SUM - Summerset Group

[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...believe it or not Warren Buffett was a past delegate .
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 ..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.

[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!!!!!!!!!!!!!!!

[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!!!!!!!!!!!!!!!

graph.JPG

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
Graphism.png

[macduffy]

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