You say you're not a good investor, yet you bought at $1.67...

You say you're not a good investor, yet you bought at $1.67 because you knew these shares were under-valued. At the same time, the popular press and fund managers were selling and saying to NOT buy stocks like Aventus. As Peter Lynch says, it's not the PhD in economics who has the edge but the lay person who can see what's happening in real-life and respond to it. You've doubled your money (from 10k to 20k) from a free stimulus cheque; and on a 20c per unit per year distribution, now collect 12% on that money indefinitely. That doesn't sound very dumb to me! You could have left it in the bank and collected your zero-point-something term deposit interest over twelve months and it might be worth $10,200 today.

I vaguely remember holding for a year, then selling, Brett Blundy's Sanity / Bras 'n' Things before the GFC and losing money on it. I remember thinking at the time that he ended up doing okay, but shareholders lost money. I can't even remember what happened with it. Perhaps a merger or take-over after a long period of under-performance. This is a pretty weak anecdote. It was 15+ years ago. I can't help but wonder how this merger is in the average retail investor's interests. It feels like an opportunity for senior managers to secure a better job, Blundy to sell-down his holdings, HMC to increase Funds Under Management (FUM), the investment banks to charge consulting fees, etc. I've been annoyed about this so-called merger (take-over) since it was announced.

Having said all that (again!) I reckon that logically we're going to be okay -- despite my distaste for this situation.

Remember back to late November or early December... One of the big REITs -- I can't remember which one -- announced a big lift in NAV / NTA and all the A-REITs seemed to lift? The NTA increases are continuing, and inflation is only making it worse (helping?!). Many of the A-REITs have been declaring 10% growth in NTA per year, making the REIT more valuable and lowering gearing. Last week, Vicinity (VCX) announced its half yearly report and shares jumped 10% on the day. Scentre is up about 12% in three weeks. They are just shopping mall REITs (very similar to HDN) yet Mr. Market has decided they're on the "buy" list in February. GPT's announcement seemed weak. CQE always performs well. CLW produced an excellent result (under-appreciated and under-valued in my opinion).

I have $1.41 written in my notebook as the combined NTA for a merged Aventus / HDN. Don't ask me where I got that number from as I would struggle to find it again! It would have been one of the presentations released by Aventus. I haven't been able to find out what the proposed dividend of the merged entity will be, the dividend dates, or if a re-investment plan will be active. I assume it will be about 8.5c per unit per year, and @ the current price of $1.34 we'd be on a 6.3% yield. Hopefully, distribution information will be provided in this week's investor conference call and to the ASX. It is far from being all bad.

If the HDN result is good on Wednesday, and some of the uncertainties are cleared up, I wouldn't be surprised if HDN shares rise in a similar way as VCX and SCG did. Higher interest rates do increase our cost of debt, but the rental contracts would have CPI increase clauses in them. And Australian shoppers are sitting on a lot of cash, which they saved during the pandemic. AVN / HDN isn't a screaming buy for me at these prices but I definitely see them as being under-valued. If we have a bad day on the market tomorrow and Tuesday (Russia / Ukraine?) and the prices drop sharply with people getting out prior to AVN being removed from the ASX, we aren't far from my target to buy more. If it gets to $3.00 I'll be buying more. I haven't bought any shares in any company this year, preferring to keep a large percentage of my portfolio as dry powder In my case, this money would only be sitting, stagnating in the bank anyway.

As per the release after Friday's trade it looks like Wednesday is the final day of trading for AVN. So whatever shares you (and I) have at close of trade on the 23rd, is what will be transferred to HDN and refunded through the 28.5c special distribution.

We just need a bit of certainty regarding future combined group earnings and distributions, and perhaps an increase of NTA from HDN's assets at Wednesday's meeting, then HDN units should go higher (in my uninformed opinion). Don't forget, we will also be eligible for ASX200 inclusion. One final thing I realised....we are barely a month away from (hopefully) receiving another distribution cheque which lowers the initial purchase cost futher. This is one thing I like about holding a percentage of my portfolio in REITs: If there is a unit price downturn, those cheques keep on rolling in every three (or six) months like clockwork.

All the best to you, sir.