Saturday, July 22, 2017

Journey To Retirement Part 2.3 -- First REIT

I did it, yes, I did it, the day I've been waiting for since 2007.  What ?

Dividend collected equals the amount of capital I've invested in initially and that is to say it is now mathematically impossible to lose money on this investment !

Well this is not the first stock that I've achieved mathematical impossible to lose money status (the other 2 are First Reit with CPFIS in 2015 and Nordic Group in 2017) but unlike the other 2, this one is purely do nothing by just collecting dividend throughout the years.  And what a way to celebrate the 10th anniversary in investing in First Reit !

Technically speaking, it is not I did nothing throughout the years to achieve that.  I vested in 2007, rode through the 2008 GFC despite stock price sank to below my holding price.  Then, in 2010 injected more capital for the 5-for-4 @ $0.50 right issue.  Next, resist analysts' call to sell off S-Reit in 2013 due to the fact that US Fed will start tapering on its QE3 and commence on rate hiking cycle.  All this because I am confident that I've boarded the right boat since the day I vested.  All this cannot be achieved without perseverance, determination, patience and confidence.

The confident on First Reit is due to personal encounter.  More than 10 years ago, my grandmother in her 80s suffered her first stroke.  After recovered, we took care of her from home.  However, due to the fact that we are not professional trained, unfortunately, the 2nd stroke came along.  It was lucky that we discovered fast enough and she managed to recover.  Her body condition and movement after the 2nd stroke has made us in a very difficult condition to look after her by ourselves so we have no choice but to send her to one of those nursing home to allow those professional trained personnel to look after her.  While hunting for the nursing home, we found that those more famous and reputable one (managed by Chinese clan) have a long list of waiting queue despite the costly fee.  After some searching and also considered location, we have opted for the Orange Valley nursing home (the one that SPH invested in months ago BUT don't be fast to jump into conclusion in investing in SPH, it is a totally different story).  During her stay there, she suffered the 3rd stroke and if not in the nursing home she would not have survived from that.  She passed away 4 years ago at the age of 93.  After that encountered, I've realized the importance of nursing home and decide to invest in stock relating to that.  Searching all over the place all I could find are either managing hospitals or clinics and nothing else.  Those I really not interested.  Then came early 2007 when First Reit (initial portfolio only consisted of 4 hospitals in Indonesia) acquired 3 assets in Singapore with 2 of them as nursing home and I saw this as a good opportunity.  However, there were some initially concerns as majority of the assets are in Indonesia which I am unfamiliar with.  After much thoughts, I figured out that health care is a global issue and not just restricted to Singapore even with more advancing country like Japan is facing a high demand in nursing home.  Furthermore, First Reit at that time during its IPO was offering a dividend yield of 9.17% (based on $0.71 IPO price), a high enough dividend yield to offset my concerns on investing in foreign assets.  I'm not the first day investor and I bought it at price of $0.78 which was about 8.35% dividend yield but that was considered high at that time.  Now, with my holding price of $0.6067 and a distribution of 8.47 cents for FY2016, that is 13.96% dividend yield that I am getting now.  As it stands now, based on 21st Jul 2017 closing price of $1.335, my unrealized capital gain is +119.54% and dividend return is +100.50%.  Parkway Life is another S-Reit with nursing home assets but unfortunately, it was listed after I invested in First Reit that is why it never appear in my portfolio.

I believed I'm not the only First Reit unitholders to achieve that mathematically impossible to lose money status as those first day unitholders would have achieved that 1 or 2 quarters earlier than me.  From 2008 to 2012, I have recommended some of my ex-clients to invest in it and their holding price ranged from the 0.50+ to 0.80+ level.  I believe in another 1 to 3 years times some of them will be achieving what I have achieved now.  Moreover, I don't really recalled since the recovery of 2008 GFC, First Reit has ever reported a dip in earning Y-O-Y.

Going forward, it opens up more options for me now with First Reit.  It has became the 奇兵 in my 孙子兵法 way of investing, the one that win you the war.  A stock now that allow me to go for the kill to maximize profit or using the famous quote of Sir Alex Ferguson (the retired Manchester United manager) -- "Go for that bloody throat".  Meanwhile, I will continue to collect dividend and if opportunity arise switch to collecting scrip as dividend (they did that last year).  

Happy 10th Year Anniversary First Reit !!!






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