Financial Freedom

United Engineers Launches Rival Bid for WBL - Another F&N in the making?

United Engineers (UE) is launching a takeover bid for WBL Corporation. Will this be like another F&N? UE's last done price was $3.33 while WBL's last done price today was $4.20. Looking at UE's price chart over the past few months, one wonders whether there might have been some leakage of news. The share price of around $2.40-$2.50 rose sharply from Nov 2012 onwards to today's current price of $3 over dollars. There was also a significant spike in volume.

Anyway, UE is looking for more recurring income and thus is looking to use up its war chest of money to buy WBL which has businesses spanning automotive, property and technology. Considering that UE is mainly involved in property development, they might be interested in spinning off some of these businesses subsequently. But that is probably anyone's guess.

It looks like the stock price of both UE and WBL is only likely to surge as shareholders await for the bidding price to go up just like the case of F&N.

Ascott REIT Dividends

Ascott REIT has gone cum dividend and will be paying out an advanced distribution or dividends per unit of 0.59 cents to 0.63 cents. The book closure date is on 5 Feb 2013. This advance distribution is to account for the private placement of shares.

In addition to the advance distribution, there is its normal distribution with book closure date on 5 Feb 2013 too. Each unit is entitled to 4.238 cents.

Based on both announcements of the distribution payments, Ascott REIT's dividends should range from 4.828 to 4.868 Singapore cents. Ascott REIT pays out its dividends on a semi-annual basis.

The yield is roughly around 6.2% if you ignore the dilutive effects of the private placement. OCBC has a HOLD call on this REIT with a fair value price of $1.36. Lim & Tan maintains its BUY call on this REIT.

I sold my entire holdings in Ascott REIT recently. Ascott REIT's price at closing today was $1.375.

Warren Buffett and others on Gold

I know that there are many people who are positive on gold and silver right now. So it is good to take a look at the other side of the story so that we do not get too much group-think.

In this video, Warren Buffett says he would rather own a productive asset than gold.

Some time back, Wells Fargo also gave its outlook on the gold "bubble" and warned investors on being over invested in it.

Must Watch! Crazy Fishing Methods

It is the weekend so thought I will break the monotony of it all and show some entertaining videos of people fishing.

This shows a homeless man fishing with stones:

Russian man ice-fishing with bare hands:

Catching wild salmon with bare hands:

Jeffrey Gundach's Picks and Outlook

Jeffrey Gundlach is co-founder of DoubleLine Capital LP and also its chief executive. He correctly predicted the subprime mortgage disaster and is one of the world's leading bond fund manager. In fact, he is sitting on cash because he sees bleak times ahead. He is favoring protection over growth in the next 1-2 years. He believes the opportunity for sitting on cash is much larger than if you were to be invested for growth now.

Regarding the European Union, he sees a possible break-up and does not think that the Euro is going to work. The question boils down to Germany being able to forgo the gains that it had obtained from the single currency.

He recommends buying hard assets like gemstones, art, commercial real estate. DoubleLine has also been buying the stocks of Chinese companies, U.S. natural gas producers and gold-mining firms. It is funny that he is now into equities given that he operates bond funds.

Liquidated Ascott REIT, Sabana REIT and Cross Timbers Royalty Trust

Liquidated my entire holdings in Ascott REIT, Sabana REIT and Cross Timbers Royalty Trust since they have all appreciated. Most of them were sold for a profit though I have held on to some for a few years while others were just bought recently.

Ascott REIT sold 15 lots at $1.415
Sabana REIT sold 2 lots at $1.18
Cross TImbers Royalty Trust sold 100 shares at US$30.789

My sense is that the REIT market in Singapore is already fairly valued and there are perhaps little opportunities for further increase. I could be wrong but thought it will be better to sit on some cash and await further opportunities.