General Discussion, page-785

@VYR

Thanks V for your insights.

Agree wholeheartedly with your observations regarding gearing and debt. This is what led me to VMT (that together with the technology story and a past life as a keen motorbike rider). I like Charles' financially conservative approach. It is what I would do myself.

I think we've both had some valuable investment lessons during our lives. My hardest ones date back to the Oct '87 crash. For many years after that I stuck to term deposits and direct property investment (positive cash flow - I was too risk averse for negative gearing). I only got seriously back into the stock market after I retired.

I'm completely out of direct property now. Far too much like hard work. But my familiarity with the sector draws me to the listed REITs in spite of some reservations. I bought in when the market plummeted in the early days of COVID.

Something to watch out for with REITs, is the influence of institutional investors whose interests do not closely align with retail investors. Their main imperative seems to be to find places to park investor capital, so they regularly seek to grow the funds with large CRs that almost invariably dilute the stock. This feeds in to what you say about above market rents. In a nutshell, the institutions are not strongly motivated to ensure that new fund investments are nett value accretive, with the result that they hardly ever are.

I hold only 3 (out of 14) stocks that are not strongly cash-flow positive. All are tech start-ups, of which 2 look poised to take off within the next year or so. However, these are also stocks that I have been invested in, and closely following, for quite a while (circa 7 years), drawing on perhaps the most valuable lesson I learned from '87 - namely patience.

Cheers