I do all of those bad things. Snoopy, the allusion to first floor windows was relating to people jumping out of high rise buildings in the crash if 1929.
I thought about reducing my exposure to OCA a little while ago, as I was getting increasingly uncomfortable with my accumulations. But where do you put the money. I decided that OCA covers all my bases of investment, such as security, long term growth and success and somewhat inflation proofing. Just wish I could pick where the bottom will be. It must be getting there soon.
I sold two thirds of my holding last year at prices from $1.59 down to $1.31. I put that into cash and its still there.
Would I sell the remaining one third free carry stake at the current price ? - Absolutely Not.
Would I buy more at the current price ? No, not yet. I need to see some encouragement on a TA basis that the ~ 6 month downtrend has finished.
What really disappointed me last year was assurances given by Earl Gasparich in the half year call of 22 January 2021 telling analysts and listeners that he believed in future that the cost of care would move in line with Government funding. It didn't and the rampant rate of human resource cost increase under his watch ever since it listed continued right through 2021.
Can our new CEO turn this around or does the culture of the company run so deep that he gets sucked into the vortex of all that matters is providing first class care irrespective of cost and without cost restraint of any kind and shareholders are little more than an inconvenience to be tolerated. As a shareholder I sometimes feel like I'm little more than a quasi employment agent and philanthropist with this company giving away all the business transformation gains to others and getting left with crumbs.
What I want to see and am hoping to see from Brent is a more communicative style to shareholders with quarterly updates in between the half year reporting, leaning in more on new developments with a much higher level of independent living and a more fulsome level of facilities, (model this off the new Hobsonville village they purchased please) as this is a proven formula that's worked very well for Summerset and Ryman.
There is no concrete earnings evidence after nearly 5 years that OCA's business model works well for shareholders, (all we have is talk) so I believe they need to adapt this going forward as the cost of a high care business model is going to be a systemic headwind, (handbrake on company growth) forever and a day.
The first clue to find out whether they are going to be agile and adaptive is their new greenfield development at Pukekohe. If plans when revealed, still revolve around a high level of care units I will see this as a sign the company are not adapting to the tremendous cost pressures involved in providing care. If that's the case my capital is probably better off invested elsewhere over the long run.
There is a reasonably widely held view in the investment community that in times of high inflation "cash is trash". I disagree and believe that cash in hand has two key advantages in times of extreme market volatility.
1. It confers tremendous peace of mind and acts like a shock absorber cushioning the volatility in your portfolio.
2. It confers the advantage of great optionality around buying shares in the future at cheaper prices.
Last edited by Beagle; 15-02-2022 at 10:51 AM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
or at least party pallor games of a 3rd world war...
one slip of the button on some fly boy's HUD and whish off goes a rocket ..
How exactly would this slip impact on the demand of elderlies in NZ to get into care?
Obviously - scaremongering is easy ... for traders it might be useful to pump the hype ... and dependant on ones character it might be even fun to scare less experienced investors - but really, what is the point?
Main impact of World War 2 on the NZ economy was that we had the British here to learn to fly their planes in combination with a certain labour shortage given that some of the boys needed for work have been overseas.
Why would this reduce demand or supply for NZ care facilities?
I guess in the medium term we might have some immigration pressure which would bring house prices further up ...
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"Prediction is very difficult, especially about the future" (Niels Bohr)
Better not annualise the 6.3% drop in Auckland house prices last month...we don't need any help feeling glum at the moment.
Suppose the near halving of sales volume might get reversed and normalise again when the Govt's investigation into the application of new consumer credit finance laws helps the banks understand them better....or maybe the "rocket scientists" in power have no idea what they're doing ?
….
Government in panic mode over an unintended (presumably?) consequence of its legislation. Or, maybe it wants to shut out more potential first home buyers in order to boost the disgruntled voters in the electorate.
Better not annualise the 6.3% drop in Auckland house prices last month...we don't need any help feeling glum at the moment.
Suppose the near halving of sales volume might get reversed and normalise again when the Govt's investigation into the application of new consumer credit finance laws helps the banks understand them better....or maybe the "rocket scientists" in power have no idea what they're doing ?
Market merely front running a collapse in house prices this year ? You folks be the judge.
Just as well nationwide medium prices only dropped 2.2% last month...we can annualise that without any blood pressure issues, that's only dropping at a rate of 26% per annum which isn't too bad and would only wipe out last year's real estate gains so no worries, nothing to see here, or maybe this is the start of a multi year pullback in real estate as dramatically higher and increasing further still, interest rates cripple recent home buyers ? Interesting times.
Thing is, most people need to sell their house to get into a retirement unit and if sales have halved, that could be a nasty big "fly in the ointment".
Market front running? or still to react
I always thought this chart ((from UBS) fascinating ... a year old but still tells the story about changes in house prices and changes in sector share prices
Last edited by winner69; 15-02-2022 at 12:38 PM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Pretty close correlation there. Thanks for sharing.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Apparently Rsquared is .34 ----- meaning changes HPI explains 34% of the change in share price (annually) over time ...from UBS
Thanks for that. This shows we tend to see trends / relationships when presented with a graph, but the maths suggests there is more randomness to the data. If you have the data, a good experiment is to offset the correlation calculations whereby one data set may lead the other by 1 to n periods. If you can find a strong calculation (over say 0.7) then one piece of data might be used as a predictor for the other e.g. one data set is pulled forward by a day/week/month or multiples thereof. I'd be curious to see that with your milk price data versus (was it?) housing.
Originally Posted by bottomfeeder
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