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  1. #12001
    Legend
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    Quote Originally Posted by Balance View Post
    Thanks, Snoopy.
    A couple more remarks on my second numerical example. This is the one where the couple take out their maximum REL loan at aged 65 and continue to live in the house until aged 95 (Example 2). On the surface this results in a much worse loss than the 85 year old couple taking out a maximum (double the size) mortgage and living in the house until they are 95 (Example 1). However, the probability of a couple living in a house for 30 years is actually much less.

    A doctor told an elderly relative of mine that if they made 85 their life expectancy was two years. But if they made it to 87 their life expectancy was another two years. And so on. The message here was that once you get to that 85 year threshold, it will probably take a significant health event (e.g. stroke or heart attack) to finish you off. But to get to 85 in the first place, you must have looked after yourself, oh and and chosen your parents well. There are plenty of folk aged between 65 and 85 that end up being not so lucky.

    The second point in Example 2 is that after 30 years, what started out as a million dollar house ended up not being quite a million dollar house after all that time. Some may think that a laughable assumption, but I don't think so. The current property boom has been fuelled by lifetime low interest rates, families funnelling dual incomes into their mortgages, not just one, and houses getting more expensive because they are getting bigger. None of these trends are sustainable and extrapolatable going forwards. In the long term, you can't have house prices going higher and higher when wages are not increasing in line with house affordability. Politically a house price crash today of around 50% to correct this would not be acceptable. So the only way out is a more modest crash and wages gradually catching up with prices over a generation. I believe that my house price line as detailed in Example 2 is realistic. Consequently I think Heartland's main risk in REL mortgages is in those longer term loans. Fortunately for shareholders, I don't think there will be many running over 30 years!

    SNOOPY
    Last edited by Snoopy; 16-02-2019 at 10:13 PM.
    Industry shorthand sees BNZ employees still called 'bankers' but ANZ employees now called 'anchors'. Westpac has opted out of banking industry shorthand...

  2. #12002
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    ben au is in competition with hgh in aus and they had some good takeaways in there result
    bull

  3. #12003
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    Quote Originally Posted by bull.... View Post
    ben au is in competition with hgh in aus and they had some good takeaways in there result
    Where are they in competition with HGH.?

  4. #12004
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by bull.... View Post
    ben au is in competition with hgh in aus and they had some good takeaways in there result
    Well, yes - market appeared to be unhappy about their latest results and presentation - didn't it? Never good if a results presentation starts with problems ... the punters want to see happy faces and fireworks!

    Not quite sure how comparable they are to HGH's REL busness in Australia - their "homesure" is no REL, isn't it? Still - interesting reading, cheers.
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

  5. #12005
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    Quote Originally Posted by percy View Post
    Where are they in competition with HGH.?
    guess the competition is that it is a alternative to a rel , the punter gets bascally the same thing some money
    bull

  6. #12006
    ShareTrader Legend Beagle's Avatar
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    I think HGH needs to adapt their REL lending model to the changing conditions in Australia. Lowering the lending limits by 10% across the board at the various age points would appear to be a prudent move, along with ensuring any valuation used on new lending on a house is current (within 30 days).
    No butts, hold no mutts, (unless they're the furry variety).

  7. #12007
    percy
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    They have a history of reading the market,so I would expect they have already done so.

  8. #12008
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    I got a few of those Heartland Notes mid 2017 - the ones at 4.5% pa maturing 2022

    The heartland share price was about $1.80/$1.90 at the time.

    Sold the Notes the other day for a healthy capital gain of 30% odd (at 3.3%)....in the same period the share price is down 30%. Sometimes Notes/Bonds are a better bet than shares ...weird eh

    Might buy some more Heartland shares with the winnings....maybe
    “Just consider that maybe the probability of you being wrong is higher than you think.”

  9. #12009
    Legend peat's Avatar
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    I'm largely out now, given the gartley failed by hitting 1:31 , so I am back to my very modest holding - lost 5c plus bro. way it goes. c'est la vie.
    it didnt behave at all as it should if the gartley was to be effective - they should bounce strongly off the potential reversal zone and this one never did so I had the heebies quite quickly and should've bailed even earlier but 5c is nothing these days huh .
    see ZEL for a gartley that worked.
    For clarity, nothing I say is advice....

  10. #12010
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    Good day on the bourse for Heartland

    Half year announcement tomorrow — some already know it’s good or just punters having a punt.

    Whatever Heartland’s long run half yearly profit growth will continue ....even though WINX.AU has a longer winning streak.
    “Just consider that maybe the probability of you being wrong is higher than you think.”

  11. #12011
    Legend Balance's Avatar
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    Quote Originally Posted by winner69 View Post
    Good day on the bourse for Heartland

    Half year announcement tomorrow — some already know it’s good or just punters having a punt.

    Whatever Heartland’s long run half yearly profit growth will continue ....even though WINX.AU has a longer winning streak.
    Bets off the table from the sellers today?

    I sense the capital raising is on.

  12. #12012
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    Quote Originally Posted by Balance View Post
    Bets off the table from the sellers today?

    I sense the capital raising is on.
    Strong growth.= capital raise.
    No growth= No capital raise.
    So I agree with you,ie capital raise.


    ps One for one at $1.25 to take out both UDC and TRA,and to support huge Australian REL growth...lol.
    Bring it on..!!
    Last edited by percy; 18-02-2019 at 07:30 PM.

  13. #12013
    Legend Balance's Avatar
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    Quote Originally Posted by percy View Post
    Strong growth.= capital raise.
    No growth= No capital raise.
    So I agree with you,ie capital raise.


    ps One for one at $1.25 to take out both UDC and TRA,and to support huge Australian REL growth...lol.
    Bring it on..!!
    1:5 at $1.00 underwritten - that's my pick.

    Announcement of capital raise will not impact on sp as already factored in imo.

  14. #12014
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    1:15 at 1.25 is my guess.

  15. #12015
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    Quote Originally Posted by horus1 View Post
    1:15 at 1.25 is my guess.
    One for 15 would be a relatively small issue. I would expect something a bit more substantial - say 1:5, at a small discount and underwritten.

    Disc: Not holding.

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