Charles Goodhart is an Economics Professor from the London School of Economics. He said that "Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes" One interpretation is that when a measurement becomes a target, it ceases to be a good measure. I was expecting to lose money when I ploughed my trainer's fees into the portfolio created by my third batch of students. After all, the Capricorn effect is long over and REITs have already completed a fairly good run in the markets.Furthermore, the worse decision we made as a class was to keep First Reit in our portfolio. It subsequently lost me about 7+% over the span of less than a month, likely due to the perceived problems from its sponsors. Interestingly, the class kept it in the po

Frasers Property Limited (formerly known as Frasers Centrepoint Limited) is a multinational integrated real estate conglomerate with assets located in Singapore, Australia, China, and Europe. Frasers Property is active in property development, management, REITs, and investments. As at 30 September 2018, Frasers Property has a total of S$32.4 billion in total assets. In this article, I’ll revisit its fundamentals, provide an update on its latest results, and evaluate its valuation. Here are 10 things to know about Frasers Property before you invest. 1. Singapore: Profit before interest and tax (PBIT) grew 17.8% year-on-year to S$481.0 million in 2018. This was due to an increase in development profits from key projects, namely: Park Life EC, North Park Residences, and Seaside Resi

Real estate investment trusts (REITs) in Singapore often have a larger company as a sponsor. The sponsor is often also the major shareholder of the REIT, and is sometimes related to the REIT’s manager. A major role of the sponsor is to provide a REIT with the rights of first refusal on properties that are owned by the sponsor. Although having a sponsor is beneficial to a REIT for the pipeline of acquisition opportunities, there remain potential conflicts of interest between a sponsor and the REIT’s minority shareholders that could result in minority shareholders getting the shorter end of the stick. Here are some possible conflicts that investors should be aware of. Sponsors prioritise REIT Manager’s interests over minority shareholders Conflicts of interest arise when sp

After ending 2018 on a bad note, the performance of the stock market in the first two months of 2019 has gave investors a reason to cheer. If you are looking to repeat the splendid performance, here are some strategies for you to consider. Investors Takeaway: 3 Strategies If You Want To Beat The Market Again By DBS Take Advantage Of Interest In S-REITs With Fed Chairman Powell re-iterating the Fed’s dovish stance to be patient on rate hikes, interest in REITs should sustain going forward. The consensus now appears to be zero rate hikes for this year as the Fed continues to monitor how the economy evolves. Previously, DBS recommended investors to focus on large cap REITs in resilient segments such as retail and industrial (warehouse and business parks). DBS likes these large cap REITs f

The US Federal Reserve has indicated that 2019 will likely see slower interest rate hikes. This comes on the back of mounting macroeconomic uncertainties, that has seen investors turn to less risky investments. This may benefit REITs in three ways: # 1 Traditionally, REITs take on a lot of debt to fund its capital-intensive property investments. Slower interest rate hikes in 2019 will ease the growing pressure on REITs, in terms of debt repayment. # 2 Markets are efficient – which means that prices of REITs would have taken into consideration that rate hikes would continue as normal. This stance of slowing down the interest rate hikes in 2019 is new information for the market, and may give REITs a boost. (Do note that most of this new information should already be priced into the markets

I wanted to take this time to quickly update on my latest position. After the recent run-up to most of the S-Reits which I believe is near valuation peak over the past 10 years (apart from 2015), I have decided to lock in my gains and divested Frasers Logistic Trust (FLT) yesterday at a price of $1.14. This divestment gave me a very decent return in terms of both dividend and capital appreciation for the past couple of years I had them. Other than the dividends I have been getting over these years, I have also participated in their rights last year which brings down my average price further.At $1.14, and assuming 1.78 cents/quarter annualized for the full year, it represents a dividend yield of 6.2% currently, which I think is a bit heavy (expensive) from a valuation perspective.

We are at the tail-end of the earnings season. Real estate investment trusts (REITs) have always been a favourite investment for risk-adverse investors because of their stable earnings qualities. Today, we’re looking at two REITs that have lived up to their investors’ expectations by delivering positive performances in their latest earnings updates. First up is Frasers Logistics and Industrial Trust (SGX: BUOU), or FLIT, the first Singapore-listed real estate investment trust with a portfolio comprising 83 logistics and industrial properties concentrated within major logistics and industrial markets in Australia, Germany, and the Netherlands. For the quarter ended 31 December 2018, gross revenue grew 40.3% year on year to 59.5 million Australian dollars, while adjusted net propert

In the continuation of the accounting demystified series, it’s now time to look at the different methods of recording cost of goods sold when a company purchases inventory. Readers may be surprised to know that the method used can have significant consequences on the cost of goods sold recorded, which in turn affects the gross margin recorded by the business. I will also provide some background on the matching principle, which is a dominant feature in accounting. Matching principle The matching principle in accounting states that when any revenue is recognized as a result of a sale of goods and services, the business also has to recognize the associated expenses and costs that led to that sale. A simple example would be the sale of a bottle of shampoo for S$10. The business would hav

In my years of investing, one problem I’ve noticed among investors (myself included) is the tendency to hold onto stocks that have performed terribly over the years and whose businesses have deteriorated significantly over the same time period. Of course, none of us plans to go out and purchase a lemon, but even with the best and most water-tight investment thesis, things do go wrong now and then, and companies may fall on hard times and not recover. I previously wrote on why we should not retain deadwood in our portfolios, and here are three reasons investors persistently refuse to sell their losing stocks and do some much-needed housekeeping. 1. Regret aversion Regret aversion is a condition whereby someone avoids or delays making a decision so that they do not experience regret. F

Among the many investment books I have read, only a few have inspired me enough for me to write about them in some detail. One of them would be The Investment Checklist by Michael Shearn. This is part 5 of Shearn’s checklist, which continues with the remaining questions related to the measurement of operating and financial health of a business. (You can see the previous part here.) 1. What are the fundamentals of the business? “Fundamentals” is a general term used to indicate the overall financial health and general conditions surrounding the business. Investors can take this to mean the revenue, margin, and net profit trends; financial ratios; and also prospects for the business. It’s a catch-all term that allows investors to take a sweeping look at the characteristics

No.  Counters No. of Shares Market Price (SGD) Total Value (SGD) based on market price Allocation % 1. Starhill Reit 377,000 0.68 256,360.00 29.0% 2. Vicom   31,300 6.29 196,877.00 22.0% 3. Frasers Logistic Trust 163,000 1.11 180,930.00 21.0% 4. Far East Hospitality Trust 230,000 0.64 147,200.00 17.0% 5. Manulife Reit   81,000 US$0.865   94,587.00 11.0% 6. Warchest     1,000     1,000.00   1.0% Total 876,954.00 100% The market has rebounded well in 2019 and almost everyone in the local finance community I know are making a good profits so far in these 2 months.KPO has done wonderful in his portfolio which you can read here while Miss Niao has already concurr

Frasers Property Ltd (SGX: TQ5) reported its first-quarter earnings for the fiscal year ending 30 September 2019 on Tuesday evening. Frasers Property is a multi-national company that owns, develops and manages a diverse portfolio of properties. The properties are geographically spread out over 80 cities across Asia, Australia, Europe, the Middle East, and Africa. At the end of September 2018, Frasers Property had total assets worth approximately S$33 billion. Revenue increased by 44.7% year on year to S$1.08 billion. Profit (before fair value changes and exceptional item) rose 87% to S$507.2 million. If we include fair value changes and exceptional items, attributable profits would have risen by 76.1% to S$145.6 million from S$82.7 million. Fraser Property noted that the increase in earn

Frasers Logistics & Industrial Trust (FLT) listed on the SGX on 20 June 2016. It was initially established to invest in logistics and industrial properties located in Australia. However, in early 2018, FLT expanded its investment mandate to include properties in Europe, leading to its latest acquisitions in Germany and the Netherlands. In this article, I’ll revisit FLT’s fundamentals, give an update on its most recent financial results, and assess its valuation at its current price. Here are 10 things to know about FLT before you invest. Portfolio 1. As at 5 November 2018, FLT owns 83 properties valued at A$2.98 billion. This is from 51 properties worth A$1.58 billion when FLT first listed in 2016. Out of FLT’s current portfolio, 61 properties are located in Austral

With the 90-day truce in the US-China trade war coming to a halfway mark, attention is now on the outcome of those talks. While the news so far appears to be indicating that the talks will end in a positive note, it is hardly a foregone conclusion. Things could still change in a swift if either party changes its mind. So, what happens if the US-China trade talks fall apart? Investors Takeaway: 3 Things To Do If US-China Trade Talks Go Wrong By DBS Stay Invested In REITs S-REITs managed to put in the second-best performance in 2H18 after healthcare. According to DBS, S-REITs should continue to garner investors’ interest as bond yields are still pressured by the Fed turning more dovish. The Federal Reserve’s previous guidance in December last year pointed to two interest rate hikes in

https://www.fool.sg/2019/01/25/singapore-retail-reits-on-the-rise/https://www.fool.sg/2019/01/25/frasers-logistics-industrial-trusts-latest-earnings-dpu-impacted-by-falling-currency/https://www.fool.sg/2019/01/23/singapores-top-10-dividend-shares-among-the-worlds-best/https://www.fool.sg/2019/01/23/10-quick-things-investors-should-know-about-frasers-centrepoint-trusts-latest-earnings-2/https://www.fool.sg/2019/01/20/distributable-income-rises-at-frasers-commercial-trust/With more than 40 real estate investment trusts (REITs) or stapled trusts in the local stock market, choosing the one that is best positioned for growth can be a tough task. However, one key metric that can help investors identify such REITs is the gearing ratio. The gearing ratio is a ratio comparing the REIT’s debt aga

https://www.fool.sg/2019/01/23/singapores-top-10-dividend-shares-among-the-worlds-best/https://www.fool.sg/2019/01/23/2-singapore-listed-reits-with-overseas-assets-i-am-watching-this-week/https://www.fool.sg/2019/01/03/20-key-numbers-for-a-deeper-understanding-of-frasers-logistics-and-industrial-trust/Yesterday evening, Frasers Logistics & Industrial Trust (SGX: BUOU) released its first quarter earnings update for its financial year ending 30 September 2019 (FY2019). Frasers Logistics & Industrial Trust, or FLT, is a Singapore-listed REIT which owns industrial properties in Australia, Germany, and the Netherlands. The REIT’s sponsor is Frasers Property Limited (SGX: TQ5). Below are nine important points to note from FLT’s latest results: 1. Revenue for the reporting qua

https://www.fool.sg/2019/01/25/2-reits-that-have-delivered-mixed-performances-recently-9/https://www.fool.sg/2019/01/25/singapore-exchange-limiteds-latest-earnings-strong-growth-seen/https://www.fool.sg/2019/01/25/frasers-logistics-industrial-trusts-latest-earnings-dpu-impacted-by-falling-currency/https://www.fool.sg/2019/01/24/3-ways-to-invest-with-a-small-budget/https://www.fool.sg/2019/01/24/what-investors-should-know-about-capitaland-commercial-trusts-2018-earnings/Benjamin Graham is the father of value investing and in his seminal book “The Intelligent Investor”, he introduces a very effective way to think about the stock market which I believe will benefit all investors. Graham not only had the intellectual capacity for analysing businesses and going through reams of numb

Earnings season is well and truly upon us. In an earlier article, I highlighted two Singapore-based REITs that Foolish investors should keep an eye on. Besides those, there are two trusts with their assets predominantly overseas that will have my interest when they release their earnings updates this week. Banking on one of the fastest growing economies in the world Ascendas India Trust (SGX: CY6U) is one of just two Singapore-listed trusts that invest primarily in real estate in India. India is the fastest growing large economy in the world, exceeding even that of China. Ascendas India Trust, with its portfolio of IT parks and warehouses in key cities in India, is, therefore, expected to ride on the coattails of economic tailwinds. In the last quarter, on a constant currency basis, the

Hello 2019!Since I stopped updating on my portfolio 4 months ago, I've received lots of inquiries from readers asking me to reinstate back this post.After much deliberation, I've decided to republish them again in my blog starting this month with the January's update. While I don’t exactly know how these updates will benefit readers who are requesting for these updates, I hope they are not using this the wrong way.For myself, I am using the update to justify for accountability to myself which is mainly to articulate my summary thoughts in a more organized manner and why I decided to hold/buy/sell and make certain decisions.Overall MarketsLet's first start with the observation of the overall market.This has been a pretty smooth sailing month so far.STI ended the year in 2018 with las

Frasers Logistics and Industrial Trust (SGX: BUOU) is a real estate investment trust (REIT) listed in Singapore with logistics and industrial properties. The REIT’s sponsor is Frasers Property Ltd (SGX: TQ5). At the end of December 2018, the REIT released its annual report for the full year ended 30 September 2018 (FY2018). Here are some key figures from the report to give investors a deeper understanding of the REIT. Where does the REIT make money from? The REIT’s portfolio of 82 properties, as of 30 September 2018, is concentrated in major logistics and industrial markets of Australia, Germany and the Netherlands. The properties are mostly on freehold and long leasehold land tenures – 70% of the properties sit on freehold land, 21.6% are on more than 80-year leasehold while 8.3% ha