I have been watching them build Sum St John's over the last few years as my boys go to Sacred Heart College so we drive past.
It's one impressive build.
OCA at the current price represents great value. But I have no cash left to invest. If I did I would be buying up around 20 stocks on the NZX.
And the wife tells me I need to reduce the farm debt. Hands are tied apart from recycling my current portfolio. Which I'm currently getting very bored with!.
Balance me ol mate …..If they did that they might get a fright …but wouldn’t be surprised as it would spoil the party as the saying goes.
I demonstrated what happens to DMF not that long ago and got told no no you just don’t get it etc etc
Haha - hardly surprising! In the land of OCA believers, the one-eyed man is king!
Yes, the way that OCA books the 30% DMF (as per the 2019 presentation) is very revealing of why the company is in the state that it finds itself today - as in having to stop paying dividends, sell assets and slow down developments.
W69, the day that sales stop growing, the operating losses start growing?
Haha - hardly surprising! In the land of OCA believers, the one-eyed man is king!
Yes, the way that OCA books the 30% DMF (as per the 2019 presentation) is very revealing of why the company is in the state that it finds itself today - as in having to stop paying dividends, sell assets and slow down developments.
W69, the day that sales stop growing, the operating losses start growing?
Doesn't matter how they 'book' it.
It's how and when they receive it in cash that matters.
As I said the other day RYM is looking like better value.
A couple of take aways.
OCA has something like 0.75 staff per resident, RYM close to 0.5.
Another take away. Divide the number of sale & resales by the profit for each operator and there is a stark difference.
I understand this doesn't tell a full picture & I haven't finished looking into RYM yet as just doing it as an exercise at the moment as I would rather have my money in the resources sector.
Both have similar debt to asset ratios.
Debt to equity something like 50% higher for OCA.
Not saying OCA isn't a bad buy at these levels, but you are relying on the property market more than anything to turn things around dramatically whereas RYM are making reasonable money from the day to day that OCA can't seem to do.
And the wife tells me I need to reduce the farm debt. Hands are tied apart from recycling my current portfolio. Which I'm currently getting very bored with!.
I have been struggling with this dilemma as well. My business debt is well below my peers.
I ponder increasing it to a still safe/low level. Buy dividend shares - and look forward to interest rates falling/economy improving and the benefits that come with that.
Selling my business will provide for retirement, profits give a decent lifestyle in the meantime. I don’t need to do anything-it’s just a desire to push boundaries a bit.
I have been struggling with this dilemma as well. My business debt is well below my peers.
I ponder increasing it to a still safe/low level. Buy dividend shares - and look forward to interest rates falling/economy improving and the benefits that come with that.
Selling my business will provide for retirement, profits give a decent lifestyle in the meantime. I don’t need to do anything-it’s just a desire to push boundaries a bit.
Effectively it’s borrowing to invest.
Thoughts?
You nailed it. It makes total sense to keep your tax deductible debt and invest any free cashflows.
The risk is having tough periods like right now. But the thrill of using the knowledge that you have built up running your own business, to then invest in on market businesses is very good for your wellbeing. And more often than not your bank account.
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Originally Posted by winner69
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