Jimmy Kimmel - Halloween Candy Prank

In this video prank, parents tell their children they ate their halloween candy whilst they were sleeping.  See the funny reactions!

Investment Outlook and Stock Picks for 2013

What better way to start the new year then to give an outlook on what 2013 ought to bring?  And what better way to know what 2013 will bring by looking at what the experts think will happen.

OCBC Research will be sticking to the strategy of overweighing in the oil & gas, banking, healthcare and selective property sub-sectors.  Their stock picks for 2013 include Biosensors, CapitaMalls Asia (CMA), CapitaMall Trust (CMT), City Developments (CDL), DBS, Ezion Holdings, Keppel Corp, M1, Sembcorp Marine, Starhill Global REIT, UOB and Venture Corp.  Despite strong gains in 2012, they expect further upside for these sectors/stocks.

For Phillip Securities Research, their top picks include SIA Engineering Company, Capitaland and Pan United.  Thematic plays will be dividend stocks and construction stocks.

Here are the closing price of all the stocks on 31 Dec 2012:

	Closing Price on 31 Dec 2012
Biosensors	1.205
CMT	2.130
CMA	1.940
City Developments	12.870
DBS	14.840
Ezion Holdings	1.690
Keppel Corp	11.000
M1	2.710
SembCorp Marine	4.600
Starhill Global REIT	0.785
UOB	19.810
Venture Corp	8.060
Capitaland	3.700
SIA Engineering Company	4.390
Pan United	0.775

We've Crossed 400,000 PageViews

With more than millions of blogs around, this blog is not one of the large blogs around.  Neither is it a "hi - bye" kind of blog.  Each milestone is memorable and crossing 400,000 pageviews is memorable enough for me.

Thanks to all readers for supporting thus far.

What are REITs?

 

 Real Estate Investment Trusts or REITs can be a corporation, business trust or association that acts as an investment agent that acquires or provides financing for the acquisition of real estate or real estate mortgages or even a combination of both.  It basically combines the capital of many investors to purchase any form of income producing real estate.  In most countries, REITs are often accorded special tax breaks where they are not required to pay any corporate income tax if it distributes the majority (usually 90% to 95%) of its taxable income to shareholders each year.

Unlike property stocks, REITs is akin to holding personal property where the taxation of income takes place at the investor level rather than at the company level.  In certain countries, dividends or distributions are also not taxed.  So there is an added advantage for investors to own it. REITs are usually traded just like any stock or share on the stock exchange.  They are easily liquidated compared to owning a real property.

Different type of REITs

REITs can be classified as equity REITs, mortgage REITs or Hybrid REITs.  Mortgage REITs are more common in the United States compared to the Asia Pacific region where most of the REITs are equity REITs.

Equity REITs invest in and own usually immovable properties with revenues and income derived mainly from the rental income of these properties.  Most equity REITs are spun off by property developers who aim to free up capital for their core business of property developing which gives them a better return of investment compared to owning property just for rental yield of less than 10%.

Mortgage REITs invests in loans that are secured by real estate or mortgage backed securities.  Their revenues and income are usually derived from the interest paid for the mortgage loans or the difference in rates at which they borrow and lend out money.

There are some REITs that are also a hybrid of both equity REITs and mortgage REITs.

Blessed Christmas to All Readers

Christmas is coming in exactly 3 days.  And less we forget the true meaning about Christmas, it is not about the presents, or the good food that we fill our tummies with.  Neither is it about the gatherings, or shopping for presents or whatever retailers will have you believe.

Christmas is to celebrate the birth of Jesus - the greatest gift to all mankind.

Hundreds of years before Jesus' birth, the prophet Isaiah said: "Therefore the Lord himself will give you a sign.  Behold, the virgin shall conceive and bear a son, and shall call his name Immanuel."

I leave you with this beautiful rendition of Oh Come Oh Come Immanuel by the Franz Family.  Enjoy and blessed Christmas to all readers.

Jimmy Kimmel - Lie Detector

Funny video where Jimmy Kimmel hooks up kids to a "lie detector" machine. Just for laughs.

 

REITs Trading Below NAV (Net Asset Value)

Net Asset Value or NAV is one of the factors to consider when investing in REITs.  The NAV is basically the sum of all the REITs' assets (usually property and cash) minus away its liabilities (e.g. bank loans).  Investors often look at the price of the REIT and its NAV to see whether a bargain exists when a REIT is trading at significant discount to its NAV.

Should a REIT trade above NAV or below NAV?

A common argument is that REITs should actually trade above their NAV.  Why so?   There are a few reasons given:

• A REIT is more liquid that a property itself.  As such, a "premium" or value should be placed on this added liquidity as compared to a real property.  An investor in a REIT can basically liquidate his holdings in the stock market as compared to holding a real property which requires time and effort to get rid of.  
• Smaller upfront capital required as compared to a real property.  
• Professional management without hassle of being a landlord yourself
• Divesification into various properties
• NAV was determined sometime back and it is likely that today's NAV of the property is higher

However, it is not uncommon to find certain REITs that actually trade at a discount to their NAV.  Many reasons are given for this discount.  The most common answer that links the reason for this discount is that of RISK.  This could be due to:

• Foreign Exchange risk
• Drop in property value 
• Potential drop in distributions
• Country Risk
• Uncertainty about the future outlook of the REIT
• NAV was determined sometime back and it is likely that today's NAV of the property is lower

Just a few years back, when the market sentiment was weaker, most Singapore REITs were trading at significant discount to their NAV.  At the end of 2012,  REITs that are trading at discount to their NAV are much fewer. These include Fortune REIT, Suntec REIT, Frasers Commerical Trust, Saizen, LippoMalls Indonesia Retail Trust, Ascott and Starhill Global.