaper while still commanding prevailing market rents.

This is especially the case for assets with much shorter remaining land leases.

VIVA Industrial Trust, anyone?

It helps to make the IPO look more attractive to investors.

Having mostly leasehold assets, the distribution yield really should be higher than the 6.3% at IPO.

The impression I get is that the IPO is probably priced more dearly.

If we look at past IPOs of S-REITs with mostly leasehold assets, most of their distribution yields were higher, if I remember correctly.

2. Japanese focus.

The Japanese focus of Daiwa House Logistics Trust might not last long since they have right of first refusal (ROFR) over 11 assets in Vietnam, Malaysia and Indonesia.

They market this as a good thing but one reason why I liked Saizen REIT, Croesus Retail Trust and Accordia Golf Trust was their focus on underappreciated and undervalued Japanese assets.

The Japanese market is probably more stable and less risky when compared to Vietnam, Malaysia and Indonesia.

3. Fund raising.

There are two things here.

We have been seeing some issuance of perpetual bonds by REITs to raise funds and the most notable is probably Lippo Mall Trust.

While perpetual bonds do not increase the gearing level of REITs, all else remaining equal, since they are treated as equity instead of debt, it is a form of financial engineering to make numbers look better.

Still, as long as the funds raised will help to improve performance and generate more income in a sustainable fashion for shareholders, it is a good thing.

I could be wrong but it is the first time I see a REIT having perpetual bonds issued at IPO and that makes me somewhat curious.

The second thing is that with the REIT being relatively small and with a relatively long list of ROFR assets, there could be more fund raising before long especially when the manager says they want to keep gearing below 40%.

Why start with only 14 Japanese assets and mostly leasehold ones with average remaining land lease of about 38 years?

Why not start with a larger portfolio and include most of these ROFR assets of which 17 are mostly Japanese freehold assets instead?

I have a couple of guesses but they are just guesses.

So, Daiwa House Logistics Trust, good or not?

As it is, Daiwa House Logistics Trust might seem decent enough for some as an investment for income but it isn't something I feel I must have in my portfolio.

It isn't screaming "BUY."

References:
1. VIVA Industrial Trust: 9% yield.

2. Saizen REIT.

3. Croesus Retail Trust.

4. Accordia Golf Trust.

5. Cutting losses in S-REITs.

6. Dividends from DBS, OCBC and UOB.

Invest in Alibaba Group? High risk, high reward? (Updated on 3 Dec 21.)

A reader left me a comment asking me to talk to myself on Alibaba as an investment but requested that I do not publish the comment.

Apparently, he followed the advice of a local blogger and got it at a share price of $220 and is now very worried especially after reading in the news that Temasek Holdings has started trimming their stake.

Article from The Business Times: HERE. 

The reader told me the name of the blog and because I know the blogger he mentioned, I went and took a look. 

I had to ascertain if the blogger indeed advised his readers to buy into Alibaba.

After looking at the blogs, I do not think the blogger meant to push readers to buy shares of Alibaba but one blog title went "If you have not bought a position in Alibaba, NOW is the right time to do so."

Yes, all 3 letters of the word "now" are in caps.

That was back in July this year and I see why it could easily be interpreted as investment advice to his readers.

I haven't blogged about Alibaba because I don't really have an interest in Chinese companies.

OK, I did mention Alibaba in a blog a couple of months ago in September and if you are interested, read: 

"Investing with some common sense for peace of mind."

I haven't invested in a Chinese company since China Minzhong and readers who have been following my blog for a long time might remember the name.

Newer readers might be interested in this blog: 

"How to make recovering from investment losses easier?"

The blog isn't just about China Minzhong and, so, it should be an interesting read for most.

To the reader who wrote to me about following the blogger and investing in Alibaba, I can only say that all of us should have our own plan and not just ride on someone else's coattail.

The blogger could have vastly different circumstances, risk appetite and even goals compared to his readers.

Without a thorough understanding of the blogger and checking to see that we are wearing the same shoes as him, it would be very hard to stomach paper losses especially big ones.

Why is this so?

Well, it is because we would be going in with only the thought (or dream) of making money.

So, when we lose money instead, we get hit and it could hit very hard for some.

For example, another reader followed a famous local trader and bought into Noble Group a few years ago.

What happened?

See: 

Noble Group will be worth $7.00 a share.

In that blog, I said that if we wanted to own a zhi char store, we must know how to handle a wok.

Rely on someone else to do the work and we are at his mercy.

So, how do we prevent ourselves from getting into a situation like the reader who wrote to me about Alibaba has found himself in?

Of course, some might also be interested on when might be a better time to invest in Alibaba?

Read the blogs which I have linked earlier in this blog and you will have an idea.

Peace of mind is priceless and it is not something to gamble away.

When people say "high risk, high reward," we have to pay more attention to "high risk" and what it means if things go wrong.

Focus on "high reward" instead and money might not be the only thing we lose.

Of course, AK is only talking to himself like the crazy fellow that he is, as usual.

-------

UPDATE: 3rd December 2021.

For those inclined towards Technical Analysis, remember that the trend is our friend.

Don't fight the trend.

I waited for the dust to settle during the last bear market and for share prices to find a bottom before increasing my investment in the local banks.

If I were interested in investing in Alibaba, I would do the same.

Related posts:

1. To retire by 45, have a plan.

2. Investors eat crusty bread with ink slowly for peace of mind.
3. My investment portfolio or investment philosophy?

CPF Amendment Bill 2021 and AK talks to himself.

Thanks to a nudge by Siew Mun, I went to read the CPF Amendment Bill 2021.

Some of my many blogs on the CPF have become outdated because of this Bill.

The changes which interest me most are the following and they will take effect from 1 January 2022:

1. Enjoy tax relief when we top up our loved ones' CPF MA.

I have always been curious why the recipient gets income tax relief and not the giver?

Well, this is now fixed.

2. Enjoy up to $16,000 income tax relief when topping up CPF MAs.

We can get up to $8,000 income tax relief for topping up our loved ones' CPF MAs.

We can also get up to $8,000 income tax relief for topping up our own CPF MA.

Take note that this income tax relief cap is shared by the RA, SA and MA.

So, previously, we would not say "Top Up" to MA but "Voluntary Contribution" to MA.

Now, when we inject money into the MA, it is a "Top Up" and it will share the annual income tax relief cap for the RA and SA.

This annual cap was $7,000.

3. Beefing up the MA is no longer part of the CPF Annual Contribution Limit.

This follows from the previous point that injection of money into the CPF MA will be considered a "Top Up" and not a "Voluntary Contribution."

What do all these changes mean for those of us who are actively using the CPF to have a strong foundation in retirement funding?

Would my strategy have changed because of these changes?

In the first 4 years of my life as a working adult, I transferred all my OA savings to my SA to give it a bigger base and more time for compound interest to work its magic.

I would still do that today if I just started my life as a working adult.

If I had extra funds, I would have pumped more money into my SA which would enjoy income tax relief at the same time.

Income tax relief will apply to the first $8,000 of Top Up from next year instead of $7,000.

Now, in my early retirement, I would continue to do yearly Voluntary Contribution to my CPF account up to the prevailing Annual Contribution Limit as I think of the CPF as a AAA rated sovereign bond with attractive coupons.

See:

$1.5 million in CPF savings by doing nothing henceforth.

The difference with this CPF Amendment Bill is that I will be able to inject a bit more money into my CPF account from next year because the MA is now under the "Top Up" scheme and not "Voluntary Contribution."

Since my CPF SA has already hit the prevailing FRS, I cannot do Top Up to my CPF SA anymore.

However, since the Basic Healthcare Sum increases yearly, there will be room for me to Top Up my CPF MA yearly.

I will provide links to this blog in some of my older blogs such as the following:

1. Ways to beef up our CPF savings.

2. Know how to grow our CPF savings?

Reference:
CPF Amendment Bill 2021 Highlights.

Read Siew Mun's comment in this blog's comments section:
Retiring by 40 is a fantasy.

Retiring by 40 is a fantasy for most and AK talks to himself.

Imagine a guy in Singapore who is in his 20s.

Imagine he is in love with a female and they decide to get married right after graduation.

Imagine they decide to buy a flat or a condo right away.

Imagine them having 2 or 3 children in the next three years.

Imagine the wife becoming a stay at home mom after having their first child.

Imagine them buying a family car.

Can they retire early?

Well, if they are born with silver spoons in their mouths, yes.

Otherwise, early retirement is highly unlikely unless they got very lucky.

The title of this blog might look familiar to some readers because part of it is taken from a much longer title from a recent article in Today.

Links to financial planning sites littered that article but I guess that is normal since Today isn't a hobbyist blogger like AK.

Anyway, if we want something and if we don't plan it right, we won't get that something.

So, if an early retirement is what we want, then, we must know what will help and what won't.

How to achieve early retirement?

In a nutshell:

Build wealth and avoid wealth destruction.

In more than a decade of blogging, this is something I have blogged about extensively.

I won't rehash since I am lazy.

Instead, I will point interested readers to some blogs here in ASSI which might provide food for thought.

1. A happy marriage is worth waiting for!

2. Do you want to be richer?

3. How to upsize CPF savings from $100K to $225K?

4. Good habits now for a comfortable retirement!

5. If we are not rich, don't act rich!

6. 3 good reasons to buy a car.

7. How to have children and a comfortable retirement?

Finally, we need insurance but know what is necessary and don't overpay.

See:

What is the purpose of insurance and are we overpaying?

To be fair, retiring by 40 was a fantasy for AK too.

AK only retired a few months before he turned 45.

See:

To retire by age 45, start with a plan.

There are so many blogs in ASSI and I might have missed some useful ones. 

However, the above blogs should be good enough to make many readers lose sleep for many nights.

Jokes aside, for an average person in Singapore who wants an early retirement, it isn't impossible.

It does need good planning and disciplined execution.

Now, why is an early retirement a fantasy for most in Singapore?

If AK can do it, so can you!

Believe it!

Gambatte!

Related posts:
1. Planning for retirement early made early retirement possible.

2. Why did AK want an early retirement?

If you are using the mobile version of ASSI and would like to read more related posts, go to the full web version of ASSI by scrolling to the bottom of this page and clicking on the link.

Links to more posts in the left and right sidebars can be found.

ESR-REIT gives ARA Logos the short end of the stick?

This is going to be a quick blog. 

My interest here is mostly academic. 

I have a big tub of popcorn ready and I hope the movie is a good one.

Talking about movies, recently, I dug out my Harry Potter books from almost 20 years ago and read them again. 

Thanks to the weekly screening of Harry Potter movies on TV recently, I felt like reading the books again.

The books are still as good as ever; they are definitely better than the movies, to be honest.

Really, I do solemnly swear.

Time does fly, doesn't it?

Fellow Harry Potter fans might remember this:

   

Anyway, isn't this an interesting article in The Business Times?

ESR-Reit, Ara Logos propose merger with pricing favouring ESR-Reit unitholders. 

Feeling of deja vu?

Hmm. 

Maybe, just a bit.

Familiar ESR REIT pattern? 

Hmm.

Maybe, just a bit.

Another interesting article in The Business Times.

ARA Logos unitholders must weigh pure-play logistics status against being part of a larger entity.

"Under the deal, for each ALOG unit, ESR-REIT will pay S$0.095 a unit in cash and 1.6765 new ESR-REIT units issued at S$0.51 each, for a total of S$0.95 a unit, the REITs said. 

"Units of ESR-REIT were trading up 2.15 percent at S$0.475 at 11:55 a.m. SGT Monday, while ALOG was at S$0.90, down 3.74 percent." 

 UOBKH advises ARA LOGOS unitholders to accept ESR-REIT takeover bid. 

Really?

Accept? 

Don't accept? 

Alamak, I blur. 

Remember, no one cares more about our money than we do and don't ask barbers if we need a haircut. 

ARA Logos unitholders have to take care of their interest because no one else will do it for them.

Remember this article which was published in The Business Times with regards to ESR REIT's offer for Sabana REIT? 

 Sabana Reit's dissident unitholders were right to fight its manager... 

 "If the proposed merger of Sabana Reit and ESR-Reit last year demonstrated anything, it is that IDs cannot always be relied upon to act in the interest of unitholders." 

IDs cannot be relied on? 

Can rely on brokerages or not? 

Alamak, I really blur lah. 

Sabana REIT was lucky to have activist investors leading the charge.

What about ARA Logos?

I also said something about the proposed merger in the comments section of this blog:

3Q 2021 passive income. 

Good luck to unitholders of ARA Logos.

The short end of the stick, anyone?

Reference: 

Sabana REIT's lesson...

3Q 2021 passive income: Better days ahead?

Time flies and it is time for another quarterly passive income update.

Usually, I publish a quarterly update on the last day of the quarter or within the first couple of days of the new quarter.

However, this quarterly update took a bit longer than usual to produce because I was caught up in some stuff happening in Black Desert Online and Neverwinter. 

In case some think that I was joking, I really wasn't.

See:
Divdends and virtual worlds.

However, this blog also took a few more days to publish because there were quite a few things I would like to talk to myself about.

So, I took some time off from adventuring in the virtual worlds to blog in the real world.

Anyway, this is going to be a slightly longer blog by ASSI's standards.

For readers who are used to my shorter (and maybe sweeter) blogs especially the more recent ones, you have been warned.

OK, I think we shall start with Tuan Sing Holdings.

I invested in Tuan Sing Holdings about 4 years ago at 33 cents a share because, after doing some research, I believed that it was very undervalued. 

As I like being paid while I wait for value to be unlocked, being rewarded with a dividend yield of about 1.5% while waiting wasn't too bad a deal.

In 3Q 2021, Tuan Sing Holding's share price shot up and the hefty discount to NAV vanished.

Together with this, the chart showed a very overbought picture and the upward movement in price was losing strength.

So, I decided it was time to enjoy the harvest and sold my smallish investment in Tuan Sing Holdings.

The substantial capital gains together with dividends received over the years made this a very good investment.

The money received mostly went to filling my war chest which was drained significantly by IREIT Global's most recent rights issue.

Readers who are interested in why I invested in Tuan Sing Holdings four years ago might want to read this blog:
Invested in Tuan Sing Holdings.

What surprised me in 3Q 2021 was Keppel Corp's move to take over SPH.

Totally unexpected.

Each share of SPH would receive $0.668 cash, 0.596 unit of Keppel REIT and 0.782 unit of SPH REIT.

It looked rather messy to me and I would have preferred an all cash deal.

As I already have a relatively large exposure to REITs in my portfolio, I am not too enthusiastic about this unsolicited increase in exposure to REITs.

Anyway, after so many years, it seems that my storied journey with SPH has come to an end.

See:
Investment in SPH is larger now.

I also added to my investment in Wilmar as its share price softened in 3Q 2021.

As Wilmar's share price formed lower lows, the MACD, a momentum oscillator formed higher lows which gave us a positive divergence which is forward looking.

It suggested that smart money was accumulating on price weakness.

I also reminded myself that earlier in the year, Mr. Kuok paid $4.33 a share and increased exposure by some $10 million.

Of course, in any case, a positive divergence in the chart does not tell us that a strengthening of share price is imminent.

Indeed, we could see a positive divergence dragging out with lower lows in share price and higher lows in the momentum oscillator.

What the positive divergence told us was that shares were changing hands from weaker to stronger holders and that downside risk was reducing as selling pressure was probably easing.

If the positive divergence continues, I would likely add to my investment in Wilmar if its stock should see further weakness in price.

See:
Wilmar was $7.11 a share.

Passive income in 3Q 2021 also benefitted from Accordia Golf Trust's final distribution.

It was the distribution of residual funds in the Trust before it headed for delisting.

The distribution was relatively small compared to what was distributed after the sale of its assets, of course, but as a proportion of my passive income in 3Q 2021, it was pretty significant.

This is a one off event and 3Q 2022's passive income will be relatively lower, all else being equal.

Feeling a little nostalgic as Accordia Golf Trust is removed from my portfolio.

See: Accordia Golf Trust: 73.2c offer.

In 3Q 2021, King Wan Corp. announced a 1 for 1 rights issue at 2c per rights share.

In reply to a reader's comment on the rights issue, I said that King Wan Corp. increasingly looked like a lemon to me as it had not been able do better after so many years.

The rights issue was proposed to strengthen the company's balance sheet and regular readers would know that I generally do not like such rights issues.

I have written off my smallish investment in King Wan Corp. and, therefore, did not participate in the rights issue.

Of course, this is not the first time I have done something like this.

This is another reminder that, as investors, we make some and we lose some.

As long as we make more than we lose over time, we should do well enough.

See: 

Have a plan, your own plan. 

and 

Getting it right 6x out of 10.

How much did I receive in passive income from my investments in the stock market in 3Q 2021?

$69,145.13

The largest passive income contributor for me in 3Q 2021 was IREIT Global which is, of course, the largest investment in my portfolio as I increased exposure to the REIT during the most recent bear market and participated in its recent rights issues.

Other relatively significant contributors to my passive income in 3Q 2021 were Accordia Golf Trust, AIMS APAC REIT, Sabana REIT, CRCT, Starhill Global REIT, ComfortDelgro, VICOM, OCBC, UOB, DBS and Wilmar.

You might find these blogs interesting:

1. AA REIT and Woolworths' HQ.

2. Investing with common sense. 

3. Sabana REIT and Wilmar. 

4. DBS, OCBC and UOB.

5. Should we invest in AA REIT? 

Finally, for those who might have missed it, I said this with regards to SembMarine's latest round of fund raising back in July:

"I am less inclined to pump in my own money at this point into SembCorp Marine as it is anyone's guess how many years it is going to take for them to generate an income for me. 

"In my retirement, I cannot afford to be too adventurous with my money and I decided to let go of my free shares in SembCorp Marine."

See:
2Q 2021 passive income.

This article in The Business Times might also be of interest to some readers as it once again reminds us that no one cares more about our money than we do and we should never ask barbers if we need a haircut:

Sembmarine revised statement on directors' intent to subscribe for rights issue after EGM. Shifting disclosure of directors is a bigger issue than some directors not fully taking up their rights shares.

Until my next blog, stay safe and do the right things to help keep all of us safe from COVID-19.

Reference:
No one cares more about our money...

Recently published:
HDB BTO projects delayed...

HDB BTO projects delayed: What to do?

I know many readers are waiting for my blog on passive income received in 3Q 2021 but it is going to take a bit more time as there are quite a few things I would like to talk to myself about.

In the meantime, I am publishing a relatively short blog on delays in HDB BTO projects which might be of interest to some readers.

The COVID-19 pandemic and the subsequent Delta variant made life really difficult in more ways than one for many people. 

One of the consequences is the longer time it takes for construction work to be completed and this has, of course, affected the completion of HDB BTO projects as well.

Some people need their flats urgently and have decided to buy resale HDB flats instead of waiting for the completion of their HDB BTO flats. 

However, for those who are in less of a hurry, the wiser thing to do is probably to wait. 

The two big considerations would be 

1. financial cost 

and 

2. the leasehold nature of HDB flats. 

Readers who have been following my blog for a long time would know that this is a topic I have blogged about pretty frequently before.


BTO HDB flats, everything else being equal, are the most affordable form of housing in Singapore. 

I would have bought one myself if I could but I did not qualify for one. 

There are plenty of conspiracy theories out there about how the PAP government is out to rob us of our CPF savings by selling us 99 years leasehold HDB flats. 

It always amuses me to read or to hear stuff like that. 

These people are either misled or out to mislead. 

They are either misinformed or malicious.

A 99 years leasehold HDB BTO flat is a good quality housing option in Singapore if we are looking for a home to call our own till the day we die. 

Unless we have very strong reasons for buying a resale HDB flat, wait for a HDB BTO flat. 

Like many things in life, patience will be rewarded. 

If you are new to my blog, you might want to read the following blog which I shared with a reader who contacted me recently: 

When the lease on HDB flats end.

Related posts:

1. Why do I stay in a condo?

2. Not successful in SG unless...

"You mustn't tell people that. 

They will look down on you." 

AIMS APAC REIT to buy Woolworths' HQ.

It is confirmed. 

AIMS APAC REIT is going to buy Woolworths' HQ in Sydney. 

The price tag? 

Around S$454 million. 

This is going to increase the REIT's portfolio value by more than 26%.


As a long time investor of AIMS APAC REIT, I like the purchase for the following reasons: 

1. The asset will increase the number of freehold assets held by the REIT. 

2. The purchase will increase income visibility as there is a 10 years lease to Woolworths with annual rental escalation of 2.75%. 

3. There is room to build more rentable space as the asset's plot ratio has yet to be maxed out which will allow for more organic growth in the future (and this is probably a big push for the REIT to make the purchase if we look at their commendable record in maxing out plot ratios of some of their assets in Singapore.) 

4. The purchase is likely to be DPU accretive because it is going to be 60% financed by debt (which is likely to be competitively priced given the current low interest rate environment) and net proceeds raised from the recent S$250 million in perpetual bond issue will also be utilized.


A question on many unit holders' minds is probably will there be a rights issue? 

The REIT manager has said that they could issue new equity. 

Personally, I think that it is a forgone conclusion because when we compare the price tag of S$454 million and what we know in point number 4 above, there is a shortfall of some tens of millions of dollars. 

Equity issuance could take the form of private share placements or a rights issue, of course.


As a long time unit holder, I hope that any equity fund raising is going to be a rights issue. 

This is so that I can increase my investment in the REIT probably at a discounted price. 

After all, I never get invited to take part in private placements. 

I suppose I will just have to wait and see. 

Woolworths’ Full Year Result 26 Aug 21: Woolworths’ earnings led higher by Australian Food business.


References: 

1. AIMS APAC REIT and perpetuals. 

2. AA REIT: A private tour.

Investing with some common sense for peace of mind.

This blog is in reply to a comment by a reader who wants to know my opinion on what he thinks are "poor governance and regulatory oversight by MAS, DBS (its sole bookrunner) and SGX" in the case Eagle Hospitality Trust. 

Read his full comment: HERE.

Hi HH Low, 

Unfortunately, we cannot always be right and I have been wrong more than a few times myself. 

With Eagle Hospitality Trust (EHT), I was probably in the minority in sounding the alarm as many investment bloggers and analysts were saying the Trust was severely undervalued as its unit price declined. 

Many bought into the Trust and many more followed. 

The importance of not riding on coattails and to do our own due diligence really cannot be overemphasized.


Also, it pays to remember that: 

"We might have different requirements and certainly different circumstances. 

"So, it is probably not a good idea to ride on someone else's coattails, no matter how famous that someone is." 

See: Good time to buy now or should I wait?

For example, many have been buying into Alibaba since its stock price went into a tailspin and this has lasted many months.

There is a saying that stock prices flow down a river of hope and it certainly has been the case for Alibaba.

Low can go lower and if we do not have deep pockets like Charlie Munger and have to borrow money to invest in Alibaba, we might be in for many sleepless nights. 

Regular readers know where I stand on such matters. 

See: Investing and peace of mind. 

Not many have the stomach for volatility and fewer still have the stomach for constantly declining stock prices with no bottom in sight. 

It might be a better idea to wait for prices to bottom before buying and that was what I did in the bear market last year. 

I might miss out on some gains but I would have spared myself quite a bit of mental agony.

For example, see: 

Buying DBS, OCBC, UOB and cheering for IREIT Global.

Anyway, I digress. 

In the case of Eagle Hospitality Trust, for better or for worse, like always, I stuck to my views and it turned out I was right about EHT. 

The lesson? 

We have to remember that there is no free lunch in this world and nobody cares more about our money than we do.

Although I think that people who have done wrong should be punished, in the real world, evil is not always punished while the good and the innocent often pay heavy prices. 

So, instead of depending on regulators and experts to do a good job, it is probably a good idea for us to be a bit cynical and if something is too good to be true, take a closer look because it could indeed be so.


I am not the smartest person around but I like to think that I have some common sense which I believe is common enough that most people have it. 

I just happen to use my common sense a bit more, maybe. 

For anyone who might be interested, these are some of my past blogs on Eagle Hospitality Trust: 

1. Is Eagle Hospitality Trust worth it? 

2. Eagle Hospitality Trust: Financial engineering. 

3. Eagle Hospitality Trust: My philosophy. 

4. Eagle Hospitality Trust: Extinction?

AIMS APAC REIT and perpetual bonds.

This very short blog is in reply to a reader's comment on a topic which other readers might find interesting. 

AIMS APAC REIT is well run and it has been very rewarding as an investment for income. 

A perpetual bond is a good thing for the REIT because it does not add to the REIT's gearing while giving it more funds. 

A coupon of above 5% is also pretty attractive to anyone interested in lending money which is what we are doing when we buy bonds. 

Personally, I rather be invested in AIMS APAC REIT than to lend money to them because I think it is more rewarding to invest in the REIT. 

I would suggest that readers interested in the perpetual bonds read these blogs: 

1. Why have bonds in our portfolio and which ones? 

2. Bonds, REITs and the instant gratification of yield.