SUM - Summerset Group

[couta1]

JTH, Thanks for comments, I will still make a profit unless it falls guess well see and I guess not a bad stock to be stuck with for a bit longer otherwise.

[couta1]

Black Knat,I will go with the flow, the only stock I'm holding very long term is Sum,a lot of others are in deep red like Diligent and TTk but I'm not doing anymore quick selling of red arrowed stocks at the moment, at least TTK pays a good dividend and long term will come up

[Wolf]

Couta1 mate, are you trading now? Trading and buying mid/long term are a hell of alot different. Make sure you know what you're doing.

[couta1]

Wolf, I little bit of swing and positional trading no day trading stuff,cheers

[cyclist]

I'm trying to get my head around how SUM would cope with a significant downturn. I'm not concerned about share price or dividends for such a situation - just that they come out the end in acceptable shape.

A significant income stream in a strong market is re-selling occupation rights for more than the previous owner paid (and selling new units with margin inbuilt). What happens in a down market? Some round numbers, assuming that new builds are winding down in a downturn, so it is mainly resales happening:

$200K price per occupational right
200 re-sales per annum.
Assume resales can only achive a price of $185K. i.e. a 7.5% drop in the market for these units.
That equates to 15K x 200 = $3m reduction in available cashflow.

Looking at other income and expenses, it appears they may need to borrow small amounts to keep things running. Probably could weather it. An interest rate rise at the same time would cause additional pressure.

To me, the company seems strong enough to weather it. Have others done any analysis?

(I am not discounting the possibility that GFC mk II may occur at some stage. The unbalances have only got worse since 2008. I'd prefer to own shares that can weather a downturn, if needed).

[Harvey Specter]

Cyclist - may I suggest you research how Ryman did during the last property fall in 2008. I don't know the answer but as a listed co, it would be easy to find out. I understand it did alright.

[couta1]

Black knat,Thank you for your honesty, a lot of food for thought, just regarding any trading it would be a long time before I would need to account to IRD on any profit due to my large loss, I would agree with you about the TA though I have made more profit on random tries than using TA and after all if the Govt had overridden the com com I wouldn't be sitting on the loss and I don't believe any TA could predict that, it could have gone either way so my investment in Sum is based on FA only, once again thanks for your genuine reply.

[silu]

Thought you guys might be interested in this if you haven't already seen it.

http://www.listener.co.nz/current-af...good-business/

[couta1]

Black knat, Forgot to add you are correct when you say others are not using the same amount of money as myself, there are a lot of big talkers on here and I thought they must be trading large sums like myself and then I hear them say they loss a grand or so and started to think I'd better listen to less of the hype or I'm going to be the worst off on this forum at the end of the day.

[percy]

Go carefully couta1.
I did post on CNU thread on 10/11/2013 post No.1356;"I don't think you should be investing in the sharemarket."
Not a nice thing to say to a newbie,but was intended to be a wake up call.I hate losing capital, and I hate seeing other sharetrader members losing their capital.