First blood!

Im not talking about DoTA anymore.

So I just acquired 1 lot of shares of this following company:

http://www.cdlht.com/

So basically, its a REIT ( Real Estate Investment Trust ) in the hospitality sector. To put it simple, this particular trust have some stakes in some major hotels like Orchard Hotel etc. So it will generally distribute 90% of its profit as dividends to shareholders. Profits generally come from tourists coming to Singapore and lodging in either of their hotels.

Given falling tourist rates and gloomy global economic prospects, why did I buy? I remembered my brother told me to have damn good reasons to convince yourself why you buy an asset.

a) ONLY hospitality trust -> monopoly in this field. I love monopolies. The fact that they are the only hospitality REITs around means they generally earn alot.

b) CDL H Trust: the fact that CDL was used means it had implicit protection from its "parent" company, City Development Private Limited.

c) Low gearing ratio: Debt/Asset is very one the lowest among the other REITs. In such bad economic condition, refinancing any debts ( what you owe people ) is very difficult, especially from banks. So the less money you owe others, the better.

d) Low P/BV (Price/Book value): I dunno if this indicator is widely used in property/reits. But generally, it means for every 1 dollar of value the company worths, how much are you going to pay for it. I.e: P/BV = 2 means for every 2 dollars you pay, you get 1 dollar of the value of the company. So right now, its P/BV ratio is at historically low of 0.4?! So I paid 40c for every dollar of the companies value, with a steep discount of 60%!

e) I cant really foretell how will tourism be like in the next 2-3yrear. But I would like to feel bullish, given SG won the rights to host YOG ( Youth Olympic Games ) and the building a couple of Casinos.

I mean well, I cant foresee if there's anymore further depreciaion of asset values, which will affect hotel values -> affect the share price. Nor I can foresee SG going to be a ghost town in the new future.

But I would like to equites a chance. Like what Warren Buffett say, buy when others sell. Buy when others fear. And buy only what you know. I wouldnt say I 100% know hospitatality business model, but I took calculated risk in buying in buying this.

And I certainly hope SG will tide out from this financial turmoil so that a) I will get a job when I grad and b) my share will appreciate! =)

Oh ya, I bought it at $0.525/share. So I would say this is the most expensive investment I made so far.

P.S: Please don't hound me if you lose money over this stock. =S ( Choy! )