There's a lot of talk around these days about the problems in the construction industry, especially contract cost over-runs and completion delays. Fletchers is a local example but apparently it's a world wide problem. Given this, should shareholders be concerned about any flow-on effect on CBL's Builders' Performance Guarantee and other associated insurance contracts etc?
There's a lot of talk around these days about the problems in the construction industry, especially contract cost over-runs and completion delays. Fletchers is a local example but apparently it's a world wide problem. Given this, should shareholders be concerned about any flow-on effect on CBL's Builders' Performance Guarantee and other associated insurance contracts etc?
Disc: Holding CBL.
Good point. So far I assume that these guarantees cover only quality problems ... as well as covering the owner of the house if the builder goes bust. I am not aware of insurance against time overruns in construction projects and am pretty sure that any premium against this risk would be prohibitive. CBL seems to focus on insuring many small risks vs a small number of big risks.
A larger risk for them I could see would be another leaky building crisis or similar ... Certainly worthwhile to investigate how good their reinsurance would be in a case like that. Anybody knows?
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"Prediction is very difficult, especially about the future" (Niels Bohr)
I think that the price will drop further. The reason I say this is that there have been two sharp drops with CBL previously, one in October last year and again in February this year. In both cases it was about two weeks for top to bottom.
I’m presently reading Richard Fairleigh’s book Taming the Lion – 100 Secret Strategies for Investing Success.
His strategy no 4.0 - Look for patterns and anomalies. Try to identify patterns and anomalies in the way markets behave.
Strategy no 8.5 - Trends represent the gradual dispersal of information. Information and analysis can take time to be dispersed through the market place. This delay in reactions causes prices to trend.
So I think a strong knee-jerk reaction with a down-trend for about two weeks and then the price will rise again. It did rise sharply from the bottom on 2 March this year.
Well so far you and Mr Farleigh have been on the money with this one.
Hopefully it will follow the rest of your prediction in the near future.
Best Wishes
Paper Tiger
Last edited by Snow Leopard; 05-09-2017 at 08:13 PM.
Reason: Far not Fair
Well so far you and Mr Farleigh have been on the money with this one.
Hopefully it will follow the rest of your prediction in the near future.
Best Wishes
Paper Tiger
Another of Richard Farleigh's pieces of wisdom is that prices go further than expected, both down as well as up.
He says historically, all of the different asset classes have a habit of surprising people by how far they move and how long they keep moving. And he advises you to forget the old price. That often people arbitrarily decide a market is under or overvalued. In many cases it based on a feeling that the price has moved too far.
I was surprised by CBL increasing over 100% in its first year after listing. It's price went further than I expected. Not many IPOs do that.
So yes, hopefully it is bottoming out around the $3 mark.
Agree share price surprising on the upside bc Fund/s buying in,share price surprising on the downside bc fund/s selling out.
The company performance not so exaggerated as share price performance would suggest/
Doesn't look like it has...every time it tried to move up a bit, bang comes the selling pressure. Being tightly held stock the sentiment is working in negative way for now at least...
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Originally Posted by macduffy
Moka 1: Tiger 0
It is a quick read but I the big words slow me down a little
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