OCA - Oceania Group - retirement villages

[SailorRob]

Balance owned his shares for a couple weeks before selling them, I believe he bought them at 59c.

Your average is less than 59c? Jeez you must own quite a few shares now if you've managed that... Unless you are counting your covid shares?

Yep counting Covid shares, will check average this round I think I dragged it well down into the 70's.

Well picked up that it would take HUGE purchases to pull down to less than 59c.

A basic but sound mathematical competence is important in this game.

Earlier when you talked about searching for float, what's one reason why it may do you no good at all?

[Daytr]

Thanks for this link Balance, I have just been over it.

It is anything but clear to me why OCA is 'out of favour' particularly after focusing on pages 25 to 30. Having only the logic of a swamp newt this is unsurprising.

Also, if whatever you have found here is the reason it's out of favour, is it just a coincidence then, that OCA has traded down in LOCKSTEP with all of the listed property companies????

Massive coincidence.

Here is a quote from those pages;

'The sale of an ORA on a care bed is essentially the capitalisation of an alternative daily PAC and enables capital to be recycled'.

Interestingly this also highlights the point the Day Trader is trying to make, but he is getting confused with opportunity costs. It's like disagreeing with Buffett that over the years his cost of float has been negative by saying that the equity he has in the insurance business could instead be used to buy houses and rent them out... Well yeah... OCA needs properties to create the float while insurance companies need capital. Each has other uses yes.

I'm not confused at all. That opportunity cost is very real. You on the other hand think it doesn't exist.
Zero cost loans when you give up 4 - 5%. 🤣
Do the simple math buddy.

[Baa_Baa]

Mate I have stated my argument over & over & got abused for it, and I actually think OCA will do OK.

Take a look at yourself.

Starting to think RYM might do better though but need to do more research.

Did you notice that I quoted Balance, not you? Are you really this insecure apparently taking that as some personal criticism of yourself?

Since you raised it though, I think your argument is flawed with numerous repurposing of accounting principles with language and definitions not found in the business model or financials, and riddled with logical fallacies as pointed out by Ferg.

I think the abuse you’ve received is mild but warranted and I don’t care one iota what you think or say anymore about OCA, it’s all bogus nonsense.

And don’t call me “mate”, you’re not,

[Cupsy]

I'm not confused at all. That opportunity cost is very real. You on the other hand think it doesn't exist.
Zero cost loans when you give up 4 - 5%. 🤣
Do the simple math buddy.

This is your rent scenario right? are you actually giving up the full (if any) 4 or 5 percent when the dmf Is taken into account though in your scenario?

[Daytr]

Did you notice that I quoted Balance, not you? Are you really this insecure apparently taking that as some personal criticism of yourself?

Since you raised it though, I think your argument is flawed with numerous repurposing of accounting principles with language and definitions not found in the business model or financials, and riddled with logical fallacies as pointed out by Ferg.

I think the abuse you’ve received is mild but warranted and I don’t care one iota what you think or say anymore about OCA, it’s all bogus nonsense.

And don’t call me “mate”, you’re not,

Someone is titchy.
Nope, I am yet to see any proof from Ferg that what I said is a fallacy. Just saying no you don't agree or you are wrong without backing it up means nothing. I'm happy to be corrected with evidence.

I'm also not the one creating free loans out of sales. Or a float theory as old as man reinvesting in a business.
Wow that's really new.... 🙄

[Daytr]

This is your rent scenario right? are you actually giving up the full (if any) 4 or 5 percent when the dmf Is taken into account though in your scenario?

No it's not including the DMF. It's just a straight 4 - 5% opportunity cost on the capital. Instead of borrowing from the bank at 8% or whatever they are 'borrowing' from the occupier at the rental yield that ICA otherwise would have got.

OCA still get the DMF less refurb costs at the end of the day.

Either way it's a good deal for OCA, especially with interest rates so high. It's just not free.

[nztx]

must be a good deal if the tax man is no longer collecting any DWT at the 33% full whack

[Cupsy]

No it's not including the DMF. It's just a straight 4 - 5% opportunity cost on the capital. Instead of borrowing from the bank at 8% or whatever they are 'borrowing' from the occupier at the rental yield that ICA otherwise would have got.

OCA still get the DMF less refurb costs at the end of the day.

Either way it's a good deal for OCA, especially with interest rates so high. It's just not free.

My point is your opportunity cost you talk of is not 4 to 5% due to the earning the dmf, the dmf value over the average occupancy time frame you mentioned earlier is going to be close to your opportunity cost I'm guessing? And the refurb costs is irrelevant is it not, as a rental also requires maintenance to be paid for by the land lord.

So your rental scenario would be the return you mention only, less maintenance costs vs the current ora up front, with the dmf earned. And one thing you haven't mentioned is the difference of getting the cash up front vs paid weekly or monthly over the course of the rental agreement (in your rental scenario).

[Cupsy]

No it's not including the DMF. It's just a straight 4 - 5% opportunity cost on the capital. Instead of borrowing from the bank at 8% or whatever they are 'borrowing' from the occupier at the rental yield that ICA otherwise would have got.

OCA still get the DMF less refurb costs at the end of the day.

Either way it's a good deal for OCA, especially with interest rates so high. It's just not free.

My point is your opportunity cost you talk of is not 4 to 5% due to the earning the dmf, the dmf value over the average occupancy time frame you mentioned earlier is going to be close to your opportunity cost I'm guessing? And the refurb costs is irrelevant is it not, as a rental also requires maintenance to be paid for by the land lord.

So your rental scenario would be the return you mention only, less maintenance costs vs the current ora up front, with the dmf earned. And one thing you haven't mentioned is the difference of getting the cash up front vs paid weekly or monthly over the course of the rental agreement (in your rental scenario).

Just so there is no confusion, respectfully, I'm saying that I think the opportunity cost you are talking of in your rental scenario does not exist, for the reasons outlined above.

[ValueNZ]

Yep counting Covid shares, will check average this round I think I dragged it well down into the 70's.

Well picked up that it would take HUGE purchases to pull down to less than 59c.

A basic but sound mathematical competence is important in this game.

Earlier when you talked about searching for float, what's one reason why it may do you no good at all?

Float is just leverage, so earning a loss or insufficient return relative to what you paid for it can cause some hefty losses. Mohnish Pabrai talked in a podcast about paying too much for an insurance company whose float was heavily regulated and they were unable to earn a sufficient return on it.

I'm well aware that it would take huge purchases to bring down your current average to below 59c... But if there were ever any time to heavily concentrate, now would be the time. Your other investments have likely gotten closer to fair value whilst OCA has gotten further away.

Anyway that's all I have time to write as I have to get back to work.