OCA - Oceania Group - retirement villages

[SailorRob]

looks poised to tumble to new lows

Best news I have heard all day, I hope you're right.

Being able to look at the chart and easily predict the future is an incredible skill and asset to have. You can essentially print money at ant time, anywhere. You just need an open market somewhere and a dozen screens.

[SailorRob]

Seems to me that some posters accept the published NTAs of the retirement village as gospel truth.

What we know however that is the institutional market (especially overseas instos) prices in premiums or discounts to the NTAs, depending on their collective view of the property market and values are going.

Hence, the huge premiums to published NTAs during the boom years.

Now that the boom has turned to bust, hardly surprising that there are huge discounts to NTAs.

Why?

As one fundie put it to me a few months ago, they decided to get out of the sector as it was clear that the tide has gone out of the sector and the leverage from 'free equity' & debt that RVs enjoy to rising property values is now going into reverse.

Take OCA as a case in point - 30 Sept 2022:

Total land & buildings - $2.285b
Equity - $964m
'Free equity' - $889m (ror)
Debt - $493m

As can be seen, a 10% drop in property values will wipe 23.6% off NTA ($228m/$964m).

How about a 20% drop? 45.2% off NTA to 73.5c.

So market is pricing in an 18% drop in property values on OCA's sp of 79c vs NTA of $1.34 - realistic?

https://www.stuff.co.nz/life-style/h...124-nationally

Median house price to Nov 2022 - nationally down 12.4%

Auckland down 18.4% (some suburbs down 24.8%)

Wellington down 17.4% (some suburbs down 26.6%).

Leverage is a wonderful thing on the way up - it is nasty and un-nerving on the way down. Make sure you have the stomach for it if you ever use leverage or play leverage!

Good points, this is why you always value things on cash flows not on property values which are just the price at which one moron will transact with another at on a given day.

[bull....]

Best news I have heard all day, I hope you're right.

Being able to look at the chart and easily predict the future is an incredible skill and asset to have. You can essentially print money at ant time, anywhere. You just need an open market somewhere and a dozen screens.

yes yes i know your be happy your 10c price is coming might not be this yr but next yr maybe esp with fbu ramping up production

[winner69]

Property market still stuffed

Low number of sales a worry for OCA


https://reinz.co.nz/Media/Default/Mo...ber%202022.pdf

[bull....]

Property market still stuffed

Low number of sales a worry for OCA


https://reinz.co.nz/Media/Default/Mo...ber%202022.pdf

yea that NTA thingee going to be alot smaller surely next yr .... wonder who will beat who in the race to the bottom .... cashflow or NTA ?

[SailorRob]

yes yes i know your be happy your 10c price is coming might not be this yr but next yr maybe esp with fbu ramping up production

Yes ibee hapi your be fbu rampz upps they be wrek oca be me goodz

[Balance]

Yes ibee hapi your be fbu rampz upps they be wrek oca be me goodz

yea that NTA thingee going to be alot smaller surely next yr .... wonder who will beat who in the race to the bottom .... cashflow or NTA ?

Come on guys - you cannot control the market but you certainly can control how you react to the market.

One plays long term, the other short term - bit like a chicken talking to a goose?

[Poolboy]

It could be worse. We could be RYM boys. $6.20 right now - yikes.

I'm down 49.6% on my RYM. Good thing I don't have many...

[SailorRob]

For all the regular posters/viewers on this thread;

If we owned OCA in a private partnership and thus had no quoted price but still had a internet forum or chat group, what types of things would we be posting and discussing and why?

I would say that it would be very different from what we are all discussing and I'm very confident about that, the question is why would it be?

[SailorRob]

[QUOTE=peat;984786]actually , tho, as in actual reality, OCA equity paper is depreciating pretty rapidly and has been for nearly two years now with no real sign of a turnaround, so all your words about the future are just reckons. clearly the market has a problem with OCA otherwise it would likely be closer to NTA. And the market is what determines the current price, not the NTA, not your reckons, and not everyones expectations which have been pushed around for years now, hey I'm exposed to this too but thanks to a strong concept of diversification in other markets, other shares, and holding cash in TD's the pain is relatively minimal and acceptable under the view of a long term holding.

So I wouldnt be touting this as the next best thing quite yet especially to people who already have a decent exposure.

CHARLIE MUNGER: Yeah. If you — students of America go to these elite business schools and law schools and they learn corporate finance the way it’s now taught and investment management the way it’s now taught.

And some of these people write articles in the newspaper and other places and they say, “Well, the whole secret of investment is diversification.” That’s the mantra.

They’ve got it exactly back-ass-ward. The whole secret of investment is to find places where it’s safe and wise to non-diversify. It’s just that simple. Diversification is for the know-nothing investor; it’s not for the professional.