Seven Investing Tips from Dr.Neoh Soon Kean

Dr.Neoh Soon Kean is considered to be one of the successful stock investors in Malaysia. He is a founder of Dynaquest, a Penang-based investment and consulting firm.

He strongly believes that equity investment is the best way for an average person to accumulate wealth.

In the 29^th May 2017 edition of The Edge Weekly, he shared 7 investing tips to the general public. I would like to summarise the key points below:

1)    Best time to buy is when market is depressed and best time to sell is when it is the most optimistic (Be a contrarian).

2)  Buy progressively over a period of time as few people are good in market timing (Buy progressively).

3)      Do not concentrate into just few stocks unless you have very good stock picking skill. With a diversified portfolio, if 70% of the shares make good money, Dr.Neoh cited he will be very happy although he could possibly lose the remaining 30% (Diversify).

4)      Do not be frightened by market decline

5)      Do not be afraid to take profit if one or more of your stocks that have made substantial gains.

6)    Choose stocks with good dividend yields, low price-earning ratio and high cash flow. Few speculative stocks have produced profit in the long run (Buy on fundamentals).

7)    Nobody is perfect, even Warren Buffet makes mistakes (Do not expect to be right every time).

Overall, the investing tips shared by Dr.Neoh resonate well with me and it serves as a constant reminder. Nevertheless, investing process may not be as simple as the above unless we assume all investors are rational being, sometimes emotional aspect could cloud an investor’s investment decision, hence the investment result.

That’s why some investors sell winners in the equity portfolio, and hold on the losers because realising losses can be emotionally painful.

Some investors own 10 stocks but fail to view the 10 stocks from portfolio perspective. Even though 8 stocks make money, if the losses from the 2 stock are huge, we will still be suffering loss from total return perspective.

I will shed more light on emotional aspect of investing in the future J

How to Tap into Indonesia Healthcare Potential via REIT

Fancy a REIT that allows you to earn rental income from Indonesian hospitals?

A fellow friend of mine who is an astute investor, shared with me recently on this REIT that is listed in Singapore stock exchange, but owns healthcare assets across Indonesia, Singapore and South Korea. It has 18 hospital assets with 11 of them located in Indonesia.

The aim of this REIT is to acquire profitable hospitals across Asia and it is committed to distribute 100% of its taxable income. Hence, primary reason buying into REIT should always be earning the stable and rising stream of passive income, any capital gains are BONUS.

 

This healthcare REIT is ultimately owned by Lippo Karawaci, a well-established property player in Indonesia that is listed in Indonesia stock exchange. There is a strong pipeline of  hospitals under Siloam Hospitals ( part of Lippo Group) that can be injected into the REIT over time.

Since it has large exposure to Indonesia hospitals, investors don’t have to worry much on Indonesian Rupiah fluctuation as rental income earned from the Indonesian hospitals are denominated in SGD, whereas rental income from South Korea is denominated in USD.

For Indonesian hospital rental calculation, it is subject to formula of 2 x percentage increase of Singapore inflation, capped at 2% when it comes to yearly rental adjustment. Hence, if Singapore experiences higher inflation, it will have a positive effect on rental adjustment.

The REIT’s asset under management has increased by compounded growth of 16% since 2007 to 2016. It has also declared and paid out stable and rising dividends over time, which is good news for existing shareholders!

The REIT’s debt to equity ratio stood at healthy 30% region in 2016 with more than 90% of its debt priced in fixed rate; hence interest rate fluctuation is likely to have mitigated impact on this REIT.

Overall, I believe Indonesian growing population is a plus point to the healthcare sector.  This is a REIT that could be analysed further.

This REIT is listed in Singapore; hence dividend payment will be in SGD.