SUM - Summerset Group

[RRR]

Salt fund returns of 14% including fees since inception is good but after tax the return would drop by 30%! Fees and tax reduces the real returns to individuals of managed funds significantly. "Buy and monitor" investors like many of us don't have the issue of tax and our only cost is brokerage. Individual investors have an inherent advantage over funds..sorry off topic.

Disc - holder of SUM and RYM

[winner69]

They have outperformed the NZX50/ASX200 over the last 3 years (since their inception). Looks like they are achieving fine so far..

Don't overlook that Salt don't set out to make huge returns all the time - rather to make positive absolute returns under all market conditions.

[hardt]

They have outperformed the NZX50/ASX200 over the last 3 years (since their inception). Looks like they are achieving fine so far..

S&P/NZX50 Gross Index is up 50% over 3 years... Even in gross terms the fund has barely kept pace with the market they operate in...

[winner69]

S&P/NZX50 Gross Index is up 50% over 3 years... Even in gross terms the fund has barely kept pace with the market they operate in...

Salt 73% Australia and 27% NZ

Fund 3 year return 14.0% pa v blended ASX / NZX of 10.4% pa

Just saying

[Beagle]

That is the situation with Ryman and Summerset. Our issueis not their management capability but their balance sheets andvaluation now that the housing market has turned

I take that with a grain of...let me see...SALT. The national stat's suggest the market has not turned and RBNZ at a national level are still expecting real estate to increase 7% in the year ahead.
Some so called experts have myopic vision when it comes to real estate and think the stat's for Auckland are a proxy for the whole country.

If some people got off their chuff and had a look they would see there's a big difference between some villages and SUM others. SUM are a far nicer living environment than others.

[winner69]

I take that with a grain of...let me see...SALT. The national stat's suggest the market has not turned and RBNZ at a national level are still expecting real estate to increase 7% in the year ahead.
Some so called experts have myopic vision when it comes to real estate and think the stat's for Auckland are a proxy for the whole country.

If some people got off their chuff and had a look they would see there's a big difference between some villages and SUM others. SUM are a far nicer living environment than others.

Salt people must have been sucked in by the Herald and other media ....aided and abetted by a few bank employed economists / commentators.

Yep, the property market in the media and in reality poles apart.

Good opportunity for decent long term investment returns here.

(Be interesting when likes of Salt need to cover their short positions)

[Bjauck]

...
Some so called experts have myopic vision when it comes to real estate and think the stat's for Auckland are a proxy for the whole country......and one of the issues for Auckland is that there may be pent up demand as new dwellings have not kept pace with the increase in population.

[Beagle]

Salt people must have been sucked in by the Herald and other media ....aided and abetted by a few bank employed economists / commentators.

Yep, the property market in the media and in reality poles apart.

Good opportunity for decent long term investment returns here.

(Be interesting when likes of Salt need to cover their short positions)

Yes indeed mate, when she turns upward it could be quite swift. Haven't looked but I presume SALT are based in Australia ? as a lot of selling pressure lately has come in the afternoon when the Aussie market is trading.


...and one of the issues for Auckland is that there may be pent up demand as new dwellings have not kept pace with the increase in population.
Agreed. With immigration running at 72,000 per annum, around half of them wanting to settle in Auckland and Labour trailing by miles in the polls and a serious systemic shortage of builders I can't see the overall situation changing to a material degree in the foreseeable future.

We'll get some more visibility on how their development margins are tracking on 15 August.

[BlackPeter]

Who knows - maybe today is the day? SUM movement ... up to 4.78. I would hate to be short on SUM :p!

[peat]

. Haven't looked but I presume SALT are based in Australia ?
They are a NZ outfit
https://www.saltfunds.co.nz/

with mainly NZer's in their team
https://www.saltfunds.co.nz/our-team-1/

Last time I heard of them they got all vocal about the NPT selling out to KPG and ended up winning that stoush.

[winner69]

They are a NZ outfit
https://www.saltfunds.co.nz/

with mainly NZer's in their team
https://www.saltfunds.co.nz/our-team-1/

Last time I heard of them they got all vocal about the NPT selling out to KPG and ended up winning that stoush.

Main guys dot a bit frustrated at BT and formed their own company a few years ago

A couple of them are accountants - so must be pretty good. (Had to say that)

[Beagle]

Salt of the earth forward thinking bean counters, (investors would be hoping), but I think they're barking up the wrong tree shorting this one. Hard to swim against a constant incoming tide for very long...

Speaking of salt of the earth asset managers I rate that Shane Solly of Harbour asset management, pretty smart guy. http://www.sharechat.co.nz/article/97fb6fb8/market-close-nz-shares-fall-fletcher-drops-air-nz-reaches-16-year-high.html

[couta1]

Ryman up 49c from a week ago, Sum up a wee bit, how's that SP ratio chart tracking winner?

[Nasi Goreng]

Salt of the earth forward thinking bean counters, (investors would be hoping), but I think they're barking up the wrong tree shorting this one. Hard to swim against a constant incoming tide for very long...

Speaking of salt of the earth asset managers I rate that Shane Solly of Harbour asset management, pretty smart guy. http://www.sharechat.co.nz/article/97fb6fb8/market-close-nz-shares-fall-fletcher-drops-air-nz-reaches-16-year-high.html

I get the feeling sometimes these fund managers just want to stick their neck out to raise their profile and maybe their ego's... not that they need bigger ones. If it comes off, great for them... if not, they are so diversified it doesn't really matter... its not like SUM would be 100% of their portfolio. Good for us, if we are buying low because of their shorts.

[peat]

I get the feeling sometimes these fund managers just want to stick their neck out to raise their profile and maybe their ego's... not that they need bigger ones. If it comes off, great for them... if not, they are so diversified it doesn't really matter... its not like SUM would be 100% of their portfolio. Good for us, if we are buying low because of their shorts.

Thats exactly what I thought about that Simplicity announcement yesterday on gender and ethnic diversity in boards. So much grandstanding. FFS they're less than a year old and they're trying tell company's what to do. (Sorry off topic)

[percy]

Thats exactly what I thought about that Simplicity announcement yesterday on gender and ethnic diversity in boards. So much grandstanding. FFS they're less than a year old and they're trying tell company's what to do. (Sorry off topic)

Stay off topic.
I am enjoying it.

[Carpenterjoe]

Ryman up 49c from a week ago, Sum up a wee bit, how's that SP ratio chart tracking winner?

Mateeee, reckon RYM's short term swing is related to end of year tax situations. But, long term on this sector is bloody positive. Focus is on how sector Leverage debt, Manage debt, Manage clients, Development costs and how reserve bank manages interest rates. Also property growth, how councils release and re-zone land.

[Xerof]

Did Salt REALLY admit to being short? Lovely, thats a red rag to some of the other funds out there, who, if they follow usual procedure, will put the squeeze on. Tequila and lemon with your salt anyone?

[peat]

Short people got no reason
Short people got no reason
Short people got no reason
To live

They got little hands
And little eyes
And they walk around
Tellin' great big lies
They got little noses
And tiny little teeth
They wear platform shoes
On their nasty little feet

Well, I don't want no short people
Don't want no short people
Don't want no short people
Round here

[bull....]

The retirement sector has been a bad investment this yr well underperformed the nzx except for arv.

[couta1]

Hey winner, at the rate Ryman going(Just hit $9) Sum might only be worth just over 50% on that ratio graph soon. Sum a bit of a dog at atm aye. Rym has more exposure to big index funds amongst others.

[Beagle]

Hey winner, at the rate Ryman going(Just hit $9) Sum might only be worth just over 50% on that ratio graph soon. Sum a bit of a dog at atm aye. Rym has more exposure to big index funds amongst others.

It's pushed out to record level's. The difference in PE must also be at SUM sort of record level's between RYM and SUM. Reminds me of the time when AIR was priced really stupidly at $1.75 late last year at a record discount to the forward average PE of the market at only 30% of same and we've all seen the result since then.

[couta1]

It's pushed out to record level's. The difference in PE must also be at SUM sort of record level's between RYM and SUM. Reminds me of the time when AIR was priced really stupidly at $1.75 late last year at a record discount to the forward average PE of the market at only 30% of same and we've all seen the result since then. Yeah dumb market combined with dumb comments made at the AGM re Auckland headwinds.

[Bjauck]

Short people got no reason
... Yikes...some people must have hated that song.

[bull....]

Yuk this is what some rest homes serve the retired . my pet eats better - hope summerset foods better rymans etc

http://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&objectid=11889422

[Bjauck]

Yuk this is what some rest homes serve the retired . my pet eats better - hope summerset foods better rymans etc

http://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&objectid=11889422

Camera angles and photo composition notwithstanding - what is the context? Would you give a toothless person a sirloin steak with carrots and croutons? Anyway what has an incident at Las Colinas Nursing Facility in the USA got to do with SUM in NZ (or RYM for that matter) ?

I had a horrible meal on an American airline once. Is that relevant as the subject for a post on the Air NZ thread?

[couta1]

Hey winner, you in hiding from this thread, don't blame you. Rym finishes up 17c at $8.99 while Sum finishes down 9c at $4.70, not all happy on planet Sum. PS-Still waiting for that cute ratio graph update.

[winner69]

Hey winner, you in hiding from this thread, don't blame you. Rym finishes up 17c at $8.99 while Sum finishes down 9c at $4.70, not all happy on planet Sum. PS-Still waiting for that cute ratio graph update.

Bloody miserable day eh couts - national super pay day and I didn't even venture out for the scallops and chips for lunch ....so updated your chart

I think your hypothesis was that SUM share price should be about half of RYMs

Funny enough its almost there now.

Based on your hypothesis SUM shareprice went from undervalued June 2013 tnru June 2015 to be being about right from June 2015 to June 2016 and then became 'overvalued' from June 2016 .... and now about right.

Spooky eh. Some say 'reversion to the mean' is a powerful thing. It looks like it's happening here now.

So both RYM and SUM share price about 'right' at the moment - based on yout hypothesis or whatever you call it. (It has stood the test of time)


Of course Mr Beagle and others will say a load of the proverbial

[Beagle]

RYM (SUM)
Underlying Profit 178, (56.5)
Underlying EPS 35.6, (25.4)
Historical PE 25.3, (18.5)
Historical avg growth 16, (48)
Est current growth 15, (30)
Forecast Profit 205, (73.5) Forecast growth for RYM for the current year assumes they meet their medium term 15% target, SUM at mid point of forecast
Forecast EPS 41, (33)
Forward PE 22, (14) Forward PE for RYM is for YE 31/3/2018 for SUM 31/12/2017

[couta1]

Thanks for the chart update winner, I wish my hypothesis had been proven wrong, but as you say, it has stood the test of time. Must be time for a holiday.

[Beagle]

http://www.sharechat.co.nz/article/5991498e/nz-house-prices-rise-5-8-in-june-led-by-growth-outside-auckland-reinz.html?utm_medium=email&utm_campaign=NZ%20house%20prices%20rise%2058%20in% 20June%20led%20by%20growth%20outside%20Auckland%20 REINZ&utm_content=NZ%20house%20prices%20rise%2058%20in%2 0June%20led%20by%20growth%20outside%20Auckland%20R EINZ+CID_92f6635a80d936b368381448059ca592&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle5991498enz-house-prices-rise-5-8-in-june-led-by-growth-outside-auckland-reinzhtml House prices look fine to me. No worries.

[sb9]

http://www.sharechat.co.nz/article/5991498e/nz-house-prices-rise-5-8-in-june-led-by-growth-outside-auckland-reinz.html?utm_medium=email&utm_campaign=NZ%20house%20prices%20rise%2058%20in% 20June%20led%20by%20growth%20outside%20Auckland%20 REINZ&utm_content=NZ%20house%20prices%20rise%2058%20in%2 0June%20led%20by%20growth%20outside%20Auckland%20R EINZ+CID_92f6635a80d936b368381448059ca592&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle5991498enz-house-prices-rise-5-8-in-june-led-by-growth-outside-auckland-reinzhtml House prices look fine to me. No worries.


http://www.interest.co.nz/property/88770/winters-icy-grip-takes-hold-housing-market-prices-and-volumes-fall

Slightly different perspective with more emphasis on Auckland housing market...

[Bjauck]

http://www.sharechat.co.nz/article/5991498e/nz-house-prices-rise-5-8-in-june-led-by-growth-outside-auckland-reinz.html?utm_medium=email&utm_campaign=NZ%20house%20prices%20rise%2058%20in% 20June%20led%20by%20growth%20outside%20Auckland%20 REINZ&utm_content=NZ%20house%20prices%20rise%2058%20in%2 0June%20led%20by%20growth%20outside%20Auckland%20R EINZ+CID_92f6635a80d936b368381448059ca592&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle5991498enz-house-prices-rise-5-8-in-june-led-by-growth-outside-auckland-reinzhtml House prices look fine to me. No worries.

True. "In Auckland house prices lifted 2.5 percent on the year to $850,000 while outside of Auckland prices climbed 11 percent to $431,000." The median price in the Auckland market has still gone up by more than the inflation rate (CPI) over the past year (2.2%)

For investors that is in addition to their net rental income (and their stellar returns from the past few years.)

[winner69]

RYM (SUM)
Underlying Profit 178, (56.5)
Underlying EPS 35.6, (25.4)
Historical PE 25.3, (18.5)
Historical avg growth 16, (48)
Est current growth 15, (30)
Forecast Profit 205, (73.5) Forecast growth for RYM for the current year assumes they meet their medium term 15% target, SUM at mid point of forecast
Forecast EPS 41, (33)
Forward PE 22, (14) Forward PE for RYM is for YE 31/3/2018 for SUM 31/12/2017

Not fair is it

Fact of life though is that RYM have always commanded a higher multiple than SUM and others.

Possibly because they are #1, been around longer by others, trusted etc and maybe seen as more than just a property company because they actually make money out looking after oldies (besides property deals).

Looks like they made $30m odd from looking after orders. So maybe some see RYM worth $x as a property company PLUS a multiple of this $30m odd

We need to live with this premium that RYM commands. Won't change tomorrow - but maybe 5 years time it will be different.

Couts hypothesis stood test of time though - spooky

[Beagle]

I hear what you are saying Winner but one company is growing presently at twice the rate of the other and on average over half of the last decade has grown at three times the rate of the other. How many more years is it necessary to outperform RYM to at least get on the same PE ? I would have thought five years at three times the rate of growth would be all the evidence one needs as well as this year growing at twice the rate.

Its not logical, in fact it fly's so far in the face of logic as to beg the question of what do some institutions know that I don't ?...or is this a free hit like when AIR was $1.75 nine months ago ? The divergence in PE compared to RYM is right at the extreme end of the range, the Bollinger bands are very tight and we have (apart from yesterday's close, if one assumes that's an aberration) just broken through the 30 day MA. On a fundamental basis a forward PE of 14 is about half its average since listing.

[BlackPeter]

I hear what you are saying Winner but one company is growing presently at twice the rate of the other and on average over half of the last decade has grown at three times the rate of the other. How many more years is it necessary to outperform RYM to at least get on the same PE ? I would have thought five years at three times the rate of growth would be all the evidence one needs as well as this year growing at twice the rate.

Its not logical, in fact it fly's so far in the face of logic as to beg the question of what do some institutions know that I don't ?...or is this a free hit like when AIR was $1.75 nine months ago ? The divergence in PE compared to RYM is right at the extreme end of the range, the Bollinger bands are very tight and we have (apart from yesterday's close, if one assumes that's an aberration) just broken through the 30 day MA. On a fundamental basis a forward PE of 14 is about half its average since listing.

Life is not fair. However, there is an easy way to fix that - if all investors just sell half of their RYM shares and buy instead SUM, than the issue is fixed. I started the trend already ;):

[hardt]

RYM (SUM)
Underlying Profit 178, (56.5)
Underlying EPS 35.6, (25.4)
Historical PE 25.3, (18.5)
Historical avg growth 16, (48)
Est current growth 15, (30)
Forecast Profit 205, (73.5) Forecast growth for RYM for the current year assumes they meet their medium term 15% target, SUM at mid point of forecast
Forecast EPS 41, (33)
Forward PE 22, (14) Forward PE for RYM is for YE 31/3/2018 for SUM 31/12/2017

How often does this have to be explained to you?

http://www.sharetrader.co.nz/showthread.php?5009-Summerset-Group-IPO&p=672647#post672647

http://www.sharetrader.co.nz/showthread.php?5009-Summerset-Group-IPO&p=672627#post672627

http://www.sharetrader.co.nz/showthread.php?5009-Summerset-Group-IPO&p=671908#post671908

SUM is years behind Ryman which has been public since 1999, with opportunities in both NZ and Aussie, huge pipeline moving forward... not many reasons not for there to be a premium on Ryman...

Don't compare growth rates of a $4.5bn company to that of $1bn company... as said before law of larger numbers do apply to Ryman and Summerset is yet to experience it.

Summerset is still a great business, my grandparents are looking at monterey park I would happily hold SUM... I just wouldn't complain about its peers being given a star next to their name.

Might take years to see a good enough return...

[Beagle]

Life is not fair. However, there is an easy way to fix that - if all investors just sell half of their RYM shares and buy instead SUM, than the issue is fixed. I started the trend already ;): Don't care if its not fair...in the long run it screams "opportunity"...15 or so years to go to retirement so I am happy to play the long game. I haven't seen too many long term opportunities this good in recent years. Coutts got a truck load of these...I think he's on the money with this one well and truly.

[winner69]

http://www.sharechat.co.nz/article/5991498e/nz-house-prices-rise-5-8-in-june-led-by-growth-outside-auckland-reinz.html?utm_medium=email&utm_campaign=NZ%20house%20prices%20rise%2058%20in% 20June%20led%20by%20growth%20outside%20Auckland%20 REINZ&utm_content=NZ%20house%20prices%20rise%2058%20in%2 0June%20led%20by%20growth%20outside%20Auckland%20R EINZ+CID_92f6635a80d936b368381448059ca592&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle5991498enz-house-prices-rise-5-8-in-june-led-by-growth-outside-auckland-reinzhtml House prices look fine to me. No worries.

No worries

Even if prices fall a bit in Auckland and don't increase as fast elsewhere I reckon next year we will see a surprising robust increase in prices.

Yep, no worries - assuming it even impacts on the likes of SUM

[Beagle]

No worries

Even if prices fall a bit in Auckland and don't increase as fast elsewhere I reckon next year we will see a surprising robust increase in prices.

Yep, no worries - assuming it even impacts on the likes of SUM

Most of their profit is from development but as you know they are expanding their care offering with dementia units and more supported living facilities.
A lot more embedded value in existing units now.

hardt - You predicate your thesis that there's more to be made from care services on the assumption that side of the business doesn't have rapidly rising staff costs or that all those costs will be met by increased Govt funding...I wouldn't be too sure of yourself on that front if I were you. I think Couta1's statements and concerns in that regard expressed on the OCA thread have a lot of credibility seeing as he and his wife have worked in that sector for decades. (I know Couta1 as a very good friend and not as some stranger on the internet, so can vouch for his track record in the industry). As for RYM's expansion into Australia, plenty of housing concerns over on that side of the ditch and RYM's SP has still been ostensibly flat for over 3 years now.

Buying at this ~ $9 price compared to SUM is something I believe will see continuing under-performance in one's portfolio relative to how it could be structured. That's how I see it and I've been spot on with RYM for the last 3 1/2 years, (correctly called it as going nowhere and vastly overpriced just over 3 years ago) so more than happy to back my own judgement and put my own money where my mouth is on this company.

I have the runs on the board. Lets see how your call goes on this one when you've been on the forum for 3 1/2 years. I'd be more than happy to short RYM and double down on SUM at this sort of valuation discrepancy...will look to endeavor to execute that plan very shortly.

Biggest volume day in SUM for some months, recently punched through 30 day MA and Bollinger bands are very tight. FA screams out great value and they're reporting their half year result in just on a months time...just saying...people should as always, DYOR.

[Lewylewylewy]

Yup, over the past few days I've been thinking that sum is probably at the bottom. I suspect it'll go up within a year. I'm picking in 12 months time we'll see up to $5.5

[Raz]

Sold a third of my SUM shares for an unexpected private company investment a year ago , certainly looking like the better investment... however have repurchased again over the past week at a similar price I exited. I reckon we have some room to move on up now:-)

[janner]

I reckon we have some room to move on up now:-)

Hmmmm... Not the first one to express such a comment as it has progressively gone lower and lower Raz...

Is this really the trend change ??

[BlackPeter]

No worries

Even if prices fall a bit in Auckland and don't increase as fast elsewhere I reckon next year we will see a surprising robust increase in prices.

Yep, no worries - assuming it even impacts on the likes of SUM

hmm - is this the same winner who tells me on the MPG thread that the market will crumble?

[King1212]

Panic step in....

https://www.stuff.co.nz/business/property/94684331/homeowners-told-dont-panic-as-auckland-house-prices-stall

[winner69]

Panic step in....

https://www.stuff.co.nz/business/property/94684331/homeowners-told-dont-panic-as-auckland-house-prices-stall

Bugger

Property market in the media is not the property market in reality

One thing is that even if prices collapsed most homeowners will be still be better off than they were a year or so ago - just not as rich as they were on paper last month.

About 85,000 property sales a year. There is about 1.6 million dwellings in NZ (about 60% owner occupied) which sort of suggests that the majority of home owners aren't even in the market and therefore won't even be thinking of panicking.

[percy]

I don't matter at all to me what the property market does,as long as I buy/sell in the same market.

[winner69]

I don't matter at all to me what the property market does,as long as I buy/sell in the same market.

I agree .....so true

Why worry

[winner69]

I don't matter at all to me what the property market does,as long as I buy/sell in the same market.

Some years ago an acquaintance was really worried about an 'impending recession' that the media was raving on about

I asked him how did 2008/2009 go for you

He said fine, those were great years

I told him that's what a recession does to you mate.....and some said it was greatest recession since the depression

Ah great, recessions aren't bad after all he said

[Raz]

Hmmmm... Not the first one to express such a comment as it has progressively gone lower and lower Raz...

Is this really the trend change ??

You may be right..just wait and see...

[Bjauck]

Panic step in....

https://www.stuff.co.nz/business/property/94684331/homeowners-told-dont-panic-as-auckland-house-prices-stall Every twist and turn in the housing market is fodder for a lead item in the NZH. Many NZH readers would have the vast majority of their nest eggs wrapped up in the equity of their home, so I am guessing these housing articles with breathless headings act as click bait for the NZH and its advertisers.

Even for Auckland owner-occupier home owners, over the past year their equity (on average) has gone up by more than the CPI. That is an unrealised tax-free gain. Plus they have enjoyed the accommodation offered by their home (the value of which is untaxed).

If they had had their home equity in a term deposit, they would have been lucky to have earned 4%, all of which would have been taxable. After tax that would have barely covered the increase in the CPI.

[macduffy]

So true, Bj. The article, however, was a Fairfax (Stuff) one which is equally lightweight in the Business section these days.

[bull....]

Some should read annual reports, property market is very important to the sector possibly the most important factor for this sector.

[percy]

Some should read annual reports, property market is very important to the sector possibly the most important factor for this sector.

Possibly you should point this out to the directors and management of Ryman,as they seemed to have missed it.!
Have done so for over 25 years or more.
They still think it is an aging population who chose their retirement villages for lifestyle reasons.
May pay to let SUM know as well, as they seem to share Ryman's view.

[bull....]

Possibly you should point this out to the directors and management of Ryman,as they seemed to have missed it.!
Have done so for over 25 years or more.
They still think it is an aging population who chose their retirement villages for lifestyle reasons.
May pay to let SUM know as well, as they seem to share Ryman's view.

you maybe correct percy about the companies thinking differently but analysts I would think would say property cycle is more important

[percy]

you maybe correct percy about the companies thinking differently but analysts I would think would say property cycle is more important

Well we have a choice,listen to analysts, or the people who know the business best.
One has a record of being right,while other does not.
25 years is a long time for analysts to be wrong.!

[Bjauck]

So true, Bj. The article, however, was a Fairfax (Stuff) one which is equally lightweight in the Business section these days. LOL, I am so used to expecting it from the NZH! Yep they seem to be morphing into one, merger or not.

[bull....]

Well we have a choice,listen to analysts, or the people who know the business best.
One has a record of being right,while other does not.
25 years is a long time for analysts to be wrong.!

companies also say tthat care facilties, serviced apartments mitigate the slowdown in the property sector thats there argument.

[RTM]

Possibly you should point this out to the directors and management of Ryman,as they seemed to have missed it.!
Have done so for over 25 years or more.
They still think it is an aging population who chose their retirement villages for lifestyle reasons.
May pay to let SUM know as well, as they seem to share Ryman's view.

Surely there must be some kind of link. High property prices will enable folk approaching retirement to sell, buy into a RYM / MET /SUM / etc village and have some left over for kids, cars, trips or general health and well being. If property prices are low, then I think a lot of folk might not be able to afford the retirement village option and may just sit tight in their homes. Not everyone is as "well positioned" as Percy !

Disc. Small holding in SUM

[percy]

Currently 50 people a week make a retirement village their new home,for lifestyle reasons.Most will "meet the market" when it comes to selling their own property.Most will have a good deal of money left over,after buying their retirement unit.
Question time; What will be the number of people making the same decision in ;
1] a year's time.
2] In 5 years time.
3] In 10 years time.

RTM There are a great number of people better "well positioned" than me.
I do realise there are great number of people who do not own their own home, or can ever afford to stop working.They are not RYM or SUM's target market.

[artemis]

Surely there must be some kind of link. High property prices will enable folk approaching retirement to sell, buy into a RYM / MET /SUM / etc village and have some left over for kids, cars, trips or general health and well being. If property prices are low, then I think a lot of folk might not be able to afford the retirement village option and may just sit tight in their homes. Not everyone is as "well positioned" as Percy !

Disc. Small holding in SUM

Equally the retirement sector might venture into lower cost options. Couple of companies in Australia set up decent quality sort-of trailer parks for retired people. Been a while since I looked but IIRC they were in nice but reasonably priced locations like beaches, residents lease their plot of land but own their dwelling. Which can be sold on or moved off. Some services available but on the moderate side.

[percy]

Equally the retirement sector might venture into lower cost options. Couple of companies in Australia set up decent quality sort-of trailer parks for retired people. Been a while since I looked but IIRC they were in nice but reasonably priced locations like beaches, residents lease their plot of land but own their dwelling. Which can be sold on or moved off. Some services available but on the moderate side.

INA in Aussie are doing this.Fantastic places all up the East Coast of NSW.

[couta1]

Bullish finish to the week, Bolly bands starting to widen so should run up a bit from here, $5 would be good.

[Brain]

Currently 50,000 people a week make a retirement village their new home,for lifestyle reasons.Most will "meet the market" when it comes to selling their own property.Most will have a good deal of money left over,after buying their retirement unit.
Question time; What will be the number of people making the same decision in ;
1] a year's time.
2] In 5 years time.
3] In 10 years time.

RTM There are a great number of people better "well positioned" than me.
I do realise there are great number of people who do not own their own home, or can ever afford to stop working.They are not RYM or SUM's target market.

I think you might have the comma in the wrong place Percy. 50,000 a week would make retirement villages Stella investments. :)

Would like to know the real figure though.

[percy]

I think you might have the comma in the wrong place Percy. 50,000 a week would make retirement villages Stella investments. :)

Would like to know the real figure though.

Correct.Thank you have corrected.!!!
And yes the 50 comes from a recent MSD Super Seniors newsletter the Govt sends out to the over 65s.

[James108]

5,000/week is still too much. That would be 260,000 moving into retirement villages a year.

[percy]

5,000/week is still too much. That would be 260,000 moving into retirement villages a year.

Finally got it right.!.50 per week.
MSD Seniors June newsletter.

[winner69]

Couts - share price still comfortably within the long term regression channel

Top of the channel is about 600 - probably heading up there over the next few months

[Baa_Baa]

Couts - share price still comfortably within the long term regression channel

Top of the channel is about 600 - probably heading up there over the next few months

Put up a chart winner, what regression channel are you on about? Why do you think it's going to the top?

[percy]

What's a year or two, when the ground work has been laid, for upward trajectory to move up into yet another higher gear.
Gaining momemtum,however the build rate will be lucky to keep up with the demand,as each week around 50 seniors decide to make a retirement village their new home.There are now 37,000 New Zealanders living in retirement villages.
The huge wall of seniors is increasing rapidly, providing huge tailwinds for the sector.
Some in the sector have a proven model, which means they are "well positioned," while others have some catching up to do.

Sorry I got the number of seniors deciding to make a retirement village their new home each week, wrong yesterday.
At least I got it right with the above post #4840 0n 08-06-2017.
hardt.Thank you for posting the link to the article I was quoting.

[Raz]

Currently 50 people a week make a retirement village their new home,for lifestyle reasons.Most will "meet the market" when it comes to selling their own property.Most will have a good deal of money left over,after buying their retirement unit.
Question time; What will be the number of people making the same decision in ;
1] a year's time.
2] In 5 years time.
3] In 10 years time.

RTM There are a great number of people better "well positioned" than me.
I do realise there are great number of people who do not own their own home, or can ever afford to stop working.They are not RYM or SUM's target market.

I think it will change for the worse gradually. Only a small percentage of the population has/had the awareness,discipline and ability to save a substantial portfolio of investments over and above super (should I also add luck of timing?). The key wealth effect that has assisted people into homes regardless of the property has been those with a company or government pension over and above NZ super. That is at its peak currently with the majority entered/entering retirement. The last ones in a similar plan would now be in their early 50s and they are such a small number that effect will taper off as well as property over time. The timeline is the real question for me.

ps up 15c since buying in again, still layered SL in place..

[Beagle]

I think it will change for the worse gradually. Only a small percentage of the population has/had the awareness,discipline and ability to save a substantial portfolio of investments over and above super (should I also add luck of timing?). The key wealth effect that has assisted people into homes regardless of the property has been those with a company or government pension over and above NZ super. That is at its peak currently with the majority entered/entering retirement. The last ones in a similar plan would now be in their early 50s and they are such a small number that effect will taper off as well as property over time. The timeline is the real question for me.

Agree that its a sad reality that there's a fairly low percentage of the population who have a decent sized nest egg for retirement but why would you think the penetration rate will decline given most people free up capital when they downsize their home moving into a retirement village ? Sure if real estate goes into a sustained decline its a given that some people wanting to move to a village will need to look at an apartment rather than a stand alone condominium but I think there's a gradual growing awareness of the lifestyle benefits these villages offer. A place of peace, tranquility and community support away from the increasing rat race of society in general. I foresee the penetration ate increasing over time and average village unit size decreasing.

Winner69 - $6.00 would make our friend Couta1 very happy...I think he backed up the truck a little while ago.

[Raz]

Agree that its a sad reality that there's a fairly low percentage of the population who have a decent sized nest egg for retirement but why would you think the penetration rate will decline given most people free up capital when they downsize their home moving into a retirement village ? Sure if real estate goes into a sustained decline its a given that some people wanting to move to a village will need to look at an apartment rather than a stand alone condominium but I think there's a gradual growing awareness of the lifestyle benefits these villages offer. A place of peace, tranquility and community support away from the increasing rat race of society in general. I foresee the penetration ate increasing over time and average village unit size decreasing.

Winner69 - $6.00 would make our friend Couta1 very happy...I think he backed up the truck a little while ago.

The problem is not just declining property market but more a question if people can liquidate their properties when they want to. Auckland & Wellington may be the last place to have this problem however the rest of NZ could have this problem relatively quickly. They other places do not have immigration or Government to underpin their local economies.

I guess it really comes down to if you believe we can continue, medium term, currently policy setting (high immigration) and that translates into allowing people to exit out of property in Auckland. I note no party is really offering any alternatives. It may go another election cycle however politically and economically can't see it continuing, as is, for next ten years plus.

[Beagle]

The problem is not just declining property market but more a question if people can liquidate their properties when they want to. Auckland & Wellington may be the last place to have this problem however the rest of NZ could have this problem relatively quickly. They other places do not have immigration or Government to underpin their local economies.

I guess it really comes down to if you believe we can continue, medium term, currently policy setting (high immigration) and that translates into allowing people to exit out of property in Auckland. I note no party is really offering any alternatives. It may go another election cycle however politically and economically can't see it continuing, as is, for next ten years plus.

Spoke with the GM of one of the major Australian owned franchises this week. brief synopsis :- Big volume drop's for sure, some franchisees are going to need to change their prolific spending habits. People finding it a lot harder to get bank finance. Seeing a reversion to traditional marketing methods, (setting an asking price, surely something refreshing for potential home buyers ?) and a trend away from auctions / tenders. Immigration level's supporting demand.

Agree with you that long term the current immigration level's appear uncomfortable for the N.Z. economy in terms of pressure on infrastructure, (Auckland roads in particular) but also hospitals / schools... right across the board really.

At a national level I don't foresee any material house price declines coming in the foreseeable future. I'd be surprised if prices didn't move up at least in line with inflation. Auckland's market will continue to be supported by extremely high level's of immigration for some time. My crystal ball thinking is that Auckland's medium prices are likely to be sideways in numerical terms for some time, (i.e. a very slow drop in inflation adjusted terms), but your guess or anyone else's is just as good as mine.

In terms of SUM, it will be interesting to see how their development margins are tracking on 15 August as (as we all know), that's how they make most of their money. Companies recent guidance and comments at the annual meeting suggest margins are fine. Resale's are going according to my model and on higher embedded values so all seems to be tracking well. 2017 PE of 14 continues to seem dirt cheap for a proven performer like SUM especially given the long term demographic tailwinds this sector enjoys. (Some commentators think the average forward PE for the NZX50 is just over 20).

One suspects the real estate risks are fully priced in at this level and perhaps the market is ignoring the potential advantage of a real estate correction ? (Bare land has traditionally had a very high Beta coefficient and drops more than houses in a correction). Is SUM giving itself very broad financial capability with recent debt raising to position itself to take advantage of cheaper potential land acquisitions on a significant scale ? Gearing up for more growth perhaps ?

[Lewylewylewy]

Very smart post, Beagle.

[Raz]

Spoke with the GM of one of the major Australian owned franchises this week. brief synopsis :- Big volume drop's for sure, some franchisees are going to need to change their prolific spending habits. People finding it a lot harder to get bank finance. Seeing a reversion to traditional marketing methods, (setting an asking price, surely something refreshing for potential home buyers ?) and a trend away from auctions / tenders. Immigration level's supporting demand.

Agree with you that long term the current immigration level's appear uncomfortable for the N.Z. economy in terms of pressure on infrastructure, (Auckland roads in particular) but also hospitals / schools... right across the board really.

At a national level I don't foresee any material house price declines coming in the foreseeable future. I'd be surprised if prices didn't move up at least in line with inflation. Auckland's market will continue to be supported by extremely high level's of immigration for some time. My crystal ball thinking is that Auckland's medium prices are likely to be sideways in numerical terms for some time, (i.e. a very slow drop in inflation adjusted terms), but your guess or anyone else's is just as good as mine.

In terms of SUM, it will be interesting to see how their development margins are tracking on 15 August as (as we all know), that's how they make most of their money. Companies recent guidance and comments at the annual meeting suggest margins are fine. Resale's are going according to my model and on higher embedded values so all seems to be tracking well. 2017 PE of 14 continues to seem dirt cheap for a proven performer like SUM especially given the long term demographic tailwinds this sector enjoys. (Some commentators think the average forward PE for the NZX50 is just over 20).

One suspects the real estate risks are fully priced in at this level and perhaps the market is ignoring the potential advantage of a real estate correction ? (Bare land has traditionally had a very high Beta coefficient and drops more than houses in a correction). Is SUM giving itself very broad financial capability with recent debt raising to position itself to take advantage of cheaper potential land acquisitions on a significant scale ? Gearing up for more growth perhaps ?

One would hope they are priced in..that why I just invested!

[Beagle]

One would hope they are priced in..that why I just invested!

Yes I topped up a few more recently too but I am like Oliver Twist with this one !

[Zaphod]

Meanwhile in North America, US car loans are some 13% above the pre-peak 2008 crisis, with total household debt just under 2008 levels while wages have risen much more slowly. Sub-prime lending adverts are rampant on TV and on the street: "Bad credit/Bankruptcy? No problem!" read one banner I saw today. Lenders have become far more comfortable with risk, and the cumulative balance of bad-debt is steadily increasing. Couple all of this with the Trump administration's move to remove many of the lending restrictions imposed by Obama sends shivers down my spine.

The situation here in Canada is somewhat different, but the effects upon the economy by the actions of the southern neighbours are very concerning, even to us NZers.

[Bjauck]

The problem is not just declining property market but more a question if people can liquidate their properties when they want to. Auckland & Wellington may be the last place to have this problem however the rest of NZ could have this problem relatively quickly. They other places do not have immigration or Government to underpin their local economies.

I guess it really comes down to if you believe we can continue, medium term, currently policy setting (high immigration) and that translates into allowing people to exit out of property in Auckland. I note no party is really offering any alternatives. It may go another election cycle however politically and economically can't see it continuing, as is, for next ten years plus. The high net immigration rate at the moment may be at the top of the cycle, but even if net migration into Auckland reduced to zero now, there must be a lot of pent up demand from those who have put off buying their first home to meet the supply from vendors. There have been large (unrealistic?) price increases from the past several years to act as cushion for any future price drops.

[macduffy]

I'm not sure that big, unrealistic price increases act as a cushion. Wouldn't it be more a case of "the bigger they are, they further they have to fall"? Not that I'm expecting that, given the extent of unmet demand in the (Auckland) market.

[trader_jackson]

Hmm... I'm sure it was mentioned on here that Summerset "set their own prices" for their units? and also that the property market doesn't affect retirement stocks (never did to RYM back in 08 or something?)

No worries

Back to $5 next week (3rd time I've said this in a few weeks or something... 3rd time lucky for sure)

[Lewylewylewy]

These shares won't return to their normal price until there is both an announcement from sum and some evidence (a reasonable time into the future, but just less than a year) that property prices aren't stalling as much as the media is suggesting, or that they've started going up again.

I'm picking that these will be $5.25 - $6 by this time next year, depending on the property news. If I had to guess, I'd say $5.38 this time next year. 😃

[JeremyALD]

These shares won't return to their normal price until there is both an announcement from sum and some evidence (a reasonable time into the future, but just less than a year) that property prices aren't stalling as much as the media is suggesting, or that they've started going up again.

I'm picking that these will be $5.25 - $6 by this time next year, depending on the property news. If I had to guess, I'd say $5.38 this time next year. 😃

Not necessarily. Prices ARE stalling but it doesn't mean SUM won't do well. Once the public connects those things together the SP will start moving back on up.

[winner69]

SUM will continue to make decent profits through thick and thin. Talk of a property crash and its impact on SUM is just that

The issue is what multiples are punters prepared to pay for SUM's profits ....not SUM's actual performance. Sentiment could still see SUM share price fall further or stagnate.

I'll leave it to others to comment on whether the current 'level of sentiment' is warranted or not.

Whatever SUM will still continue to build heaps of units and make heaps of money.

[winner69]

Good to see our friend Mr Ogden take an interest in the SUM bonds

[Beagle]

Not necessarily. Prices ARE stalling but it doesn't mean SUM won't do well. Once the public connects those things together the SP will start moving back on up.


SUM will continue to make decent profits through thick and thin. Talk of a property crash and its impact on SUM is just that

The issue is what multiples are punters prepared to pay for SUM's profits ....not SUM's actual performance. Sentiment could still see SUM share price fall further or stagnate.

I'll leave it to others to comment on whether the current 'level of sentiment' is warranted or not.

Whatever SUM will still continue to build heaps of units and make heaps of money.

+1, agree 100%.

[LAC]

SUM and RYM is a buy and hold for 30 years plan for me, so as long as it goes up over 30 years I will be happy:)
I have def been stocking up on SUM over RYM recently. Both great companies and both seem to be executing their plans well. RYM will be top pick because they have started outside NZ, but that also means SUM will head overseas at some point as well, growth is there just need to be patient:)

[Hoop]

Hmm... I'm sure it was mentioned on here that Summerset "set their own prices" for their units? and also that the property market doesn't affect retirement stocks (never did to RYM back in 08 or something?)

No worries

Back to $5 next week (3rd time I've said this in a few weeks or something... 3rd time lucky for sure)

"...... and also that the property market doesn't affect retirement stocks (never did to RYM back in 08 or something?)......"

???????:confused:

[Beagle]

"...... and also that the property market doesn't affect retirement stocks (never did to RYM back in 08 or something?)......"

???????:confused:

If I remember correctly, (forgive me its been nearly a decade) RYM got down to an underlying PE of 12 in the midst of the greatest financial crisis the world has seen since the great depression of 1929-1935 and most interestingly continued to post increased underlying earnings through the GFC. SUM is currently at 14 with no real evidence of a GFC MK2 ! Risks more than fully priced in ?

Winner, Anne Urlwin and James Ogden pretty conservative eh...should be loading up on shares not bonds at the current price !

[Raz]

If I remember correctly, (forgive me its been nearly a decade) RYM got down to an underlying PE of 12 in the midst of the greatest financial crisis the world has seen since the great depression of 1929-1935 and most interestingly continued to post increased underlying earnings through the GFC. SUM is currently at 14 with no real evidence of a GFC MK2 ! Risks more than fully priced in ?

Winner, Anne Urlwin and James Ogden pretty conservative eh...should be loading up on shares not bonds at the current price !

We didn't really suffer with GFC 1 and I would not discount GFC 2 and we will not miss out next time me suspects!

[Beagle]

We didn't really suffer with GFC 1 and I would not discount GFC 2 and we will not miss out next time me suspects!
With respect mate I think the investors who lost a whopping six billion dollars in finance companies in N.Z. would be highly likely to beg to differ !

[winner69]

If I remember correctly, (forgive me its been nearly a decade) RYM got down to an underlying PE of 12 in the midst of the greatest financial crisis the world has seen since the great depression of 1929-1935 and most interestingly continued to post increased underlying earnings through the GFC. SUM is currently at 14 with no real evidence of a GFC MK2 ! Risks more than fully priced in ?

Winner, Anne Urlwin and James Ogden pretty conservative eh...should be loading up on shares not bonds at the current price !

Got down to 13.

Before the exubernce of the last few years RYM average PE uo to 2013 was only 17 odd -that's interesting eh

[Raz]

With respect mate I think the investors who lost a whopping six billion dollars in finance companies in N.Z. would be highly likely to beg to differ !

Ok, i stand corrected, more in empathy to those I know who lost in that sector here, still it was mild here in relative terms to overseas where many businesses lost 40-60% turnover over night...and the suicides that followed.

[winner69]

Put up a chart winner, what regression channel are you on about? Why do you think it's going to the top?

You seemed a bit grumpy the other night baa_baa but I'll forgive you. I mentioned this SUM channel it a few weeks ago and couts just wanted an update

Only done the maths and haven't bothered do a chart yet. It's -

[
Just a linear regression based on weekly closes from Nov 2011 (just after floating) to current date to give a line of best fit.
All prices in this time period have been contained within 0.7 STDEV
As at this week the regression has a price of 519 (mid point of the channel)
If I drew a lower channel line this week it would be at 442 / the upper channel line would be at 597
The SUM share price has been trending UP over this tie frame at 24% pa



You might say that a STDEV of 0.7 is quite high (77 cents) but with prices trending up at 24% pa I think it's quite reasonable - after all all prices have been contained within the channel

I didn't say it's going to the top - but based on the past it possibly could ... and could go down to the bottom .....or as you will appreciate the trend could break down completely and the share price could go anywhere.

But at te moment heading to the regression line - that's good eh

All inspired by your friend Mr Raff

[Beagle]

Got down to 13.

Before the exubernce of the last few years RYM average PE uo to 2013 was only 17 odd -that's interesting eh

In normal circumstances I'm happy to pay a Ben Graham no growth PE of 8.5 + 1g (don't like his 2g). If we assume the long term forecast growth rate going forward remains at 15% then a PE of 23.5 seems fair and reasonable so RYM about fair value at present. These are not normal circumstances however and when you can buy a proven growth stock deeply discounted in the same sector with a vastly better growth rate why pay a fair price elsewhere...
Mr market just beginning to realise a forward PE of 14 for SUM was too cheap. Our mate Coutts will be happy with his truck and also trailer full already :)
SALT must be copping a real beating on their short position in SUM and large short position in RYM !

[Raz]

Looks like picked the bottom, 30 cent buffer on last transaction already...

[BlackPeter]

Looks like we returned today to the "good" side of the MA200 ... full steam ahead!

[Lewylewylewy]

Yup, over the past few days I've been thinking that sum is probably at the bottom. I suspect it'll go up within a year. I'm picking in 12 months time we'll see up to $5.5

I was 4c from the bottom. I love easy to spot ones 😝

[JeremyALD]

I was 4c from the bottom. I love easy to spot ones 😝
I would of topped up but I went all in at $5 so nice to see it's almost back there again, it was weighing down my portfolio for a little while. Luckily THL smashing it kept me happy while waiting for this to bounce :)

[winner69]

Good to see you guys all happy and excited again and recovering from that period when you were down in the dumps

Heading to 520 .....550 .....

[percy]

Good to see you guys all happy and excited again and recovering from that period when you were down in the dumps

Heading to 520 .....550 .....

Being able to stay solvent longer than the market staying wrong,meant I remained "well positioned" at all times.
Having "free " shares to off set my recent purchases, meant my average cost per share, was under market price at all times.
Also approaching the time when my wife and I am considering the "lifestyle" decision to make a retirement village our home,makes my understanding of the reasons people decide to do so,better than people who are not making the same decision.I have also had the experience of my mother entering a retirement village,as well as my mother in law having to go into dementia care.My point is when you have actual experience,you are more likely to make a better judgement call ,than someone who realises on a spreadsheet hypothesis. based on property prices.

[JeremyALD]

Great article on net migration and housing...

https://inner.kiwi/commentary/our-take-net-migration-and-away/

[Beagle]

https://www.stuff.co.nz/business/95036561/summerset-buys-land-for-third-christchurch-retirement-village?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Tuesday+25+ July+2017

Land acquisition and new village planned for Christchurch. Must say I have a ,lot of respect for what they are trying to do for dementia patients with their new memory center apartment living concept. Fastest growing proven performer on the NZX trading on a very cheap forward multiple of only 14.8. Compelling value in this sector and my biggest holding in the retirement sector.

[johnluangco]

Summerset buys land for third Christchurch retirement village

https://i.stuff.co.nz/business/95036561/summerset-buys-land-for-third-christchurch-retirement-village

[JoeGrogan]

https://www.stuff.co.nz/business/95036561/summerset-buys-land-for-third-christchurch-retirement-village?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Tuesday+25+ July+2017

Land acquisition and new village planned for Christchurch. Must say I have a ,lot of respect for what they are trying to do for dementia patients with their new memory center apartment living concept. Fastest growing proven performer on the NZX trading on a very cheap forward multiple of only 14.8. Compelling value in this sector and my biggest holding in the retirement sector.

After recently witnessing a family member deteriorate from the effects of dementia it is encouraging to know Summerset are providing ways to help these patients deal with such a terrible thing.

[Beagle]

After recently witnessing a family member deteriorate from the effects of dementia it is encouraging to know Summerset are providing ways to help these patients deal with such a terrible thing.
You have my sincere sympathy as I know from first hand experience this is an extremely difficult time for all the family. I think its very nice that family members can stay with their loved one in their own apartment, a very nice touch and the whole extended family can have some privacy while sharing time with their dementia affected loved one in their own apartment during this emotionally traumatic time. Contrasts quite markedly with how my Dad was herded out into a common living room area and we had to spend time with him without any privacy and "enjoy" interacting with about 30 other patients in RYM's secure dementia facility at Orewa Auckland.
I'll never forget the day before he died. Shriveled up like a prune on his very last legs in a common living room with 30 other residents in various stages of decline.
Really "enjoyed" coping with my emotions in full view of all the staff and about 30 other patients that day...SUMone has to come up with a better way and thank God they have !

[RupertBear]

You have my sincere sympathy as I know from first hand experience this is an extremely difficult time for all the family. I think its very nice that family members can stay with their loved one in their own apartment, a very nice touch and the whole extended family can have some privacy while sharing time with their dementia affected loved one in their own apartment during this emotionally traumatic time. Contrasts quite markedly with how my Dad was herded out into a common living room area and we had to spend time with him without any privacy and "enjoy" interacting with about 30 other patients in RYM's secure dementia facility at Orewa Auckland.
I'll never forget the day before he died. Shriveled up like a prune on his very last legs in a common living room with 30 other residents in various stages of decline.
Really "enjoyed" coping with my emotions in full view of all the staff and about 30 other patients that day...SUMone has to come up with a better way and thank God they have !

You have my sincere sympathy for your emotionally traumatic experience Beagle, my Dad suffered the same fate. I watched him waste away and die a slow horrible death in a secure dementia unit. Although they did their best for him no one should ever suffer that way. I wish there had been SUM where better for him to live out his final days so yes thank god there is now.

[JoeGrogan]

You have my sincere sympathy as I know from first hand experience this is an extremely difficult time for all the family. I think its very nice that family members can stay with their loved one in their own apartment, a very nice touch and the whole extended family can have some privacy while sharing time with their dementia affected loved one in their own apartment during this emotionally traumatic time. Contrasts quite markedly with how my Dad was herded out into a common living room area and we had to spend time with him without any privacy and "enjoy" interacting with about 30 other patients in RYM's secure dementia facility at Orewa Auckland.
I'll never forget the day before he died. Shriveled up like a prune on his very last legs in a common living room with 30 other residents in various stages of decline.
Really "enjoyed" coping with my emotions in full view of all the staff and about 30 other patients that day...SUMone has to come up with a better way and thank God they have !

I'm deeply sorry to hear Beagle, i couldn't imagine how tough that would have been to deal with.

[sb9]

You have my sincere sympathy as I know from first hand experience this is an extremely difficult time for all the family. I think its very nice that family members can stay with their loved one in their own apartment, a very nice touch and the whole extended family can have some privacy while sharing time with their dementia affected loved one in their own apartment during this emotionally traumatic time. Contrasts quite markedly with how my Dad was herded out into a common living room area and we had to spend time with him without any privacy and "enjoy" interacting with about 30 other patients in RYM's secure dementia facility at Orewa Auckland.
I'll never forget the day before he died. Shriveled up like a prune on his very last legs in a common living room with 30 other residents in various stages of decline.
Really "enjoyed" coping with my emotions in full view of all the staff and about 30 other patients that day...SUMone has to come up with a better way and thank God they have !

Sorry to hear that Roger, I echo my sentiments in the same way as others stated. Me deepest sympathies and condolences.

[Beagle]

Thanks for your very kind words folks, much appreciated. It was a few years ago now but as you can probably tell it still feels a bit raw. Shocking way for anyone to go and very tough on the whole family which is why I am so pleased SUM one is doing something about this to make this dreadful time a little more bearable for families to cope with in the future.

[Snow Leopard]

I see JC has apparently put his foot in his mouth:

'Immigrant workers were often "very caring and a lot of them have a natural affinity for it, which is important"' [https://www.stuff.co.nz/business/industries/95119371/govt-urged-to-let-migrant-staff-stay-in-retirement-sector]

whilst bemoaning that the new visa rules will affect the care industry.

Best Wishes
Paper Tiger

[artemis]

I see JC has apparently put his foot in his mouth:

'Immigrant workers were often "very caring and a lot of them have a natural affinity for it, which is important"' [https://www.stuff.co.nz/business/industries/95119371/govt-urged-to-let-migrant-staff-stay-in-retirement-sector]

whilst bemoaning that the new visa rules will affect the care industry.

Best Wishes
Paper Tiger

Lots of very negative comments on that article, many about migrants being paid 'slave wages'.

NZ is one of the easiest countries in the world to set up a business. If even a few of these negative posters got together they could set up their own business, hire locals and pay them whatever they like.

[Beagle]

Lots of very negative comments on that article, many about migrants being paid 'slave wages'.

NZ is one of the easiest countries in the world to set up a business. If even a few of these negative posters got together they could set up their own business, hire locals and pay them whatever they like.

Well said. Fact is SUM literally make nothing from their care center's as it is and the same goes from the villages themselves. Development profit and profit on resale is all the drives the profitability of this company. I'm aware of some smaller care service providers that are closing because of increased labor rates so this is indeed a real issue in N.Z. If we're not careful we may find we get to a point where unless you're independently wealthy you won't be able to afford decent late stage health care.
BTW The Government have conceded to have another look at that minimum income level as they've conceded it'll be too restrictive, sorry haven't got a link, saw that on T.V.1 breakfast program earlier this week.

[dobby41]

If we're not careful we may find we get to a point where unless you're independently wealthy you won't be able to afford decent late stage health care.

Why?
Because we have to pay the staff too much - is that what you are saying?
So we should pay some a pitance so others can live a better life?

[Beagle]

Why?
Because we have to pay the staff too much - is that what you are saying?
So we should pay some a pitance so others can live a better life?

Already we're in a position where if you want a decent room with a decent view in dementia care the Government are not funding it enough. My Dad had to pay another $120 a week at Ryman while in dementia care 4 years or so ago just to get a basic room with a garden view window and an on suite. Extrapolate that out for the last 4 years, add in the proposed very steep caregiver wages for the next five years and if you want a decent apartment like SUM are building for their dementia patients you're looking at an occupation license model or paying dramatically higher weekly fees than it would appear the Govt are going to be able to pay on your account. Think Govt subsidy about $1400 a week in five years and real cost about $2,000 a week for a good sized apartment would be my estimate. Maybe something like $600 per week from your own funds and if you have dementia for 7 years that's perhaps over $200,000 at a guess those that want the best for their loved ones may need to find.
Think - best quality care only for the well heeled.

[dobby41]

Already we're in a position where if you want a decent room with a decent view in dementia care the Government are not funding it enough. My Dad had to pay another $120 a week at Ryman while in dementia care 4 years or so ago just to get a basic room with a garden view window and an on suite. Extrapolate that out for the last 4 years, add in the proposed very steep caregiver wages for the next five years and if you want a decent apartment like SUM are building for their dementia patients you're looking at an occupation license model or paying dramatically higher weekly fees than it would appear the Govt are going to be able to pay on your account. Think Govt subsidy about $1400 a week in five years and real cost about $2,000 a week for a good sized apartment would be my estimate. Maybe something like $600 per week from your own funds and if you have dementia for 7 years that's perhaps over $200,000 at a guess those that want the best for their loved ones may need to find.
Think - best quality care only for the well heeled.

All that is all well and good but what are you saying the answer is?
The post I replied to implies that the problem was paying 'high' wages to the carers. Maybe I got the wrong impression - what impression were you trying to give?

[Bjauck]

All that is all well and good but what are you saying the answer is?
The post I replied to implies that the problem was paying 'high' wages to the carers. Maybe I got the wrong impression - what impression were you trying to give?
It is a balancing act...Lower income Kiwis could become suspicious and disgruntled if they think that the government is providing visas to lower paid immigrants as a way of keeping wage rates down (and reducing the strain on the government budget for government subsidised services.) The National Party also risks alienating its supporters if they cannot reduce tax. However I think if you want universally available quality services - in a society that has a reasonable and socially harmonious spread in incomes - you may need to accept that the government needs more tax.

As it is currently, people (single or both spouses in care) have to pay for even their basic care if they have assets over about $215,000. So if you are unfortunate enough to get dementia and need care for years, your invested savings could be all but wiped out. This type of "dementia tax", when proposed, was widely condemned in the UK before their last election as it would mean that many would not be able to pass on their house/many assets to their heirs as they had been unlucky enough to get a debilitating illness.

[Beagle]

All that is all well and good but what are you saying the answer is?
The post I replied to implies that the problem was paying 'high' wages to the carers. Maybe I got the wrong impression - what impression were you trying to give?


It is a balancing act...Lower income Kiwis could become suspicious and disgruntled if they think that the government is providing visas to lower paid immigrants as a way of keeping wage rates down (and reducing the strain on the government budget for government subsidised services.) The National Party also risks alienating its supporters if they cannot reduce tax. However I think if you want universally available quality services - in a society that has a reasonable and socially harmonious spread in incomes - you may need to accept that the government needs more tax.

As it is currently, people (single or both spouses in care) have to pay for even their basic care if they have assets over about $215,000. So if you are unfortunate enough to get dementia and need care for years, your invested savings could be all but wiped out. This type of "dementia tax", when proposed, was widely condemned in the UK before their last election as it would mean that many would not be able to pass on their house/many assets to their heirs as they had been unlucky enough to get a debilitating illness.

Well said. The issue as I see it is that the sentiment is fine, lets pay Kiwi workers another $7 an hour, but for round the clock 3 shifts a day 24/7 care in a dementia or hospital ward that's another $1,176 per week x number of staff on 24/7 duty plus extra cleaners wages e.t.c.. Someone has to pay, the taxpayer or user pays, its really that simple. Who is going to pay ? All nice and sweet to talk about the theory of paying New Zealanders a decent wage but how do service providers provide that service without going broke like some small private ones already have ?

[Jonboyz]

I find it hard to have sympathy for an employer who pays their salary staff such pitiful wages and complains about it.

https://www.stuff.co.nz/business/industries/95119371/govt-urged-to-let-migrant-staff-stay-in-retirement-sector

disc. Hold SUM but considering

[Joshuatree]

Yes its so pathetic. Goalposts will have to be shifted as bull has suggested and the returns may be a little less in future. The staff do such an amazing job(generally; i do see some pretending to care though) and get shafted for it; not valued at all,an offensive rort. At least they aren't being paid peanuts anymore (no credit to SUM)so hopefully the care will be even better now. So yes Roger sorry to rain on your sweet smelling money parade; but less returns and more humanity is a good balance.

[winner69]

Yes its so pathetic. Goalposts will have to be shifted as bull has suggested and the returns may be a little less in future. The staff do such an amazing job(generally; i do see some pretending to care though) and get shafted for it; not valued at all,an offensive rort. At least they aren't being paid peanuts anymore (no credit to SUM)so hopefully the care will be even better now. So yes Roger sorry to rain on your sweet smelling money parade; but less returns and more humanity is a good balance.

It would be nice to have less returns and more humanity ....but you know that's not the way the game is played

As long as greedy shareholders demand excessive returns this will the way. Sad eh

Corporates aren't benevolent societies

[Joshuatree]

They wont have a choice imo w69,the Labour govt will though.

[BlackPeter]

They wont have a choice imo w69,the Labour govt will though.

LOL - not a wise threat to make on an investor forum, but good to hear from the horses mouth.

[Joshuatree]

Whoops apologies for the politics slip up folks; but you get my drift.

[dobby41]

Well said. The issue as I see it is that the sentiment is fine, lets pay Kiwi workers another $7 an hour, but for round the clock 3 shifts a day 24/7 care in a dementia or hospital ward that's another $1,176 per week x number of staff on 24/7 duty plus extra cleaners wages e.t.c.. Someone has to pay, the taxpayer or user pays, its really that simple. Who is going to pay ? All nice and sweet to talk about the theory of paying New Zealanders a decent wage but how do service providers provide that service without going broke like some small private ones already have ?

So the answer is to pay some sectors of society poorly.
Seems to harp back to the good old days of the 1800's.

Of course, if they are paid poorly then they get more welfare - the Govt pays to top things up.
Sounds like Corporate welfare in stealth.

[Beagle]

The bottom line is someone has to pay for good quality late stage care, corporations are not charities.

[dobby41]

The bottom line is someone has to pay for good quality late stage care, corporations are not charities.

So the carer (the lowest paid worker) should pay rather than the person getting the care (if they have assets over the designated maximum)?
Seems a bit unfair to me really.
Fortunately I'm not a carer and, frankly, wouldn't take the job if you paid me all the tea in China.
I think people like that are worth their weight in gold!

[Beagle]

My opinion - The Govt need to be looking at stepping up to the plate if they want caregivers to be paid the sort of wages that have been outlined. The present weekly rates paid for late stage care won't be anywhere near enough.

On another subject - I see bullish "fighting" ? talk by JC at yesterday's Ellerslie opening. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11895413&utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Friday+28+J uly+2017

[dobby41]

My opinion - The Govt need to be looking at stepping up to the plate if they want caregivers to be paid the sort of wages that have been outlined. The present weekly rates paid for late stage care won't be anywhere near enough.


I thought that the Govt was funding in increase?
Is this not going to happen?

[dobby41]

On another subject - I see bullish "fighting" ? talk by JC at yesterday's Ellerslie opening. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11895413&utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Friday+28+J uly+2017

Does anyone know if retirement village units are included in the housing stats?
I have a feeling that they aren't and are part of the missing component expaining why we aren't as short of houses as we seem to think.

There is no doubt that retirement villages play a vital 'efficient' housing role.

[Ggcc]

So the carer (the lowest paid worker) should pay rather than the person getting the care (if they have assets over the designated maximum)?
Seems a bit unfair to me really.
Fortunately I'm not a carer and, frankly, wouldn't take the job if you paid me all the tea in China.
I think people like that are worth their weight in gold!

We all have a choice of what we want to do with our lives. Trying to balance lifestyle with money is always difficult. I have found the more I earned the less time I had to socialise (as in the workload increased). I am trying to change my work a little so I can have a lifestyle. We need lower paid workers in capitalism to make capitalism work. I will become one of those lower paid workers at some stage after years of slogging 7 days a week including stats because staff asked for time off. I am actually looking forward to some time off to relax more. Everyone has a choice was the message not attacking your message 😊

[winner69]

Does anyone know if retirement village units are included in the housing stats?
I have a feeling that they aren't and are part of the missing component expaining why we aren't as short of houses as we seem to think.

There is no doubt that retirement villages play a vital 'efficient' housing role.

Included in building consents numbers and in census counts

[Beagle]

I thought that the Govt was funding in increase?
Is this not going to happen?

They are but its opened up a can of "relativity" worms for nurses / cleaners / admin staff.

[dobby41]

They are but its opened up a can of "relativity" worms for nurses / cleaners / admin staff.

Relativity is an interesting thing.
A while ago I was talking to a friend who was a Govt employee.
The minimum hourly rate had just gone up and they said they would get a pay rise.
"But your not on the minimum wage" I said.
"But I need an increase to maintain relativity" they said.
In this case their hourly rate was so far above the minimum rate I couldn't see how it applied but Govt you know.

It would be nice if we were a higher wage economy - at the moment we aren't.
Some time ago a polition was crowing that we took some call centre jobs from Aussie because our wages are lower - didn't seem like much to get excited about really!
Higher wages for all, more money to spend (and the lower waged spend most, if not all, of their income), more goods sold, more goods required then, more jobs.
Sounds good to me (bit simplistic I know).

[Bjauck]

So the carer (the lowest paid worker) should pay rather than the person getting the care (if they have assets over the designated maximum)?
Seems a bit unfair to me really.
Fortunately I'm not a carer and, frankly, wouldn't take the job if you paid me all the tea in China.
I think people like that are worth their weight in gold!

Carers need to be patient - definitely not for everyone!

Dementia, for example, is an illness and it could be argued that Health Boards (i.e. Taxpayers) should cover the costs of the long term care of dementia sufferers. As it is, the lottery of whether you will require long term care has in the past provided a boost for the family trust industry in order to preserve assets. Means testing increasingly look into trusts however. I don't think there are insurance policies available in NZ to cover for long term nursing home care.

If you may have to spend just about all of your savings on end of life care, what would that do for the incentive to accumulate savings and maintain investments? Why not just spend now?

[percy]

Carers need to be patient - definitely not for everyone!

Dementia, for example, is an illness and it could be argued that Health Boards (i.e. Taxpayers) should cover the costs of the long term care of dementia sufferers. As it is, the lottery of whether you will require long term care has in the past provided a boost for the family trust industry in order to preserve assets. Means testing increasingly look into trusts however. I don't think there are insurance policies available in NZ to cover for long term nursing home care.

If you may have to spend just about all of your savings on end of life care, what would that do for the incentive to accumulate savings and maintain investments? Why not just spend now?

Savings gives you independence and freedom of choice.

[dobby41]

Carers need to be patient - definitely not for everyone!

Dementia, for example, is an illness and it could be argued that Health Boards (i.e. Taxpayers) should cover the costs of the long term care of dementia sufferers. As it is, the lottery of whether you will require long term care has in the past provided a boost for the family trust industry in order to preserve assets. Means testing increasingly look into trusts however. I don't think there are insurance policies available in NZ to cover for long term nursing home care.

If you may have to spend just about all of your savings on end of life care, what would that do for the incentive to accumulate savings and maintain investments? Why not just spend now?

Good point about Dementia being an illness that should be 'treated' by the DHB (like cancer say).

As for the last point - at the point they have dementia they aren't worried about what their assets are doing.
You would have to suppose that they accumulated assets to use in their later years (I know I am). If they didn't manage to use them all before they couldn't then so be it.
If you didn't accumulate then maybe to live to 105 and live a subsistence life on the super only.
A bit of a lottery - I know I am not basing my actions on the possibility that I might get dementia before I can spend my money - my crystal ball just doesn't work well enough for that!

[Jantar]

Relativity is an interesting thing.
A while ago I was talking to a friend who was a Govt employee.
The minimum hourly rate had just gone up and they said they would get a pay rise.
"But your not on the minimum wage" I said.
"But I need an increase to maintain relativity" they said.
In this case their hourly rate was so far above the minimum rate I couldn't see how it applied but Govt you know......
The effect does trickle upwards. Yes the minimum wage goes up say $0.50, but someone who was just above minimum wage on merit or skills is now also on minimum wage so they have to move up as well. That person may now be on a similar wage to someone on a basic trade, so that basic trade wage moves up. The advanced trade above them now needs a rise, and so does their manager.

Relativity is more than just a simple percentage, it must also recognise responsibility, skills, and knowledge required. It is often even a multiple effect, hence CEOs earn much more than their staff.

[Beagle]

https://www.stuff.co.nz/business/industries/95119371/govt-urged-to-let-migrant-staff-stay-in-retirement-sector

The Governments revised annual figure seems like a pragmatic decision to me at an annual rate that = $20 hour x 40 hours a week.
Agree hard working rest home caregivers should be paid at that rate as a minimum but the question remains as to who is going to pay for that.

[bull....]

"bleed them dry until they die". (http://www.smh.com.au/interactive/2017/retirement-racket/bleed-them-dry/)


Seems to be the catch-cry in AUS of the retirement sector as they mention it again in the article below which goes on to say that states in AUS are now looking at regulation

http://www.canberratimes.com.au/business/states-scurry-to-reform-retirement-villages-20170801-gxmxyh.html

[dobby41]

Interesting.
I hadn't really considered people wanting to leave a village before they die or need to move into care.
I had always thought of it in terms of you just leave less inheritance so it didn't matter so much what the exit fees were.
But if you did want to leave then you wouldn't have much left to do anything else.

[BlackPeter]

"bleed them dry until they die". (http://www.smh.com.au/interactive/2017/retirement-racket/bleed-them-dry/)


Seems to be the catch-cry in AUS of the retirement sector as they mention it again in the article below which goes on to say that states in AUS are now looking at regulation

http://www.canberratimes.com.au/business/states-scurry-to-reform-retirement-villages-20170801-gxmxyh.html

Our bear in disguise ... here we go again. Any chance you could explain to us the relevance of the outdated Australian material you posted? What has this to do with SUM - they don't operate in Australia and they have ways fairer contracts anyway?

[bull....]

Our bear in disguise ... here we go again. Any chance you could explain to us the relevance of the outdated Australian material you posted? What has this to do with SUM - they don't operate in Australia and they have ways fairer contracts anyway?

Its not out-dated there is on going debate in AUS about the retirement sector , regulation will fundamentally change the dynamics of the sector. Anyone with interest in retirement stocks should follow what happening in AUS as it may affect the sectoer here too one day.

Main points too watch - which will affect profits

exit fees are a good source of gain but under investigation
refurb costs these may stay good revenue
mainteneance fees - probably stay good revenue
churn - cant really change unless we ramp up bad service and nutrition less doctors on site etc then we can get more churn so more churn might make up for exit fee regulation?

some of the things to consider on what is happening in aus and investors should note of what happens there could happen here.

[dobby41]

and they have ways fairer contracts anyway?

I haven't compared contracts but are they fairer?
What happens to the person who decides to leave before they die (maybe they don't like the village anymore, just like people mive houses now)?

[bull....]

Interesting.
I hadn't really considered people wanting to leave a village before they die or need to move into care.
I had always thought of it in terms of you just leave less inheritance so it didn't matter so much what the exit fees were.
But if you did want to leave then you wouldn't have much left to do anything else.

people want to leave sometimes because retirement village like school lots of clicky groups and im the boss of the place mentality amoung residents so not everyone happy all the time so when you leave you have all the costs and may not be able to afford to leave anyway good for village as unhappy resident trapped mean more churn lol

[BlackPeter]

I haven't compared contracts but are they fairer?
What happens to the person who decides to leave before they die (maybe they don't like the village anymore, just like people mive houses now)?

Are they fairer?
Well, I haven't heard that it is possible in NZ to sign up any of these contracts without having them explained to you by an independant lawyer. People fully understand what they sign up to. This does not always seem to be the case in Australia. I think the situation in NZ is fairer.

What happens if they want to leave early?

Depends on how long they did live in the village. The deferred management fee is charged in proportion to the length of the stay (as it should), but with a cap.

SUM offers as well the option to move to a different village by basically transferring your right to live (i.e. DMF is not charged twice). Obviously - if somebody wants to move from SUM into the RYM village next door, they might be out of luck (and need to pay the proportion of the DMF they owe SUM and afterwards whatever RYM charges.

However - not sure what people expect - they get an amazing lifestyle - swimming pool, sauna, bowling green, various clubs, free entertainment - and maintenance, food and care basically charged at cost - and then they complain afterwards if they need to pay the bill for their lifestyle? Sounds pretty greedy to me, but I guess it is typically the children who didn't do anything to accrue the money in the first place but consider it already "theirs" before the parents are 6 foot below.

Obviously - retirement villages could charge the management fee as they go .. just means that many people might run out of money while living in the same village (which can't happen with the DMF). Which option is the better one?

[dobby41]

Depends on how long they did live in the village. The deferred management fee is charged in proportion to the length of the stay (as it should), but with a cap.

SUM offers as well the option to move to a different village by basically transferring your right to live (i.e. DMF is not charged twice). Obviously - if somebody wants to move from SUM into the RYM village next door, they might be out of luck (and need to pay the proportion of the DMF they owe SUM and afterwards whatever RYM charges.

My understanding is that they take the value of the place when you brought it and subtract the deferred maintenance from that - you get what's left.
But after, say, 10 years the place could be worth a lot more - no doubt the replacement properties will have gone up.
The village will refurbish (at your cost basically) and sell at a higher price.
Is my understanding wrong?

[BlackPeter]

people want to leave sometimes because retirement village like school lots of clicky groups and im the boss of the place mentality amoung residents so not everyone happy all the time so when you leave you have all the costs and may not be able to afford to leave anyway good for village as unhappy resident trapped mean more churn lol

Not quite so. Most retirement villages offer you a trial period (3 months or so) where you can leave without incurring DMF, and if it takes longer for you to realise that you don't like the climate in this village, than you just need to pay a portion of the DMF. Sounds fair to me - why should retirement villages house elderlies basically for free?

[BlackPeter]

My understanding is that they take the value of the place when you brought it and subtract the deferred maintenance from that - you get what's left.
But after, say, 10 years the place could be worth a lot more - no doubt the replacement properties will have gone up.
The village will refurbish (at your cost basically) and sell at a higher price.
Is my understanding wrong?

It depends - contracts changed over time and depending on the operator ... but yes, this is one of the models. People will be absolutely clear about what they sign up for at the time they enter the contract. If they don't like it, they have all the right in the world to go somewhere else.

BTW - if property prices drop ... they typically still get the money back they put in (minus DMF).

[dobby41]

It depends - contracts changed over time and depending on the operator ...

Anyone know what model SUM use?
Or the others?

[BlackPeter]

Anyone know what model SUM use?
Or the others?

Here is a summary of Summersets up to date conditions - check particularly page 22:
https://www.summerset.co.nz/assets/Brochures/SUM140385-Summerset-Brand-Brochure-Web-Version-08.12.14.pdf

Worthwhile to note that you don't buy a unit - you buy a right to occupy. If e.g. something happens to the unit - it is not the problem of the occupier, but the village will provide either with a replacement - or pay you the full market value for your unit without any deductions :).

[kiwico]

There is regulation in NZ of a sort - there is the Retirement Villages Act 2003 and the code of practice (http://www.mbie.govt.nz/info-services/housing-property/retirement-villages/code-of-practice-2008/?searchterm=retirement%20villages%2A)all villages need to adhere to. The code is there to protect residents and was greatly enhanced post Canterbury earthquakes to deal with the issue when a resident needs to move out of their unit due to damage.

[Beagle]

Our bear in disguise ... here we go again. Any chance you could explain to us the relevance of the outdated Australian material you posted? What has this to do with SUM - they don't operate in Australia and they have ways fairer contracts anyway?

Well said. SUM people need to get over the sensationalist Australian newspaper reports which have nothing to do with SUM as they don't operate there. SUM have a 94% resident satisfaction survey which they are very proud of which is in line with the same very high resident satisfaction survey they did the previous year so they must be doing a LOT of things very well !

My guess is a lot of the younger generation are a bit miffed they will inherit a lot less, (no capital gain and the DMF) but here's a free heads up, old folks don't care. What they care about is being happy and living in a well supported, safe and caring community environment.
It's their money and they are free to do with it what they please.

Overall the penetration rate for retirement village living in terms of old folks housing needs has been steadily rising in N.Z. so there's obviously increasing level's of satisfaction from our elderly folks.

P.S. Good day for the sector overall. I think some investors took comfort from the fact that despite all the much hyped talk of a property crash the very latest national average data shows the housing market increased 0.348% from June to July 2017 i.e. an average annual rate of just over 4% per annum.
http://www.interest.co.nz/property/89080/qv-says-flattening-average-dwelling-values-auckland-hamilton-and-christchurch-now
Still a supportive environment for retirement companies and in line with my price model assumptions.

[Harley]

https://thewest.com.au/news/wa/exclusive-hotel-set-to-be-converted-to-high-end-aged-care-facility-ng-b88554470z

[percy]

Well said. SUM people need to get over the sensationalist Australian newspaper reports which have nothing to do with SUM as they don't operate there. SUM have a 94% resident satisfaction survey which they are very proud of which is in line with the same very high resident satisfaction survey they did the previous year so they must be doing a LOT of things very well !

My guess is a lot of the younger generation are a bit miffed they will inherit a lot less, (no capital gain and the DMF) but here's a free heads up, old folks don't care. What they care about is being happy and living in a well supported, safe and caring community environment.
It's their money and they are free to do with it what they please.

Overall the penetration rate for retirement village living in terms of old folks housing needs has been steadily rising in N.Z. so there's obviously increasing level's of satisfaction from our elderly folks.

Australia
....Someone kindly posted on Ryman thread, a report of RYM's agm.What is of particular interest, is RYM's Australian director,George Savvides comments.
Inheritance.
...Our house has a rateable valuation of $540,000.Market valuation may be close to that.No mortgage.
So far retirement village units we may be looking at are near $340,000.
That would free up $200,000.
In 10 years time I die.Retirement village unit gives my estate approx.$250,000.
The freed up $200,000, "percy" invested over 10 years, will most probably generate between $600,000 and $800,000,
Well positioned.?

[dobby41]

The freed up $200,000, "percy" invested over 10 years, will most probably generate between $600,000 and $800,000,
Well positioned.?

300% to 400% in 10 years - impressive!
What's that - 20% to 30% compounding per annum?

[dobby41]

My guess is a lot of the younger generation are a bit miffed they will inherit a lot less, (no capital gain and the DMF) but here's a free heads up, old folks don't care. What they care about is being happy and living in a well supported, safe and caring community environment.
It's their money and they are free to do with it what they please.

I think you are right that many younger generation are worried about their inheritance.
So are many older people which is a drag on the numbers going into a village. They are used to saving for a rainy day and want to leave something. Took a little bit to convince my parents to move and they can see the benefits now.

What does concern me with the model is what happens if they want to move somewhere else. They wouldn't have enough money having missed out on any capital gain AND paying to have the place refurbished. I hadn't thought of that senario before.
Good for the shareholder though.

[Bjauck]

...
...Our house has a rateable valuation of $540,000.Market valuation may be close to that.No mortgage.
So far retirement village units we may be looking at are near $340,000.
That would free up $200,000.
....
I think you would make the most of that freed up investment capital!

The current older generation has enjoyed a boost over the years in their leveraged real estate capital values beyond both the increase in inflation and incomes. Today's first home buyers, even if they can afford the deposits, won't be as lucky to enjoy such windfall residential real estate price increases, as interest rates cannot fall much further.

As the older land owing generation (including those who were in a position to free up part of their real estate wealth when they moved into a great SUM unit!) pass away there are plenty of the younger and hard working generation who need however to rely on inheriting assets so that they can afford to move out of their cramped, but still expensive, apartments.

increasingly, more so than in the past, it is a question of how wealthy your family is that determines if you can buy and what type of house house the younger generation can buy. Perhaps that is why there is pressure on the older generation to preserve inheritances.

[BlackPeter]

increasingly, more so than in the past, it is a question of how wealthy your family is that determines if you can buy and what type of house house the younger generation can buy. Perhaps that is why there is pressure on the older generation to preserve inheritances.

Probably the wrong question and admittedly not the right discussion for this thread either. However interesting to note that most wealthy countries have much lower rates of home ownership than most poor countries. Switzerland: 43.4%, Germany: 51.9%, New Zealand: 64.8%, India 86.6%, Romania: 96.4%;

https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate

Only exception I can see in this list is Singapore - they are reasonably wealthy and have still a very high home ownership rate, but this is due to the state selling every Singaporean couple at their wedding day a heavily subsidized flat.

Just saying - we might be in a dead end if we want to improve our wealth by keeping our homeownership rates up ... home ownership reduces flexibility.

[Bjauck]

...
Just saying - we might be in a dead end if we want to improve our wealth by keeping our homeownership rates up ... home ownership reduces flexibility.
I think it is a relevant discussion although general and not just specific to SUM.
Agree - in NZ so much of household wealth is tied up in the family home (with expensive residential land). The SUM model is based on selling ORAs, the prices of which are based on surrounding real estate values. If fewer of the surrounding homes are owner occupied then the potential market for ORAs will drop. Not a problem for the next decade or so as the tsunami of land-owning retiring baby boomers continues to grow...

However if you wish to encourage a diversion into productive assets and away from investing and inflating the price of land - then I imagine taxation and lending preferences will need to change to encourage such a change. As you say there are many wealthy countries with a greater proportion of household wealth invested in productive assets as opposed to owning residential land (and inflating the price of land?). In that situation perhaps the retirement companies need to devise a scheme the cost of which is not reliant on ORA/real estate value relativity.

[Carpenterjoe]

Probably the wrong question and admittedly not the right discussion for this thread either. However interesting to note that most wealthy countries have much lower rates of home ownership than most poor countries. Switzerland: 43.4%, Germany: 51.9%, New Zealand: 64.8%, India 86.6%, Romania: 96.4%;

https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate

Only exception I can see in this list is Singapore - they are reasonably wealthy and have still a very high home ownership rate, but this is due to the state selling every Singaporean couple at their wedding day a heavily subsidized flat.

Just saying - we might be in a dead end if we want to improve our wealth by keeping our homeownership rates up ... home ownership reduces flexibility.

Occupied dwellings are interesting, they change a lot and slowly.

Australia's % have gone from

52.6% Owner in 1947
72.5% Owner in 1966
71.6% Owner in 1980

to circa 31% Currently (i think)

(note) Switzerland in the 1970 was circa 28.5%

[Bjauck]

Occupied dwellings are interesting, they change a lot and slowly.

Australia's % have gone from

52.6% Owner in 1947
72.5% Owner in 1966
71.6% Owner in 1980

to circa 31% Currently (i think)

(note) Switzerland in the 1970 was circa 28.5%
67% were owner-occupiers in OZ in 2011 down from 68% in 2006
http://www.abc.net.au/news/factcheck/2015-05-06/fact-file-housing-in-australia/6442650

In the UK:
71% were owner occupiers in 2003
64% in 2016

Low interest rates and booming asset prices do seem to make home owning less affordable for more people in Oz and the UK too.

NZ's owner occupied homes as a percent of total
dwellings has dropped from 74% in 1991 to 64% in 2015 (and continuing to fall.)
http://www.stats.govt.nz/browse_for_stats/population/estimates_and_projections/dwellings-household-trends-1991-2015.aspx#renting

However taking into account the population increase, the total number of owner-occupiers (potential market for SUM) is increasing.(as per the graph in the linked item)

It would be nice to hope that those people who are being priced out or choosing not to become home owners are building up investments elsewhere, which they could eventually use to buy an ORA, should they so desire.

[dobby41]

It would be nice to hope that those people who are being priced out or choosing not to become home owners are building up investments elsewhere, which they could eventually use to buy an ORA, should they so desire.

What do you think the chances of that are?
Close to zero I'd suggest. We don't, as a country, have the financial literacy for that.

[Carpenterjoe]

67% were owner-occupiers in OZ in 2011

Whoops, the 30 odd percent i quoted is those whom own out right. Cheers for the correction.

[JeremyALD]

Will this finally cross $5 again. Been looking stronger of late.

[bull....]

could be good for retirement stocks , more kiwi retirees coming home maybe

https://www.stuff.co.nz/business/opinion-analysis/95390826/janine-starks-kiwi-retirees-in-australia-are-getting-a-raw-deal

[winner69]

could be good for retirement stocks , more kiwi retirees coming home maybe

https://www.stuff.co.nz/business/opinion-analysis/95390826/janine-starks-kiwi-retirees-in-australia-are-getting-a-raw-deal



I gather it's already happening to some extent - part of the 72,000 odd net migration number

Come home now ......inevitably a x% into retirement villages later

[Bjauck]

could be good for retirement stocks , more kiwi retirees coming home maybe

https://www.stuff.co.nz/business/opinion-analysis/95390826/janine-starks-kiwi-retirees-in-australia-are-getting-a-raw-deal

Lets hope the health boards and system is funded adequately to cope too.

[mondograss]

I wonder who will get there first, Summerset, Ryman, Metlifecare or one of the others?
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11899951

[BlackPeter]

I wonder who will get there first, Summerset, Ryman, Metlifecare or one of the others?
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11899951

Interesting:


The trust's accounts show that it loss $1,176,526 in the latest period. Revenue fell from $14,267,471 in the September 30, 2015 year to $11,521,333 last year. Expenses rose from $18.1m in 2015 to $18.7m last year. That resulted in a deficit climbing from $3.1m in 2015 to $6.1m last year.

One industry expert today described the accounts as "dire" and revealing an extremely sorry situation. Such losses could not be sustained, he said.

However, he also noticed how the trust owned 48 per cent of Smith & Caughey Holdings, valued in the latest accounts as being worth $40,473,613, up from $36,989,766 in 2015. That showed the elderly rest home's relationship to the Queen St department store, he said.


So - actually - they made (as the other retirement providers) another fat paper gain. Asset rich but cash poor - as many of their residents.

Obviously - this situation is not sustainable. Clearly - for the government to just increase the pay rates without properly increasing the funding is a no go and will only kill off our age care sector.

I think however that the financial situation of the big four is different - given that they can capitalise their valuation gains (using the DMF) and not just sit on them (as this fund apparently did).

[Beagle]

This closure appears to be just the very tip of the iceberg as caregiver rates have only just started to increase on 1 July 2017.
SUM companies with a well funded structure and very strong balance sheet are probably best placed to work this to their commercial advantage.

[mondograss]

Interesting:



So - actually - they made (as the other retirement providers) another fat paper gain. Asset rich but cash poor - as many of their residents.

Obviously - this situation is not sustainable. Clearly - for the government to just increase the pay rates without properly increasing the funding is a no go and will only kill off our age care sector.

I think however that the financial situation of the big four is different - given that they can capitalise their valuation gains (using the DMF) and not just sit on them (as this fund apparently did).

Actually I was referring to the likelihood the big 4 would go after the large, prime Remuera site that the rest home currently occupies. But yes you make an interesting point too, that the charitable trust rest homes will struggle if they are in an asset rich, cash poor position and can't monetise the assets. One would think that would apply to many of those rest homes run by religious orders.

[Raz]

This closure appears to be just the very tip of the iceberg as caregiver rates have only just started to increase on 1 July 2017.
SUM companies with a well funded structure and very strong balance sheet are probably best placed to work this to their commercial advantage.

The rest home sector short term future I believe is open to political risk, if national gets in with it current proposed bill then all will be good for the caregiver cost element..take a look at the detail :-). If not then they have a problem. Pick the election and you can pick the share price trend for the sector.

[aajm1490]

Hi all,

Apologies for being slightly off-topic; I'll keep this as short as possible.

Colmar Brunton is conducting some research on behalf of the Financial Markets Authority (FMA) about what information investors find most helpful to make informed decisions about particular investments. This will help the FMA improve product disclosure documents to make them more useful for investors. We're looking for people to take part in paid research interviews at our Auckland and Wellington offices in late August.

We'd like to talk with you if you have recently invested, or seriously considered investing, in the Summerset fixed rate 6 year bond offer.

Your contact details and the feedback you provide in interviews will be completely annonymised and will not be used for any other purpose. If you are interested in taking part, please email ali.ajmal@colmarbrunton.co.nz with your contact details including a phone number.

Cheers

PS: If you're interested, please get in touch via the email above as direct messages on ST won't be acknowledged.
PPS: This message was cleared with an ST Admin before being posted.

[bull....]

looks like a double top is in

[J9jcm50]

[QUOTE=Beagle;676568]Well said. SUM people need to get over the sensationalist Australian newspaper reports which have nothing to do with SUM as they don't operate there. SUM have a 94% resident satisfaction survey which they are very proud of which is in line with the same very high resident satisfaction survey they did the previous year so they must be doing a LOT of things very well !

My guess is a lot of the younger generation are a bit miffed they will inherit a lot less, (no capital gain and the DMF) but here's a free heads up, old folks don't care. What they care about is being happy and living in a well supported, safe and caring community environment.
It's their money and they are free to do with it what they please.

Overall the penetration rate for retirement village living in terms of old folks housing needs has been steadily rising in N.Z. so there's obviously increasing level's of satisfaction from our elderly folks.

P.S. Good day for the sector overall. I think some investors took comfort from the fact that despite all the much hyped talk of a property crash the very latest national average data shows the housing market increased 0.348% from June to July 2017 i.e. an average annual rate of just over 4% per annum.
http://www.interest.co.nz/property/89080/qv-says-flattening-average-dwelling-values-auckland-hamilton-and-christchurch-now
Still a supportive environment for retirement companies and in line with my price model assumptions.

[i love this blog. The younger generation need to get a grip that the parents are well looked after and happy. If they get an inheritance then great but it's not a right it's a privilege. ]

[Bjauck]

...
My guess is a lot of the younger generation are a bit miffed they will inherit a lot less, (no capital gain and the DMF) but here's a free heads up, old folks don't care. What they care about is being happy and living in a well supported, safe and caring community environment.
It's their money and they are free to do with it what they please....

[i love this blog. The younger generation need to get a grip that the parents are well looked after and happy. If they get an inheritance then great but it's not a right it's a privilege. ] Lucky for youngsters with a caring and rich land-owning family! The NZ land-owning us-and-them aristocracy is developing.

In my opinion, I think the Silent Generation (those born pre 1945) do care about the problems facing the younger generation. Perhaps your comment that the "old folks" do not care may refer to Baby boomers. In which case, you may well have a point. Maybe they are "the entitled generation" who enjoyed their education without being saddled with enormous student debt as well as enjoying windfall capital gains (as a result of the shift to low interest rates) on their leveraged real estate. Maybe they now wish to guard those gains against a younger generation who struggle to get on the first rung of the property ladder as a result of prices being umpteen multiples of average incomes...

I think that most of the folks moving into Retirement villages are still from the Silent Generation. So maybe they can make such a move with the knowledge that their middle-aged children are already in homes in which they already have a large amount of leveraged equity.

Of course this is a generalisation.

[thestg]

SUMMERSET REPORTS STRONG PROFIT GROWTH FOR FIRST HALF OF 2017
• Net profit after tax of NZ$90.3m, up 78% from 1H16
• Underlying profit for 1H17 NZ$35.7m, up 45% on 1H16
• Total assets of NZ$1.9b, up 27% on 1H16
• 323 total sales of occupation rights, up 6% on 1H16
• 171 new retirement homes delivered
• Interim dividend of NZ 3.9 cents per share
• Record development margin of 28%

[percy]

Absolute cracker.
That development margin is a pleasant big surprise.

[couta1]

WOW, that result should silence the naysayers. Development margin in a so called challenging period is outstanding.

[percy]

WOW, that result should silence the naysayers. Development margin in a so called challenging period is outstanding.

Couta1 was that you and your terrier, doing a spot of modelling on the 1st page of SUM's presentation?

[Beagle]

https://www.nzx.com/files/attachments/263382.pdf

The use of two dogs in the presentation instead of the usual one tells you all you need to know.
My only heads up for the full year result that I will go on record with is this, the full year presentation will warrant three dogs in the pictures :D I am more than happy to nominate Skippy my 11 year old Sydney Silky Terrier or his brother Basil who is even cuter but not quite so handsome, (if that makes sense).
Rating BBB

[couta1]

Couta1 was that you and your terrier, doing a spot of modelling on the 1st page of SUM's presentation? HaHa, not yet, but in another 10 or so years definitely.

[trader_jackson]

Hmm... I'm sure it was mentioned on here that Summerset "set their own prices" for their units? and also that the property market doesn't affect retirement stocks (never did to RYM back in 08 or something?)

No worries

Back to $5 next week (3rd time I've said this in a few weeks or something... 3rd time lucky for sure)

Posted nearly exactly a month ago... after todays solid results (and yes the margin was a nice surprise) you'd think SUM would finally go over $5, in fact go way over over $5.

Only other thing that was surprising, given the solid results, is why they didn't upgrade profit guidance for the full year (...maybe they want to do an HBL and know they will achieve guidance and will over deliver?)

[BigBob]

looks like a double top is in

Called that a bit too early, I think...

Looks more like a double bottom with support around 480 holding....

[bull....]

Called that a bit too early, I think...

Looks more like a double bottom with support around 480 holding....

lol must have been a bad day , anyway good result

[Brain]

These TA formations are best called with the wisdom of hindsight.

[RTM]

These TA formations are best called with the wisdom of hindsight.

Excellent post ! Well summed up.

[peat]

These TA formations are best called with the wisdom of hindsight.

or just badly called in the first place.....

[Hoop]

These TA formations are best called with the wisdom of hindsight.

Brain ..believe it or not you are right.....Well done ;).

TA observes and analyses trading sentiment/behaviour. To do that you need knowledge and behavioural events from historic data to be able to compare..Wisdom is life experiences which is knowledge learned from historic events..Look at the chart below..using hindsight we have seen this 1,2,3,change of trend bottom pattern before..so we have wisdom (chart experience) that suggests SUM will rally up from today........... but maybe not as high as we might like......or.......... this rally performance could make up for the lesser than expected rally performance last time....


or just badly called in the first place.....

Bull was too quick off the mark to call it a double top pattern as the pattern had not yet completed (price had to fall to below 4.80) You can't called it a pattern until it is fully formed.

A double bottom pattern was also not correct as there is only one low point and that pattern (Bottom pattern ) was confirmed in Mid July and reinforced with todays rise....thereby dismissing any doubts of a failed bottom pattern and ends any thoughts of a double top...

Referring to SUM's chart we have just witnessed another bottom with a higher bottom ...noticing this [B]Bottom Pattern we can apply the 1, 2, 3, trend method to confirm the change of trend (from down trend to up trend) and apply a target price of $5.85 (73% chance)

Also remember.. patterns commonly occur within patterns...
Ref: Bulkowski (http://thepatternsite.com/Bottom.html#P13)

9085

[peat]

how many did you buy today Hoop ? :p

[Hoop]

how many did you buy today Hoop ? :p

None!!!....I've spent all my money frying better fish (with a bit of A2 milk added to the mixture)...Peat :D

[Beagle]

Absolute cracker.
That development margin is a pleasant big surprise.

Huge surprise really and reading through the presentation its clear that the construction cost issue is an Auckland specific problem.
Behind the paywall article and linked radio interview with Julian Cook on NBR yesterday afternoon reports that he is very confident of achieving 450 new units this year.
171 in the first half generated ~ $21m development margin so simple extrapolation suggests 279 in the second half would result in 63% more development profit ~ $34m. Add in resales with significantly higher embedded value and I think its crystal clear their full year forecast of $72m - $75m is extremely conservative.

I am looking forward to upgraded guidance in due course which I expect will come out shortly after Q3 sales data release sometime in October.
My modelling originally had SUM at $70m underlying for the year as at late April after the AGM which proved a bit conservative.
My revised modelling shows $85 - $90m underlying for the full year with a bias towards the upside. I see approx. 40.5 cps underlying profit for the year putting SUM on 2017 PE of just 12.5 and this from a company with a long proven track record of growing earnings at a CAGR of 48% !

Further, if they hit the top end of my forecasted underlying profit they would have grown underlying earnings at 59% this year ! The stock is trading on a PEG ratio of just 0.25 ! In addition I note our resident TA expert Hoop gives it the TA tick and I also note a clear break up through the 100 day MA at $4.97.
The management team and board have my full confidence. I am expecting quite significant analyst upgrades after yesterday's stunning result.

I have conducted my own analysis looking forward to determine how the increased Auckland construction cost pressure might affect development margins in Auckland on new projects in Parnell and St John's. Julian Cook yesterday in an interview with an NBR journalist talked about Auckland construction cost pressure of ~ 10%.
Its a relief he's finally put a figure on it but cautions that its quite likely this problem remains.
Against that my analysis which is based on suburban sales data from Barfoot and Thompson shows average sales values in Parnell in the six months to May 2017 of $1.76m up from $1.13m in the same comparable period two years ago an increase of 55.8%.
St Johns average was $1.20m as compared to $729K two years ago, an increase of 64.6%.
We know that retirement units in any given suburb are a function of, and inextricably linked to prevailing suburban prices so I have every confidence regarding their ability to develop these forthcoming Auckland villages at very attractive development margins based on the companies track record of taking development in house and growing development margins strongly over several years and also based on the significant increase in those suburbs house prices which is well ahead of the Auckland average over that timeframe.

Shareholders appear to be very well positioned. Disc: Holding and have been busy topping up yesterday and this morning for long term capital growth.

[winner69]

Presentations and interviews the phrase 'we set the prices' (of units) gets used a lot

Really working this in light of their high margins in the face of increasing building costs (and perceived collapse in property prices)

[bull....]

property developers always did well leading up to 1987

[Zaphod]

property developers always did well leading up to 1987

There were certainly some bargains to be had immediately after 1987, for those who had any cash left of course.

[percy]

You can not stop the aging process,as the great tsunami of retirees over the next 20 years will prove.
Always being in the right sector at the right time, offering a product the customer wants proves very profitable.
Shareholders remain "well positioned."

[Antipodean]

Did I miss something? NZX and ASB showing NTA of $158.811 for this stock....

[Beagle]

Did I miss something? NZX and ASB showing NTA of $158.811 for this stock....
Have a look at yesterday's presentation on the NZX, completely different number, its $2.86
https://www.nzx.com/files/attachments/263382.pdf

Interestingly embedded value is now up to $140K per unit as at 30 June 2017 up from $114K on 31/12/16 and $95K as at 31/12/15 which will have a huge positive impact going forward in terms of profit on resale's.

[Antipodean]

Fundamentally SUM is ticking a great many of my boxes so I have taken a sizable position today. Could have got in a few pips lower but I think over time this will be of relatively little effect.

Re: NTA - What I was saying was that I think someone entered the numbers wrong - hopefully corrected shortly.

9086

[cyclist]

Fundamentally SUM is ticking a great many of my boxes so I have taken a sizable position today. Could have got in a few pips lower but I think over time this will be of relatively little effect.

Re: NTA - What I was saying was that I think someone entered the numbers wrong - hopefully corrected shortly.

Classic. Actually read your initial post as $1.58. I suspect Beagle did too. But if it is $158, then clearly the stock is massively undervalued :eek2:

[Beagle]

Welcome aboard, like you I am very confident of strong growth ahead. Fundamentally and technically this looks very strong.

[peat]

Fundamentally and technically this looks very strong.

I've drawn a thick purple Support/Resistance line at yesterdays close of $5.05 (I did this yesterday)

9087

Very interesting level with lots of gaps happening right thurr.
Today another strong green candle of course.

The theory of the triangle is ... about $1.20 at the tallest point. so add $1.20 to the breakout. Gives $6.50 target.

Discl (not holding)

[Beagle]

I've drawn a thick purple Support/Resistance line at yesterdays close of $5.05 (I did this yesterday)

9087

Very interesting level with lots of gaps happening right thurr.
Today another strong green candle of course.

The theory of the triangle is ... about $1.20 at the tallest point. so add $1.20 to the breakout. Gives $6.50 target.

Discl (not holding)

Thanks Peat, that's the sort of price gain I'm looking for in 2017 with ongoing strong growth thereafter. Tucked away in my long term portfolio, a good retirement stock in more ways than one :) Directors a bit cheeky not upgrading full year guidance at the time of the half year announcement and definitely keeping a LOT of powder dry for upgraded guidance in due course.
Shares were $5.60 last Sept/ Oct and underlying profits are growing at an ongoing rate of ~ 50% per annum. Eventually the SP must follow underlying EPS growth. Forward PE (12.5) is currently as low as RYM ever got too during the GFC which makes no sense to me whatsoever.

[peat]

again , yesterdays news but it contains a good chat with the CEO Julian Cook,
http://www.radionz.co.nz/audio/player?audio_id=201854793

[JeremyALD]

Julian Cook seems like a good chap. Dosen't over inflate the positives, but always sounds confident in the future. Happy with the result and this remains my largest share at 50% of my retirement portfolio. I now have shares in all 5 listed retirement providers....although I was much too late to OCA and have just dipped my toes in the water :)

[Beagle]

Agreed Jeremy. Also my #1 position for reasons stated at post #5446 above.

[trader_jackson]

OCA and ARV up this morning, but SUM down back below $5?
What's going on?

[oldtech]

Is it because it went ex-dividend yesterday?

[777]

They were ex dividend on Monday.

[iceman]

Only 3.9c dividend so not responsible for today's fall

[Beagle]

Salt Funds management or whatever they're called like to short them, probably the villains.

[Hoop]

SUM technically broke down this morning..This is a serious breakdown as it is another confirmation that SUM could be a Bear...Some cyclic reversals from Bull to Bear can be hard to pick when the proceedings use slow creep tactics...This is the second failed rally since the September 2016 top and each time the rally has been a lower high..A bit of encouragement (or an event to muddy the TA water) is the recent higher low which helped to form a Symmetrical Triangle (ST)..How the price navagates the ST will provide the answer to the question of whether SUM is experiencing an extended time in Bull Market correction mode or whether it is the continuing suspected bear cycle..
Another bit of encouraging news is the MA200 is below the price and the price is currently resting on the short term up trend line...

The DMI indicator and the moving averages don't seem to work very well..This suggests the SUM market players are not dominated by the medium/short term investors.

Its usual to buy near support which is now but caution is needed this time just in case its a bear..maybe a wait and see attitude is a prudent course of action...Note: SUM has been a poor performer for a year now (-12%)

9110

[BlackPeter]

SUM technically broke down this morning..This is a serious breakdown as it is another confirmation that SUM could be a Bear...Some cyclic reversals from Bull to Bear can be hard to pick when the proceedings use slow creep tactics...This is the second failed rally since the September 2016 top and each time the rally has been a lower high..A bit of encouragement (or an event to muddy the TA water) is the recent higher low which helped to form a Symmetrical Triangle (ST)..How the price navagates the ST will provide the answer to the question of whether SUM is experiencing an extended time in Bull Market correction mode or whether it is the continuing suspected bear cycle..
Another bit of encouraging news is the MA200 is below the price and the price is currently resting on the short term up trend line...

The DMI indicator and the moving averages don't seem to work very well..This suggests the SUM market players are not dominated by the medium/short term investors.

Its usual to buy near support which is now but caution is needed this time just in case its a bear..maybe a wait and see attitude is a prudent course of action...Note: SUM has been a poor performer for a year now (-12%)

9110

that's interesting .... I guess it depends very much on which time window you look at.

Short term I only see an uptrend and a stock close to pass the Golden Cross:

9115

Long term I only see an uptrend and a stock close to pass the Golden Cross:

9117

But yes, you are right - if it drops below the MA200 (btw a nice bounce today), than people need to make up with themselves whether they want to hold based on fundamentals.

SUM had in recent years several dips below the MA200 - and yes, there was good money to make for selling and buying well timed, but as well money to lose for getting out and missing the entry. So far it looks like a reasonable buy and hold stock to me.

[Snow Leopard]

SUM technically broke down this morning..This is a serious breakdown...

If you were using a log price chart for this I would take it seriously and lie down with a paper bag over my head.

But you aren't.
So I won't.

Best Wishes
Paper Tiger

[Hoop]

that's interesting .... I guess it depends very much on which time window you look at.

Short term I only see an uptrend and a stock close to pass the Golden Cross:,,,,,,,,,,,,

A longer term chart I produced above has shown two recently failed rallys each being a lower high..the latest failed high has confirmed a price primary down trend...the jury is still out on whether this is a year long bull market correction or something more sinister and smells like a bear...Sometimes it pays to see the bigger picture and be aware, which then enables you to be investor cautious about the naure of the shorter term uptrend (secondary)...

I disagree with your longer term bottom chart, I revisited my charts after seeing your bottom long term chart..I looked at both my linear and log charts..both charts show definite primary up trend breaks... the log scale chart showing the primary up trend from just after listing (5 years ago) ended in June this year.. On the linear chart an assumed (adjusted)** 3 year old primary trend line ended 2 weeks earlier in May 2017....

**On linear charts some trendlines are curved therefore adjusted

You often see some charting with a narrow view and the creator of these charts have some sort of agenda... I call them a "politicans chart" ..A bit like a close up photo of a beautiful mansion ..widen the view and "shock/horror the panarama backdrop is the grottiest street in the town.

SUM suffered a 6 month teddybear (cute and cuddly) cycle (~25% drop) back in 2015 and it took from January 2014 to July 2015 for shareholder to regain that capital lost in that 6 month very small bear dip....so history has it that SUM is not immune to bears during equity market good times..so tread softly...

[Snow Leopard]

...You often see some charting with a narrow view and the creator of these charts have some sort of agenda... I call them a "politicans chart" ....

Almost every chart is a "politicians chart". Any chart that shows more than raw data or as accompanying commentary is biased.

Best Wishes
Paper Tiger

[moka]

OCA and ARV up this morning, but SUM down back below $5?
What's going on?

Milford blog posted 22/08/17
https://milfordasset.com/can-summerset-defy-residential-property-market/


Can Summerset defy the residential property market?

Summerset could continue to report impressive underlying earnings growth and expand aggressively for several years to come due to its embedded value. However, in the long term, the residential property market will heavily influence the performance of the company. How investors reflect this through the company’s share price will be interesting to observe.

[percy]

Well that was all a lot of noise about nothing.!

[Hoop]

If you were using a log price chart for this I would take it seriously and lie down with a paper bag over my head.

But you aren't.
So I won't.

Best Wishes
Paper Tiger

Almost every chart is a "politicians chart". Any chart that shows more than raw data or as accompanying commentary is biased.

Best Wishes
Paper Tiger

Specially made for the log paranoid cat with a paper bag over his head...I hope you appeciate my time and effort I put into this, my feline friend.. (40 minutes to produce and post).

The first chart is a log/linear overlay of my previously posted chart...As you see Shorter time periods (1 year) and small price range the overall difference between linear and log is minimal...so no bias from me..
Second chart is a long term chart (start Nov 2011) with large price range..This type of chart should always be in log scale as it shows perspective of price growth as a %.

I added nothing so no bias (ooops I couldn't help myself there is a primary trend line added).

The drawn in trendline is the qualify my statement.


......I disagree with your longer term bottom chart, I revisited my charts after seeing your bottom long term chart..I looked at both my linear and log charts..both charts show definite primary up trend breaks... the log scale chart showing the primary up trend from just after listing (5 years ago) ended in June this year.. On the linear chart an assumed (adjusted)** 3 year old primary trend line ended 2 weeks earlier in May 2017....


And for those people who are FA orientated and believe "Mr Market is underperforming" They too should look at the wider view to incorporate all the picture not just focus on part of it...eg earnings growth..Mr Market is concerned by "something" within all the retirement industry sector...It's hard to figure what it is, so it's prudent to play detective and do your own homework..maybe (maybe not) it's all to do with investor sentiment and their bullish attitude being dampened when swaping their focus from growth to risk and how wel these big 4 companies could cope with unforeseen change or a perceived falling off of the property market/economy..To test my assumption I did a risk check and I was in disbelief I must have got this wrong, or my interpretation of the result is not correct or does not apply. Can the FA experts check the results by doing their own Altman Z-score calculation for SUM RYM MET OCA and explain. Thanks.

9125 9126

[dabsman]

Where can you learn this black magic hoop? Is there a course?

[BlackPeter]

Hi Hoop - nice graphs - and I leave the discussion about the logarithmic paper bags to you and PT, though I admit that it makes sense to draw long term charts in log scale.

What however confuses me is your proposal to use the Altman-Z for the financial health analysis of a retirement village? Retirement villages do have (as banks) quite high liabilities on their balance sheet, but other than banks do they have hardly any risks connected to these liabilities, given that most of them are interest free loans from the inhabitants which can't be recalled at will.

Altmann Z is used to measure the likelihood of a production company to go bankrupt (and it has limited value to do that). It makes however no sense to use it for financial institutions (they might go bankrupt, but Altmann Z won't tell you - it always looks bad for a successful bank) or for (in this case) real estate companies, but particularly if there is hardly any risk that their liabilities might grow faster than their asset values ...

So - yes, I could with some imagination see potentially some meagre years for retirement stocks (though I'd see that as unlikely), but I am not clear how you could see SUM, MET, RYM or OCA go bankrupt?

[Hoop]

Where can you learn this black magic hoop? Is there a course?
This is off topic so I'll keep it brief..
There use to be some Business Schools around the world that incorporate these courses towards the business degree I haven't looked lately..back then the two main text books were:
Technical Analysis of the Financial Markets by John Murphy (1999) a text book used by the New York Institute of Finance (https://en.wikipedia.org/wiki/New_York_Institute_of_Finance)...believe it or not Warren Buffett was a past delegate :D.
Encyclopedia of Chart Patterns (2nd Ed) by Thomas N Bulkowski (2005) continuously updating on his Thepatternsite.com.

Probably be able to read these online somewhere or from a library (old school :)) or be a nice law abiding person and puchase it.

I alway refer back to Bulkowki's encyclopedia's both Chart Pattern book and his Candlestick book for probability of a happening data..John Murphy's book hardly ever..its a learning textbook.
also a good site is Colin Twiggs and his companies Incredible Charts website (https://www.incrediblecharts.com/)..much learning stuff there on the left hand side orange highlighted background area..their free charts unfortunately don't supply NZ data anymore.
Nowadays...Online stuff is easy to get..close to home is KW's thread on STs Investing strategies..Google is only way to go to get things...surf away..

For investors (most are FA investors) TA is buy/sell timing tool ..so a basic simple knowledge is all that needed..Some members (mostly FA investors) on ST have been very successful by applying KISS principle using a chart to which to draw basic Support/resistance lines (used to buy/sell and setting stops) and a trendline..thats it..

The Pattern Site is here. (https://en.wikipedia.org/wiki/New_York_Institute_of_Finance)

[Hoop]

...
Altmann Z is used to measure the likelihood of a production company to go bankrupt (and it has limited value to do that). It makes however no sense to use it for financial institutions (they might go bankrupt, but Altmann Z won't tell you - it always looks bad for a successful bank) or for (in this case) real estate companies, but particularly if there is hardly any risk that their liabilities might grow faster than their asset values ...

So - yes, I could with some imagination see potentially some meagre years for retirement stocks (though I'd see that as unlikely), but I am not clear how you could see SUM, MET, RYM or OCA go bankrupt?
I fiddle around with all sorts of tools BP...Re: Z-score..I'm not sure how valid this measure is for certain companies and/or sectors...that's why I'm asking for expert opinion...I know most property companies/sectors have some shockingly low Z-Scores (maybe why they have low PE Ratio averages) and go though their lifecycle reasonable OK and during good times they can produce someobscene earnings and capital gains...So yeah, it's a theoretical risk thing, but when times go to extreme such as a bad recession it's always the usual suspects that crash and burn..Some individual companies in the property sector being one...

So it makes me wonder as recessionary events pop up approximately once a decade, why the investing community would consider share buying in the retirement sector (with low Z-scores) as an excellent very long term buy and hold (superannuation) type investment vehicles..It seems I'm the only one wondering, so am I looking at this all wrong?

[Hoop]

Hi Hoop - nice graphs -.............

GRAPHS!!!!!!!!!!!!!!! :t_down:

[BlackPeter]

So it makes me wonder as recessionary events pop up approximately once a decade, why the investing community would consider buying shares in the retirement sectors (with low Z-scores) as excellent very long term buy and hold (superannuation) type investment vehicles..It seems I'm the only one wondering, so am I looking at this all wrong?

You just try to use a square peg for a round hole ...

Altman Z has been developed for US manufacturing companies. While it might work as well with private companies (if you have comparable balance sheets) and for other countries, it certainly does not make sense to use its scores to compare companies in different industries and with different balance sheet characteristics - and if you really try to use the score outside of its designated range, than it clearly does not make sense to continue using the standard 1.8 and 3 score. However - don't ask me what other scores to use ... I am not aware of anybody successfully doing that and publishing the results.

I had some time ago some play with the Altman Z, but gave up on it - Sure, it did help me to identify some duds (in the manufacturing sector), but honestly - there always have been easier ways to come to the same judgement. If it looks like a dud and smells like a dud you don't need to apply the Altman-Z, but then, it might be useful for investors who try to make money by exploiting the grey area between companies succeeding and companies going bust.

Anyway - maybe there are people who stuck longer around with Altman-Z and feel it adds value to their investment tool box. Might be a worthwhile discussion for one of the investment threads. However - don't think it is the appropriate tool to assess SUM or its competitors.

[BlackPeter]

GRAPHS!!!!!!!!!!!!!!! :t_down:

9127

come on - show a bit flexibility ...

[Hoop]

come on - show a bit flexibility ...

OK..To be a good investor one has to be adapable to change..Since it seems everyone saying it now including you, I have changed my job designation from Chartist to Graphist

[Hoop]

Noun. graphist (plural graphists) A person able to communicate or depict information or art via graphism.

An image of Graphism
9128

[macduffy]

Would someone please ring a bell when we get back to discussing Summerset?

:sleep:

[winner69]

Would someone please ring a bell when we get back to discussing Summerset?

:sleep:

ding dong

no real worries really - share price still in that long term upward channel

and still building and selling things ...all honky dory

[Snow Leopard]

Specially made for the log paranoid cat with a paper bag over his head...I hope you appeciate my time and effort I put into this, my feline friend.. (40 minutes to produce and post)....

Bartender: You really think the world's gonna end?
Ford: Yes.
Bartender: Shouldn't we lie down? Put paper bags over our heads or something?
Ford: If you like.
Bartender: Would it help?
Ford: Not at all.

Best Wishes
Paper Tiger

[Hoop]

Bartender: You really think the world's gonna end?
Ford: Yes.
Bartender: Shouldn't we lie down? Put paper bags over our heads or something?
Ford: If you like.
Bartender: Would it help?
Ford: Not at all.

Best Wishes
Paper Tiger

Every scenario even the very bad ones helps someone in the world....Bad scenarios seem to help Warren Buffett... Perhaps Ford was a paper bag salesman

[dabsman]

Thanks for the info earlier Hoop - I've found the books :) If a bartender put a bag on their head I'd drink all the Patron - so it would be helpful...

[Hoop]

Thanks for the info earlier Hoop - I've found the books :) If a bartender put a bag on their head I'd drink all the Patron - so it would be helpful...
Great....enjoy the reading..
It seems SUM is disappointing everyone again today closing at $5.01 -10c, -1.96% ..its now fallen back to its major support around the $4.95 - 5.00 area

[iceman]

Great....enjoy the reading..
It seems SUM is disappointing everyone again today closing at $5.01 -10c, -1.96% ..its now fallen back to its major support around the $4.95 - 5.00 area

Not disappointing me. I've had small buys at $4.90-$4.95 for a few weeks and am happy they've all been filled :-)

[Beagle]

Not disappointing me. I've had buy small buys at $4.90-$4.95 for a few weeks and am happy they've all been filled :-)

Well done mate, nice timing ! Happy to do a Couta around that level if I get the opportunity.

[Hoop]

Timings:...Rule of Thumb..Buy near support not near resistance..so on the face of it with SUM at its major support it should be a buy/accumulation**..

Concerns:
Good news first: This 5.00 major support has conjunctions EMA50 EMA100 not far below the secondary up trend line (latest rally line). Also at this support area is the S&R Line..so in chart theory this 5.00 is very strong and SUM is the quality company we all think it is then that support should hold and provide a good chance buy entry/accumulation..Many FAer's using basic charts will see this as a good entry point and I suspect that demand "should" see a bounce up off todays opening of $5.01...
Not so good news: SUM has performed poorly for a year now and could be in a downtrend (not yet fully confirmed) which should be a buy in/accumulation deterrent. SUM has a symmetrical triangle pattern in play ..**Therefore prudent buy in action should be at the triangle break out rather than the rule of thumb "buy at support".. Concern:Why the investors trading behaviour allow a symmetrical triangle pattern to form in the first place is a question needing an answer..This triangle is neither bullish or bearish, it's a neutral pattern with breakouts either side at 50%..but I suspect the upside breakout to be more favoured in SUM's triangle due to the support conjunction..

The disappointing things :
1...Shorter term..After the 15% price correction (May - June) this growth company's July -August rally should have kicked on to create a higher high (>5.50) but it failed at 5.21..The good news This rally is not over yet (rally's uptrend line isn't broken [5.00])..Investors bought in during March /April 2017 are underwater by about -4%..while the NZ bull market went up +8%...
2...Longer term ...Investors who bought in September October 2016 are still underwater (-10%)...NZ equities being in a bull market (up 7% Oct16 -Sept17).


Not disappointing me. I've had small buys at $4.90-$4.95 for a few weeks and am happy they've all been filled :-)

Iceman..This may not be a disappointment to you but is to how I see it ... as the Market suggests these SUM investors that timed it wrong have missed out on a years worth of rather large opportunistic gain within a very favourable marketplace..

Simply put...SUM is not performing within its Bull market environment...and so it's investors are missing out on the Bull Market which won't last forever...The old saying "Make Hay while the sun shines"..

Could be Worse?:..Yes RYM investors entered during May 2014 using buy and Hold strategy are +3% better off while the NZ bull market has risen +50%

[Hoop]

Since I've posted above SUM has fallen -3c to 4.98..one support (EMA50) in the conjunction has fallen...Rally (confirmed)trend line being tested

[iceman]

Timings:...Rule of Thumb..Buy near support not near resistance..so on the face of it with SUM at its major support it should be a buy/accumulation**..

Concerns:
Good news first: This 5.00 major support has conjunctions EMA50 EMA100 not far below the secondary up trend line (latest rally line). Also at this support area is the S&R Line..so in chart theory this 5.00 is very strong and SUM is the quality company we all think it is then that support should hold and provide a good chance buy entry/accumulation..Many FAer's using basic charts will see this as a good entry point and I suspect that demand "should" see a bounce up off todays opening of $5.01...
Not so good news: SUM has performed poorly for a year now and could be in a downtrend (not yet fully confirmed) which should be a buy in/accumulation deterrent. SUM has a symmetrical triangle pattern in play ..**Therefore prudent buy in action should be at the triangle break out rather than the rule of thumb "buy at support".. Concern:Why the investors trading behaviour allow a symmetrical triangle pattern to form in the first place is a question needing an answer..This triangle is neither bullish or bearish, it's a neutral pattern with breakouts either side at 50%..but I suspect the upside breakout to be more favoured in SUM's triangle due to the support conjunction..

The disappointing things :
1...Shorter term..After the 15% price correction (May - June) this growth company's July -August rally should have kicked on to create a higher high (>5.50) but it failed at 5.21..The good news This rally is not over yet (rally's uptrend line isn't broken [5.00])..Investors bought in during March /April 2017 are underwater by about -4%..while the NZ bull market went up +8%...
2...Longer term ...Investors who bought in September October 2016 are still underwater (-10%)...NZ equities being in a bull market (up 7% Oct16 -Sept17).



Iceman..This may not be a disappointment to you but is to how I see it ... as the Market suggests these SUM investors that timed it wrong have missed out on a years worth of rather large opportunistic gain within a very favourable marketplace..

Simply put...SUM is not performing within its Bull market environment...and so it's investors are missing out on the Bull Market which won't last forever...The old saying "Make Hay while the sun shines"..

Could be Worse?:..Yes RYM investors entered during May 2014 using buy and Hold strategy are +3% better off while the NZ bull market has risen +50%

Thanks Hoop. Your analysis appreciated as always

[Beagle]

The sheep are worried by North Korea and Taxcinda Marx. The hound will continue embracing his inner possum confident in the long term growth drivers behind this needs based business, its management and the most undemanding fundamentals SUM trades on.

[peat]

Yes Hoop that $5.00 mark is amazing. Gaps , Support, Resistance....
I tend to think this big triangle is a continuation pattern.

9151

[Hoop]

The sheep are worried by North Korea and Taxcinda Marx. The hound will continue embracing his inner possum confident in the long term growth drivers behind this needs based business, its management and the most undemanding fundamentals SUM trades on.
Taxcinda Marx was not around when SUM turned around and started to head down and Km was quiet back then..
SUM down to 4.96 (-5c) and TA-wise is breaking down.TA is showing something is of concern or its simply a stock gone up in price to fast and is taking a long term correction...Who knows.. TAer's (incl medium term TAers) just act..and at the moment it pays to invest money where the action is..and similar to the building sector it aint the retirement sector atm...
When SUM & Co springs back into life I will be there into it again...but so far this year buying in RYM ,SUM would have seen the bull market continue on without you...Buying now just seems to be more of the same type scenario (no mass buy signals)

[Hoop]

Yes Hoop that $5.00 mark is amazing. Gaps , Support, Resistance....
I tend to think this big triangle is a continuation pattern.

9151

Yes Peat..Chartists are aware that symmetrical triangles as with some other patterns can also act as a continuation pattern...
Remember in many of my recent previous posts on this this thread..I have been questioning SUM's continuing uptrend and whether that up trend is still continuing....

Symmetrical triangles can only act as a continuation pattern when they occur above a primary up trend line (or resumed major up trend line) and sometimes the pattern apex can test that trend line ...

Now what has happened recently is the Primary up trend has disected this symmetrical triangle and broke in the middle of it....meaning SUM's up trend has ended...Yes I'm not a great fan of trendlines (they can fake) This year long "correction" is very long for a correction process ..very long and/or severe bull market corrections can break Primary Trends..and so I have been writing posts referring other indicating confirmations....
There is a lot of TA uncertaincy (unconfirmed indicator breaks) atm but we do know there are NO buy signals yet so I stay out...Also pattern breakouts often occur when a meandering price line is arrested from testing the two boundaries above and below it...SUM is confusing me atm We have witnessed the Prinary trendline slicing through the pattern (bearish) but having a support conjunction in the middle of a symmetrical triangle pattern suggests a possible bullish breakout, but these last two days are seeing these supports slowing breaking one by one...a concern to the TA bulls ..eh?

If some of these indicators (not yet fully confirmed) turn out to be true (confirmed at a later stage) and the primary tide has indeed turned then the current symmetrical triangle pattern is not a continuation pattern and the breakout odds are 50/50 (Bulkowski 54/46), the bullish breakout rally being a poor performer with another lower high (another sucker rally)..

I don't take 54% odds...They have to be 70+% for me..so SUM atm is a no-goer for me

[Beagle]

Appreciate your TA expertise Hoop.
From my perspective using simple TA I note both the 100 day MA and 180 day MA are at $4.93. If it were to breech this level I am not selling as SUM have never been cheaper on a FA basis at any stage since they listed nearly six years ago. I could say a lot more about the FA side of it and where I see the current and future years profits but at least 49% of me wants this stock to go down even lower so I can do a Couta at a really absurdly low price.

[James108]

Appreciate your TA expertise Hoop.
From my perspective using simple TA I note both the 100 day MA and 180 day MA are at $4.93. If it were to breech this level I am not selling as SUM have never been cheaper on a FA basis at any stage since they listed nearly six years ago. I could say a lot more about the FA side of it and where I see the current and future years profits but at least 49% of me wants this stock to go down even lower so I can do a Couta at a really absurdly low price.

Roger how do you think a probable capital gains tax will affect the tax that summerset pays?

Would appreciate the input of an accountant.

[winner69]

SUM shareprice still comfortably in the 6 year uptrending linear regression channel

Been trending up at 24% pa in those 6 years - thats pretty good

No worries

[fish]

Roger how do you think a probable capital gains tax will affect the tax that summerset pays?

Would appreciate the input of an accountant.

I cannot see how anyone knows until if or when the details are known
Taxcinda is a wild card.
I did see an artickle stating iy should have no effect-occupiers buy a right to live in the house ie they dont buy the property .
A principle of nz taxation is also not to double tax-thats why we have imputation credits etc.
This is an opinion not given by an accountant.
Accountants charge.

[Hoop]

Appreciate your TA expertise Hoop.
From my perspective using simple TA I note both the 100 day MA and 180 day MA are at $4.93. If it were to breech this level I am not selling as SUM have never been cheaper on a FA basis at any stage since they listed nearly six years ago. I could say a lot more about the FA side of it and where I see the current and future years profits but at least 49% of me wants this stock to go down even lower so I can do a Couta at a really absurdly low price.

Roger how do you think a probable capital gains tax will affect the tax that summerset pays?

Would appreciate the input of an accountant.

Labour, it seems could introduce some sort of Capital Gains Tax...I to would be interested in the cost to retirement villages..

On the broader issue of CGT..its a short term issue not a long term thing..People thinking CGT think property but often the case the people endorsing CGT thinking it won't effect them usually does eventually in direct or indirect form.. who knows it could be CGT on shares (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11918622)** as well or any other capital making ventures which could affect any market (including Sharemarket investors) The effect is short term while the CGT gets bedded in..Anyway it never does what it is intended, in the longer term markets return to what they normally do (supply/demand pricing)...and businesses do too
** I'm registered as a share Trader so I already pay tax on capital gains...A CGT of say 15% would be of benefit to me as I pay alot higher percentage tax rate atm..not sure about the benefits with capital losses..

Beagle..yes FA is attractive. So why is Mr Market worried about the retirement sector?..We all know the various media info which isn't that frightening so it's a mystery to me. Maybe there's info out there that the lesser privileged plebs like me are not privy to...Peat mentioned price gap behaviour, maybe we could suddenly find out one way or the other...or its nothing and shares have got cheaper (FA-wise) due to investor focus being elsewhere atm....but its still a TA no go at the moment...maybe Monday next week it all changes for the better...maybe not..

TA can be fun....FA bent TA'ers (e.g Me) when seeing TA/FA conflict turn to their secondary job.. being a Private Detective..https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcQUf5O7pNwoJ0Qg8Sz0vlKTxVdHwbSut UFSuVvx8wuI2cW9xD6_l9v_6S0I've become a big fan of Google Alert (https://support.google.com/websearch/answer/4815696?hl=en)

[artemis]

CGT is short term in one respect, in that it gets folded into costs and forgotten about over time, except by traders who might pay a whole lot less tax on capital gains. But in another respect it is not short term. Owners of assets will act in their own best interest and if that means holding on to assets or finding other ways to protect their position, that is what they will do. Such as borrow against rather than sell, change ownership structure. If they can.

PS Agree about Google Alerts - I get results sent to my RSS feed as more efficient than email.