SUM - Summerset Group

[BlackPeter]

cheers Hoop, I do appreciate your view and analysis.

However still not understanding why you think that the Brexit had no impact on SUM (and supposedly the other retirement stocks)? You might have noticed that SUM started already to rise this week from the latest drop (up to 440) and it only turned red on Friday afternoon when the unexpected BREXIT output became clear. Are you saying it would have done that otherwise as well? Why?

[Grunter]

Grunter..please open your mind to allow TAer's to analyse investor's behaviour during these events...it adds to our knowledge of how we could able to take advantage of a situation...sometimes these black swan events are windows of opportunities and sometimes they are omens leading to sharp corrections...Just taking an emotional guess using your rearview experience to drive your investments forward is fraught with danger..The wise and successful investor uses all the tools in their toolbox for their decision making...there minds are open and flexible to possible change..

Grunter I suggest you add this tool to your toolbox..you don't have to use it but I strongly suggest you learn how to use it..as you never know it may come in handy for you later...

Remeber TA is just a graphic result of what has happened in the past up to what is happening now...TA can not predict the future..TA can however analyse the odds of a happening reasonably well,

TA is a tool for all investors...used properly it can aid you in your decision making process..It can also help some who either forgotten or wrongly perceived past share price and share trends ..It also used to correct personal thought biases, thereby correcting investors logical decisions...

Appreciate your enthusiasm for TA, however I believe TA to be a load of rubbish and there is a weight of academic evidence to back me up on that.

[Beagle]

Grunter..please open your mind to allow TAer's to analyse investor's behaviour during these events...it adds to our knowledge of how we could able to take advantage of a situation...sometimes these black swan events are windows of opportunities and sometimes they are omens leading to sharp corrections...Just taking an emotional guess using your rearview experience to drive your investments forward is fraught with danger..The wise and successful investor uses all the tools in their toolbox for their decision making...there minds are open and flexible to possible change..Grunter I suggest you add this tool to your toolbox..you don't have to use it but I strongly suggest you learn how to use it..as you never know it may come in handy for you later...

Remeber TA is just a graphic result of what has happened in the past up to what is happening now...TA can not predict the future..TA can however analyse the odds of a happening reasonably well,

TA is a tool for all investors...used properly it can aid you in your decision making process..It can also help some who either forgotten or wrongly perceived past share price and share trends ..It also used to correct personal thought biases, thereby correcting investors logical decisions...

I have learned to respect and value your input so thanks again for continuing to share it. This bit I especially agree with.

[Grunter]

Furthermore, it is probably best to clarify that Brexit is a Grey Swan, not a Black Swan.

Whilst we did not know which way Brexit would vote, we could reasonably see this event coming (and had time to position accordingly), whereas a true Black Swan is entirely unpredictable - such as The Twin Towers Attack.

[Hoop]

I'm sorry, that is absolute garbage. You are saying that Brexit has no effect on the pullback in SUM's share price, yet Brexit and the lead up to it has been the dominant reason for a pullback in stocks across the board as as a flight to safety has taken shape. Look at the retirement village sector as a whole (or even the market as a whole) and you will see that RYM and MET have also pulled back - this means that there is no company-specific driver for SUM's share price - which there must be for your analysis that Brexit has not affected SUM to be correct from a TA point of view.

Grunter...The rot set in 10 days before the Referendum result...The result is a black swan event because the Mr Market had factored in a perceived remain result so not foreseen.. A Black Swan is a sudden unforeseen action causing sudden Systemic destruction, Financial/Political/ Behavioural/Cultural/Geographical and others which I can't think of)...A Back Swan effect doesn't have to look like a Block Buster Disaster Movie and be a physical in nature (Twin Towers)...actually the physical nature of Twin Towers was in terms of size of Global population and buildings a tiny to insignificant happening..It was the sudden financial data lost and sudden "systems" breakdown (Financial/Political/ Behavioural/Cultural/Geographical) that created that Black Swan Effect....

Therefore SUM chart had the "remain vote mostly built in to it last Thursday...

The SUM chart (investor) behavioural attitude has not changed by the black swan... We Chartists know this as there has been no major TA breakdowns nor anymore Technical damage since last Thursday...therefore the Brexit effect is not visible.....Yet!!

It doesn't mean the Brexit factor may not appear to play a part at some future point..it just means that Brexit did not start the SUM (and other NZX stocks) rot....The rot started 10 days before Brexit..Can't blame the Brits, but the charts do tell us we can blame ourselves, Investor exuberant behaviour of making our Equities too expensive..

This is the main problem I have with Media...they will blame Brexit "if" the NZX tanks and peoples finances start evaporating .... the English people will cop the Public (global) wraith thanks to the less educated media..Globally there could be lives lost due to some maniac over-enmotional reactions..

TA is showing that there are other more significant factors in play which caused the start of this rot.. not Brexit (I do realise it is a theoretical bear factor)..but the SUM chart hasn't showed this up yet as other bear factors are in play and masking any (if any) brexit effect.

Disc.....Edited several times

Disc: not a Pom

[BlackPeter]

Appreciate your enthusiasm for TA, however I believe TA to be a load of rubbish and there is a weight of academic evidence to back me up on that.

I never found name calling a particular helpful or convincing means in a discussion, but if it works for you, than I guess it clarifies for us the context you are coming from .

Nobody requires you to use TA ... it just means you close your eyes to one important factor (and yes, there are many other factors as well) influencing stock markets - and this is the human psyche. In my view one of the reasons TA works (sometimes) is because people are using it ... ignoring this fact just deprives you of one useful tool.

But hey - everybody to their own.

[Grunter]

Grunter...The rot set in 10 days before the Referendum result...The result is a black swan event because the Mr Market had factored in a perceived remain result as well as an action that has gone against the "systems commonsense" and has the potential of causing mass Systemic destruction, Financial/Political/ Behavioural/Cultural/Geographical and others I can't think of)...Therefore SUM chart had the "remain vote mostly built in to it last Thursday...The SUM chart (investor) behavioural attitude has not changed by the black swan... We Chartists know this as there has been no major TA breakdowns nor anymore Technical damage since last Thursday...therefore the Brexit effect is not visible.....Yet!!

It doesn't mean the Brexit factor may not appear to play a part at some future point..it just means that Brexit did not start the SUM (and other NZX stocks) rot....The rot started 10 days before Brexit..Can't blame the Brits, but the charts do tell us we can blame ourselves, Investor exuberant behaviour of making our Equities too expensive..

This is the main problem I have with Media...they will blame Brexit "if" the NZX tanks and peoples finances start evaporating .... the English people will cop the Public (global) wraith thanks to the less educated media..Globally there could be lives lost due to some maniac over-enmotional reactions..

TA is showing that there are other more significant factors in play which caused the start of this rot.. not Brexit (I do realise it is a theoretical bear factor)..but the SUM chart hasn't showed this up yet as other bear factors are in play and masking any (if any) brexit effect.

Disc: not a Pom

Brexit started weighing on markets well before the vote on Friday as investors repositioned portfolios and took views as to how they believed the vote would go. In the two weeks leading up to the events, the markets would swing based on which way the latest polling showed the result was likely to lean. Because of the above, Brexit therefore is not a Black Swan in the truest sense of a completely unexpected event. A Grey Swan is a more fitting description.

[winner69]

First time poster here, have been following this thread for a while since I became interested in Summerset.

Just want to say I believe a lot of you worry about a lot of things that don't matter in the long run to the performance of this company.

The guy with the best ideas on this company is Roger - he's hit the nail on the head on how to value retirement villages - it's all to do with underlying earnings. The drivers for underlying earnings growth are:

1) house price growth
2) the number of units that can be built, sold and resold

Everything else to do with this company is just noise.

Looking at Summerset, I see it as grossly undervalued - Summerset should be a similar performer to Ryman in terms of earnings growth in the long term, and I believe their P/E should converge to a similar level. For a growth company, a P/E of 11 is low, therefore RYM's 15 is more sensible in this climate of inflated P/E ratios. Given this, the value of SUM should be $5.85 at their current earning level.

I'm working on building a DCF model for SUM, but a year ago, their DCF valuation was $4.30. Since then they have had significant increases in underlying earnings as well as increased build rates, so this points to even better than predicted underlying earnings growth than originally modelled.

I think we worry about a lot of things that don't matter - even Brexit

Currently share price activity just the ups and downs (noise) as the share price steadily increases to $6 (based on all the things grunther mentioned about)

And TA is telling that story well

[Hoop]

I think he is talking in terms of TA signals and the fact that the 200 day MA and upward trend lines are still in tact. There haven't been a cascade of selling signals, so as of today, the TA on SUM remains sound.

True ..Only Short to medium sell signals have fired...Long term investors will still be "in" as their sell signals have not fired....but I would assume Long Termers will be watching to either sell out or accumulate depending on future SUM shareprice movements..

[RupertBear]

I am a newbie trader and very interested to learn more about TA. Can someone direct me to a good TA website or beginners guide to TA or any charting programes I could buy?? Many thanks