tag:blogger.com,1999:blog-28021668.post7007999306005244044..comments2023-10-12T21:12:41.408+08:00Comments on Value Investment - Musicwhiz's Journey: Musicwhizhttp://www.blogger.com/profile/10950754156386935254noreply@blogger.comBlogger18125tag:blogger.com,1999:blog-28021668.post-74402744793640751922008-02-19T23:44:00.000+08:002008-02-19T23:44:00.000+08:00Hello Raymond,Yep agree with you on that. Since I ...Hello Raymond,<BR/><BR/>Yep agree with you on that. Since I purchased FSL Trust, the USD has dropped from 1.44 to the current 1.411 but I did factor in an exchange rate of 1.30 in my computations when I purchased FSL Trust, in order to determine my yield tolerance.<BR/><BR/>The issue now is whether FSL Trust can have sustainable dividends moving forward as they have to service their debt and as mentioned by OCBC, the options and clauses in some of the long-term contracts are also not favourable to the trust. Thus, I may consider divesting and admitting that I had made an error of judgement as I did not fully understand shipping trusts; but this is subject to more reading and evaluation.<BR/><BR/>Regards, MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-52789583125517233722008-02-19T23:42:00.000+08:002008-02-19T23:42:00.000+08:00Hello java_funds,Yes, thanks for pointing it out. ...Hello java_funds,<BR/><BR/>Yes, thanks for pointing it out. OCBC's report on FSL Trust also mentioned this and it must have been an oversight on my part that I did not fully realize this. As it is, I may consider divesting if I do not feel comfortable with the long-term prospects of shipping trusts. I do also blame myself for doing incomplete research on this before I purchased; but at the time, I did not have the views of some very experienced forumers to guide me along.<BR/><BR/>Regards,<BR/>MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-3595704011917361312008-02-19T23:40:00.000+08:002008-02-19T23:40:00.000+08:00Hi Market Uncle,Sorry for the very late reply, but...Hi Market Uncle,<BR/><BR/>Sorry for the very late reply, but I've been reading up more on shipping trusts and FSL Trust lately to gain a better understanding. Suffice to say I do not 100% understand all aspects of the business model, and have yet to clarify certain doubts. I will leave a comment on your blog when I have more knowledge.<BR/><BR/>Thanks,<BR/>MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-44368098616506731852008-02-19T17:56:00.000+08:002008-02-19T17:56:00.000+08:00the USD weakness may erode your dividend yields.Th...the USD weakness may erode your dividend yields.<BR/>That is why I avoid stocks in USD denominations.<BR/><BR/>RaymondAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-28021668.post-26123028559900875672008-02-19T17:01:00.000+08:002008-02-19T17:01:00.000+08:00MW,pls note that FSL's distribution is based on op...MW,<BR/><BR/>pls note that FSL's distribution is based on operating cash flow which is BEFORE depreciation charges and only services the interest portion of their debt.<BR/><BR/>Despite 12% yield, your principal is eroding and their is a must re-finance deby by date (can't remember which year). <BR/><BR/>Be warned bro.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-28021668.post-331905511098111692008-02-14T23:06:00.000+08:002008-02-14T23:06:00.000+08:00Hi Musicwhiz, Just happen to find that you had al...Hi Musicwhiz, <BR/> Just happen to find that you had also analysed shipping leases.<BR/><BR/> I had done my own analysis and am still learning about it. <BR/><BR/> Please take a look at mine:<BR/>http://market-uncle.blogspot.com/2008/02/shipping-trust-comparing-fsl-and-pst.html<BR/><BR/>Mr icici brought up some valid queries that you might also find worth pondering. <BR/><BR/> In short, its the current yield sustainable and whether the shareholder returns from FSL in particular able to cover the capital deployed and cost of capital (expected rate or return).<BR/><BR/> Look forward to your views. Thanks!Market Unclehttps://www.blogger.com/profile/13926458268187430049noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-51215299869064556432008-01-29T03:01:00.000+08:002008-01-29T03:01:00.000+08:00Hello ao,For FSL Trust, since it is not a company ...Hello ao,<BR/><BR/>For FSL Trust, since it is not a company per se but operates similar to a business trust, the yield is the most important aspect for me as well as a long-term view. I did not analyze FSL Trust in the same way as a regular company, but did note its stable cash flows and chance for more yield-accretive acquisitions.<BR/><BR/>Regards, MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-1226446104756257052008-01-29T02:56:00.000+08:002008-01-29T02:56:00.000+08:00Hi Anonymous,It is true, I feel, that shipping tru...Hi Anonymous,<BR/><BR/>It is true, I feel, that shipping trusts in general are little understood and are not "popular" unlike high yield REITs. This is similar to the situation for REITS about 5 years ago as well. Hopefully, the general public will in time come to appreciate the high yield and steady cash flows and also to understand the risks involved in shipping trusts.<BR/><BR/>My investments are all long-term by nature and I do not have a specific time frame for exiting FSL Trust as I welcome the regular cash flows.<BR/><BR/>Regards, MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-62002566812585170572008-01-29T00:27:00.000+08:002008-01-29T00:27:00.000+08:00hi musicwhiz,i was wondering how did you go about ...hi musicwhiz,<BR/><BR/>i was wondering how did you go about calculating the intrinsic value of FSL trust? (the price you bought in and the margin of safety that you've used)<BR/><BR/>regards,.dead.pixels.https://www.blogger.com/profile/11195640328672911414noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-46688120574633847752008-01-28T20:02:00.000+08:002008-01-28T20:02:00.000+08:00Hi dsea,Thanks for sharing your perspectives, very...Hi dsea,<BR/><BR/>Thanks for sharing your perspectives, very enlightening indeed as I am still learning as well !<BR/><BR/>Yes, it will be necessary for FSL Trust to gear up, which they had already mentioned in their latest press release for 4Q 2007. They intend to achieve a 1:1 debt-equity ratio eventually and they have some room left for loans to raise funds to acquire more vessels.<BR/><BR/>Regards, MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-90675277980704025102008-01-28T20:00:00.000+08:002008-01-28T20:00:00.000+08:00Hi Mr. ICICI,FSL Trust purchased the ships based o...Hi Mr. ICICI,<BR/><BR/>FSL Trust purchased the ships based on the market value of the ships as at time of transaction. Similarly, Ezra and Swiber also sold off their vessels at prevailing market rates. I guess there is always an issue of whether the trust paid too much for the assets, but the fact that they can lease them out and generate stable lease income is the most important consideration. Seeing that such leases will last 7-9 years, I am not worried in the near-term about them having to purchase more vessels to continue their distributions.<BR/><BR/>Regards, MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-15219203306749107442008-01-28T08:02:00.000+08:002008-01-28T08:02:00.000+08:00Hi, bare boats or not, i am finding the reasons fo...Hi, bare boats or not, i am finding the reasons for the higher DPU vis-a-vis other business trusts. could it be fsl is little known so needs attention? could it be the current economic cycle for the marine industries? ... anyway, current trends do play a big part in these trusts and not sure how long the hype will comtinue. does this fall into "long term" or you have a specific and accurate timing of getting out of fsl?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-28021668.post-44216023403952500652008-01-27T23:42:00.000+08:002008-01-27T23:42:00.000+08:00Hello MusicWhiz & ICICITwo perspectives.a) Dividen...Hello MusicWhiz & ICICI<BR/><BR/>Two perspectives.<BR/><BR/>a) Dividend Yield of FSL trust depends on DPU & Mkt price. For now, its due to the fact that MKT prices has corrected substantially such that the dividend yield is being pushed up to abt 12%<BR/><BR/>b) My own view is that Asset yield, (ROA?), is charter revenue/purchase price. So far, revenue net of SGA expenses gives us abt 12.5 mil per quarter. Against the asset base of 609 mil, the management is extracting a CF yield of 8.5% pa <BR/><BR/>I think these 2 things are different. One is based on stk mkt price and others based on shipping rates.<BR/><BR/>Further to these, MusicWhiz, another issue still bugging me is that if the CF is fully distributed, the TRUST is not retaining any to buy future ships from Equity, but must gear up. Thoughts?dseahttps://www.blogger.com/profile/15659015361274204794noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-22622075052277431292008-01-27T22:08:00.000+08:002008-01-27T22:08:00.000+08:00hey musicwhiz,do you think FSL may have overpaid f...hey musicwhiz,<BR/><BR/>do you think FSL may have overpaid for their ships?<BR/><BR/>Do you think Swiber or Ezra may have overpaid for their ships? if not, why do you think so? Are there any ways we can check this out?Mr ICICIhttps://www.blogger.com/profile/12428931307225453905noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-13878636782178918112008-01-27T21:27:00.000+08:002008-01-27T21:27:00.000+08:00Hi Anonymous,Sorry to tell you this, but I can't f...Hi Anonymous,<BR/><BR/>Sorry to tell you this, but I can't for the life of me imagine how junk bonds and a shipping trust could be similar. Perhaps you could be so kind as to enlighten ? An objective appraisal of any investment is always encouraged, so please share your thoughts and insights here.<BR/><BR/>Thanks,<BR/><BR/>MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-47114157074889964072008-01-26T13:59:00.000+08:002008-01-26T13:59:00.000+08:00Hi java_funds,Hmm, ok maybe I got it mixed up :P B...Hi java_funds,<BR/><BR/>Hmm, ok maybe I got it mixed up :P But I think FSL Trust will pay out 90% from FY 2008 onwards. Yes, I had factored in a discount should the US Dollar fall further (as at this writing, it is about 1.4198).<BR/><BR/>Regards, MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.comtag:blogger.com,1999:blog-28021668.post-40941306934110591112008-01-26T09:51:00.000+08:002008-01-26T09:51:00.000+08:00Has it ever cross your mind that a yield above 10%...Has it ever cross your mind that a yield above 10% give one the idea that its similar to junk bonds?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-28021668.post-30617203916498696312008-01-25T10:57:00.000+08:002008-01-25T10:57:00.000+08:00I tot it was Rickmers that gave out only 75% inste...I tot it was Rickmers that gave out only 75% instead of PST. In any case, I think FSL is a good buy but I suggest u take a 15-20%additional discount on expected yield becoz of forex.Anonymousnoreply@blogger.com