Thursday, 18 July 2019

Keppel DC REIT - To Sell or Not to Sell?



I've been invested in Keppel DC for some time now.

It's IPO is December 2014 was a first for data center REITs in Asia, and from the off I liked it. Since 2015, I've picked up shares in bundles and at the moment I hold around 52,000 of them.

To date this counter has been good to me. Currently, it's up about 80% and for the first time I'm feeling that perhaps the time is right to take the cash. As I've blogged about before, I try not to let emotions influence my investment decisions, but in this case I am wavering...

I should be! It's 80% up in the port. and this is a ton of cash that could be thrown somewhere else for a hell of a lot more yield that DC is currently offering (3.1%) That said, everything does seem to be stored on cloud these days, and I can't see this changing soon.

So what's a man to do when there's a recession on the horizon?

In cases like this I like to follow what I will call for the sake of chit chat and sounding smart: 'The Emotive/Rational Approach'.

What the living bejesus is this I hear you ask?

Well, as investors, unless we have the mind of Buffet. Lynch or any of the other investing greats we're pretty much doomed to let emotions rear their ugly heads and reek havoc sporadically in our portfolios.

This has happened to me a couple of times.

For example, late in 2018 I was reading tons of stuff about block chain technology etc. and got a bit freaked out. I had lots of DBS shares, and, of course (in my freaked head), they would be doomed once this new technology took over. I've still no idea why I acted as I did but I sold 90% of my DBS shares in a whirlwind of speculation and brow knitting.

'The big banks are fucked, I tell you' my mind screamed this at me, urging me to take action there and then.

And that's what I did. I sold almost all of my DBS, and you know what... I got lucky. This was in Oct 2018 when it was trading at $106. Thus, I exited with a large paper gain, but screwed up my long term plans to use DBS as a key blue-chip dividend player over 20 years.

So there you go... Probably the most stupid thing I have have done investment wise, but thanks to positive market sentiment I got away with it.

So anyway back to 'The Emotive/Rational Approach'. As you can seen from my horror story, acting on emotion is ridiculous and dangerous in investing. I learned an important lesson from this blunder and will not ever again allow myself to act like a man who take investing advise from a 14 year old.

'So son... This is the deal. Listen a minute. Blockchain is going to take over soon and banks will be made irrelevant in our current economic system, what do you think?'

'What...? Eh...? What's... Yeah, dad whatever, sell them and relax. All will be sweet.'

What I find works better is allowing emotion to guide me towards certain sector/area. For when there's hype and emotional charge around something, it acts as an impetus for me to be bothered reading about it.

As I've blogged about numerous times, I don't find investing particularly interesting, especially reading annual reports and other heavy waffle. My interests lie more in literature, meditation, music, art and the history of ideas... Forgive me if investing isn't my first love; it's merely a means to an end - a comfortable retirement.

That said, once emotion guides us towards something (as it has with me and gold recently) it's important to take a step back and think clearly and rationally. This involves reading loads of boring stuff, watching suits on Youtube throw their hat into the investing ring and, of course, breathing in the goodness of http://www.sginvestbloggers.com/ which is, if I'm honest, the best place to spend your time in blogsphere. Big up to the sginvestbloggers!

Reading and digesting various opinions about a stock allows the emotional fizz to dissipate. Then and only then are you in a position to think about buying - or selling - a stock.

This bring me back to the big question... Should I sell DC REIT when it's up 80%

Emotion whispers into one ear, 'Yeah, why not.' 

Rationality whispers into the other, 'What! Sell! Are you crazy? Think about the future of cloud over the next 5-10 years; think of the tailwinds my friend.'

Anyway, what will be will be...

What do you all think? To sell or not to sell?

6 comments:

  1. It is overvalued now. Sell it, buy back during the correction phase.

    ReplyDelete
  2. Thanks for your comment. I might just do that. Have a good day!

    ReplyDelete
  3. Hi Singapore Dividend Collector,

    My comment digressed from your blog post, but if you like philosophy, history, and literature, try googling Quintus Curtius (the blogger, not the historical figure, lol). :)

    ReplyDelete
    Replies
    1. Thanks for the comment Nerd. I've bookmarked the blog and subscribed to the Youtube channel. Always good to find out about something new and cool!

      Delete
  4. Wealthy traders are patient with winning trades and enormously impatient with losing trades.

    Many of times you want to lock in your gains in fear of losing out your current profits. If you are so concern I suggest scaling out some position and let the rest run. This way you still have exposure to this REITs.

    Trend is your friend until otherwise stated. Also don't try to catch tops rather wait till it turn then decide.

    ReplyDelete
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