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20-02-2023, 07:59 PM
#14831
I appreciate that, but the continual “the sky is falling” narrative, without any real foundation, is wearing thin. OCA is not going bust. Neither are the others. They are simply experiencing a temporary glitch in the matrix as pretty much everyone is, to some extent, right now. Things will recover. Who knows when, but this is the nature of investing and it puzzles me why so many so-called experienced investors here are down ramping OCA, without let up, while other very experienced investors here are taking the opportunity to buy in.
All this doom and gloom detracts from useful discussion about the business.
Originally Posted by CD_CHCH
Never say never...
While I personally believe it is unlikely that OCA will fail (or wind up) history shows there are many companies that people thought wouldn't "wind-up" that no longer exist:
Blockbuster
Enron
Pan-Am
TOYS R US
Borders
Compaq
Holden
Or for some closer to home examples of brands that vanished:
3 Guys
Big Fresh
D.I.C. (department store)
DEKA (New Zealand)
Haywrights
Hill and Stewart
Kirkcaldie & Stains
Woolworths
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20-02-2023, 08:30 PM
#14832
Originally Posted by justakiwi
I appreciate that, but the continual “the sky is falling” narrative, without any real foundation, is wearing thin. OCA is not going bust. Neither are the others. They are simply experiencing a temporary glitch in the matrix as pretty much everyone is, to some extent, right now. Things will recover. Who knows when, but this is the nature of investing and it puzzles me why so many so-called experienced investors here are down ramping OCA, without let up, while other very experienced investors here are taking the opportunity to buy in.
All this doom and gloom detracts from useful discussion about the business.
It's OK JK to ask the questions, it's not down ramping. Dickheads who like to feed cabbage to residents (and others of similar doom and gloom ilk), well that's just them non-holders, jilted ex-lovers stirring and obvious nonsense that belittles them, not the intelligence of the reader.
For ages RV has been peaches and cream, then the REIT sector goes on a down-rating, while the big guys are still talking their game, then boom, RYM does a billion$ CR and SUM go out testing appetite for a $125m Bond offer. Something's not right. All of them are well leveraged, have massively increased marketing, with special offers etc. It's all about Cash Flow, even large successful businesses need to maintain cash flow, if they can't do that, they can't paid the bills/debts, things can go pear shaped very quickly.
An open mind is important, looking through the 'alarm bells', others raise, making a call on whether it's real or not, whether it's important or not. There's no doubt that the demographic will supply increasing numbers of customers, but a cash flow crisis, or a stressed balance sheet, or creditors wanting their money back, or any of those sort of 'must have' business sureties, are more important than the glossy 'everything's OK, nothing to see here, she'll be right' rhetoric that all the RV's are prone to.
So watch for sales throughout - very important, cash flows particularly, manageable debt, changes (reductions) to build pipeline, sales of redundant property, etc etc. They all have to click together. Without those adaptations to market forces, even a very large business can get into trouble surprisingly quickly.
Last edited by Baa_Baa; 20-02-2023 at 08:31 PM.
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20-02-2023, 08:52 PM
#14833
Originally Posted by Baa_Baa
It's OK JK to ask the questions, it's not down ramping. Dickheads who like to feed cabbage to residents (and others of similar doom and gloom ilk), well that's just them non-holders, jilted ex-lovers stirring and obvious nonsense that belittles them, not the intelligence of the reader.
For ages RV has been peaches and cream, then the REIT sector goes on a down-rating, while the big guys are still talking their game, then boom, RYM does a billion$ CR and SUM go out testing appetite for a $125m Bond offer. Something's not right. All of them are well leveraged, have massively increased marketing, with special offers etc. It's all about Cash Flow, even large successful businesses need to maintain cash flow, if they can't do that, they can't paid the bills/debts, things can go pear shaped very quickly.
An open mind is important, looking through the 'alarm bells', others raise, making a call on whether it's real or not, whether it's important or not. There's no doubt that the demographic will supply increasing numbers of customers, but a cash flow crisis, or a stressed balance sheet, or creditors wanting their money back, or any of those sort of 'must have' business sureties, are more important than the glossy 'everything's OK, nothing to see here, she'll be right' rhetoric that all the RV's are prone to.
So watch for sales throughout - very important, cash flows particularly, manageable debt, changes (reductions) to build pipeline, sales of redundant property, etc etc. They all have to click together. Without those adaptations to market forces, even a very large business can get into trouble surprisingly quickly.
An excellent post thanks Baa Baa. I would give you a positive rep for it but I have to share the love first
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20-02-2023, 09:06 PM
#14834
Originally Posted by ValueNZ
Yep, 7.2% p.a becomes a real return of 0% p.a after you adjust for the current inflation rate... If you believe in OCA as a company you'd realise there are much better returns to be had purchasing the stock since its currently trading at a discounted rate.
There is no certainty with respect to stock prices. NZ taxes both the capital gain and interest paid on financial arrangements, and there is no allowance for inflation. So If the bonds are returning 7.23% then you need to deduct your marginal income tax rate - say 39% - so the after tax annual return is 4.41%. With inflation at 7.2% then the real return is about negative 2.79%.
Last edited by Bjauck; 20-02-2023 at 09:10 PM.
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20-02-2023, 09:08 PM
#14835
Member
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21-02-2023, 08:38 AM
#14836
Originally Posted by justakiwi
If any of you genuinely believe there is a rats arse chance of OCA (or any of these four providers) "winding up" - you need your heads read.
I have not even looked at an OCA annual report so do not be alarmed by anything I say, but just pointing out equity risk is higher than that of the bond holders and was just wondering if perhaps OCA bonds will provide a better return in the short term (2-3 years) with a chance to buy shares cheaper after the recession and the central bank pivot.
I did have a read of the Arvida 2022 annual report and that company made some money from management fees but mostly profit was from revaluations and development margins. Those two sources of "profit" have been removed for now, so maybe as a conservative, risk averse investor if I switched to bonds I might do better in some companies as the equity risk premium for RVs seems to have disappeared at least until interest rates start dropping again.
Speculating and jumping around is probably not advisable or profitable as we are constantly told by the managed funds industry "shares for the long term" and "time in the market, not timing the market"
Baa baa great post but did you really have to use the word "dickhead" sometimes you can get your point across without using profanities.
Last edited by Aaron; 21-02-2023 at 09:01 AM.
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21-02-2023, 09:28 AM
#14837
Stock levels.
Cash Flow.
When I was selling books to schools I always started the year with massive negative cash flow,and a massive stock holding.
This focused my attention.:
The main concern was the quality of my stock.?.............As I knew my clients requirements my stock was quality.
And the demand.?.......................................... ....................With schools reopening in February. demand was assured
Cash Flow.As I had finished buying,and was about to start selling cash flow would right itself very quickly.Which it did.
So I ask myself what is difference between OCA and my book business.Are the business dynamics the same?.
OCA.
Stock Levels
....................Good stock of excellent new units,and ongoing good sales of "used" units.
Cash Flow
..................Demand is assured with aging population.
....................Slow or stop new developments and cash flow will come right .
...................Sale of no longer required villages will reduce debt.
Appears the dynamics of book selling and retirement villages have a lot in common.
Last edited by percy; 21-02-2023 at 09:38 AM.
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21-02-2023, 09:49 AM
#14838
Excellent post as usual, and yes, I do get that.
Originally Posted by Baa_Baa
So watch for sales throughout - very important, cash flows particularly, manageable debt, changes (reductions) to build pipeline, sales of redundant property, etc etc. They all have to click together. Without those adaptations to market forces, even a very large business can get into trouble surprisingly quickly.
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21-02-2023, 09:59 AM
#14839
Which is precisely why focusing on share price in some of these discussions, is a waste of time and energy. If the company one invests in, is still doing what it said it would and is showing that it is adapting as needed to outside influences out of its control, I'm not about to panic and sell up, just because the share price has dropped today, or because the share price isn't where I think it should be. I have no problem with constructive discussion. I do get frustrated with the non-constructive negativity. And I don't just mean with OCA.
To be honest, I don't think it makes a huge amount of difference which RV one invests in right now. They will all still be around, and making money, in 2, 5, 10, 15 years. And at some point down the track, the share price of each company will be more closely aligned to where we currently wish they were.
Long term.
Originally Posted by Aaron
Speculating and jumping around is probably not advisable or profitable as we are constantly told by the managed funds industry "shares for the long term" and "time in the market, not timing the market"
And sometimes, you really can't.
Baa baa great post but did you really have to use the word "dickhead" sometimes you can get your point across without using profanities.
Last edited by justakiwi; 21-02-2023 at 10:21 AM.
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21-02-2023, 11:06 AM
#14840
lol classic OCA shenanigans
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