Tuesday, December 16, 2014

Lippo Malls: Parachuting after the falling knife!

Lippo Malls today went as low as $0.305!

LMIRT is actually one of my first few investments that I made back in June.

After reading B's post and SI's post, I just wanted to vomit out the thoughts in my brain so it's not nagging at me to be expressed.

I gotta say, they are both hardworking investors and got down to crunch the numbers given the new information available. Even better yet, they are willing to share that information and their opinions publicly. Awesome folks.

Me on the other hand, I don't think I'm that detailed. Going down to the level of individual properties and acquisitions is just too much work for me. I understand my shortcomings of investment analysis and I think this is my greatest one. However, there are pros and cons to my (lack of) investment analysis.

Because I only read financial statements, it is easier for me to cover a much larger range of companies, since the information is very comparable. I guess my ideal style of investing is actually more along the lines of ghchua or Sanye. When I look at Sanye's portfolios, sometimes I feel weak in the knees and start having dirty fantasies. Yes, that's how weird it is. Their style seems to be to have a watchlist of solid companies and to accumulate them on weakness.

I guess the difference between myself and them is that I am casting a slightly bigger net, so I am catching more things that they would normally give a miss. My watchlist without REITs and trusts is 90+ companies. Doesn't matter though, everyone has their own style which reflects their own edges and also emotional control.

Anyway, back to LMIRT. I managed to pick up some lots on today's price weakness. The yield should be clearly pushing over 8% now.

Following my on previous train of thought, if I liked at 6.7% yield, I would LOVE it at 8% yield! And yes I do, hence the accumulation.

Compared to Saizen and Croesus which is in Japan that is systematically being destroyed by the economic nuclear bomb selfie unleashed by Shinzo (Kanin-)Abe and his government of delusional self-taught economics geniuses, Indonesia DOES have an infinitely better narrative compared to Japan 10-20 years into the future. A huge population, relatively young, with plenty of room for development and growth.

My very deep study into REIT literature has also told me that discounts to NAV are not commonplace. As a retail REIT, LMIRT is actually is a more premium and stable REIT sector. The only thing I see as a real risk in LMIRT is the currency effect. Everything else, I would like to imagine it is a mispricing of the market.

The numbers are attractive and the narrative is good. The only thing that is worrisome is the trend of almost no shareholder value. Will this be a dud? But if so many people are throwing in the towel now, this feels like the best time for me to go in!

Oh GMGH, you silly contrarian!

6 comments:

  1. Replies
    1. Thanks Jimmy, looking forward to more posts on your blog! Welcome to the scene!

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  2. Hey there!

    I was looking at LMIRT as well but then i havent have the confidence to get any yet. im looking into other stocks currently. anyway i've linked you as well. good read!

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    Replies
    1. Hi Jeff,

      Thanks! No need to rush into anything you don't feel comfortable with. Welcome to the scene! Maybe you can write your take on LMIRT as a future post? I would like to see others' point of view! It helps me in case I am too biased, haha

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  3. Hi GMGH

    You got a good price at $0.305. It's already better than existing shareholders and those placement shareholders.

    If the yield entice you at 6.5%, then at this price it would salivate you.

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    1. Hey B!

      Naw, I didn't manage to catch it right at the bottom, but close enough! I am really quite enticed by it! Did you take a nibble?

      With the small size of my SGX portfolio, LMIRT is already 20%. I am trying look at other counters now, because if it falls I will want to buy even more, and that would not be good for my diversification, haha

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