SMRT

[Jacmar]

Seeking for some advices here.

As mentioned previously, I have 15 lots @1.88 using my CPF funds. Although the price drop quite badly and hovering around the 1.6 region since last year, I am able to justify holding the shares as at least the dividend is paying me more than what CPF is paying me @2.5%. I can continue holding as the cost price will get cheaper over time and hopefully, the price can slowly crawl its way up to the breakeven point.

With the drastic cut of the dividend, the reason do not hold anymore. I cannot even justify additional purchase to average down as the dividend pay much lesser than what CPF is paying me. Of course unless I am hoping for capital gain... But that is not my purpose when I purchased using my CPF. I'm looking for something that is safe and also pays better than CPF.

I know my choice of choosing SMRT might not be correct as a safe yield stock. The increased in ridership/train revenues, rental over the past years made me believed it was safe... But I also know the due diligence I did for this purchase is very lacking.

As such, I have hope to rethink the current situation more seriously. Currently I am comtemplating on the actions (or non-actions).
1) Continued to hold and just hope for some events (fare increase? other sources of revenues?) to increase its share price again?
2) Average down another 15-20k when the price seems to reach its bottom?
3) Sell off and registered the loss (around 6K, 20%)


For 1), the dividends is paying lesser than CPF so basically the cost of holding is increasing as time goes by. Of course, dividends might go up in the future...
For 2), the above reason to preventing me from averaging down, unless the price dropped to $1 which means the yield will be 2.5% which is the same as CPF... provided the dividend don't drop also in the future...
For 3), it is painful but if that must be done to stem further loss... I shall do it.

At a crossroad now... Hoping to hear some advices from the more experienced people here before making a decision...

I have learnt a lot by reading the kind contributions made in the forum. I hoped sometime in the future, I will be knowledgeable enough to contribute back to this forum. Thank you very much in advance for you kind advices.

Let me share with you a story. my son just started his investment journey. Despite my good advise not to buy SMRT(at $1.74 then) he went ahead and I let him go ahead. He bought it base on emotional grounds(work briefly worked at SMRT!) Why I let him go ahead is that he needs to learn what's like to suffer a lost while it is still small. recently he cut loss at $1.55. For a small amt of tuition fees he has learn 2 lessons. Have you learn yours?