Croesus Retail Trust

[Salty]

I keep seeing value investors saying this is not value investing stock etc.
Then I see Croesus corner stone investor includes Target asset management.
That's the famous value fund in there.

Different shades of value really. Haha

[KopiKat]

I keep seeing value investors saying this is not value investing stock etc.
Then I see Croesus corner stone investor includes Target asset management.
That's the famous value fund in there.

Different shades of value really. Haha

This one?

Can see their recent performance since 1-Jun-11 (pg11). Perhaps too short a period to see performance comparable to their previous one which ran from '96 to '10 where CAGR was 17.59%. Or perhaps a different team? I see many in the team with Engineering background. Interesting!

BTW, did anyone actually posted that this is not a Value stock? I see many pointing out the risks + certain aspects of financial engineering and cautioning others who are focussed mainly on the high Yield to go in with their eyes open...

[paullow]

I keep seeing value investors saying this is not value investing stock etc.
Then I see Croesus corner stone investor includes Target asset management.
That's the famous value fund in there.

I happen to click that link which you provided. It says:

@@@@@

Highly Disciplined
– ‘Careful and Bold’ approach
– Concentrated portfolio (Around 30 stocks)
– High level of conviction

@@@@@

With that I stopped reading further.

To me, it doesn't make sense. Concentrated portfolio ?30 stocks.

Then what is not concentrated? 100 stocks?

[Salty]

Oops sorry I usually fast to jump to conclusion.
That's my bad point. Sorry Kopi bro!

I thought when even tikam also cannot means not value stock.

Just pointing out somehow there's this respectable value fund inside

[felixleong]

value lies in the eye of the beholder, at 8% yield maybe
but at the current 6.5% the value is definitely a lot less liao haha

[cyclone]

I keep seeing value investors saying this is not value investing stock etc.
Then I see Croesus corner stone investor includes Target asset management.
That's the famous value fund in there.

I happen to click that link which you provided. It says:

@@@@@

Highly Disciplined
– ‘Careful and Bold’ approach
– Concentrated portfolio (Around 30 stocks)
– High level of conviction

@@@@@

With that I stopped reading further.

To me, it doesn't make sense. Concentrated portfolio ?30 stocks.

Then what is not concentrated? 100 stocks?

Sorry, off-topic.
Bro Paullow, I saw your post was blank. I wondered why.
It was because you missed the closing tag [/quote].

[felixleong]

I keep seeing value investors saying this is not value investing stock etc.
Then I see Croesus corner stone investor includes Target asset management.
That's the famous value fund in there.

I happen to click that link which you provided. It says:

@@@@@

Highly Disciplined
– ‘Careful and Bold’ approach
– Concentrated portfolio (Around 30 stocks)
– High level of conviction

@@@@@

With that I stopped reading further.

To me, it doesn't make sense. Concentrated portfolio ?30 stocks.

Then what is not concentrated? 100 stocks?

May I know what is the size of the fund?

I think if its like 1 to 10 million dollar fund, then maybe 30 stocks is not so focused

if its like a 1 to 10 billion dollar fund, 30 stocks is really very focused

[MINX]

What you modestly call a tikam is actually a value arbitrage with margin of safety. I wrongly referred to it as yield arbitrage previously but realised my error after reading the book you recommended.

For me, the sudden realisation was that we were happily employing a crude and tiny subset of his bigger repertoire of "tricks"!

---

I agree that one should not get carried away and ignore all the risks. But if you want to make some money, you need to take on some risks, at the end of the day, if you are comfortable with the risk reward, then you buy. I believe many would be more than happy even with 6% yield, compared to the 4+ % yield from the Sriets now or the < 1% FD rate, hence I believe CRT's share price still have room to run.

Was it Warren Buffett who says that "The greatest risk comes from ignorance" ? You're using only Yield as your only/main screen?? I used to be overly focussed on Yield as the key screen prior to the '08 major correction. Some of the High Yield stocks (8% to 10%) I happily accumulated were FSL, Rickmers & MPS. Although I did get to enjoy the high yield for a few quarters and did see some Capital Gains (mostly unrealised) for a while, all of them dropped and never recovered from the '08 market correction. They never really recovered and dropped even further during the next market correction in '11. Along the way, Dividend payout was slashed and some even stopped. By the time I sold, I could only roughly recover back 10% to 20% of my original amount, even after factoring in the high Yield collected in the 1st few periods...

Even for REITs, I had Allco (now FCOT), MIREIT (now AIMSAMPReit), Cambridge,... (all of them were amongst the highest yielding REITs) which dropped to a fraction of my original purchase price during the same period...

The key lesson I'd learnt from this painful (and stressful) episode was that Yield should not be used as the main deciding factor in any investment decision. Rather, look at the fundamentals first...

<Refer to the quoted article posted by 'swakoo' below>

“The music is clearly playing for yielding assets as this is a classic carry trade, with low debt costs and high yielding assets,” said Mr. Gibson, whose firm has GBP65.6 billion under management, and isn’t planning to buy Croesus units. But he adds, “if we look at similar deals across the world in the past, over the long run, these strategies have tended to come unstuck, so investors should exercise caution.”

I have no doubts that many of the recent High Yield IPOs will continue to do well for a long while more and make people like me look stupid. But, who cares... As long as I sleep well... There're always many other safer tikam opportunities out there... Those I won't lose sleep even if I have to hold long term...

Good Luck!

I believe in 08, all shares were badly hit, not just high div yielders. But i take your point about ignoring risks & fundmanetals. At the end of the day, I believe you need to take on some risk if you want to earn higher profit, no? To be very safe, don't invest at all. So everyone seek their own risk/reward return, no right or wrong, if you make money, you are ultimately correct.

[d.o.g.]

I happen to click that link which you provided. It says:

@@@@@

Highly Disciplined
– ‘Careful and Bold’ approach
– Concentrated portfolio (Around 30 stocks)
– High level of conviction

@@@@@

With that I stopped reading further.

To me, it doesn't make sense. Concentrated portfolio ?30 stocks.

Then what is not concentrated? 100 stocks?

Concentration is a relative term.

Target's latest newsletter for April 2013 indicates the fund size is US$851m. The breakdown shows 30 holdings:

8 are small cap (under US$1b) making up 15% of the fund
14 are mid caps (US$1-5b) forming 51% of the fund
8 are large caps (over US$5b) taking up 24% of the fund.

The top 8 positions are 42% of the fund.

At this kind of size, it is not unusual for funds to have 50 positions or more. Relatively speaking, Target's portfolio IS concentrated. Target's old fund was over US$2bn at its peak, and it was holding about 40 positions. That also made it a concentrated fund among its peers. For example, Tweedy Browne's Global Value Fund is US$6bn and holds 101 securities. Their Global Value Fund II is only US$282m and holds 88 securities. Their original Value Fund is US$600m and holds 47 securities. Third Avenue's Value Fund is also considered concentrated, it's US$2.6bn and holds 36 stocks. Ditto David Winters' Wintergreen Fund which is US$1.6bn and holds 31 stocks.

As for why Target bought, remember that the purchase price is a big part of future returns. They could get a big allocation at a relatively good yield, that gave them a margin of safety. With the reach for yield in today's low interest rate environment, the odds for an IPO pop were good. Whether they hang on to it is a different matter.

Ditto for their investment into Courts Asia - they got a good price, so it was (fairly) easy money. Of course, Target had to earn their stripes first, to get to the size where they get invited to participate in IPOs.

[Boon]

I happen to click that link which you provided. It says:

@@@@@

Highly Disciplined
– ‘Careful and Bold’ approach
– Concentrated portfolio (Around 30 stocks)
– High level of conviction

@@@@@

With that I stopped reading further.

To me, it doesn't make sense. Concentrated portfolio ?30 stocks.

Then what is not concentrated? 100 stocks?

Concentration is a relative term.

Target's latest newsletter for April 2013 indicates the fund size is US$851m. The breakdown shows 30 holdings:

Global Investment Limited (GIL) holds a portfolio of "Asia Listed Equities"

Market Value as at 31-March-2013 = around SGD 56 million

Number of securities = 51

http://info.sgx.com/webcoranncatth.nsf/V...3003D09A3/$file/16c_20130506_CurrentAssetReview1Q2013.pdf?openelement