VGL - Vista Group.

**dibble** · 08-05-2020, 06:10 PM

Originally Posted by Left field

Good Question........(and you are right.) So here's my story FWIW.

I was late to discover VGL. I liked their International spread, sound management and reputation. However I think the timing of my first purchase was wrong (although the TA indicators looked awesome in Mid 2019 - see pic.) Buy the trend.... and in mid 2019 the long term trend was UP.

Attachment 11517

That said, I did well by taking only a small stake. I'm a big into buying in instalments. Small nibbles.

What I didn't foresee was a large slowing of revenue as the company went to a SAAS model. This was badly received by the market and the SP dropped 30% with a 'death cross' occurring in Sept 2019.

When faced with such a TA 'death cross' I usually sell out and wait for the trend to change. However rather than selling out at this stage, I chose to average down. In hindsight this was a wrong decision.

Then Covid 19 came and I was again blindsided as the SP dropped when "lock-downs" became common internationally. All of a sudden the once sound International Movie and Entertainment market was hit hard.

Faced with all this, I've been buying at the current SP levels and 'averaging down.' I suspect it will be 1 - 2 years before I start getting a decent return on my shares.

As I've said before, it isn't all woe. VGL is rare red ink in my portfolio (in which my av returns are still well above NZX50 averages) and I'm well placed to sit this one out. I still believe this company has great prospects. Time will tell.

Jolly good answer thanks. So more of a lesson around trading strategy. Not been an easy 2 months to balance tactics with gut feel whilst trying to read what one can into the splattering of runes.

**Leftfield** · 13-05-2020, 05:11 PM

Nice to see VGL's new shares trading today at a 38% premium on the recent cap raise offer price. Happy I took it up.
Be interesting to see how it plays out from Thursday.

**Leftfield** · 25-05-2020, 10:10 AM

Another step into Europe. https://www.nzx.com/announcements/353639

Slow burner this one.

**Hoop** · 25-05-2020, 01:40 PM

Left field I did nearly the same as you..Reading your 8th May #290 post echoed my trading..Buying then accumulating into the uptrend (nibbling).
Got caught out with the sudden unexpected drop as it was so sudden I had no time to unload..

Vista reverting back to SaaS status is something you don't normally expect to happen. Normally as a company matures it moves away from Saas towards a product value/dividend yielding company..Any move back to Saas status also causes a revert back of valuation methodology which affects share price..I personally think Vista was rather naughty, they should have fore-warned with a market disclosure of their intentions to that structural change back to a Saas company status. They must have known it was a price sensitive decision..

The day of the announcement was a market bombshell which saw the sudden market revaluing Vista resulting in the share price near instant 40% fall...NZX did not react so Vista got away without even a rap on the knuckles..Unless there is a leak (rumour or insider trading) TA would not signal a warning..there was no leak and this TAer got caught in this price fall as well...Then it was Covid and I must admit I ignored that TA warning ..At the beginning, the world outside China (me too) disbelieved the severity of the virus in relation to the unprecedented draconian measures taken severely affecting the economy.....TA said sell and I didn't..Final score TA 1 Hoop 0

An opposite comparison can be seen with Pushpay with it's normal structural change away from Saas status towards maturity creating a change in the company value methodology resulting in the shareprice to triple..PPH disclosed it's strategy intentions well in advance but the market disbelieved until it become evidential...

I'm with Left field, I think Vista still has a future..
Disc: VGL (+ new shares) PPH PLX MSR = 5% stocks ...95% in Fixed term investment

**Leftfield** · 25-05-2020, 06:44 PM

Thanks Hoop.

I see you are 95% out of the market. I would be interested to learn how you intend to decide when/if to re-enter? What signals are you keeping an eye on?

**Hoop** · 26-05-2020, 12:43 PM

Originally Posted by Left field

Thanks Hoop.

I see you are 95% out of the market. I would be interested to learn how you intend to decide when/if to re-enter? What signals are you keeping an eye on?

At the moment I am short term bullish but I am extremely bearish longer term which is an emotion I must try to control. That's hard to do when I believe in the 4 R's Economic Recession Management scenario..Run Rescue Recession Recovery and we are only in the rescue phase.It all depends on how well the Governments and Central Banks manage the rescue phase as to how deep the recession is going to be...so far the powerful countries governments and central banks (incl NZ) are playing the same management game as per textbook..so I have faith we may avoid a very deep recession as long as everyone sticks to the plan.

The recession is not here yet, neither is the recession effects on our share markets but when the recession is here and operating for some time, the signals I use are "ducks lining up in a row" method..I have 20+ "ducks". I weigh some "ducks" more valuable or less valuable due to their correlation coefficient value..this is where being either a statistician or a Chartist or both comes in very handy..
My two favourite ducks which have a 100% accuracy rate (so far) are inverted yield curve (a recession predictor) and copper price uptrend reversion during the depths of the recession (share market bottoming out predictor)..Now all this may look easy but market manipulation with economic computer models sort of makes signals rather confusing these days. For example copper has already reverted to an uptrend so does that suggest the recession was a brief sharp covid effect and is now over or is the worst yet to come and copper will signal the next uptrend reversion...
I think somewhere on ST I have posted my ducks..I will revisit my files and repost them.

In the meantime download and read Russell Napier's Anatomy of the Bear..He has many end of bear signal predictors..

With regard to Vista....Vista has no history as it was founded (2014) during the last Bull cycle so I'm not terribly sure how badly it would perform in a Recession within an Indexed Cyclical bear cycle..As it's customers are cyclical companies and strongly effected by economic periods, I can only assume Vista could be rather exposed during recessionary periods...
Disc: Have VGL

**Leftfield** · 26-05-2020, 03:45 PM

Thanks for posting Hoop. I thoroughly respect your charting expertise and was genuinely interested to see how you are managing the current very volatile market signals. So thank you for sharing your brief strategy.

FWIW I'm currently 80% invested and in the past I have used TA to successfully dodge the worst effects of the 1987 crash. (In those days I used meta stock.) However, these days I am finding;
1.) There used to be a saying that when USA (S&P etc) sneezed, then NZ catches a cold (in 1987 it was more like pneumonia!) However IMHO NZX these days is slowly becoming more disconnected and more unique in its reactions, and as I am 100% invested in NZ I tend to watch local signals more closely.
2.) I'm currently finding the NZX50 and S&P average market TA monitoring is less relevant and the TA monitoring of individual companies is more relevant.
For example in the recent COVID downturn the TA signals being sent by ATM versus the NZX50 index were different. As a result I tend to make my decisions specific to individual companies rather than an index based decision. (VGL being my only failure in this respect.)

It will be interesting to one day compare notes on how we both fare in these tricky market conditions.

**Hoop** · 26-05-2020, 10:19 PM

Yes the indexes seem to be less relevant in recent years...The success of the very large stocks (FAANG) have hijacked the S&P index..A similar thing happened in NZ with the dot-com bubble burst when Telecom distorted the NZSE40 index..
With this Covid effect I've found that many stocks had the same dramatic drop followed by a dramatic bounce including the NZX50 index..the bounce is interesting as the poorer performing (struggling) stocks have a poorer bounce...sadly Vista is in this category which is a worry.
Your ATM example is something unbelievable..looking at ATM's chart you would have to ask "didn't anyone tell ATM what was happening in the world"..

Yes we must compare notes someday