OCA - Oceania Group - retirement villages

[SailorRob]

I have read his earlier stuff as well and follow his posts on twitter. It is difficult to say what his post GFC performance has been like. The only thing I can find is on Datarama. But only that is a best guess what his entry price is and it is only his US holdings. I have to say I am more interested in the rationale in his pick of stocks. On occasion I will try to assess the company he's picked.

I think he has been right in alot of cases but never exactly right on the timing. More recent examples are his Tesla and Cathy Woods shorts.

I do see merit in the principle in that as humans we display repetitive behaviour. In terms of the impact of computers on TA. l can't really say because I have no knowledge in this space. In saying this I read the book, the front office. Which is a great read about the world of hedge funds. I vaguely recall that the impact of TA now is very different to a decade or two ago. That is quite possibly due to the use of computers. I guess how quickly do those opportunities close up.

I can only speculate that hedge funds have yet to setup shop on the NZX. Based on observation there is certainly less volatility when comparing the movements of some individuals shares on NZX to the likes of US.

I couldn't agree with you more. My interest is aligned with value investing. I think it suits me in alot of ways. I think in some areas we have an edge over institutions i.e level of capital deployed, time horizon, investing mandates just to name a few. There's the relationship that institutions have with the clients. In a paradoxical way that can limit the returns that can be achieved. Fortunately we don't have to deal with that.

Personally I try to look at things where is considered unpopular. Potentially buy at a 25% to 30% discount depending on the company and the likelihood. You are right low P/E and PB shouldn't be the only reasons. Payback period is important too.

Did you follow his 'SELL' tweet!

And then see his 'I was wrong to say SELL tweet'

I'm a fan but man some of his tweets have gone south and west.

[SailorRob]

exactly and thats why all RV stocks are tracking each other performance wise. so i would argue that it matters little in the long run which RV stock you invest in as none has an advantage over the other apart from short term stock price blips

It's which one is at the biggest discount to future cash generation.

Which has the runway for growth and the most 'float' to equity capital and the highest CAGR of float going forward.

There are differentiations to OCA model as many highlighted but that's not a moat and can be easily replicated.

However it may mean they're more successful.

Look at Ryman recently, absolutely awful management and capital decisions...

Maybe over the next 20 years you're right.

[SailorRob]

exactly and thats why all RV stocks are tracking each other performance wise. so i would argue that it matters little in the long run which RV stock you invest in as none has an advantage over the other apart from short term stock price blips

Well how do you then explain the RV stocks tracking the rubbish like Argosy?

Totally different model but caught up in the same malaise.

One has few capital, the other does not.

[Fortunecookie]

Did you follow his 'SELL' tweet!

And then see his 'I was wrong to say SELL tweet'

I'm a fan but man some of his tweets have gone south and west.

I did see but I didn't pay too much attention on that occasion. It wouldn't interesting to see what his recent performance has been like.

[X-men]

Come bull...you won...time to buy in 68c is a great re-entry price....what could go wrong!!!

[nztx]

Come bull...you won...time to buy in 68c is a great re-entry price....what could go wrong!!!

What will a CR do to the price ?

[SailorRob]

What will a CR do to the price ?

Hopefully demolish it and keep it in the gutter for the next 17 years.

Posted the below a while ago, the returns are MUCH better now.

Just the CAGR alone would be 6.55% with dividends reinvested at a low share price, you're going to do maybe 15% CAGR.

Or turn a million into nearly 13 million.

After joking with a mate that at this rate OCA would take until 2040 to reach $2, I decided to take a look at what this scenario could look like as an investment.

I was stunned to find that it would be a very decent investment and in all likelihood beat the returns you would get from putting your money with 95% of professional investors over the same 18 year time period. If the shares go to $2 now it will destroy your returns.


From here to $2 in 18 years, the share price would produce a compounded 4.1% return. If dividends kept in lockstep (so the yield remained the same and the dividend also grew at 4.1%) and you paid 25% tax on the dividend and then reinvested into the company at the prevailing share price you would compound your investment at 7.92%.


Now if the share price stayed at 97c for the first 10 years and then grew steadily to $2 by the 18th year, you'd compound at 8.75%, but if the share price stayed at 97c for 17 years before jumping to $2, then you'd compound at a phenomenal 9.5%. This would turn a million into 5.5 million. At the original 7.92% it would be 4.41 million.

Obviously the share price staying static while dividends grow is unlikley, but this shows the effect of having a share price go nowhere. The longer it stays lower the better and you can of course commit external capital.

Given the choice 999 of 1000 investors would want and pray for only $3.46 million and reject the $5.5 million, throwing away 2 million dollars as they prey for the share price to go up NOW which would mean only getting a compound 6.92% return.

[X-men]

Arvida no CR....a lot of ST members believe no CR. Recent insider said no CR

[BlackPeter]

Ok that's good. You didn't mention it once and your comparison to REIT's is way off. Totally different companies.

You don't seam to understand that the market treats retirement villages like REITS based on their main source of income, but sure - you think you are right and the market is wrong, I get it. You are not the only one ;

Still - I prefer to apply the well known Swedish army rule: If the terrain is different from you map, than trust the terrain.

Maybe you should review your map ;

[SailorRob]

You don't seam to understand that the market treats retirement villages like REITS based on their main source of income, but sure - you think you are right and the market is wrong, I get it. You are not the only one ;

Still - I prefer to apply the well known Swedish army rule: If the terrain is different from you map, than trust the terrain.

Maybe you should review your map ;

Maybe, just maybe BlackPeter you should learn how to read a balance sheet.

It's nothing to do with income sport. It's funding.

Returns on shareholders capital.

Spend the day looking into it.