ABA Abano health

[percy]

I have read a report by craigs "analysis of the hearing aid market".
Excellent.The area of greatest growth Asia.This is interesting as it is the area ABA are focussing on.
Most hearing aids are at present sold through electrical stores.As any deaf person will tell you to get the best from a hearing aid you need a plug moulded into your ear and the hearing aid computer set to suit your hearing.Surprise ABA do this while electrical stores do not. The ageing population means huge growth.This company has had outstanding performance.Asia will take time but the results will come.I seem to remember ABA was working with a major hearing aid manufacturer.

[percy]

I have just read the chairman"s and the MD's addresses to the AGM.I am sure the foundations for future growth in Australia and Asia are right.Not a lot of growth in the short term,but potential for huge growth in the longer term.Very pleasing.

[Catalyst]

Percy, I have also just read the Chairman's and MD's addresses to the AGM. My take on it was that ABA will not see much profit growth for the next 2-3 years because the Asian start-up costs will offset any growth in their other sectors. Audiology in Asia seems too much of a variable at the moment. If they can get it right and replicate the NZ audiology model then ABA will do very well but at the moment it's a wait and see for me.

[percy]

Catalyst,
Yes,will take time.The Asian market will take time.ABA model has to first prove itself in Asia before they really can ramp it up.very few deaf Asians wear hearing aids and the greatest world wide growth in hearing aids is expected to come from Asia.I expect the model will work. Then we will see huge growth.I do not know when the best time would be to buy in,or what value the shares are worth.What I do see is 1,000s or more outlets in Tawain,Hong Kong,Singapore and Malaysia being worth big dollars,and me owning part of it.This company knows what it wants to achieve,and has proven that they do what they say they will do.

[BWH]

What's going on? The shareprice has done nothing but drop over the last couple of weeks.

[blackcap]

SAM selling out?

[percy]

There are a lot of sellers and few buyers.Is in a down trend .The last report I read said it would be a long time before Asain hearing clinics were profitable.

[darksentinel]

Thank you Phaedrus et al for teaching me to (sometimes) recognise a downwards trendline break and sell at a profit!

[Phaedrus]

It is good that you are finding TA to be useful, DS - there certainly was a nice clear end to that spectacular uptrend, wasn't there!

ABA was down another 4% today.

The chart clearly shows when the "big money" got out as evinced by the marked "step" in the OBV and the big volume spike. Didn't they do well?
Note how even a simple Trailing Stop (usually the last indicator to fire) got you out well before the downtrend really hit its stride.

"Buy and Hold" sucks eh? - even with "good" stocks.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/ABA215.gif

[Arbitrage]

If it is "smart money" getting out, what does this say about Kingfish Ltd? 4% of its portfolio is ABA which they have held for quite some time.

[Phaedrus]

Perhaps it gives us a clue as to how/why Kingfisher fails to outperform NZ market Indices.

Their fortunes are washing in and out with the tidal ebb and flow of the market.

That's exactly what happens when you "buy and hold".

[ratkin]

Before rubbishing buy and hold why not draw a ten year chart , then tell us its been a poor investment? Buy and hold is a long term strategy , therefore a long term chart would be needed to judge the success of an investment. Dont forget to include the dividends , Plus the 25% share cancellation and return to shareholders at 5.23 in january.
Look forward to seeing it

[Phaedrus]

ABA has been a good investment and was quite a reasonable "Buy and Hold" candidate - until the uptrend ended.

They all do.

For 18 months now, "long-term" holders have been in the process of giving their profits back to the market.

[Lego_Man]

Who here actually buys and holds for 10 years?

[Arbitrage]

Me and Warren Buffett.

[ratkin]

Probably more than you imagine.

Can anyone here beat 1977 ? My father bought me some tesco shares as a reward for passing my "o" levels
He chose Tesco for me because i was going out with one of the tesco checkout girls at the time. I still hold them now.

Thank goodness she didnt work in Ratners :)

[Lego_Man]

Isnt Buffett's average holding period 2-3 years? Which would align nicely with Mr P's "medium-long term uptrend" ideas.

[Phaedrus]

Who here actually buys and holds for 10 years?


Me and Warren Buffett.'Fraid not Arb - maybe just you and Ratkin!

Measured over 26 years, Buffett's average holding time of an investment is only one year, with only 20% of the stocks being held more than two years. Nearly a third (30%) were sold in less than six months.

[POSSUM THE CAT]

Still have some I bought in 1987

[Arbitrage]

Buffett started buying Coca Cola shares in 1988. Apparently one of his most lucrative holdings which he still has today.

[Arbitrage]

However I still hold a miniscule quantity of Bridgevale Mining shares I bought in the dark ages which became Bridgecorp which became dust. A good example of not buying to hold however when the brokerage is greater than the sale price it makes things difficult to unload. Then along comes receivership...

[ratkin]

Biggest problem i find with buy and hold is the good companies being sold off. Often way too cheaply.
Im still peeved off that Frucor was allowed to go at a ridiculous price . Would of no doubt still owned some today
if people were not so short sighted as to give the company away. Still see plenty of V cans lying around the place.

[Phaedrus]

Buffett was doing really well out of Coca Cola - but then the uptrend ended. They all do.
KO must surely have been one of his worst performing investments over the last 12 years.
Ah, the joys and rewards of a "Buy and Hold" approach eh!

http://i602.photobucket.com/albums/tt102/PhaedrusPB/KO216.gif

I won't deface the chart with sordid technical indicators - suffice to say that the most primitive TA would have got you and I (well, me at least) out of KO way back in 1998.

[ratkin]

I see you not defacing it with dividend payments either , im sure they grew rather substantial after holding for thirty years, especially if reinvested


http://www.dividend.com/historical/stock.php?symbol=KO

[blackcap]

Im with you on this one Ratkin... charts can be made to show what you want them. If you bought Coca Cola in 1981 at $2 or whatever it was even if holding now you have done well.....

[ratkin]

Coca cola not that unusual either , go back and look at the fortune 500 archives for the 70s and 80s and you will
see many of todays top companies . If you had randomly picked ten from the top 100 and just held them i suspect
you would of done very well indeed, especially if concentrating on the popular brands of the time.
And even the ones that went bad such as Kodak , it would of been very easy to see the effect digital cameras would
have allowing plenty of time for an exit on fundamental grounds.

Heres a list of anyones curious.
http://money.cnn.com/magazines/fortune/fortune500_archive/full/1980/



Of course i wouldnt put abano healthcare in that category !!

[Phaedrus]

I'm sure dividends grew rather substantial after holding for thirty years, especially if reinvested....You would want to reinvest them in some other stock though - one that was going UP!

It is really surprising how small a dividend yield it takes to influence some people. Over the time that KO has been trendless, dividend yield has averaged out at about 2.08% pa. Call me unreasonable, demanding, avaricious, or unrealistic, but I expect my investments to provide an annual return far, far higher than a mere 2%! Why would you settle for such a derisory sum?

[h2so4]

You would want to reinvest them in some other stock though - one that was going UP!

It is really surprising how small a dividend yield it takes to influence some people. Over the time that KO has been trendless, dividend yield has averaged out at about 2.08% pa. Call me unreasonable, demanding, avaricious, or unrealistic, but I expect my investments to provide an annual return far, far higher than a mere 2%! Why would you settle for such a derisory sum?

I agree, but the massive growth achieved from the previous 17 years using buy and hold has been well and truly paid for. So any further growth thru a trendless share price plus a 2% divi would just adds to ones wealth. I'd be happy holding KO 20+ years.:)

[Lego_Man]

Yes, but you would compare your dividend yield to the current value of your investment.

So it would be irrelevant what your investment has done up to now, when you are talking about ongoing yield gain.

I almost tear my hair out when i hear people talk about their "yield to purchase price."

For example you had Coke shares worth 5000, they have now grown to 10,000. Current dividend yield is 2%. You can get 6% in the bank.

Why is it relevant what you paid for the shares initially? We are talking about future returns. All youre doing by holding at that point is giving your gains back to the market (relatively speaking) by compounding at an inferior rate than even the risk free rate.

[percy]

I just love talking to old guys,who tell me they are getting 50% divie yeild on this 65% on that,and 95% yield on the other.Good on them.If they had just put the money at the bank at 3 ,4 or 5%.in fact they have earned the right to talk like that,rather than those who chased high yields and lost the lot.So what their 50% yield is only 2% on todays purchase price.

[h2so4]

Yes, but you would compare your dividend yield to the current value of your investment.

So it would be irrelevant what your investment has done up to now, when you are talking about ongoing yield gain.

I almost tear my hair out when i hear people talk about their "yield to purchase price."

For example you had Coke shares worth 5000, they have now grown to 10,000. Current dividend yield is 2%. You can get 6% in the bank.

Why is it relevant what you paid for the shares initially? We are talking about future returns. All youre doing by holding at that point is giving your gains back to the market (relatively speaking) by compounding at an inferior rate than even the risk free rate.

Back in 1988 Wall Street was tearing its hair out when Buffett purchased more than $1b of KO.

Are you suggesting that Buffett should quit his shareholding and put the money in the bank to earn 6%?

I think there are other reasons why Buffett continues to hold apart from the $250m dividend.

[Lego_Man]

Back in 1988 Wall Street was tearing its hair out when Buffett purchased more than $1b of KO.

Are you suggesting that Buffett should quit his shareholding and put the money in the bank to earn 6%?

I think there are other reasons why Buffett continues to hold apart from the $250m dividend.

That's fine as long the dividend isnt used as continued sole justification for holding. Yield can only be based on current value, anything else is illogical.

If you arent expecting capital growth, and are saying a 2% return in future is OK because you've made money on the stock in the past - that's where i think the error is.

[h2so4]

That's fine as long the dividend isnt used as continued sole justification for holding. Yield can only be based on current value, anything else is illogical.

If you arent expecting capital growth, and are saying a 2% return in future is OK because you've made money on the stock in the past - that's where i think the error is.

I think what I am saying is that in 1988 Buffett paid for 20 years growth and now the 2% dividend is just a bonus. A bit like selling shares to free carry the rest, except he hasn't sold any.

[Lego_Man]

I think what I am saying is that in 1988 Buffett paid for 20 years growth and now the 2% dividend is just a bonus. A bit like selling shares to free carry the rest, except he hasn't sold any.

If that's his justification though, then he is wasting potential return by deploying capital in an asset that is earning sub-optimal returns. What has happened in the past shouldnt matter, you should invest in what will give the highest expected return in the future (adjusted for risk).

When you buy a share at a point in time, the past chart is only looked at as a guide. Who cares if the stock has doubled in the last five years, except insofar as it will adjust your projection of where it will go in the next 5 years?

[ratkin]

The dividend yield is actually 2.8%
Maybe Buffet not as hung up on the shareprice as you guys. Its quite possible the company is increasing in value even though the price is stagnant.
53% of profits are paid in dividends the rest are hopefully usefully emplyed increasing company worth, so buffett
probably more thn happy to hold.
Their main product a bit last century though , was a time everyone drank gallons of the stuff, now it all energy drinks

[h2so4]

The dividend yield is actually 2.8%
Maybe Buffet not as hung up on the shareprice as you guys. Its quite possible the company is increasing in value even though the price is stagnant.
53% of profits are paid in dividends the rest are hopefully usefully emplyed increasing company worth, so buffett
probably more thn happy to hold.
Their main product a bit last century though , was a time everyone drank gallons of the stuff, now it all energy drinks

Very possible:) Shareholder equity grew from $9.3b in 2000 to $24.8b in 2009.

[percy]

Well the additional A$30mil banking facility will speed up the dental growth in Aussie.
"WE ARE WELL POSITIONED to take advantage of this ENORMOUS market and the opportunities it offers for profitable growth."