Friday, January 8, 2010

Happy & Sad - My First REIT encounter

Yesterday, I made a huge decision and sold off my entire holdings of First REIT at a price of $0.86 (17,000 shares) giving me $14,569.55 in proceeds to deploy elsewhere.

My foray into First REIT first began on 05 Jan 2007.

05 Jan 07 - Buy 2 lots @ $0.765
15 Jan 07 - Buy 5 lots @$0.765
05 Mar 08 - Buy 3 lots @ $0.725
02 Apr 08 - Buy 5 lots @ $0.70
02 Sep 08 - Buy 1 lot @$0.70
14 Oct 08 - Buy 1 lot @$0.425

I sold all on 07 Jan 2010 @$0.86.

Any feelings?

I have been happy about getting the dividends that are given every quarter. I will miss those dividends badly. Everytime, I get the dividends, it brings a smile to my face. Now those days are gone.

When I clicked on the SELL button yesterday, the feeling of earning a nice ROC of 18% also brightened my day for a while. Today, I have no more special feelings about this stock.

Through the 2 over years that I have held on to this stock, it has given me more heartache than joy. The price has always been depressed and hovered below my average buying price. Everytime I looked at the stock market, my heart sank when I noticed that First REIT kept getting cheaper and cheaper.

All in all, I would like to think that First REIT has caused my heart alot more pain than joy.

That is even after I exit this REIT with a return on capital of 18% and not to mention the 2 years of dividends that I have enjoyed.

The reason I sold was because I felt that it was trading quite close to its NAV and even though its fair value should be around $1.00, I still did not see First REIT living up to its expansion plans be it in China or the rest of asia. It has been two long years and they have only expanded into Singapore. I guess any future expansion will increase their gearing and even though that would bring their yield up, their price will be depressed because of the high gearing.

At such a time like this, I felt that it would be good to lock in some gains now.

I do not deny the possibility of re-entering this stock since it is one of my favorites.

6 comments:

  1. But do make love to your stock once in a while.

    ReplyDelete
  2. Words of True Wisdom indeed!

    It is such a common phrase we hear but deep down inside.. a lot of us UNKNOWINGLY fall in deep deep love with our stocks that we are willing to stick through both thick and thin with it.

    ReplyDelete
  3. I would probably give different advice from what has been given so far, but it will be too long and tedious to type out. If you like, you can email me at musicwhiz55@gmail.com to discuss further.

    Cheers,
    Musicwhiz

    ReplyDelete
  4. "However beautiful the strategy, you should occasionally look at the results." - Winston Churchill

    "When the tide comes back, you will soon find out not all boats rise high." - CreateWealth8888

    ReplyDelete

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