STE's Stocks Investing Journey

Accounting Profit is Fake Yup, you heard me correctly. Accountant’s idea of profit is prepared according to tax adjustments and accounting standards. These were established to provide consistency and governance across how accounting is done. The problem is these ‘rules’ are very much open to interpretation — leaving room for ‘creative accounting’. The collapse of Enron is a prime example of how investors and business owners assess a company’s financial performance is guided by all the wrong numbers . But if you look at the Net Cash Flow position, you will see that the company was losing cash. Sounds familiar?

Y our Portfolio Yield Determine Your Risk-Tolerance , No? In general, your portfolio yield could be a very good indicator if you are taking too much risk or risk-averse. I plot a chart to show my portfolio yield vs other income investment instrument as below: My yield from equity is about 6.1% , which is slightly lower than S-REITs average of around 6.5% (base on OCBC Investment Research S-REIT Tracker- link ). Although I am just having around 42% in REITs since my other’s holding also mostly dividend play like Telco/ Banks + 2 investment trust ( Hotung Investment and Global Investment) and some other blue chips ( Keppel Corp / ComfortDelgro) etc, which gave me a yield of almost 1.75X higher than STI ( ES3). My Portfolio Yield (Including Bond + CPF) drops to just around 5.1% if I include the Bond and CPF  balance where the interest rate is lower than Equity.

I would like to share this very good article from SeekingAlpha.com in regard to investing in REITs : Summary REITs are famous for being defensive income-producing investments. There exists, however, a lot of landmines that can lead to massive losses. We explore the most common reasons that lead to large losses in the REIT sector. Finally, we present how we seek to avoid landmines at High Yield Landlord. Generally speaking, REITs are famous for three things: ·          They pay high dividends. ·          They are defensive investments. ·          They tend to outperform in the long run:

Yes, not by -8 % or -38% but -81.5% !! This is what happened when APPT (Asian Pay TV Trust) announced their result and dividend payout for next quarter this morning. I think most of the so-called " income investors " (including me)  were stunned by this sudden news and of course, the share price dropped by -49.2% and closed at $0.16 today. I still have a small position of this stock in my portfolio ( 0.4% ) and expected it (dividend) to be cut by 50% to around 3 cts which is a more sustainable level and close it's FCF and may still give us an approx 10% yield at the price of 30+ cts . Although it just a small position, but sitting with such huge "paper loss "now is no joke and a really painful lesson learned, I am sure those vested will have the same feeling.

< Image  credit to seatrade-maritime.com> HPH Trust has been one of the worst performer blue chips within the STI Index component. It has created hype during IPO in 2011 where investors being attracted with high dividend yield and promising growth story of China’s export and full potential of containerization. But the reality was that, with the increasing and fierce competition from surrounding port along Pearl River Delta , couple with prolong slump in the shipping industry in its secular down cycles, the result is reflected in the current stock price of -60% down since the IPO.

Dividend vs Share Buyback Why the US market is trading upward even as investors big and small are selling? According to an article from Fortune, most people assume what has kept the market afloat this year after sinking 11% at the start of the year was a mixture of better news out of China, oil prices stabilizing, and indications that the Fed won’t raise rates as much as a thought. But the real thing buoying the market could be something else: stock buybacks.