Time flies and it’s time for another quarterly update.
Before I start the update, I just want to say a few words about Wilmar International.
I received a few comments from readers at Wilmar asking if I had any updates on the business.
Some would like to know if it is a good time to add to our Wilmar investment.
Wilmar remains deeply underrated and my previous analysis still stands.
Value is easy to see, but where stock prices would go is much more difficult.
In terms of valuation, buying Wilmar today is cheap.
However, cheap could get cheaper, and since I already have a significant investment in Wilmar, I feel no urgency to buy more.
I am just waiting and if the stock price reaches $3 per share I would buy more.
This is an important level of support and is also where insiders usually add to their positions.
Undervalued could remain undervalued for a long time.
So, I like that Wilmar pays significant dividends while waiting for value to unlock.
Now, I will talk to myself about the passive income received in the 1st quarter of 2024.
As I’ve said before, the 1st and 4th quarters of the year are always weak for generating passive income, as most businesses pay dividends in the 2nd and 3rd quarters of the year.
Q1 2024 is no exception.
It’s even weaker this year because I received lower income from my AEEAP investments, which is not unexpected.
I did not participate in the matter of the rights to strengthen the balance sheet of AAEEEEAP.
IREIT Global delivered lower returns as their Darmstadt property remains mostly vacant.
Sabana REIT generated lower income as it retained 10% of distributable income to cover the cost of internalizing managers.
Capital and China Trust generated lower income as China struggles even as the RMB weakens.
Q1 2024 passive income was $39,142.25
This is about 5.4% lower than the $41,364.36 received a year ago.
In absolute dollars, that’s a decrease of $2,222.11, or $740.70 per month.
I think I will live. ;PI
Before I forget, I should also say that I expect to receive less passive income a year from now, all else being equal, as I sold a significant portion of my Sabana REIT investment recently.
Since Sabana REIT pays semi-annually, my passive income 6 months from now will also be affected, but the higher dividends from my investments in DBS, UOB and OCBC should provide a cushion.
Although the passive income in Q1 2024 was lower, I am still quite comfortable.
I was worried during the pandemic because dividends and interest income dropped and quite drastically.
Regular readers know I have a large emergency fund, but if the pandemic were to last much longer, even that could be depleted.
Savers are lucky that interest rates are higher now, which means we actually get interest income.
This isn’t something I’ve blogged about before because for most of the years I’ve been blogging, interest rates have been too low to make a meaningful contribution.
These days, I get about $20,000 a year in interest income.
This is not considered in my quarterly update.
I thought it was worth mentioning because a higher interest rate environment isn’t all that bad.
Charlie Munger previously said that it takes character to sit on money and do nothing.
There are worse situations.
So what do I do as my cash position grows.
I’ll just wait for the next investment opportunity.
If AK can do it, so can you!
