OCA - Oceania Group - retirement villages

[ValueNZ]

Not really, the ones I bought originally had a net present value that I was more than happy with and the ones I have bought subsequently have a a similar net present value but I'm paying much less for them.

You're not taking any hammering at all, if someone yells out to you on the street oi you fat prick, but you're anorexic then you're not going to feel abused are you.

Forget about obsessing over the current market quote and focus on the amount of earnings that your business will generate over the next 10 years and how the assets that you are buying the equity portion of, are funded.

Value the business yourself.

After purchasing any shares, what you should pray for is that they collapse in price on the market while the business either improves or remains the same.

Wouldn't you prefer your shares to increase in price, above what you believe their intrinsic value is, so that you can sell them and move onto the next undervalued opportunity?

[bull....]

arv trying to catch up to oca , oca better get a move on.

anyway i think the company should tell us if they use kumera or not ?

[SailorRob]

Wouldn't you prefer your shares to increase in price, above what you believe their intrinsic value is, so that you can sell them and move onto the next undervalued opportunity?

Often, this happens.

Ultimately, over the long term, and because if nothing else of rising dividends and improving and obvious fundamentals, the market will eventually revalue to intrinsic or above.


What you suggest relies on being able to find another opportunity and be as familiar with it, and that the rise to above intrinsic value happens fast enough that you get your required return on capital and then do this again and again, which is entirely possible but very difficult.

You will make a lot more money if a very high quality business goes on sale and remains so for a while and you reinvest dividends and purchase more as you can, than having a one off revaluation.

[ValueNZ]

Often, this happens.

Ultimately, over the long term, and because if nothing else of rising dividends and improving and obvious fundamentals, the market will eventually revalue to intrinsic or above.


What you suggest relies on being able to find another opportunity and be as familiar with it, and that the rise to above intrinsic value happens fast enough that you get your required return on capital and then do this again and again, which is entirely possible but very difficult.

You will make a lot more money if a very high quality business goes on sale and remains so for a while and you reinvest dividends and purchase more as you can, than having a one off revaluation.

Certainly an interesting perspective. Perhaps I'll attempt to adapt the same mindset as you, and see falling asset prices as more of an opportunity for further future gain rather than unrealised losses.

[Baa_Baa]

[...] You will make a lot more money if a very high quality business goes on sale and remains so for a while and you reinvest dividends and purchase more as you can, than having a one off revaluation.

Just saying, you're not talking to yourself, there are people here and presumably some lurkers and watchers, who 'get it' about investing long term. Acquiring/accumulating on-market and/or via dividends/DRP, when the market decides to underprice the equity and the company spews out profits as additional equity or money to shareholders every 3-6-12 months by distributing profits. The long terms maths on this is indisputable, assuming the company remains profitable.

This imho and observation though, is a very mature investment approach and can take many years for share market participants to get a grip of, especially mentally when their capital value is being destroyed on paper. Those that do though, really don't concern themselves too much about their current capital portfolio valuation as they have no intention to sell, realising either capital profits or losses. They didn't buy to sell, they bought to lock-in a long term income and/or equity accumulation. They accumulate more by buying or reinvesting dividends.

Thing is though, there are probably a lot more people who are really only focused on the share price and especially so when it goes against their buy-in price, i.e. they're under their buy-price and trying to decide whether to lock in capital losses and move elsewhere. The share price watchers who don't or didn't realise they were really just capital traders, and didn't react early will be hurting. So many though don't have any tools to help with when to exit a capital trade (or get in). It's all gut feel, emotional, subject to whim. All they will see is the red number on their portfolio and counting how much the will lose if they sell. Professional traders are a lot more nimble and move early, getting in, or out.

This place is 'Sharetrader' and its legacy goes back two decades, the debate between hard core investors, casual investors, momentum traders, short term and day traders, noobs and experienced never stops.

The thing I like the most about your posts is that you are very patient about explaining the maths of long term investing in sound prosperous and long term companies. Though sometimes a bit rude and dismissive towards people who don't get it, regardless of their reasons, for example, they want the trade, the quick buck, the thrill of a win.

OCA is and has been for me a long term investment, the repeated extreme capital volatility which I never expected over the past few years has been a windfall enabling me to accumulate a much larger position on-market and via DRP than originally intended based on the original capital I had to invest. Personally I have no intention to sell OCA.

I think people should ponder your expose' of the power of free money that the RV's build up (debt to ORA's) and how that is leveraged. It's quite unlike most industries and core to understanding long term investing in RV's.

[SailorRob]

Certainly an interesting perspective. Perhaps I'll attempt to adapt the same mindset as you, and see falling asset prices as more of an opportunity for further future gain rather than unrealised losses.

What you are saying also holds merit but what will really highlight the perspective I'm advocating is running some math on the respective numbers. I put together a series of scenarios where I showed the outcomes of reinvesting OCA dividends at different prices, somewhere back in this thread. I'll try dig it out.

Also what will give some insight is looking at how Buffett thought about his original Washington Post purchase and the many times he goes on about wanting a stock to fall after buying.

Another thought exercise is to take the S&P500 so that you're not talking about a single business and there is no risk of total loss... the lower the market goes then the higher your future return will then be, if this was the only investment you could make then if you are still in your saving and investing phase then you'd want lower prices.

The higher the market goes all it means is that you're dragging future returns into the present as the market cannot grow forever at a higher rate than the return on capital it produces.

Obviously in some cases falling asset prices are not going to be an opportunity for future gain and this can be a real killer as well.


'One quick example: The Washington Post Company in 1973 wasselling for $80 million in the market. At the time, that day, youcould have sold the assets to any one of ten buyers for not less than$400 million, probably appreciably more. The company owned thePost, Newsweek, plus several television stations in major markets.Those same properties are worth $2 billion now, so the person whowould have paid $400 million would not have been crazy.

Now, if the stock had declined even further to a price that madethe valuation $40 million instead of $80 million, its beta wouldhave been greater. And to people who think beta measures risk, thecheaper price would have made it look riskier. This is truly Alice inWonderland. I have never been able to figure out why it’s riskier tobuy $400 million worth of properties for $40 million than $80 million. And, as a matter of fact, if you buy a group of such securitiesand you know anything at all about business valuation, there isessentially no risk in buying $400 million for $80 million, particularly if you do it by buying ten $40 million piles for $8 million each.Since you don’t have your hands on the $400 million, you want tobe sure you are in with honest and reasonably competent people,but that’s not a difficult job'

[SailorRob]

Just saying, you're not talking to yourself, there are people here and presumably some lurkers and watchers, who 'get it' about investing long term. Acquiring/accumulating on-market and/or via dividends/DRP, when the market decides to underprice the equity and the company spews out profits as additional equity or money to shareholders every 3-6-12 months by distributing profits. The long terms maths on this is indisputable, assuming the company remains profitable.

This imho and observation though, is a very mature investment approach and can take many years for share market participants to get a grip of, especially mentally when their capital value is being destroyed on paper. Those that do though, really don't concern themselves too much about their current capital portfolio valuation as they have no intention to sell, realising either capital profits or losses. They didn't buy to sell, they bought to lock-in a long term income and/or equity accumulation. They accumulate more by buying or reinvesting dividends.

Thing is though, there are probably a lot more people who are really only focused on the share price and especially so when it goes against their buy-in price, i.e. they're under their buy-price and trying to decide whether to lock in capital losses and move elsewhere. The share price watchers who don't or didn't realise they were really just capital traders, and didn't react early will be hurting. So many though don't have any tools to help with when to exit a capital trade (or get in). It's all gut feel, emotional, subject to whim. All they will see is the red number on their portfolio and counting how much the will lose if they sell. Professional traders are a lot more nimble and move early, getting in, or out.

This place is 'Sharetrader' and its legacy goes back two decades, the debate between hard core investors, casual investors, momentum traders, short term and day traders, noobs and experienced never stops.

The thing I like the most about your posts is that you are very patient about explaining the maths of long term investing in sound prosperous and long term companies. Though sometimes a bit rude and dismissive towards people who don't get it, regardless of their reasons, for example, they want the trade, the quick buck, the thrill of a win.

OCA is and has been for me a long term investment, the repeated extreme capital volatility which I never expected over the past few years has been a windfall enabling me to accumulate a much larger position on-market and via DRP than originally intended based on the original capital I had to invest. Personally I have no intention to sell OCA.

I think people should ponder your expose' of the power of free money that the RV's build up (debt to ORA's) and how that is leveraged. It's quite unlike most industries and core to understanding long term investing in RV's.

I would say extremely rude and dismissive!


Yep if people are in it for the thrill of the win and want to trade I am all for that provided they understand the odds are stacked against them. Gambling after all is a massive industry. It's when people think that it's guaranteed money, or the best way to 'invest' is when I get wound up.

[Baa_Baa]

I think people should ponder your expose' of the power of free money that the RV's build up (debt to ORA's) and how that is leveraged. It's quite unlike most industries and core to understanding long term investing in RV's.

Apologies for quoting myself SailorRob, I tried but can't find your insightful post about how RV's get free money from ORA's (debt income without interest) and leverage it, like insurance company's do by other means. This is the core to the maths of the investment thesis and how RV's distinguish themselves from traditional property developers who have to raise capital, with interest.

[ValueNZ]

I think people should ponder your expose' of the power of free money that the RV's build up (debt to ORA's) and how that is leveraged. It's quite unlike most industries and core to understanding long term investing in RV's.

Perhaps someone on this forum would like to explain this?

[SailorRob]

Perhaps someone on this forum would like to explain this?

I'll find the original post and repost it as it hopefully explains it in detail.