OCA - Oceania Group - retirement villages

[Habits]

buy $100,000 of OCA cheap, the problem is if they get even cheaper. I'm glad I dont have $100k available

[Baa_Baa]

Not pulling your leg.

My mum said she was willing to lend some cash, so you could call her a benevolent benefactor. But I don't think that's honestly don't think that's fair, I'll be paying her an interest rate ~10%, more than I think she'd be able to earn anywhere else. So it is mutually beneficial for her and I.

It'll be non-callable, and I'll easily be able to service the debt.

So I was right, no further comment, expect maybe don't rush into the buy side, this has a week or so to play out and you might get a better top up from your mothers money than tomorrow or the next day.

I presume you've done the maths on the interest rate payments versus the returns from OCA (which with no dividends and currently no capital growth are largely unknowable), especially that you bring the downside into the nearer term, versus the longer term without the debt.

[Baa_Baa]

You've been awfully quiet these past few days Baa_Baa, I can only assume you've been buying

I don't usually say much when the Traders (bless them) have taken over the thread. While understandable as OCA is getting smashed by the market (SP), I'd rather keep my powder dry and being predominantly a TA with a decent (learned here) FA, now is a time to be quiet and see how this plays out.

That said, I have a modest incremental stash ready to deploy when I think this has bottomed out. My other stocks, against OCA which is so massively declining has morphed my stock portfolio balance into a weird place, where I can justify investing more in OCA whereas until recently that would be portfolio balancing police inducing incrimination.

Either way, OCA, if you believe it has a long term future, these are close to the times when you'll never regret buying some and owning it (imho). If not though, then it's just a noisy commentary from the sidelines.

[ValueNZ]

I don't usually say much when the Traders (bless them) have taken over the thread. While understandable as OCA is getting smashed by the market (SP), I'd rather keep my powder dry and being predominantly a TA with a decent (learned here) FA, now is a time to be quiet and see how this plays out.

That said, I have a modest incremental stash ready to deploy when I think this has bottomed out. My other stocks, against OCA which is so massively declining has morphed my stock portfolio balance into a weird place, where I can justify investing more in OCA whereas until recently that would be portfolio balancing police inducing incrimination.

Either way, OCA, if you believe it has a long term future, these are close to the times when you'll never regret buying some and owning it (imho). If not though, then it's just a noisy commentary from the sidelines.

Can't say I agree in regards to "seeing how this plays out." There's no reason to believe TA will get you a better price, and you'll be annoyed with yourself if OCA jumps in price whilst you waited around with cash on the sidelines.

All I'll say is 56c is about as cheap as 38c was in 2020 adjusted for the growth of OCA. I wish you luck in getting a lower price than that.

[Baa_Baa]

Can't say I agree in regards to "seeing how this plays out." There's no reason to believe TA will get you a better price, and you'll be annoyed with yourself if OCA jumps in price whilst you waited around with cash on the sidelines.

All I'll say is 56c is about as cheap as 38c was in 2020 adjusted for the growth of OCA. I wish you luck in getting a lower price than that.

I get it, you're not familiar with TA, in the early days of the different techniques for informing investments, it might as well be chicken entrails or tea leaves, that's OK. No respectable TA though ever hit the top or the bottom of SP precisely, except by chance, it's a matter of probability and confidence. Most will be a bit late to the bottom to buy (confidence) and a bit late to the sell (confidence). I'll show you sometime if you want to. I have no ambition to pick the absolute bottom SP in this cycle, a few percent either way is neither here nor there to me over the longer term, but we're talking about market sentiment now, not about intrinsic value, somewhere close would be a win.

I would never borrow money at above average interest rates to accumulate more stock that is not in a seriously unquestionable sustained capital price uptrend. And I'd have hard stop-losses on my account to ensure I didn't get burned by adverse events in the SP. Limit buys and limits sells (stop losses) are straying into traders territory, but they're certainly going to protect your capital (to some extent), especially if you're borrowing to invest.

[troyvdh]

I guess what will be the SP in say 5-10 years time.
KISS I guess.

[ValueNZ]

I get it, you're not familiar with TA, in the early days of the different techniques for informing investments, it might as well be chicken entrails or tea leaves, that's OK. No respectable TA though ever hit the top or the bottom of SP precisely, except by chance, it's a matter of probability and confidence. Most will be a bit late to the bottom to buy (confidence) and a bit late to the sell (confidence). I'll show you sometime if you want to. I have no ambition to pick the absolute bottom SP in this cycle, a few percent either way is neither here nor there to me over the longer term, but we're talking about market sentiment now, not about intrinsic value, somewhere close would be a win.

I would never borrow money at above average interest rates to accumulate more stock that is not in a seriously unquestionable sustained capital price uptrend. And I'd have hard stop-losses on my account to ensure I didn't get burned by adverse events in the SP. Limit buys and limits sells (stop losses) are straying into traders territory, but they're certainly going to protect your capital (to some extent), especially if you're borrowing to invest.

I am familiar with TA, just not the intricacies. Enough to know it's a crock of sh!t.

So you would borrow money in my circumstance if OCA instead rose to $1, or $1.50? But not at 56c. Right... Sorry Baa_Baa, that is totally nonsensical.

I already said my loan is going to be uncallable, so the suggestion of a stop loss seriously makes no sense. I don't get burned if the SP drops dramatically, I get burned if I am forced to sell my shares. Holding the business's future cashflows constant, the SP can drop to 40c, 30c, or 20c and I wont be upset, I'll be ecstatic.

[Snoopy]

Woohoo! I'm taking out a small loan to buy more .

Not pulling your leg.

My mum said she was willing to lend some cash, so you could call her a benevolent benefactor. But I honestly don't think that's fair, I'll be paying her an interest rate ~10%, more than I think she'd be able to earn anywhere else. So it is mutually beneficial for her and I.

It'll be non-callable, and I'll easily be able to service the debt.

Well it might be callable if your Mum needs a new set of dentures at her OCA care unit in fifty years time. Or maybe she will claw the money back by getting you to pay rent at home well before then?

Seriously though, borrowing to invest, when there is no cashflow coming in and anything that is spare is to be hoovered up by those greedy banks is foolish IMO. That is because there is a fundamental reason the share price has fallen. Higher interest rates means it is harder to sell houses on the outside at sufficient premium to give you a good life when you go into an OCA villa. And it also means OCA is will be paying higher interest on their borrowings. Basically OCA are facing a cash crunch from both ends for an indeterminate period. Yes I know the commentators are picking the current high interest rates will stick around for a year or so, and then drop and so relieving the OCA double crunch. But as BP would say, prediction is a fraught thing, especially about the future. What happens if interest rates remain high for another year? And what happens when the OAPs income drops in relative terms with superannuation tied to inflation rather than wages? You will find the link between property values outside the village and inside the village will start to break down. That is what will happen.

I know the bond funding issue doesn't arise before 2027, with those OCA010 bonds. But OCA won't let their funding go down to the wire. So a new bond issue or, gulp, discounted share issue could come sooner than you think. And you don't have a good handle on this because OCA have not told you what their banking covenants are. Whatever the long term business targets are at OCA, you still have to survive the rocky road to get there, and there are several significant transient unknowns on the way. By all means follow your convictions and invest your cash as you see fit. But leveraging up to buy OCA shares? I would say that is a step too far, even if your 'bet' (for that is what it is) turns out to be a winner. Of course being of the young generation, I expect you to take no notice of this advice at all. So all I will say to you is, 'good luck', and hopefully you will learn the sharemarket lessons you need to learn while you are still young and there is not really serious money involved.

SNOOPY

[ValueNZ]

Of course being of the young generation, I expect you to take no notice of this advice at all. So all I will say to you is, 'good luck', and hopefully you will learn the sharemarket lessons you need to learn while you are still young and there is not really serious money involved.

You say there's not serious money involved, but I easily have 50 years of compounding ahead of me. Any permanent loss of capital now will have a huge impact on my NW when I'm older. In the millions.

I understand this well which is why I will never speculate, or take on risks that involve permanent loss of capital.

[Habits]

Please ValueNZ don't borrow too much that you have to pay thousands in interest