(10-06-2013, 10:12 AM)Temperament Wrote: [ -> ]Quote:my take is that entry price is crux to long term reits holding.
Ha! Ha!
It's a good reminder that all our talk and talk is aiming to do this only:-
“The Essence of Investment Management is the Management of Risks, not the Management of returns”, Benjamin Graham.
“Therefore Proper Allocation of Assets and Entry Level are the 2 most crucial actions.
Nothing you can do is better to Control Risks and Generate profit,” Dick Davis.
And i believe anything in the market can make you money if you only know how. Things that can not make you money will just languish or die a natural death in the market. imo.
Well Said Temperament, I made a bunch of money from my reits holding more than my other asset class holdings, tho must admit that I have started to pare down my reits.
I very much agree "its the entry price stupid"
(10-06-2013, 11:14 AM)kevlee Wrote: [ -> ] (10-06-2013, 10:12 AM)Temperament Wrote: [ -> ]Quote:my take is that entry price is crux to long term reits holding.
Ha! Ha!
It's a good reminder that all our talk and talk is aiming to do this only:-
“The Essence of Investment Management is the Management of Risks, not the Management of returns”, Benjamin Graham.
“Therefore Proper Allocation of Assets and Entry Level are the 2 most crucial actions.
Nothing you can do is better to Control Risks and Generate profit,” Dick Davis.
And i believe anything in the market can make you money if you only know how. Things that can not make you money will just languish or die a natural death in the market. imo.
Well Said Temperament, I made a bunch of money from my reits holding more than my other asset class holdings, tho must admit that I have started to pare down my reits.
I very much agree "its the entry price stupid"
Yes! i must always remember investment is a discipline based on principles. And i have to find your myself first every time B/S.
The moment i deviated, i am lost. Lose money lol.
(10-06-2013, 07:53 AM)freedom Wrote: [ -> ] (10-06-2013, 01:15 AM)fat al Wrote: [ -> ] (09-06-2013, 10:18 PM)freedom Wrote: [ -> ]Anyone regarding REIT as a long term investment is a bit insane, especially if you depend on it for income. Every now and then, REIT will ask money from its investors and very likely, there would be dilution to existing shareholders.
One way to mitigate the dilution problem is to sell down a portion of existing exposure to fund the rights subscription. This will of course not be a perfect solution given the market volatility and possible odd lot position required.
still you got diluted as you own less percentage of the REIT. The more important thing is that very likely, the distribution would drop after capital raising exercise. That defeats the purpose of REIT as a long term investment and income generation asset.
Sorry, my mistake, you are right on "still you got diluted".
My suggestion can only try to resolve the individual shareholders' retirement cashflow need. ie. take some original capital off to fund the rights call and maintaining the same amount portfolio exposure invested in the security.
we are only retail investors, why worry about dilution? As long as the Reit continues paying constant or increasing DPU after dilution, why worry about dilution? It is not as if we have being pushed out of the board.
Can anyone enlighten me?
(Vested in Reits)
Actually i compute, despite recent reits sell down, if you have hold reits on 1st Jan this year. You are still still way better off than most other stocks or STI Index.
(01-07-2013, 10:10 AM)sunrocker Wrote: [ -> ]we are only retail investors, why worry about dilution? As long as the Reit continues paying constant or increasing DPU after dilution, why worry about dilution? It is not as if we have being pushed out of the board.
Can anyone enlighten me?
(Vested in Reits)
The reason is your dividend yield on capital will most likely drop as a result of the dilution
(01-07-2013, 10:43 AM)safetyfirst Wrote: [ -> ] (01-07-2013, 10:10 AM)sunrocker Wrote: [ -> ]we are only retail investors, why worry about dilution? As long as the Reit continues paying constant or increasing DPU after dilution, why worry about dilution? It is not as if we have being pushed out of the board.
Can anyone enlighten me?
(Vested in Reits)
The reason is your dividend yield on capital will most likely drop as a result of the dilution
Actually I think Sunrocker hit it right that retail investors with no control or interest over management should only be concerned about the return per share rather than dilution per se. As long as DPU (PER SHARE) remains the same, then it shouldn't be an issue, which the managers mostly try to be earnings accretive. Notwhithstanding that dilution by management is an indication of where the vested interest lies.
As previously posted, paying out almost all of earnings and raise cash through shareholders when needed was what Graham proposed. Whether it works in reality is what we are trying to figure in REITS
(01-07-2013, 10:10 AM)sunrocker Wrote: [ -> ]we are only retail investors, why worry about dilution? As long as the Reit continues paying constant or increasing DPU after dilution, why worry about dilution? It is not as if we have being pushed out of the board.
Can anyone enlighten me?
(Vested in Reits)
because you won't receive the same amount though number of your shares are the same.
Unlikely that the management did a major dilutive capital exercise without reducing DPU. Though, often REITs do acquisition through rights, the dilutive effect is much smaller compared to what happened in 2008 - 2009. Rights at that time was pure dilutive without any benefit to DPU.
So it matters greatly to retail investors, especially, those relying on it for income.