OCA - Oceania Group - retirement villages

[SailorRob]

I say it again - beware of Dandelo.

Heed my advice, I beg ya.

Yep I'm being a massive idiot and falling straight into the trap!

[Daytr]

Haha.
I going to be a bit sexist now, but sounds like an old woman's club with nothing better to do.
But please by all means follow their advice if you want. I don't care one way or tother.

[Daytr]

Strong suggest anyone genuinely interested in understanding how OCA's business & profitability/loss model works to go through this presentation by OCA.

The presentation was made in 2019 (before the surge in sp in late 2019/early 2020, the collapse in 2020 and then, spectacular sp increase in 2020/early 2021) and is still as relevant today as it was then in understanding OCA.

In particular, go through pages 25 to 30 and it should become clear why OCA is so out of favour.

https://images.oceaniahealthcare.co....Conference.pdf

Yep still very relevant.
I do wonder if the shift out of care suites might hurt certain players, as many sign up to these deals knowing they have a place secured right through to the end.

I also wonder if OCA's 30% DMF is hurting them on the sales front when others are offering 25% etc. On a $1.4M villa that's a lot of dosh out of the inheritance.

[ValueNZ]

Good catch.

As for my bond math, you really need to teach your 'lost soul' mate ValueNZ how to value bonds properly instead of how to lose $$$ in OCA?

I haven't lost anything in OCA.

If OCA had risen 30% instead of fallen 30% from where I bought my first shares, and I had bought the same $ value worth of shares, I estimate that I'd have about 13,000 fewer shares. The underlying business has only grown, so too my estimate of the discounted cash flows. Tell me again how I'm worse off?

[Balance]

I haven't lost anything in OCA.

If OCA had risen 30% instead of fallen 30% from where I bought my first shares, and I had bought the same $ value worth of shares, I estimate that I'd have about 13,000 fewer shares. The underlying business has only grown, so too my estimate of the discounted cash flows. Tell me again how I'm worse off?

Your estimate which is wrong and ignorant of what's actually happening with OCA.

Stop blindly following those who think they know but actually are ignorant. Read OCA's presentation and work through the implications of why & how its business model is seriously flawed.

Seriously, if you do not know how a bond is priced (simple as), what chance have you got of understanding OCA's highly complex and opaque financials and operations?

Logic of a swamp newt.

[ValueNZ]

Your estimate which is totally wrong and totally ignorant of what's actually happening with OCA.

Seriously, if you do not know how a bond is priced (simple as), what chance have you got of understanding OCA's highly complex and opaque financials and operations?

Logic of a swamp newt.

Who says that I don't know how to price a bond... Same as any other investment, sum of discounted cash flows. Discount coupons and principal to find a NPV.

No, logic of a swamp newt would be believing that markets price securities efficiently and still buying Synlait bonds. That would be absurdity, considering the market is/was (haven't looked at in a minute) pricing in a serious risk of defaulting. Now if you believe that the market doesn't price securities efficiently, that would be a totally different case.

[mike2020]

Just estimate what the rent would be on a villa etc over a 7 year average vs the 30% not payable back by OCA, less what refurb costs OCA need to pay.

This is assuming no capital gain on the resale.

Yeah na. Rent your using capital with either interest payable or use of. Minus expenses. My mum still pays monthly fees even after buying an ora. Your baiting .

[Daytr]

Yeah na. Rent your using capital with either interest payable or use of. Minus expenses. My mum still pays monthly fees even after buying an ora. Your baiting .

I'm not baiting anyone, just opening blindspots and not buying into the magic show.

Your Mum bought the unit right?
I'm saying what would she pay if she rented it rather than bought it? $600 a week? $800 a week? More? Well that's the cost OCA is paying for use of the capital. Still far cheaper than the bank, but it's a cost.

The monthly fees she pays now would be the body corporate I would assume.

[SailorRob]

Your estimate which is wrong and ignorant of what's actually happening with OCA.

Stop blindly following those who think they know but actually are ignorant. Read OCA's presentation and work through the implications of why & how its business model is seriously flawed.

Seriously, if you do not know how a bond is priced (simple as), what chance have you got of understanding OCA's highly complex and opaque financials and operations?

Logic of a swamp newt.

Don't let the insults bother you ValueNZ. Balance works for someone else to make his money, rather than directly from his investing nous.

You will be out of that situation probably before he is.

ValueNZ can you tell me the value of a bond where you don't get any of your capital back?

[mistaTea]

Don't let the insults bother you ValueNZ. Balance works for someone else to make his money, rather than directly from his investing nous.

You will be out of that situation probably before he is.

ValueNZ can you tell me the value of a bond where you don't get any of your capital back?

The machines can answer this for us much faster than any homo sapien.

***

The value of a bond where you don't get your capital back is typically referred to as a zero-coupon bond. These bonds are issued at a discount and mature at their face value; the difference between the purchase price and the face value represents the interest earned. The value of a zero-coupon bond is calculated based on the present value of its face value, which depends on the yield or interest rate and the time until maturity.

Here’s the formula to calculate the present value (PV) of a zero-coupon bond:

PV = F/(1 + r)^n

Where:
- F is the face value of the bond.
- r is the annual discount rate or yield.
- n is the number of years until the bond matures.

This calculation gives you the current value of the bond, considering the time value of money. The higher the yield and the longer the time until maturity, the lower the present value will be, reflecting a deeper discount on the initial purchase price.