OCA - Oceania Group - retirement villages

[Daytr]

How much could they potentially pay out in dividends if development stopped?

Well it depends how big they are at the time. At the moment the debt value outweighs the development stock so its only once the development stock outweighs the debt they are in float territory.

I do wonder about market saturation, are we getting there? Will we get there at some point in the near future? Or is their another decade or two to run...
These are all considerations in regards where this ends up.

According to some, it's just growth & more growth and there's no risk of an oversupply or even just a change in appetite that impacts the outlook.

[SailorRob]

Well it depends how big they are at the time. At the moment the debt value outweighs the development stock so its only once the development stock outweighs the debt they are in float territory.

I do wonder about market saturation, are we getting there? Will we get there at some point in the near future? Or is their another decade or two to run...
These are all considerations in regards where this ends up.

According to some, it's just growth & more growth and there's no risk of an oversupply or even just a change in appetite that impacts the outlook.

You can't keep baiting us, nobody is that dumb!

Try something else.

[Daytr]

You can't keep baiting us, nobody is that dumb!

Try something else.

Hmmm not sure about that...
Free loans! No it's rent in advance, oh hang on I didn't mean that. Free loans! 🤣

[SailorRob]

Hmmm not sure about that...
Free loans! No it's rent in advance, oh hang on I didn't mean that. Free loans! 🤣

Keep it up, you have as many friends here as the other threads.

No matter how hard you try, you'll never understand it, not even with mavs pictures.

49% in maths!

[Daytr]

Keep it up, you have as many friends here as the other threads.

No matter how hard you try, you'll never understand it, not even with mavs pictures.

49% in maths!

SailorBoy, never changes. And like a boy when he can't bamboozle you with his magic show, he resorts to getting personal and lazy insults. Ohhh you have no friends... 🤣🤣🤣

You really are like a kid in primary school.
These cyber friendships are about as real as your secret sauce.

I'm very proud of that 49% in Bursary.
Seeing I only attended about 1/3rd of classes & walked into the exam with no revision.
My ping pong game also improved dramatically with all that free time...

Pssst free loans, we want free loans.
Really you are giving out free loans?
No we want your money for free.
Well you can get ducked.
Well what if you give me the money & I give you a villa of the same value to live in until you die and we give you back 70% of the loan then.
OK done, but what's with the free loans?
Forget it mate, it's just a gimmic for dumb investors, but you saw through it straight away.

[ValueNZ]

SailorBoy, never changes. And like a boy when he can't bamboozle you with his magic show, he resorts to getting personal and lazy insults. Ohhh you have no friends... 藍藍藍

You really are like a kid in primary school.
These cyber friendships are about as real as your secret sauce.

I'm very proud of that 49% in Bursary.
Seeing I only attended about 1/3rd of classes & walked into the exam with no revision.
My ping pong game also improved dramatically with all that free time...

Pssst free loans, we want free loans.
Really you are giving out free loans?
No we want your money for free.
Well you can get ducked.
Well what if you give me the money & I give you a villa of the same value to live in until you die and we give you back 70% of the loan then.
OK done, but what's with the free loans?
Forget it mate, it's just a gimmic for dumb investors, but you saw through it straight away.
No one ever claimed there was no service given to receive that "loan". Just that the cost to shareholders of receiving that capital is close to zero (+- some, historically negative cost, or paid to receive the ORA).

[winner69]

This thread just rolled over 20,000 posts

Catching up to PEB and ATM but those two been around much longer

[mistaTea]

This thread just rolled over 20,000 posts



Twenty thousand high quality posts I might add! 🫣🤭

[Baa_Baa]

This thread just rolled over 20,000 posts

Catching up to PEB and ATM but those two been around much longer

Almost catching up to your number of posts. And 5 million views, that’s average 250 views for every post!

[RTM]

Keep it up, you have as many friends here as the other threads.

No matter how hard you try, you'll never understand it, not even with mavs pictures.

49% in maths!

I remember when I passed bursary maths….my teacher reckoned he was going to apply for a recount.

[Daytr]

No one ever claimed there was no service given to receive that "loan". Just that the cost to shareholders of receiving that capital is close to zero (+- some, historically negative cost, or paid to receive the ORA).

Your a smart kid with a blind spot.
Free loan was mentioned over & over even when I outlined what the exchange actually is which is obvious to anyone with both eyes open.
But suddenly that wasn't a loan but paying rent in advance, oh but no it's not.

It's simply put not a loan, unless you want to break the transaction into bits.
A loan of cash for the loan of a villa.
The interest of the loan is nullified by the rent on the villa. I.e the cost of the loan is the rent that could have been earned on the villa.
Obviously the kicker is the 70% buyback & resale, after refurb costs. But this is the only kicker & that should grow over time which is a good deal for OCA.

How's this for a scenario?
The real estate market deteriorates further?
Not only new sales, but resales become a problem, but in the mean time OCA have to pay out the 70% whilst only sitting on a little bit of cash on the balance sheet. They are very reliant on there being a buyer for the resales.

Now I don't necessarily hold that view, but it's not out of the realms of possibility.

[Cupsy]

Your a smart kid with a blind spot.


It's simply put not a loan, unless you want to break the transaction into bits.
A loan of cash for the loan of a villa.
The interest of the loan is nullified by the rent on the villa. I.e the cost of the loan is the rent that could have been earned on the villa.
Obviously the kicker is the 70% buyback & resale, after refurb costs. But this is the only kicker & that should grow over time which is a good deal for OCA.



what exactly are you referring to here, the DMF or the ORA?, i thought the properties are held primarily to generate a DMF income? (is this the "rent" idea you are talking about that could have been earned??), i'm not sure what you then class the ORA as? additionally you appear to be ignoring time frames of occupancy in your comment??, which are in the AR and would have a large bearing on the point you are trying to make wouldn't they?.

[mistaTea]

what exactly are you referring to here, the DMF or the ORA?, i thought the properties are held primarily to generate a DMF income? (is this the "rent" idea you are talking about that could have been earned??), i'm not sure what you then class the ORA as? additionally you appear to be ignoring time frames of occupancy in your comment??, which are in the AR and would have a large bearing on the point you are trying to make wouldn't they?.

Beware of Dandelo.

[winner69]

Aren’t most if not all DMFs consumed over the term of the agreement …ie used up to pay for the cost of looking after people and running villages

[Cupsy]

ArenÂ’t most if not all DMFs consumed over the term of the agreement Â…ie used up to pay for the cost of looking after people and running villages
Is that how the DMF is explained in the AR?

[winner69]

Is that how the DMF is explained in the AR?

You could ‘is that how anything is explained in the AR’

[Cupsy]

You could ‘is that how anything is explained in the AR’
I'm not picking up the point you are making?I didn't think the dmf is used for "the cost of looking after people" as you mention, but maybe I missed it in the AR?

[winner69]

I'm not picking up the point you are making?I didn't think the dmf is used for "the cost of looking after people" as you mention, but maybe I missed it in the AR?

It included in the Revenue line

The other point is that the AR seems to go out if it’s way to confuse punters

[Poet]

It included in the Revenue line

The other point is that the AR seems to go out if it’s way to confuse punters

Yes, that is exactly what they do. They think they are so much smarter than the punters, so just crack on that everything is great, captains of industry running the ship smoothly.

But... punters have worked out the ship is being run by a bunch of complete incompetents, that's why the shareprice is in the gutter.

Can't be trusted, so don't trust them.

[Cupsy]

It included in the Revenue line



Care operations revenue is in revenue also isn't it? I'm confused!

[Daytr]

what exactly are you referring to here, the DMF or the ORA?, i thought the properties are held primarily to generate a DMF income? (is this the "rent" idea you are talking about that could have been earned??), i'm not sure what you then class the ORA as? additionally you appear to be ignoring time frames of occupancy in your comment??, which are in the AR and would have a large bearing on the point you are trying to make wouldn't they?.

The 70% or 30% to OCA is the DMF less refurbishment costs. Time frames are difficult but for villages the average estimate is 7 years.
And no it's not rent it's just the deal when someone signs up front.
The rent is if OCR didn't sell what would the rent be on the unit over 7 years? I can tell you it's a lot higher than the DMF.
Where they can that up is on capital gain if it's available.

[Cupsy]

The 70% or 30% to OCA is the DMF less refurbishment costs.

I have no idea what you are saying here, can you lay it out in a bit more detail?



The rent is if OCR didn't sell what would the rent be on the unit over 7 years? I can tell you it's a lot higher than the DMF.


Can you give us some detail, run some numbers for us on how much higher?

[SailorRob]

It's simply put not a loan

What are all the Residents' loans they go on about in the Summerset IPO document, hundreds of millions worth.

Like us, they are wrong I guess.

[SailorRob]

Your a smart kid with a blind spot. Free loan was mentioned over & over even when I outlined what the exchange actually is which is obvious to anyone with both eyes open. It's simply put not a loan


The Summerset IPO document must be a fraud. And ValueNZ you are blind mate.

Page 82 of the IPO document;


Residents’ loans.


Residents’ loans are non interest bearing and are payable when both a terminating event has occurred (i.e. receipt by the manager of an acknowledgement of termination signed by the resident or the resident’s attorney or the personal representatives of a deceased resident), and there has been a subsequent resale of the licence, and the settlement proceeds from the resale have been received by the Group.

[SailorRob]

From OCA IPO Document;


Property market risk:

Oceania’s retirement village earnings are affected by prevailing national and regional property market conditions which are outside Oceania’s control. Any downturn in the property market could impact Oceania’s ability to sell or re-sell Units, as well as the value that can be achieved on any such sale or resale, which could result in a significant negative impact on Oceania’s earnings.

[ValueNZ]

The Summerset IPO document must be a fraud. And ValueNZ you are blind mate.

Page 82 of the IPO document;


Residents’ loans.


Residents’ loans are non interest bearing and are payable when both a terminating event has occurred (i.e. receipt by the manager of an acknowledgement of termination signed by the resident or the resident’s attorney or the personal representatives of a deceased resident), and there has been a subsequent resale of the licence, and the settlement proceeds from the resale have been received by the Group.
I'm hooked on float lol. I'll spend my whole life scouting out the stuff...

Probably won't ever find anything like retirement village float again though. It beats all other float for the reason that a resale must be made before a refund is given. That's what allows it to grow so large in relation to equity at low risk, as there can't be a run on the float.

[Daytr]

The Summerset IPO document must be a fraud. And ValueNZ you are blind mate.

Page 82 of the IPO document;


Residents’ loans.


Residents’ loans are non interest bearing and are payable when both a terminating event has occurred (i.e. receipt by the manager of an acknowledgement of termination signed by the resident or the resident’s attorney or the personal representatives of a deceased resident), and there has been a subsequent resale of the licence, and the settlement proceeds from the resale have been received by the Group.

As I have said on multiple occasions now, if you treat the money paid by the occupier, you also need to include the loan of the villa from OCA. They aren't mutually exclusive.
The interest on the loan to OCA is canceled out by the rent payable by the occupier.
If you put them together, they are a swap of mutual principle and 'interest / rent' payable.
What don't you get?

[Daytr]

I'm hooked on float lol. I'll spend my whole life scouting out the stuff...

Probably won't ever find anything like retirement village float again though. It beats all other float for the reason that a resale must be made before a refund is given. That's what allows it to grow so large in relation to equity at low risk, as there can't be a run on the float.

That's a good point re the payout is not payable until there is a buyer on the resale & it does derisk the business somewhat.

[SailorRob]

I'm hooked on float lol. I'll spend my whole life scouting out the stuff...

Probably won't ever find anything like retirement village float again though. It beats all other float for the reason that a resale must be made before a refund is given. That's what allows it to grow so large in relation to equity at low risk, as there can't be a run on the float.


Exactly right, insurance float needs larger capital to create more and it can disappear fast and chasing it can lead to disaster.

The more I learn about these businesses the more I salivate.

I read both the OCA and the SUM IPO docs tonight, SUM are much more open about the model, OCA tend to not highlight it so much.

I strongly recommend going back and reading the first few pages through 2011 on the SUM thread and looking through all of Sauces posts, I have not seen higher quality on ST.

Interestingly Winner69 was also there discussing with Sauce back then and appeared to understand it, and must have made an absolute killing on SUM, but now can only harp on about the Warriors and 'hope that the share price recovers by the end of the day' Super odd. You'd think his understanding would have increased massively by now and having seen the model work with SUM...

[Daytr]

I have no idea what you are saying here, can you lay it out in a bit more detail?



Can you give us some detail, run some numbers for us on how much higher?

Just estimate what the rent would be on a villa etc over a 7 year average vs the 30% not payable back by OCA, less what refurb costs OCA need to pay.

This is assuming no capital gain on the resale.

[ValueNZ]

That's a good point re the payout is not payable until there is a buyer on the resale & it does derisk the business somewhat.
Yes, and the float is totally unregulated! OCA can do whatever they want with it. Unlike the insurance industry.

Which is pretty crazy in our quasi socialist state.

[Cupsy]

Just estimate what the rent would be on a villa etc over a 7 year average vs the 30% not payable back by OCA, less what refurb costs OCA need to pay.

This is assuming no capital gain on the resale.

How much in refurb costs are required after 7 years?(i cant imagine much), i don't see the point you are making, I can't see the way higher ruturns you are speaking of, why don't you spell it out for me (I'm not very bright).

[mistaTea]

Interesting that the Retirement Villages Act 2003 does not put any limits on the resale period.

Not an issue when things are booming along but could be in a downturn. In theory the operator could wait indefinitely to get the price they want for the resale before having to pay out the original occupant.

In reality it only impacts the timing of cashflow but does not protect against market downturns. If the market drops they have to lower their prices like everyone else.

It would be a scandal of the operator was rejecting offers out of hand and not negotiating on good faith while someone is waiting for their money.

Here is a summary of the Financial Protection part of the Act…

Point 6 of the Retirement Villages Act 2003 focuses on the financial protections afforded to residents of retirement villages in New Zealand. Here are the detailed aspects of this point:

### 1. **Management Fees**
- **Charges and Fees**: The Act requires clear disclosure of all fees and charges that a resident will incur, including management fees. These are to be outlined in the occupation right agreement.
- **Transparency**: Operators must ensure that all fees are transparent and justified, detailing what services and amenities these fees cover.

### 2. **Capital Return**
- **Exit Payments**: The Act addresses the conditions under which the capital invested by a resident will be returned upon their exit from the village. This typically happens when the unit is resold.
- **Timing of Payments**: There is no specified maximum time limit within the Act itself for when the operator must resell a unit and return the exit entitlements to the former resident. This is often governed by the terms of the occupation right agreement.
- **Depreciation and Refurbishment**: Details about how the return amount might be adjusted for wear and tear or necessary refurbishments before resale are typically included in the occupation right agreement.

### 3. **Maintenance and Refurbishment**
- **Maintenance Obligations**: Operators are responsible for the maintenance of the village's facilities and individual units to ensure they remain in good condition and retain their value.
- **Refurbishment Costs**: The costs involved in refurbishing a unit upon a resident's exit may be shared between the operator and the resident, as stipulated in the occupation right agreement. This includes updating fixtures, painting, and making repairs as needed to make the unit saleable.

### 4. **Financial Reserves**
- **Long-Term Maintenance Plan**: Operators are required to have a long-term maintenance plan that includes setting aside funds to cover significant repairs and replacements.
- **Reserve Funds**: Adequate reserve funds must be maintained to ensure that the village can meet its long-term obligations without imposing unexpected costs on residents.

### 5. **Insurance**
- **Coverage**: The Act ensures that operators must have adequate insurance for the property and operations of the village, covering potential damages and liabilities.

### 6. **Consultation**
- **Resident Involvement**: Residents must be consulted on significant financial decisions that affect the village, particularly those related to major projects or changes in fee structures.

These financial protections are essential for ensuring that the interests of residents are safeguarded, particularly regarding the significant financial investment they make when entering a retirement village.

[SailorRob]

Just estimate what the rent would be on a villa etc over a 7 year average vs the 30% not payable back by OCA, less what refurb costs OCA need to pay.

This is assuming no capital gain on the resale.


Morning Daytr, I do understand the point that you are making. If this was your privately owned business, would you rent out the villas or would you continue to operate as they do now.

Please provide a concise but clear reasoning with your answer.

[Daytr]

Morning Daytr, I do understand the point that you are making. If this was your privately owned business, would you rent out the villas or would you continue to operate as they do now.

Please provide a concise but clear reasoning with your answer.

My only point is it's not a free loan.
The business model makes sense, I.e the use of the money up front plus the interest cost if they borrowed the equivalent from the bank would be higher than the rent they could receive.
So OCA are probably paying 4 - 5% interest effectively on those funds rather than maybe 8% commercial rate from a bank.

Shame you had to fire off a whole bunch of insults to finally get to a point where you understand it.

[Daytr]

Interesting that the Retirement Villages Act 2003 does not put any limits on the resale period.

Not an issue when things are booming along but could be in a downturn. In theory the operator could wait indefinitely to get the price they want for the resale before having to pay out the original occupant.

In reality it only impacts the timing of cashflow but does not protect against market downturns. If the market drops they have to lower their prices like everyone else.

It would be a scandal of the operator was rejecting offers out of hand and not negotiating on good faith while someone is waiting for their money.

Here is a summary of the Financial Protection part of the Act…

Point 6 of the Retirement Villages Act 2003 focuses on the financial protections afforded to residents of retirement villages in New Zealand. Here are the detailed aspects of this point:

### 1. **Management Fees**
- **Charges and Fees**: The Act requires clear disclosure of all fees and charges that a resident will incur, including management fees. These are to be outlined in the occupation right agreement.
- **Transparency**: Operators must ensure that all fees are transparent and justified, detailing what services and amenities these fees cover.

### 2. **Capital Return**
- **Exit Payments**: The Act addresses the conditions under which the capital invested by a resident will be returned upon their exit from the village. This typically happens when the unit is resold.
- **Timing of Payments**: There is no specified maximum time limit within the Act itself for when the operator must resell a unit and return the exit entitlements to the former resident. This is often governed by the terms of the occupation right agreement.
- **Depreciation and Refurbishment**: Details about how the return amount might be adjusted for wear and tear or necessary refurbishments before resale are typically included in the occupation right agreement.

### 3. **Maintenance and Refurbishment**
- **Maintenance Obligations**: Operators are responsible for the maintenance of the village's facilities and individual units to ensure they remain in good condition and retain their value.
- **Refurbishment Costs**: The costs involved in refurbishing a unit upon a resident's exit may be shared between the operator and the resident, as stipulated in the occupation right agreement. This includes updating fixtures, painting, and making repairs as needed to make the unit saleable.

### 4. **Financial Reserves**
- **Long-Term Maintenance Plan**: Operators are required to have a long-term maintenance plan that includes setting aside funds to cover significant repairs and replacements.
- **Reserve Funds**: Adequate reserve funds must be maintained to ensure that the village can meet its long-term obligations without imposing unexpected costs on residents.

### 5. **Insurance**
- **Coverage**: The Act ensures that operators must have adequate insurance for the property and operations of the village, covering potential damages and liabilities.

### 6. **Consultation**
- **Resident Involvement**: Residents must be consulted on significant financial decisions that affect the village, particularly those related to major projects or changes in fee structures.

These financial protections are essential for ensuring that the interests of residents are safeguarded, particularly regarding the significant financial investment they make when entering a retirement village.

It's another good point MistaTea & this occurred to me after ValueNZ's post.
What if OCA or any operator has a backlog of exited customers to be settled through resales?
Some could quite likely be deceased estate waiting on this to be settled.

What determines a reasonable price OCA has to accept if there are no other offers?
It's probably in the fine print of the owner occupier agreement somewhere.

[SailorRob]

My only point is it's not a free loan.
The business model makes sense, I.e the use of the money up front plus the interest cost if they borrowed the equivalent from the bank would be higher than the rent they could receive.
So OCA are probably paying 4 - 5% interest effectively on those funds rather than maybe 8% commercial rate from a bank.

Shame you had to fire off a whole bunch of insults to finally get to a point where you understand it.

Really? They are paying nearly twice as much for those funds than the money they got from the bond market back when.

So they'd be better having just rented out the villas and got that 3% money from bond market.

I do NOT agree with you Day Trader. I said I get the point you're making. It is however WRONG.

Have you heard of a thing called deferred management fee?

[winner69]

……….
Interestingly Winner69 was also there discussing with Sauce back then and appeared to understand it, and must have made an absolute killing on SUM, but now can only harp on about the Warriors and 'hope that the share price recovers by the end of the day' Super odd. You'd think his understanding would have increased massively by now and having seen the model work with SUM...

Hey Rob, this ‘Harping on about the Warriors’ isn’t making comment about Oceania’s fundamentals etc etc …it’s part of study into fandom

A study into the almost fanatical Oceania fans and how they ‘behave’ when the market per se doesn’t recognise its greatness and how it’s so similar to the Wahs disciples who keep harping on how their great team will be NRL champions this year.

So guys keep posting and providing more raw material and insights to help with this study

[SailorRob]

Hey Rob, this ‘Harping on about the Warriors’ isn’t making comment about Oceania’s fundamentals etc etc …it’s part of study into fandom

A study into the almost fanatical Oceania fans and how they ‘behave’ when the market per se doesn’t recognise its greatness and how it’s so similar to the Wahs disciples who keep harping on how their great team will be NRL champions this year.

So guys keep posting and providing more raw material and insights to help with this study

Fair point, but you should go back and look through SUM forum, 2011. Meet your
former self.

Also worth noting that the market was wrong about most of the NZX 50 for a whole decade when it was bloody obvious.

Look at the massive destruction across many of these former blue chips, they were never worth what they were trading for.

The refinery was drastically mispriced for 20 plus years...

Do you know who Sauce is/was?

[winner69]

Fair point, but you should go back and look through SUM forum, 2011. Meet your
former self.

Also worth noting that the market was wrong about most of the NZX 50 for a whole decade when it was bloody obvious.

Look at the massive destruction across many of these former blue chips, they were never worth what they were trading for.

The refinery was drastically mispriced for 20 plus years...

Do you know who Sauce is/was?

Sauce a good guy but gave up posting publicly years ago

Could still be mates with MistaTea

[Balance]

Hey Rob, this ‘Harping on about the Warriors’ isn’t making comment about Oceania’s fundamentals etc etc …it’s part of study into fandom

A study into the almost fanatical Oceania fans and how they ‘behave’ when the market per se doesn’t recognise its greatness and how it’s so similar to the Wahs disciples who keep harping on how their great team will be NRL champions this year.

So guys keep posting and providing more raw material and insights to help with this study

Strong suggest anyone genuinely interested in understanding how OCA's business & profitability/loss model works to go through this presentation by OCA.

The presentation was made in 2019 (before the surge in sp in late 2019/early 2020, the collapse in 2020 and then, spectacular sp increase in 2020/early 2021) and is still as relevant today as it was then in understanding OCA.

In particular, go through pages 25 to 30 and it should become clear why OCA is so out of favour.

https://images.oceaniahealthcare.co.nz/wp-content/uploads/2022/01/20082035/FY2019-UBS-Conference.pdf

[Daytr]

Really? They are paying nearly twice as much for those funds than the money they got from the bond market back when.

So they'd be better having just rented out the villas and got that 3% money from bond market.

I do NOT agree with you Day Trader. I said I get the point you're making. It is however WRONG.

Have you heard of a thing called deferred management fee?

This is getting boring. Have you had your morning coffee yet? As it doesn't sound like you are fully awake.

I would like to see them get that amount of money from the bond market on top of all the debt they already have & what rates were then aren't what they are now.

SailorBoy reckons we should borrow over a billion bucks. Well if SailorBoy says it then we should close our eyes and do it.
But what if no one wants that amount of bonds as they see too much debt and risk?
Ahh well we just lift the coupon until they do.
12% anyone? 🤣

Ironically I mentioned on here months ago that I would have liked to see OCA raise $100M back when the share price was $1.40 - $1.50ish.
That would be cheap capital right now. At the current market cap they could buy back 25% of the company's equity!

So what would the rental return be on the average unit? Rents are pretty strong now. 5% gross sounds about right to me.

The DMF is the kicker, as again I have said over & over again. And saving 3 - 4% on current commercial interest rates on that sort of amount isn't to be sneezed at.

So you don't agree with me, whats new there, I really don't care if you do or not and you have put nothing up to prove me wrong. Nothing.
I do care about others buying into your hocus pocus and the fact that you put down anyone who challenges you is a signal that you can't back it up.

You're not wanted here, you have no friends here, 49% maths, a 10 year old child understand better, I could go on.

What does this say about you? And more importantly what does it say about your theories that you cannot just back them up?

Lastly what does it say about your cheer crowd who buy into your magic bean theory.
It probably just says that when people are vested they hear what they want to hear and believe what they want to believe.
I haven't down ramped this stock once, quite the opposite, so it's not like I am being malicious.

And I'm not going to waste any more time on this particular point. My work here is done.

Free loans. 🤣

Thanks for the apology for all the insults by the way.

[SailorRob]

Strong suggest anyone genuinely interested in understanding how OCA's business & profitability/loss model works to go through this presentation by OCA.

The presentation was made in 1979 (before the surge in sp in late 2019/early 2020, the collapse in 2020 and then, spectacular sp increase in 2020/early 2021) and is still as relevant today as it was then in understanding OCA.

In particular, go through pages 25 to 30 and it should become clear why OCA is so out of favour.

https://images.oceaniahealthcare.co.nz/wp-content/uploads/2022/01/20082035/FY2019-UBS-Conference.pdf

Didn't exist in 1979...

Aa legit as your bond math!

[SailorRob]

Sauce a good guy but gave up posting publicly years ago

Could still be mates with MistaTea

Yeah his material is on a different level to any other poster I've seen.

[Balance]

Didn't exist in 1979...

Aa legit as your bond math!

Good catch.

As for my bond math, you really need to teach your 'lost soul' mate ValueNZ how to value bonds properly instead of how to lose $$$ in OCA? :D

[winner69]

Strong suggest anyone genuinely interested in understanding how OCA's business & profitability/loss model works to go through this presentation by OCA.

The presentation was made in 2019 (before the surge in sp in late 2019/early 2020, the collapse in 2020 and then, spectacular sp increase in 2020/early 2021) and is still as relevant today as it was then in understanding OCA.

In particular, go through pages 25 to 30 and it should become clear why OCA is so out of favour.

https://images.oceaniahealthcare.co.nz/wp-content/uploads/2022/01/20082035/FY2019-UBS-Conference.pdf

Good one Balance. Got punters excited eh

Even back then little said about the cost of looking after people, running villages and HQ costs

[SailorRob]

You're not wanted here, you have no friends here

I had 6 messages yesterday morning alone about you and how to deal with you. Unfortunately I ignored all of the advice!

[Daytr]

I had 6 messages yesterday morning alone about you and how to deal with you. Unfortunately I ignored all of the advice!

Haha, the gang, ganging up.
Hiding behind their ring master.
Ohhhhh you have me quaking in my boots.
Gawd you are such a child.

[SailorRob]

Haha, the gang, ganging up.
Hiding behind their ring master.
Ohhhhh you have me quaking in my boots.
Gawd you are such a child.

It's nothing to be afraid of. They all just said ignore him, he goes around all the threads making trouble and is a massive troll.

[mistaTea]

I had 6 messages yesterday morning alone about you and how to deal with you. Unfortunately I ignored all of the advice!

I say it again - beware of Dandelo.

Heed my advice, I beg ya.

[SailorRob]

I say it again - beware of Dandelo.

Heed my advice, I beg ya.

Yep I'm being a massive idiot and falling straight into the trap!

[Daytr]

Haha.
I going to be a bit sexist now, but sounds like an old woman's club with nothing better to do.
But please by all means follow their advice if you want. I don't care one way or tother.

[Daytr]

Strong suggest anyone genuinely interested in understanding how OCA's business & profitability/loss model works to go through this presentation by OCA.

The presentation was made in 2019 (before the surge in sp in late 2019/early 2020, the collapse in 2020 and then, spectacular sp increase in 2020/early 2021) and is still as relevant today as it was then in understanding OCA.

In particular, go through pages 25 to 30 and it should become clear why OCA is so out of favour.

https://images.oceaniahealthcare.co.nz/wp-content/uploads/2022/01/20082035/FY2019-UBS-Conference.pdf

Yep still very relevant.
I do wonder if the shift out of care suites might hurt certain players, as many sign up to these deals knowing they have a place secured right through to the end.

I also wonder if OCA's 30% DMF is hurting them on the sales front when others are offering 25% etc. On a $1.4M villa that's a lot of dosh out of the inheritance.

[ValueNZ]

Good catch.

As for my bond math, you really need to teach your 'lost soul' mate ValueNZ how to value bonds properly instead of how to lose $$$ in OCA? :D
I haven't lost anything in OCA.

If OCA had risen 30% instead of fallen 30% from where I bought my first shares, and I had bought the same $ value worth of shares, I estimate that I'd have about 13,000 fewer shares. The underlying business has only grown, so too my estimate of the discounted cash flows. Tell me again how I'm worse off?

[Balance]

I haven't lost anything in OCA.

If OCA had risen 30% instead of fallen 30% from where I bought my first shares, and I had bought the same $ value worth of shares, I estimate that I'd have about 13,000 fewer shares. The underlying business has only grown, so too my estimate of the discounted cash flows. Tell me again how I'm worse off?

Your estimate which is wrong and ignorant of what's actually happening with OCA.

Stop blindly following those who think they know but actually are ignorant. Read OCA's presentation and work through the implications of why & how its business model is seriously flawed.

Seriously, if you do not know how a bond is priced (simple as), what chance have you got of understanding OCA's highly complex and opaque financials and operations?

Logic of a swamp newt.

[ValueNZ]

Your estimate which is totally wrong and totally ignorant of what's actually happening with OCA.

Seriously, if you do not know how a bond is priced (simple as), what chance have you got of understanding OCA's highly complex and opaque financials and operations?

Logic of a swamp newt.
Who says that I don't know how to price a bond... Same as any other investment, sum of discounted cash flows. Discount coupons and principal to find a NPV.

No, logic of a swamp newt would be believing that markets price securities efficiently and still buying Synlait bonds. That would be absurdity, considering the market is/was (haven't looked at in a minute) pricing in a serious risk of defaulting. Now if you believe that the market doesn't price securities efficiently, that would be a totally different case.

[mike2020]

Just estimate what the rent would be on a villa etc over a 7 year average vs the 30% not payable back by OCA, less what refurb costs OCA need to pay.

This is assuming no capital gain on the resale.
Yeah na. Rent your using capital with either interest payable or use of. Minus expenses. My mum still pays monthly fees even after buying an ora. Your baiting .

[Daytr]

Yeah na. Rent your using capital with either interest payable or use of. Minus expenses. My mum still pays monthly fees even after buying an ora. Your baiting .

I'm not baiting anyone, just opening blindspots and not buying into the magic show.

Your Mum bought the unit right?
I'm saying what would she pay if she rented it rather than bought it? $600 a week? $800 a week? More? Well that's the cost OCA is paying for use of the capital. Still far cheaper than the bank, but it's a cost.

The monthly fees she pays now would be the body corporate I would assume.

[SailorRob]

Your estimate which is wrong and ignorant of what's actually happening with OCA.

Stop blindly following those who think they know but actually are ignorant. Read OCA's presentation and work through the implications of why & how its business model is seriously flawed.

Seriously, if you do not know how a bond is priced (simple as), what chance have you got of understanding OCA's highly complex and opaque financials and operations?

Logic of a swamp newt.

Don't let the insults bother you ValueNZ. Balance works for someone else to make his money, rather than directly from his investing nous.

You will be out of that situation probably before he is.

ValueNZ can you tell me the value of a bond where you don't get any of your capital back?

[mistaTea]

Don't let the insults bother you ValueNZ. Balance works for someone else to make his money, rather than directly from his investing nous.

You will be out of that situation probably before he is.

ValueNZ can you tell me the value of a bond where you don't get any of your capital back?

The machines can answer this for us much faster than any homo sapien.

***

The value of a bond where you don't get your capital back is typically referred to as a zero-coupon bond. These bonds are issued at a discount and mature at their face value; the difference between the purchase price and the face value represents the interest earned. The value of a zero-coupon bond is calculated based on the present value of its face value, which depends on the yield or interest rate and the time until maturity.

Here’s the formula to calculate the present value (PV) of a zero-coupon bond:

PV = F/(1 + r)^n

Where:
- F is the face value of the bond.
- r is the annual discount rate or yield.
- n is the number of years until the bond matures.

This calculation gives you the current value of the bond, considering the time value of money. The higher the yield and the longer the time until maturity, the lower the present value will be, reflecting a deeper discount on the initial purchase price.

[X-men]

🥱🥱🥱🥱 are we there yet? The market is still valuing OCA at 56c.....

[SailorRob]

The machines can answer this for us much faster than any homo sapien.

***

The value of a bond where you don't get your capital back is typically referred to as a zero-coupon bond. These bonds are issued at a discount and mature at their face value; the difference between the purchase price and the face value represents the interest earned. The value of a zero-coupon bond is calculated based on the present value of its face value, which depends on the yield or interest rate and the time until maturity.

Here’s the formula to calculate the present value (PV) of a zero-coupon bond:

PV = F/(1 + r)^n

Where:
- F is the face value of the bond.
- r is the annual discount rate or yield.
- n is the number of years until the bond matures.

This calculation gives you the current value of the bond, considering the time value of money. The higher the yield and the longer the time until maturity, the lower the present value will be, reflecting a deeper discount on the initial purchase price.


Haha, I don't think the bonds Balance loaded up on were zero coupon bonds. Zero something though.

[Balance]

Haha, I don't think the bonds Balance loaded up on were zero coupon bonds. Zero something though.

I will get 100% of my money back plus interest while you will still be wondering about float(ing) sunken OCA boats. :D

[Baa_Baa]

Your estimate which is wrong and ignorant of what's actually happening with OCA.

Stop blindly following those who think they know but actually are ignorant. Read OCA's presentation and work through the implications of why & how its business model is seriously flawed.

Seriously, if you do not know how a bond is priced (simple as), what chance have you got of understanding OCA's highly complex and opaque financials and operations?

Logic of a swamp newt.

Gosh, that’s a brutal response. So you reckon OCA is stuffed but offer nothing except abuse and reference with no insights.

How about you lay it out with some detail yourself, about why OCA is stuffed? State your argument if you can, without disparaging others arguments?

[winner69]

Oh dear …Warriors smashed this week. Roosters 38 Warriors 18. FA for season is 3 wins 1 draw and 6 losses which is not good. Fans not daunted …one commented ‘ where are the Wahs we knew but I still love them and we won the second half’ so still on track.

Oceania share price down last week….4th week in a row …Warriors lost 4 in a row ….now that’s spooky. But the Oceania fans have been out in force cheering their love on. One fan even pointed out everybody had misinterpreted the last announcement and things were actually going well.

Casual observer "Up the Wahs" is now what the other teams all do to them. This is definitely not going to be Warriors year. Likewise for Oceania it seems they will remain the doldrums as well.

Not going the way fans were hoping

But guy from sponsor One Jason sent this message out ..a true fan ..with a vested interest -

@JasonCParis
The @NZWarriors were incredibly tough tonight. We won 18 - 16 after the first 15 minutes. We need to remove those poor 20 min periods and we can beat anybody. Injuries are a worry, but look at the players back from week 14. #KeepTheFaith
#UpTheWahs

[SailorRob]

I will get 100% of my money back plus interest while you will still be wondering about float(ing) sunken OCA boats. :D


I suggest you spent the evening reading the Bond prospectus and learning about your position in the cap stack Son.

There is nothing certain in the world of finance, nothing. There is no 'I will'. Apart from "I will be working my day job a while yet'

I believe you are an OCA shareholder with a higher average price than the Sailor, is that correct?

[SailorRob]

Gosh, that’s a brutal response. So you reckon OCA is stuffed but offer nothing except abuse and reference with no insights.

How about you lay it out with some detail yourself, about why OCA is stuffed? State your argument if you can, without disparaging others arguments?



Your estimate which is wrong and ignorant of what's actually happening with OCA.

Stop blindly following those who think they know but actually are ignorant. Read OCA's presentation and work through the implications of why & how its business model is seriously flawed.

Seriously, if you do not know how a bond is priced (simple as), what chance have you got of understanding OCA's highly complex and opaque financials and operations?

Logic of a swamp newt.


Pretty insulting to a lot of very smart and thorough contributors to this thread, who have gone to great lengths to explain their thought processes and are humble, unassuming and helpful. Not saying I am one of them, but pretty bad form.

And from someone who recently bought shares at a higher price than they are now.

In fact that's the biggest argument against OCA right now... Usually what Balance touches....

[SailorRob]

Strong suggest anyone genuinely interested in understanding how OCA's business & profitability/loss model works to go through this presentation by OCA.

The presentation was made in 2019 (before the surge in sp in late 2019/early 2020, the collapse in 2020 and then, spectacular sp increase in 2020/early 2021) and is still as relevant today as it was then in understanding OCA.

In particular, go through pages 25 to 30 and it should become clear why OCA is so out of favour.

https://images.oceaniahealthcare.co.nz/wp-content/uploads/2022/01/20082035/FY2019-UBS-Conference.pdf


Thanks for this link Balance, I have just been over it.

It is anything but clear to me why OCA is 'out of favour' particularly after focusing on pages 25 to 30. Having only the logic of a swamp newt this is unsurprising.

Also, if whatever you have found here is the reason it's out of favour, is it just a coincidence then, that OCA has traded down in LOCKSTEP with all of the listed property companies????

Massive coincidence.

Here is a quote from those pages;

'The sale of an ORA on a care bed is essentially the capitalisation of an alternative daily PAC and enables capital to be recycled'.

Interestingly this also highlights the point the Day Trader is trying to make, but he is getting confused with opportunity costs. It's like disagreeing with Buffett that over the years his cost of float has been negative by saying that the equity he has in the insurance business could instead be used to buy houses and rent them out... Well yeah... OCA needs properties to create the float while insurance companies need capital. Each has other uses yes.

[ValueNZ]

I suggest you spent the evening reading the Bond prospectus and learning about your position in the cap stack Son.

There is nothing certain in the world of finance, nothing. There is no 'I will'. Apart from "I will be working my day job a while yet'

I believe you are an OCA shareholder with a higher average price than the Sailor, is that correct?

Balance owned his shares for a couple weeks before selling them, I believe he bought them at 59c.

Your average is less than 59c? Jeez you must own quite a few shares now if you've managed that... Unless you are counting your covid shares?

[Daytr]

Gosh, that’s a brutal response. So you reckon OCA is stuffed but offer nothing except abuse and reference with no insights.

How about you lay it out with some detail yourself, about why OCA is stuffed? State your argument if you can, without disparaging others arguments?

Mate I have stated my argument over & over & got abused for it, and I actually think OCA will do OK.

Take a look at yourself.

Starting to think RYM might do better though but need to do more research.

[SailorRob]

Balance owned his shares for a couple weeks before selling them, I believe he bought them at 59c.

Your average is less than 59c? Jeez you must own quite a few shares now if you've managed that... Unless you are counting your covid shares?

Yep counting Covid shares, will check average this round I think I dragged it well down into the 70's.

Well picked up that it would take HUGE purchases to pull down to less than 59c.

A basic but sound mathematical competence is important in this game.

Earlier when you talked about searching for float, what's one reason why it may do you no good at all?

[Daytr]

Thanks for this link Balance, I have just been over it.

It is anything but clear to me why OCA is 'out of favour' particularly after focusing on pages 25 to 30. Having only the logic of a swamp newt this is unsurprising.

Also, if whatever you have found here is the reason it's out of favour, is it just a coincidence then, that OCA has traded down in LOCKSTEP with all of the listed property companies????

Massive coincidence.

Here is a quote from those pages;

'The sale of an ORA on a care bed is essentially the capitalisation of an alternative daily PAC and enables capital to be recycled'.

Interestingly this also highlights the point the Day Trader is trying to make, but he is getting confused with opportunity costs. It's like disagreeing with Buffett that over the years his cost of float has been negative by saying that the equity he has in the insurance business could instead be used to buy houses and rent them out... Well yeah... OCA needs properties to create the float while insurance companies need capital. Each has other uses yes.

I'm not confused at all. That opportunity cost is very real. You on the other hand think it doesn't exist.
Zero cost loans when you give up 4 - 5%. 🤣
Do the simple math buddy.

[Baa_Baa]

Mate I have stated my argument over & over & got abused for it, and I actually think OCA will do OK.

Take a look at yourself.

Starting to think RYM might do better though but need to do more research.

Did you notice that I quoted Balance, not you? Are you really this insecure apparently taking that as some personal criticism of yourself?

Since you raised it though, I think your argument is flawed with numerous repurposing of accounting principles with language and definitions not found in the business model or financials, and riddled with logical fallacies as pointed out by Ferg.

I think the abuse you’ve received is mild but warranted and I don’t care one iota what you think or say anymore about OCA, it’s all bogus nonsense.

And don’t call me “mate”, you’re not,

[Cupsy]

I'm not confused at all. That opportunity cost is very real. You on the other hand think it doesn't exist.
Zero cost loans when you give up 4 - 5%. 🤣
Do the simple math buddy.

This is your rent scenario right? are you actually giving up the full (if any) 4 or 5 percent when the dmf Is taken into account though in your scenario?

[Daytr]

Did you notice that I quoted Balance, not you? Are you really this insecure apparently taking that as some personal criticism of yourself?

Since you raised it though, I think your argument is flawed with numerous repurposing of accounting principles with language and definitions not found in the business model or financials, and riddled with logical fallacies as pointed out by Ferg.

I think the abuse you’ve received is mild but warranted and I don’t care one iota what you think or say anymore about OCA, it’s all bogus nonsense.

And don’t call me “mate”, you’re not,

Someone is titchy.
Nope, I am yet to see any proof from Ferg that what I said is a fallacy. Just saying no you don't agree or you are wrong without backing it up means nothing. I'm happy to be corrected with evidence.

I'm also not the one creating free loans out of sales. Or a float theory as old as man reinvesting in a business.
Wow that's really new.... 🙄

[Daytr]

This is your rent scenario right? are you actually giving up the full (if any) 4 or 5 percent when the dmf Is taken into account though in your scenario?

No it's not including the DMF. It's just a straight 4 - 5% opportunity cost on the capital. Instead of borrowing from the bank at 8% or whatever they are 'borrowing' from the occupier at the rental yield that ICA otherwise would have got.

OCA still get the DMF less refurb costs at the end of the day.

Either way it's a good deal for OCA, especially with interest rates so high. It's just not free.

[nztx]

must be a good deal if the tax man is no longer collecting any DWT at the 33% full whack :)

[Cupsy]

No it's not including the DMF. It's just a straight 4 - 5% opportunity cost on the capital. Instead of borrowing from the bank at 8% or whatever they are 'borrowing' from the occupier at the rental yield that ICA otherwise would have got.

OCA still get the DMF less refurb costs at the end of the day.

Either way it's a good deal for OCA, especially with interest rates so high. It's just not free.

My point is your opportunity cost you talk of is not 4 to 5% due to the earning the dmf, the dmf value over the average occupancy time frame you mentioned earlier is going to be close to your opportunity cost I'm guessing? And the refurb costs is irrelevant is it not, as a rental also requires maintenance to be paid for by the land lord.

So your rental scenario would be the return you mention only, less maintenance costs vs the current ora up front, with the dmf earned. And one thing you haven't mentioned is the difference of getting the cash up front vs paid weekly or monthly over the course of the rental agreement (in your rental scenario).

[Cupsy]

No it's not including the DMF. It's just a straight 4 - 5% opportunity cost on the capital. Instead of borrowing from the bank at 8% or whatever they are 'borrowing' from the occupier at the rental yield that ICA otherwise would have got.

OCA still get the DMF less refurb costs at the end of the day.

Either way it's a good deal for OCA, especially with interest rates so high. It's just not free.


My point is your opportunity cost you talk of is not 4 to 5% due to the earning the dmf, the dmf value over the average occupancy time frame you mentioned earlier is going to be close to your opportunity cost I'm guessing? And the refurb costs is irrelevant is it not, as a rental also requires maintenance to be paid for by the land lord.

So your rental scenario would be the return you mention only, less maintenance costs vs the current ora up front, with the dmf earned. And one thing you haven't mentioned is the difference of getting the cash up front vs paid weekly or monthly over the course of the rental agreement (in your rental scenario).

Just so there is no confusion, respectfully, I'm saying that I think the opportunity cost you are talking of in your rental scenario does not exist, for the reasons outlined above.

[ValueNZ]

Yep counting Covid shares, will check average this round I think I dragged it well down into the 70's.

Well picked up that it would take HUGE purchases to pull down to less than 59c.

A basic but sound mathematical competence is important in this game.

Earlier when you talked about searching for float, what's one reason why it may do you no good at all?

Float is just leverage, so earning a loss or insufficient return relative to what you paid for it can cause some hefty losses. Mohnish Pabrai talked in a podcast about paying too much for an insurance company whose float was heavily regulated and they were unable to earn a sufficient return on it.

I'm well aware that it would take huge purchases to bring down your current average to below 59c... But if there were ever any time to heavily concentrate, now would be the time. Your other investments have likely gotten closer to fair value whilst OCA has gotten further away.

Anyway that's all I have time to write as I have to get back to work.

[mistaTea]

https://www.rnz.co.nz/programmes/the-detail/story/2018937868/new-zealand-s-retirement-extremes

Geez I wanna retire today and go live in The Helier.

Sounds…expensive.

[Bjauck]

Haha.
I going to be a bit sexist now, but sounds like an old woman's club with nothing better to do.
But please by all means follow their advice if you want. I don't care one way or tother.
I wouldn’t be surprised if I was in a minority on this board, but I think that is not just a bit sexist. It is very sexist.

[Daytr]

My point is your opportunity cost you talk of is not 4 to 5% due to the earning the dmf, the dmf value over the average occupancy time frame you mentioned earlier is going to be close to your opportunity cost I'm guessing? And the refurb costs is irrelevant is it not, as a rental also requires maintenance to be paid for by the land lord.

So your rental scenario would be the return you mention only, less maintenance costs vs the current ora up front, with the dmf earned. And one thing you haven't mentioned is the difference of getting the cash up front vs paid weekly or monthly over the course of the rental agreement (in your rental scenario).

I have stated on several occasions it does not include the DMF & the DMF is the kicker.
However if you do the calculation over the average 7 years the lost rent outweighs what the net DMF is.

Prior to a unit being resold, it's gets a renovation, I.e perhaps new kitchen,.New curtains, carpets etc. This comes out of the DMF.

I have mentioned the benefit of the money up front, but what's knew about that? All 'loans' you get the money up front & use of cash. It doesn't mean there aren't interest costs on the loan. And of course they make money on that money, hell if a business doesn't make money on borrowings that is a company heading towards bankruptcy.

The problem with what many are saying is that OCA gets free loans & the DMF, it's double dipping.

I have also said on many occasions, it's a good deal for OCA, it's just not free.

[SailorRob]

Float is just leverage, so earning a loss or insufficient return relative to what you paid for it can cause some hefty losses.


On fire Value as usual.

Chasing float only makes sense if you can get it for an appropriate price, as with everything else.

What is the work you have to get back to at 10:30pm?

[SailorRob]

Worth a read and to think about carefully in OCA model context.

Think about each of the risks highlighted and how they apply to OCA.

https://www.oaktreecapital.com/insights/memo/the-impact-of-debt

[bull....]

This is all most people need to know , never mind the gospel chorus from the bagholders on the goldmine of the float.

From fletcher building. no wonder most RV satocks are heading towards lows again

There has also been a notable slowdown in house sales in the New Zealand market and an end to the house price momentum seen through the first half of FY24.

https://www.nzx.com/announcements/430952

[Daytr]

This is all most people need to know , never mind the gospel chorus from the bagholders on the goldmine of the float.

From fletcher building. no wonder most RV satocks are heading towards lows again

There has also been a notable slowdown in house sales in the New Zealand market and an end to the house price momentum seen through the first half of FY24.

https://www.nzx.com/announcements/430952


Got to wonder what Fletchers are doing wrong in Australia though, the property market over there has been booming compared to here.

[Bjauck]

I wouldn’t be surprised if I was in a minority on this board, but I think that is not just a bit sexist. It is very sexist.
I looked at the Oceania diversity report. A majority of the directors are men, but the overwhelming majority of employees are women. There was no breakdown of clients, but the demographics of the elderly, plus observation when visiting villages would indicate a large majority of clients are women too.

[mistaTea]

I looked at the Oceania diversity report. A majority of the directors are men, but the overwhelming majority of employees are women. There was no breakdown of clients, but the demographics of the elderly, plus observation when visiting villages would indicate a large majority of clients are women too.

Not a suprise really, as they will have a lot of nursing staff which will be overwhelmingly female.

Not a surprise either if the majority of occupants are female too as those with a muff tend to live longer than than those with a sausage.

[ValueNZ]

On fire Value as usual.

Chasing float only makes sense if you can get it for an appropriate price, as with everything else.

What is the work you have to get back to at 10:30pm?
I'm working at a supermarket stacking shelves from the afternoon until midnight. Nothing fancy but it works in well with university, still in the privileged situation to be able to invest nearly all of my wage.

[X-men]

🥱🥱🥱🥱are we there yet??

[SailorRob]

🥱🥱🥱🥱are we there yet??

2040 is the name of the Game. Your 4000 shares will be looking good by then.

[mistaTea]

The retirement village sector in New Zealand is currently facing several challenges that have impacted the share prices of listed companies, such as Oceania Healthcare (OCA.NZ). Here's a breakdown of the key factors:


1. **Economic Environment and High Debt Levels**: The retirement village sector is grappling with an inflationary economic environment that has significantly increased construction costs and affected the availability of materials due to supply chain disruptions. This has put pressure on the development of new facilities and expansions. Moreover, significant players in the sector have accrued substantial debt, which has become a concern amid rising interest rates and lower house price inflation. Companies like Ryman Healthcare, Arvida, and Oceania Healthcare have notably tripled their debt over the past five years, a factor that constrains their financial performance and affects investor sentiment【8†source】.


2. **Regulatory Changes and Compliance Costs**: There are ongoing reviews and proposed reforms in the Retirement Villages Act that aim to improve fairness for residents by standardizing certain documents and increasing regulatory oversight. While these changes are designed to protect consumers, they may also introduce additional compliance burdens for operators, potentially stifling innovation and increasing operational costs. This regulatory uncertainty can lead to investor wariness, contributing to lower share prices【10†source】.


3. **Supply and Demand Dynamics**: Although there is a growing demand for retirement village units due to an aging population, the sector struggles with supply issues. High construction costs, labor shortages, and regulatory hurdles have led to a projected shortfall in the number of units needed to meet future demand. This imbalance could pressure existing facilities and slow down the expansion plans of operators, affecting their growth prospects and thus their stock performance【9†source】.


Overall, these factors combine to create a challenging environment for retirement village operators in New Zealand, impacting their financial stability and growth potential, which in turn affects their share prices on the stock market.


*********

Debt clearly a big concern (https://www.rnz.co.nz/news/business/486807/debt-holding-back-retirement-village-sector-report) in these difficult economic times.

One of the sources sighted was about the Retirement Villages Act review (https://www.dentons.co.nz/en/insights/articles/2023/august/10/retirement-villages-reform). Will be interesting to see where this lands. The gravy train whereby an operator can hold a departing resident's cash (in theory indefinitely under the current rules) interest free will most likely come to an end I think. The current rules are way too in favour of the operator.

[bull....]

One of the sources sighted was about the Retirement Villages Act review (https://www.dentons.co.nz/en/insights/articles/2023/august/10/retirement-villages-reform). Will be interesting to see where this lands. The gravy train whereby an operator can hold a departing resident's cash (in theory indefinitely under the current rules) interest free will most likely come to an end I think. The current rules are way too in favour of the operator.

So your suggesting the float may not exist anymore and in fact operators will have to pay you interest. :scared: then indeed the gravy will have dried up

[Daytr]

The retirement village sector in New Zealand is currently facing several challenges that have impacted the share prices of listed companies, such as Oceania Healthcare (OCA.NZ). Here's a breakdown of the key factors:


1. **Economic Environment and High Debt Levels**: The retirement village sector is grappling with an inflationary economic environment that has significantly increased construction costs and affected the availability of materials due to supply chain disruptions. This has put pressure on the development of new facilities and expansions. Moreover, significant players in the sector have accrued substantial debt, which has become a concern amid rising interest rates and lower house price inflation. Companies like Ryman Healthcare, Arvida, and Oceania Healthcare have notably tripled their debt over the past five years, a factor that constrains their financial performance and affects investor sentiment【8†source】.


2. **Regulatory Changes and Compliance Costs**: There are ongoing reviews and proposed reforms in the Retirement Villages Act that aim to improve fairness for residents by standardizing certain documents and increasing regulatory oversight. While these changes are designed to protect consumers, they may also introduce additional compliance burdens for operators, potentially stifling innovation and increasing operational costs. This regulatory uncertainty can lead to investor wariness, contributing to lower share prices【10†source】.


3. **Supply and Demand Dynamics**: Although there is a growing demand for retirement village units due to an aging population, the sector struggles with supply issues. High construction costs, labor shortages, and regulatory hurdles have led to a projected shortfall in the number of units needed to meet future demand. This imbalance could pressure existing facilities and slow down the expansion plans of operators, affecting their growth prospects and thus their stock performance【9†source】.


Overall, these factors combine to create a challenging environment for retirement village operators in New Zealand, impacting their financial stability and growth potential, which in turn affects their share prices on the stock market.


*********

Debt clearly a big concern (https://www.rnz.co.nz/news/business/486807/debt-holding-back-retirement-village-sector-report) in these difficult economic times.

One of the sources sighted was about the Retirement Villages Act review (https://www.dentons.co.nz/en/insights/articles/2023/august/10/retirement-villages-reform). Will be interesting to see where this lands. The gravy train whereby an operator can hold a departing resident's cash (in theory indefinitely under the current rules) interest free will most likely come to an end I think. The current rules are way too in favour of the operator.

I think the Government will be very careful not to overly constrain an industry that has supplied a large amount of very necessary housing let alone supplying care facilities for the elderly that the Government doesn't want a bar of.

What I expect to see is demand for more transparency.

Ultimately this is a demand & supply situation that the Government cannot fill. Anyway the proof will be in the pudding.

[X-men]

Here we go sailor moon...U can buy all this dog sheet at 54c...

What the management does? Fuk all ...all laughing at U...

[bull....]

Here we go sailor moon...U can buy all this dog sheet at 54c...

What the management does? Fuk all ...all laughing at U...

yes sadly the realities of the current situation. many on here do not understand how even a flat property market with rising costs can lead to disaster for these operations. and yes sadly the float even though it is relatively stable does not guarantee survival.

All bets off on these operations if there is a further down turn in the property market.

[X-men]

Better off to delist or merge with arvida... shareholders still get paid 65c...a share...

[mistaTea]

yes sadly the realities of the current situation. many on here do not understand how even a flat property market with rising costs can lead to disaster for these operations. and yes sadly the float even though it is relatively stable does not guarantee survival.

All bets off on these operations if there is a further down turn in the property market.

Certainly a few things to be mindful of when looking to invest in this sector right now.

*****

In addition to the economic pressures, regulatory challenges, and supply constraints, there are a few other issues that the retirement village sector in New Zealand faces:

1. **Demographic Shifts**: While the aging population does drive demand, demographic shifts also present challenges. For example, the preferences and expectations of new generations of retirees may differ significantly from previous ones, influencing the types of services and facilities required. Adapting to these changing demands while maintaining profitability can be challenging for retirement village operators.

2. **Labor Shortages**: The sector relies heavily on skilled labor, including healthcare professionals and managerial staff, to operate effectively. Labor shortages, partly exacerbated by stringent immigration policies, can impact the quality of care and services provided. This shortage also inflates wages and operating costs, squeezing profit margins further.

3. **Technological Adaptations**: Integrating advanced technologies for healthcare and operational efficiency is becoming increasingly necessary. However, the cost of adopting these technologies can be high, and there can be resistance from both staff and residents due to the change in routine and the learning curve associated with new systems.

4. **Resident Satisfaction and Retention**: Maintaining high levels of resident satisfaction is critical, as it impacts the reputation and attractiveness of a retirement village. Negative publicity from issues like disputes over fees, service quality, or contractual disagreements can deter potential residents and influence investor confidence.

5. **Environmental and Sustainability Issues**: There's a growing pressure on all sectors, including retirement villages, to adopt more sustainable practices. This includes better waste management, energy efficiency, and environmentally friendly building practices, which may require significant investment.

These challenges require strategic management and forward planning to ensure long-term sustainability and profitability in the retirement village sector. Addressing them effectively can also create opportunities for differentiation and competitive advantage in a growing market.

[SailorRob]

I'm working at a supermarket stacking shelves from the afternoon until midnight. Nothing fancy but it works in well with university, still in the privileged situation to be able to invest nearly all of my wage.


That is legendary!

Imagine if you were doing 50 hours a week at the supermarket and the rest of the time actually learning about investing rather than learning BS.

That said, I think the degree will be an asset worth having, not for what you learn but for the doors it opens.

That said, 3 or 4 years working and learning instead of working part time and learning BS would also open a lot of doors.

Just think after all this effort, you'll be attacked by Communists and decried by those who have less than you as an oppressor.

[SailorRob]

The gravy train whereby an operator can hold a departing resident's cash (in theory indefinitely under the current rules) interest free will most likely come to an end I think. The current rules are way too in favour of the operator.

Looking at the Share prices of these companies - this gravy train... has to end soon, just printing money from poor elderly!

In practice, my understanding is that this isn't an issue and doesn't happen too often. Could be wrong.

[SailorRob]

and yes sadly the float even though it is relatively stable does not guarantee survival.


The what?? The float?? What Float??

How dare you disregard Day Trader like this.

[Bobdn]

@Sailor, yes, it's great to see for sure. ValueNZ working hard stacking shelves and completing a degree.

I did the same thing back in the day at University and, in my case, put all my savings into just two stocks. I lost the lot but it was the best time to make those sort of mistakes. I learnt a tremendous amount.

Hopefully wont happen to ValueNZ but even if it did, it wouldn't make any difference to such a young investor. Plenty of time to make up for missteps.

[mistaTea]

@Sailor, yes, it's great to see for sure. ValueNZ working hard stacking shelves and completing a degree.

I did the same thing back in the day at University and, in my case, put all my savings into just two stocks. I lost the lot but it was the best time to make those sort of mistakes. I learnt a tremendous amount.

Hopefully wont happen to ValueNZ but even if it did, it wouldn't make any difference to such a young investor. Plenty of time to make up for missteps.

I did the same.

Spent all my money on smokes, p1ss and chasing girls though!

Still ended up rich by 35.

[winner69]

Oceania share price down each week for last 4 weeks …….Warriors have lost 4 weeks in a row

Spooky eh ….must mean something

Warriors likely to lose this week again …wonder what will happen to Oceania share price?

And Jason Paris is still fan #1 ….I’m sure a few Oceania fans could write such a comment about their beloved as well

@JasonCParis
The @NZWarriors were incredibly tough tonight. We won 18 - 16 after the first 15 minutes. We need to remove those poor 20 min periods and we can beat anybody. Injuries are a worry, but look at the players back from week 14. #KeepTheFaith
#UpTheWahs

[SailorRob]

This is all most people need to know , never mind the gospel chorus from the bagholders on the goldmine of the float.

From fletcher building. no wonder most RV satocks are heading towards lows again

There has also been a notable slowdown in house sales in the New Zealand market and an end to the house price momentum seen through the first half of FY24.

https://www.nzx.com/announcements/430952



Good link Bull, I have never believed in all this Property hype.

I just sold a place for 5.2 million that sold for 7.1 million 20 years ago in January 2005... (Adjusted to 2024 dollars, 4.4 million actual sale price in 2005) and it had a $hitload of money spent on it over the 20 years.

While Maverick is all over OCA like nobody else, I have never much liked the property market predictions and turnover predictions that have been presented as an almost certain fact. Truth is nobody knows and things can get a hell of a lot worse. Also the Share price predictions are not much better.

Baa_Baa on another thread mentioned the property market being on its A$rse right now.... Well at 4.5 times the size of our GDP (vs 1.7 x for the USA and most other countries) and 1970's pads in the provinces selling right now for the high 800's when median wages in the town are at best 75k... I would say that property markets are super pumped to the Moon right now.

Just because something has fallen, that in itself says nothing about the current situation of valuation or turnover.

Wake me up when provincial property (most of which is incredibly ill maintained and old) is trading at 3 x median incomes. Still wont be on its backside - just normal.

[SailorRob]

@Sailor, yes, it's great to see for sure. ValueNZ working hard stacking shelves and completing a degree.

I did the same thing back in the day at University and, in my case, put all my savings into just two stocks. I lost the lot but it was the best time to make those sort of mistakes. I learnt a tremendous amount.

Hopefully wont happen to ValueNZ but even if it did, it wouldn't make any difference to such a young investor. Plenty of time to make up for missteps.


Great post, was that in the 87 crash?

Another way to think about it is that mistakes at a young age, while don't cost much in capital, will cost a lot in missed compounding as the years really matter.

So if he saved up 10k in a year and lost it, no big deal right? Well if he could compound that at 10% after tax and expenses, then by age 58 (well before most retire) that would be well over half a million. Yes a lot of that will be inflation.

Not disagreeing with you but something else to think about. Capital at a young age is super precious.

[SailorRob]

Spent all my money on smokes, p1ss and chasing girls though!

And the rest you wasted!

[SailorRob]

Oceania share price down each week for last 4 weeks …….Warriors have lost 4 weeks in a row

Spooky eh ….must mean something

Warriors likely to lose this week again …wonder what will happen to Oceania share price?

And Jason Paris is still fan #1 ….I’m sure a few Oceania fans could write such a comment about their beloved as well

@JasonCParis
The @NZWarriors were incredibly tough tonight. We won 18 - 16 after the first 15 minutes. We need to remove those poor 20 min periods and we can beat anybody. Injuries are a worry, but look at the players back from week 14. #KeepTheFaith
#UpTheWahs


I would suggest learning from the Winner69 of 2011, SUM thread.

[Bobdn]

@sailor Yes 1987. Capital at a young age is super precious and the loss at that age feels particularly painful. I remember it well.

The main thing is not to give up on investing, take your lumps, and get into low fee, broad market passive funds as soon as you can. Sure carve off 10 percent for your tilts and mad money if you must. Why not.

Congratulations on that house sale. I wouldn't know what to do with that much money. Would definitely get double glazing as a start.

[mistaTea]

And the rest you wasted!

Hahaha!!!

Yes indeed 🫣

[SailorRob]

Yes 1987. Capital at a young age is super precious and the loss at that age feels particularly painful. I remember it well.

The main thing is not to give up on investing, take your lumps, and get into low fee, broad market passive funds as soon as you can. Sure carve off 10 percent for your tilts and mad money if you must. Why not.


You have just highlighted a huge advantage of indexing that nobody ever talks about.... Those who eventually can and do 'beat ' the market.... they never do it from day one, and they dont count the losses or underperformance while they are learning, so over the whole lifetime, even some very good investors, would have been better indexing from the start.

I've been meaning to reply to your Berkshire post a while back as you are missing some very important points.

[Bobdn]

I thought that would attract your attention;)

I'm a BRK fan. I think I even bought MGV to increase my exposure to it. But I cant buy single stocks again unfortunately because I screw it up.

[SailorRob]

I thought that would attract your attention;)

It did.

If there are two Marathon runners in a race without an end and at certain points the two runners are neck and neck, it would pay to observe each runner.

If one has forgotten to pace him/herself and is thus absolutely buggered with a virtually impossibly high heart rate, damaged leg and internal organs about to explode as well as a dilating sphincter, while the other isn't even warmed up properly and is cruising along at a pace they can easily maintain indefinitely....

[SailorRob]

A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves.


But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the "hamburgers" they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices

So smile when you read a headline that says "Investors lose as market falls." Edit it in your mind to "Sharetraders lose as market falls -- but investors gain." Though writers often forget this truism, there is a buyer for every seller and what hurts one necessarily helps the other. (As they say in golf matches: "Every putt makes someone happy.")

We gained enormously from the low prices placed on many equities and businesses in the 1970s and 1980s. Markets that then were hostile to investment transients were friendly to those taking up permanent residence. In recent years, the actions we took in those decades have been validated, but we have found few new opportunities. In its role as a corporate "saver," Berkshire continually looks for ways to sensibly deploy capital, but it may be some time before we find opportunities that get us truly excited.

[ValueNZ]

That is legendary!

Imagine if you were doing 50 hours a week at the supermarket and the rest of the time actually learning about investing rather than learning BS.

That said, I think the degree will be an asset worth having, not for what you learn but for the doors it opens.

That said, 3 or 4 years working and learning instead of working part time and learning BS would also open a lot of doors.

Just think after all this effort, you'll be attacked by Communists and decried by those who have less than you as an oppressor.
University definitely teaches a bunch of BS, and it sucks that I feel I have less time to learn about actual investing. But still I need the degree to be able to work in the finance field.

Plus the degree is damn near free, excluding the opportunity cost of not being able to work as much (which is of course massive). Our socialist state heavily subsidies our Uni's, fees free first year, and offers interest free loans to be paid off as you earn. I also earned a 5k scholarship for having decent grades. Net, the papers for my whole degree will cost a little under 5k, but that is applied to an interest free loan. It's a three year degree but I'm taking 6 papers this semester so I could theoretically do it in 2-2.5 years with summer school.

[SailorRob]

University definitely teaches a bunch of BS, and it sucks that I feel I have less time to learn about actual investing. But still I need the degree to be able to work in the finance field.

Plus the degree is damn near free, excluding the opportunity cost of not being able to work as much (which is of course massive). Our socialist state heavily subsidies our Uni's, fees free first year, and offers interest free loans to be paid off as you earn. I also earned a 5k scholarship for having decent grades. Net, the papers for my whole degree will cost a little under 5k, but that is applied to an interest free loan. It's a three year degree but I'm taking 6 papers this semester so I could theoretically do it in 2-2.5 years with summer school.


If a product is free then you are the product.

[ValueNZ]

If a product is free then you are the product.
If the product that I am is my labour, then sure why not. A cog in the machine.

When I said it's damn near free, I meant to me. The vast majority of the cost of my degree will be bourn by the NZ government/society.

I realise there is no free lunch.

[mistaTea]

If the product that I am is my labour, then sure why not. A cog in the machine.

When I said it's damn near free, I meant to me. The vast majority of the cost of my degree will be bourn by the NZ government/society.

I realise there is no free lunch.

I got a Business Degree and it has enabled me to earn much more than my siblings, none of whom have a degree.

We are all cut from the same cloth, similar intelligence etc but I have been able to exploit more opportunities. Which in itself becomes a kind of compounding machine.

You can also be very successful without a degree. But the qualification helps.

You will do just fine. Just don’t forget to enjoy being young too. It doesn’t last for as long as you think at your age.

[SailorRob]

If the product that I am is my labour, then sure why not. A cog in the machine.

When I said it's damn near free, I meant to me. The vast majority of the cost of my degree will be bourn by the NZ government/society.

I realise there is no free lunch.


They may see it not as a cost but an investment in feeding you full of what they want you fed full of!

That might be a bit deep, but when the State is balls deep in the tertiary education sector, that comes with serious strings attached, most nuanced and barely visible.

[SailorRob]

I got a Business Degree and it has enabled me to earn much more than my siblings, none of whom have a degree.

We are all cut from the same cloth, similar intelligence etc but I have been able to exploit more opportunities. Which in itself becomes a kind of compounding machine.

You can also be very successful without a degree. But the qualification helps.

You will do just fine. Just don’t forget to enjoy being young too. It doesn’t last for as long as you think at your age.


Agree with all of this, very true.

[ValueNZ]

They may see it not as a cost but an investment in feeding you full of what they want you fed full of!

That might be a bit deep, but when the State is balls deep in the tertiary education sector, that comes with serious strings attached, most nuanced and barely visible.
Okay apologies I see what you mean now.

Trust me I probably know that better than you, you should see some of the woke BS I have to write up in a class called *********. This mandatory paper has me learning all about unconscious bias, how we are all racist ect. Now of course I can see right though all this crap, but have learnt to just keep my mouth shut, so I can maintain an A average. There is no room for debate or discussion in our universities, whether it's that paper or finance. I cringe every time my finance lecturer states that the stock market is very risky lol.

[Baa_Baa]

I cringe every time my finance lecturer states that the stock market is very risky lol.

That's why they're a lecturer earning a pitiful wage and will never be rich, or even wealthy.

You have insights well beyond your years.

[SailorRob]

Okay apologies I see what you mean now.

Trust me I probably know that better than you, you should see some of the woke BS I have to write up in a class called Intercultural Perspectives on Organisations. This mandatory paper has me learning all about unconscious bias, how we are all racist ect. Now of course I can see write though all this crap, but have learnt to just keep my mouth shut, so I can maintain an A average. There is no room for debate or discussion in our universities, whether it's that paper or finance. I cringe every time my finance lecturer states that the stock market is very risky lol.


Yep thats exactly what I am getting at.

Awesome post, would love to hear more about it sometime.

Incredible that you are actually the real woke one - Awoke to whats really going on. It's like you are a skeptical 40 year old in a 18 year olds body.

Easy for us to see it for what it is as it's all developed since we were your age and we didn't grow up with it from a young age, in other words we weren't indoctrinated like your generation.

How many others like you are there, at your school and uni, like out of 100 how many would see it like you see the 'Perspectives' paper?

The good thing is that later, in the markets and in the corporate world, you'll be competing with and investing alongside others who spent their time learning that crap instead of learning how to invest.

[SailorRob]

That's why they're a lecturer earning a pitiful wage and will never be rich, or even wealthy.

You have insights well beyond your years.


Ha we both said the same thing, you more succinctly than I.

[Habits]

Value, uni has changed since I was there. But employers haven't, they still appreciate good comms incl spelling ... ect = etc, write though = right through

No need to pay me, thanks will do, hehehe

[bull....]

That's why they're a lecturer earning a pitiful wage and will never be rich, or even wealthy.

You have insights well beyond your years.

what a rediculous statement , most people work all there lives and some enjoy wealth from investing as well.
just look at yourself .
anyway if value NZ can make it with out working full time for ever he will have been in the minority. wish him the best as starting young gives better odd's of acheivement.

[bull....]

Good link Bull, I have never believed in all this Property hype.

I just sold a place for 5.2 million that sold for 7.1 million 20 years ago in January 2005... (Adjusted to 2024 dollars, 4.4 million actual sale price in 2005) and it had a $hitload of money spent on it over the 20 years.

While Maverick is all over OCA like nobody else, I have never much liked the property market predictions and turnover predictions that have been presented as an almost certain fact. Truth is nobody knows and things can get a hell of a lot worse. Also the Share price predictions are not much better.

Baa_Baa on another thread mentioned the property market being on its A$rse right now.... Well at 4.5 times the size of our GDP (vs 1.7 x for the USA and most other countries) and 1970's pads in the provinces selling right now for the high 800's when median wages in the town are at best 75k... I would say that property markets are super pumped to the Moon right now.

Just because something has fallen, that in itself says nothing about the current situation of valuation or turnover.

Wake me up when provincial property (most of which is incredibly ill maintained and old) is trading at 3 x median incomes. Still wont be on its backside - just normal.

yep no one can predict anything with 100% certainty.

So would you guess property will stay flat to reach 3x median
or fall to reach that level
or will it become the norm to always be 7 x + median considering everyones real wages are falling every year

when you guess that your be able to work out a probable est of future selling prices of OCA units

[SailorRob]

yep no one can predict anything with 100% certainty.

So would you guess property will stay flat to reach 3x median
or fall to reach that level
or will it become the norm to always be 7 x + median considering everyones real wages are falling every year

when you guess that your be able to work out a probable est of future selling prices of OCA units


Yeah no idea, my guess is that it will stay flat-ish to correct so nominal prices might hold up while a couple of decades of inflation do the correction. Only need inflation of 2-3% while nominal prices stay flat.

OCA units don't need to be tied to it. There will be a demand for this service that will grow, not only due to demographics.

[bull....]

Yeah no idea, my guess is that it will stay flat-ish to correct so nominal prices might hold up while a couple of decades of inflation do the correction. Only need inflation of 2-3% while nominal prices stay flat.

OCA units don't need to be tied to it. There will be a demand for this service that will grow, not only due to demographics.

. as you say flat which i tend to think as well at the moment and yea demand for units is there but under a flat price senario even with 2 - 3% inflation OCA margins are being eaten away are they not. sure you might say they can raise prices to compensate for this but then will all the competition do the same and then at what unit price level would demand fall away. :scared: so many variables but like you say float should keep increasing but that doesnt save the ship does it if your margins are shrinking.

[Daytr]

Just checking.
This is the OCA thread right?
Who would know by looking at the last few pages of posts.

[RTM]

University definitely teaches a bunch of BS, and it sucks that I feel I have less time to learn about actual investing. But still I need the degree to be able to work in the finance field.

Plus the degree is damn near free, excluding the opportunity cost of not being able to work as much (which is of course massive). Our socialist state heavily subsidies our Uni's, fees free first year, and offers interest free loans to be paid off as you earn. I also earned a 5k scholarship for having decent grades. Net, the papers for my whole degree will cost a little under 5k, but that is applied to an interest free loan. It's a three year degree but I'm taking 6 papers this semester so I could theoretically do it in 2-2.5 years with summer school.

I'd slow down a bit ValueNZ...and make sure you get to enjoy University Life. Or does that not exist now ?

[kiwikeith]

Just checking.
This is the OCA thread right?
Who would know by looking at the last few pages of posts.

Yes most posts have nothing to do with OCA - infuriating for actual shareholders in OCA.

[mistaTea]

I'd slow down a bit ValueNZ...and make sure you get to enjoy University Life. Or does that not exist now ?

Yes no need to be in a huge rush.

Start young, put the majority of funds in passive index funds, enjoy living while also contributing to your investments over time…

By age 30 value will be far wealthier than the majority of his peers.

No great rush, and more important to enjoy whatever this experience is that we call life/reality.

Look at OCA bringing us all together in a philosophical mood!

[winner69]

REINZ report the total number of properties sold in New Zealand in April were 25.3% higher than April last yesr

Prices flat, maybe up a tad

Main thing is volumes still rising strongly ..indicates a good start to F25 for Oceania ….sales wise that is

Interesting REINZ use the word ‘suddued’ but probably comparing current market to the boom times when agents were creaming it
https://www.reinz.co.nz/Web/Web/News/News-Articles/Market-updates/REINZ-April-data-A-subdued-market-amid-economic-challenges.aspx?name=REINZ-April-data-A-subdued-market-amid-economic-challenges

[RTM]

Yes most posts have nothing to do with OCA - infuriating for actual shareholders in OCA.

Yeah...but to be fair.....in the absence of new news, any OCA "commentary" is just relitigating what has been discussed over and over and over again......

[SailorRob]

Yes most posts have nothing to do with OCA - infuriating for actual shareholders in OCA.

Please Keith, repost your top 5 contributions to the thread over the last 6 months for my review.

Thanks in advance, your contributions are welcome.

Would be infuriating if you have contributed nothing.

[winner69]

Sharon from ANZ notes that annual house price inflation is pushing further into positive territory …but a relatively low peak in this cycle is on the cards

Looking good for Oceania F25 …sales / margins wise

https://eu.watermarker.singletrack.io/NZ_REINZ_housing_data_still_on_the_chilly_side.pdf ?data=DhZAW5pNirsgovBdALYwogjcrWZAB6DXgwQPV%2F%2FR 4Y8c2U5HXzipnPnjShFNDgLRga0%2Fl4fXY0u7%2BiuK0FSiPf 3f8DqlXlWyAWUBt2mmlUd%2FyHUtQyEcX2sL3On34dT1GMWyeN TTGYyUZRH0SUGmZBuM02OdVBI7LEVHlD4i8334uxQZ5ZG2dZ5K 4bBTVtGWCEN0zE6wubQ3sZvwgoMl1O23OKbhGDsFLTP17Y6HQj hTJw1DUXqNAw8MU0UdYwJxkkERV4OPguZaSfdUQzWKeKGE%2B6 eYr6qsr0r9xSAhNtzbC9AnKnpWkDpK3yDV35NLsfK1KZ9uy6%2 BwZRVUtbbZ0TBObP6a436u4%2FLPu1Tt4fueazBCAZo3dKHDwD gA4Pl5bpCa3I%2BDyLs6uTX%2FfFGJUo%2Bcq6OXZr8o%2B1sC jG3LoY8eBRGCHwb%2B8dTw0%2B3RPkRff0HAeac6Erq6Ehmi9% 2BldnD7nuMe%2BBHW9K8%2FytGGLFx9tTQ8so35qrxk7uhnVvV VuO704Emc9leFIzxi0LAbJo7i%2F6Xy4tI4K5XMYhBVeNS%2Bu HBpO%2B4HJRsefAWR080Pcb6QqKJjV93yOZzy3Zk%2FaSnZaOl AkmWDazNtWsDu4nCkPa2SUXbgsPeq5Fsi62xUStbzKDLbi1FFG nqiTl6rUyEY2ttZNGejIrfbohdxKY%2B26HcAZWyRVWOkt1%2B LBF3aoGwv3zjcC7PgFYAGO3UKcu0XBdLyPpfVu57lkBrFr%2Fj ql3t1Z9sXrA7cJ9vWyvUoZAlcofrS7clhDa1VRalr32zCT5T9a z5C4hfbt8MZi6bEqIJ3jyf0yE9vEMOCQKP2eFUnDA4v88f%2FN %2FaThmwj0xi1MT3g0vXz6PfZVtlgozTn2oCj57Pqv5u0qExxP wijM&s3Url=https%3A%2F%2Fanz-singletrack.s3.ap-southeast-2.amazonaws.com%2FNZ_REINZ_housing_data_still_on_t he_chilly_side.pdf%3FX-Amz-Signature%3D93a4578f7847dbd9b50012b618f85b2b4bdfd0 eb3b991972b3d9c4563b1d03fa%26X-Amz-Algorithm%3DAWS4-HMAC-SHA256%26X-Amz-Credential%3DAKIAW3DTAMO2PNZSGZ3G%252F20240513%252 Fap-southeast-2%252Fs3%252Faws4_request%26X-Amz-Date%3D20240513T215713Z%26X-Amz-Expires%3D86400%26X-Amz-SignedHeaders%3Dhost

[winner69]

Please Keith, repost your top 5 contributions to the thread over the last 6 months for my review.

Thanks in advance, your contributions are welcome.

Would be infuriating if you have contributed nothing.


In spite of Rob being a bit miserable with you dont take it to heart …..you still a great guy …..cheers

[kiwikeith]

Please Keith, repost your top 5 contributions to the thread over the last 6 months for my review.

Thanks in advance, your contributions are welcome.

Would be infuriating if you have contributed nothing.

Rob. Thanks for the invitation to supply material for your "review". I think you would be better served by a period of self reflection to try to understand the source of your intellectual superiority condition. Keith

[alokdhir]

Sharon from ANZ notes that annual house price inflation is pushing further into positive territory …but a relatively low peak in this cycle is on the cards

Looking good for Oceania F25 …sales / margins wise

https://eu.watermarker.singletrack.io/NZ_REINZ_housing_data_still_on_the_chilly_side.pdf ?data=DhZAW5pNirsgovBdALYwogjcrWZAB6DXgwQPV%2F%2FR 4Y8c2U5HXzipnPnjShFNDgLRga0%2Fl4fXY0u7%2BiuK0FSiPf 3f8DqlXlWyAWUBt2mmlUd%2FyHUtQyEcX2sL3On34dT1GMWyeN TTGYyUZRH0SUGmZBuM02OdVBI7LEVHlD4i8334uxQZ5ZG2dZ5K 4bBTVtGWCEN0zE6wubQ3sZvwgoMl1O23OKbhGDsFLTP17Y6HQj hTJw1DUXqNAw8MU0UdYwJxkkERV4OPguZaSfdUQzWKeKGE%2B6 eYr6qsr0r9xSAhNtzbC9AnKnpWkDpK3yDV35NLsfK1KZ9uy6%2 BwZRVUtbbZ0TBObP6a436u4%2FLPu1Tt4fueazBCAZo3dKHDwD gA4Pl5bpCa3I%2BDyLs6uTX%2FfFGJUo%2Bcq6OXZr8o%2B1sC jG3LoY8eBRGCHwb%2B8dTw0%2B3RPkRff0HAeac6Erq6Ehmi9% 2BldnD7nuMe%2BBHW9K8%2FytGGLFx9tTQ8so35qrxk7uhnVvV VuO704Emc9leFIzxi0LAbJo7i%2F6Xy4tI4K5XMYhBVeNS%2Bu HBpO%2B4HJRsefAWR080Pcb6QqKJjV93yOZzy3Zk%2FaSnZaOl AkmWDazNtWsDu4nCkPa2SUXbgsPeq5Fsi62xUStbzKDLbi1FFG nqiTl6rUyEY2ttZNGejIrfbohdxKY%2B26HcAZWyRVWOkt1%2B LBF3aoGwv3zjcC7PgFYAGO3UKcu0XBdLyPpfVu57lkBrFr%2Fj ql3t1Z9sXrA7cJ9vWyvUoZAlcofrS7clhDa1VRalr32zCT5T9a z5C4hfbt8MZi6bEqIJ3jyf0yE9vEMOCQKP2eFUnDA4v88f%2FN %2FaThmwj0xi1MT3g0vXz6PfZVtlgozTn2oCj57Pqv5u0qExxP wijM&s3Url=https%3A%2F%2Fanz-singletrack.s3.ap-southeast-2.amazonaws.com%2FNZ_REINZ_housing_data_still_on_t he_chilly_side.pdf%3FX-Amz-Signature%3D93a4578f7847dbd9b50012b618f85b2b4bdfd0 eb3b991972b3d9c4563b1d03fa%26X-Amz-Algorithm%3DAWS4-HMAC-SHA256%26X-Amz-Credential%3DAKIAW3DTAMO2PNZSGZ3G%252F20240513%252 Fap-southeast-2%252Fs3%252Faws4_request%26X-Amz-Date%3D20240513T215713Z%26X-Amz-Expires%3D86400%26X-Amz-SignedHeaders%3Dhost

W69 please help me understand as its beyond my simple mind

I reckon prerequisite for a OCA investor is a IQ over 150 as only very sharp minds can understand its dynamics ...me including market doesnt get it ...at every market downturn it makes new low ...54 cents recent and 52 week low made yesterday ...shows more bailing out then getting in ...maybe they dont understand it just like me ...but u I believe is a sharp one ...then enlighten us with your honest thoughts ...is it a BUY at current SP ? If it was a buy at 70 then its better buy at 54 ??

[Lego_Man]

Final leg down incoming - will be interested to see where it bottoms?

[winner69]

W69 please help me understand as its beyond my simple mind

I reckon prerequisite for a OCA investor is a IQ over 150 as only very sharp minds can understand its dynamics ...me including market doesnt get it ...at every market downturn it makes new low ...54 cents recent and 52 week low made yesterday ...shows more bailing out then getting in ...maybe they dont understand it just like me ...but u I believe is a sharp one ...then enlighten us with your honest thoughts ...is it a BUY at current SP ? If it was a buy at 70 then its better buy at 54 ??

Alokdhir ….maybe an OCA investor only needs an IQ of 40 to recognise the ‘deep value’ embedded in the current share price.

Yes mate the share fall keeps going sown but the army of fans remain undaunted …fandom makes for an interesting study

Maybe a buy when the Warriors start winning ….consistently …whenever that is

[alokdhir]

Alokdhir ….maybe an OCA investor only needs an IQ of 40 to recognise the ‘deep value’ embedded in the current share price.

Yes mate the share fall keeps going sown but the army of fans remain undaunted …fandom makes for an interesting study

Maybe a buy when the Warriors start winning ….consistently …whenever that is

So u are saying whole market's wisdom is below IQ 40 levels !!! Goes against my belief that collective wisdom of market is always better then normal single person's wisdom ...Not Einstein type people included ...only normal like me ...not even u ...lol

[winner69]

Alokdhir ...OCA has a special aura about it that attracts fans .....bit like Taylor

[Daytr]

Oceania share price down each week for last 4 weeks …….Warriors have lost 4 weeks in a row

Spooky eh ….must mean something

Warriors likely to lose this week again …wonder what will happen to Oceania share price?

And Jason Paris is still fan #1 ….I’m sure a few Oceania fans could write such a comment about their beloved as well

@JasonCParis
The @NZWarriors were incredibly tough tonight. We won 18 - 16 after the first 15 minutes. We need to remove those poor 20 min periods and we can beat anybody. Injuries are a worry, but look at the players back from week 14. #KeepTheFaith
#UpTheWahs

I think Jason Paris is a very good CEO & his tie up of Vodafone with Starlink was a smart move.
Private equity also normally don't employ mugs.

However he has a blind spot with the Warriors but that's OK its sport & their's an emotional investment. Also his passion is smart for business, being the No 1 sponsor of the team & fandom that comes with it.

As you point out there are many similarities with the Wah fans & OCA investors.

The difference is their shouldn't be emotion in your investment & also Jason Paris's emotional investment is actually good for his business.
I fired him an email a while back, had an almost instant reply & the man was on holiday.

[alokdhir]

Alokdhir ...OCA has a special aura about it that attracts fans .....bit like Taylor

More like Moths getting attracted to flame ?? at least thats how it is at the moment ...maybe will turn around sometime ...really liked analogy of how it suits SP keeps going down to people who intend to keep buying ...but what about most others who dont intend to keep buying as they would like to spread their risk

[allfromacell]

REINZ report the total number of properties sold in New Zealand in April were 25.3% higher than April last yesr

Prices flat, maybe up a tad

Main thing is volumes still rising strongly ..indicates a good start to F25 for Oceania ….sales wise that is

Interesting REINZ use the word ‘suddued’ but probably comparing current market to the boom times when agents were creaming it
https://www.reinz.co.nz/Web/Web/News/News-Articles/Market-updates/REINZ-April-data-A-subdued-market-amid-economic-challenges.aspx?name=REINZ-April-data-A-subdued-market-amid-economic-challenges

HPI down 0.8% across NZ and 1.6% in Auckland on last month. That Auckland fall is around 20% p.a so wouldn't want that continuing.

[SailorRob]

Rob. Thanks for the invitation to supply material for your "review". I think you would be better served by a period of self reflection to try to understand the source of your intellectual superiority condition. Keith

Just comes from doing more work than most others.

Please self reflect on the sheer audacity of complaining about what others contribute when you contribute nothing yourself.

Think of it like turning up to Xmas lunch, standing and watching everyone else preparing the food, then storming the table before anyone else and loudly complaining about the food.

This evening I will review your last 20 posts and give feedback.

[SailorRob]

Alokdhir ...OCA has a special aura about it that attracts fans .....bit like Taylor


It's just the balance sheet sport. Not a particularly special business.

[kiwikeith]

Just comes from doing more work than most others.

Please self reflect on the sheer audacity of complaining about what others contribute when you contribute nothing yourself.

Think of it like turning up to Xmas lunch, standing and watching everyone else preparing the food, then storming the table before anyone else and loudly complaining about the food.

This evening I will review your last 20 posts and give feedback.

Piss poor analogy. I did not complain about the quality of anyone's post. I was commenting on so many posts being off topic - ie nothing to do with the OCA, in this case. A better analogy is turning up to a christmas lunch to find there is no food at all but a political rally or a rugby game taking place.

[SailorRob]

Piss poor analogy. I did not complain about the quality of anyone's post. I was commenting on so many posts being off topic - ie nothing to do with the OCA, in this case. A better analogy is turning up to a christmas lunch to find there is no food at all but a political rally or a rugby game taking place.

Fair enough.

Intellectual superiority, there has to be proof.

Bull retiring from the petrol bowser 20 years ago and supporting himself ever since on returns he has made on his own capital - THAT is intellectual superiority.

[ValueNZ]

So u are saying whole market's wisdom is below IQ 40 levels !!! Goes against my belief that collective wisdom of market is always better then normal single person's wisdom ...Not Einstein type people included ...only normal like me ...not even u ...lol
Those selling at 53c probably do have an IQ around that level, lol.

"Sharetraders lose as OCA falls, Investors win"

[Balance]

54c heading towards 50c by results day?

Market is catching onto the fact that OCA’s growth strategy is seriously flawed and unless sales of new units increase soon and quickly, there is not enough DMFs to cover escalating costs, interest and debt repayment.

For reference to those who are genuinely interested, go through how OCA books its DMF in its P&L & balance sheet when they sell a unit.

[alokdhir]

Those selling at 53c probably do have an IQ around that level, lol.

"Sharetraders lose as OCA falls, Investors win"

I am sure they ( sellers ) are thinking other way round ...TBH they have been right so far ...its almost 18 months they have been right ...maybe buyer's time will be longer then that ...Meta went below $ 100 for 2-3 days only I reckon by contrast

[ValueNZ]

I am sure they ( sellers ) are thinking other way round ...TBH they have been right so far ...its almost 18 months they have been right ...maybe buyer's time will be longer then that ...Meta went below $ 100 for 2-3 days only I reckon by contrast
Are you right because you sell something and over the following 18 months it drops in price?

And equally are you wrong because you buy something and it drops in price over the following 18 months?

The naive investor might say yes to both these questions... But you should contemplate them and their implications.

[alokdhir]

Are you right because you sell something and over the following 18 months it drops in price?

And equally are you wrong because you buy something and it drops in price over the following 18 months?

The naive investor might say yes to both these questions... But you should contemplate them and their implications.

Seems u have an IQ much higher then the market ...I salute that ...keep it going and u will be super rich one day :p

PS : I have experienced in life that one tends to loose most when one is most confident of his choice / decision / wisdom !!! maybe a thought for u to ponder upon

[ValueNZ]

PS : I have experienced in life that one tends to loose most when one is most confident of his choice / decision / wisdom !!! maybe a thought for u to ponder upon
True. Long term capital management is an excellent case study.

[Daytr]

54c heading towards 50c by results day?

Market is catching onto the fact that OCA’s growth strategy is seriously flawed and unless sales of new units increase soon and quickly, there is not enough DMFs to cover escalating costs, interest and debt repayment.

For reference to those who are genuinely interested, go through how OCA books its DMF in its P&L & balance sheet when they sell a unit.

Oh don't start that again Balance.
None of the true OCA fans care about such incidental things. 🤣

[Toddy]

Seems u have an IQ much higher then the market ...I salute that ...keep it going and u will be super rich one day :p

PS : I have experienced in life that one tends to loose most when one is most confident of his choice / decision / wisdom !!! maybe a thought for u to ponder upon

One tends to loose the most in life when they do 'nothing'. I. E inaction.

So buy and sell away and be confident and believe in your strategy.

[alokdhir]

One tends to loose the most in life when they do 'nothing'. I. E inaction.

So buy and sell away and be confident and believe in your strategy.

If going all out in OCA at 70 cents was ones strategy and confidence then ....wisdom is learning when to act on your hunches and when to pay heed to what universe is telling u ....but maybe its more macho to die for your convictions ...lol

PS : I think I shud bow out now ...tried enough but as W69 says OCA has fans ...even more loyal then Taylor ...hopefully they will be rewarded for their convictions and loyalty ...not my cup of tea .

[winner69]

54c heading towards 50c by results day?

Market is catching onto the fact that OCA’s growth strategy is seriously flawed and unless sales of new units increase soon and quickly, there is not enough DMFs to cover escalating costs, interest and debt repayment.

For reference to those who are genuinely interested, go through how OCA books its DMF in its P&L & balance sheet when they sell a unit.

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

[Toddy]

If going all out in OCA at 70 cents was ones strategy and confidence then ....wisdom is learning when to act on your hunches and when to pay heed to what universe is telling u ....but maybe its more macho to die for your convictions ...lol

I wouldn't beat anyone up who went all out on OCA. It's not a dog company so the sp will recover whenever New Zealand gets up and running again.

The lesson will be having capital tied up for a period of time.

My opinion would be alot different if we were talking about stocks like MFB, THL, KMD, WHS, NTL etc

But, OCA, it's safe as houses.

[alokdhir]

I wouldn't beat anyone up who went all out on OCA. It's not a dog company so the sp will recover whenever New Zealand gets up and running again.

The lesson will be having capital tied up for a period of time.

My opinion would be alot different if we were talking about stocks like MFB, THL, KMD, WHS, NTL etc

But, OCA, it's safe as houses.

I hope u have read the above two posts of seasoned market analysts if I can call them ...W69 and Balance ...there are always reasons for stock's SP ...which either we understand in present or in future

[Daytr]

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

Sounds strangely familiar. 🤣

[SailorRob]

Winner and balance vs maverick and ferg...

Hahaha.

I know who's analysis I trust.

Everything balance raises are reasons I am invested in OCA

Pages 25 to 30 of the presentation he posted are brilliant.

But he's too busy in his day job to pay proper attention...

[Toddy]

I hope u have read the above two posts of seasoned market analysts if I can call them ...W69 and Balance ...there are always reasons for stock's SP ...which either we understand in present or in future

The gradual sp ski slope doesn't look to unfamiliar to the majority of NZX stocks currently. There are alot of 52 week lows happening this week on more often than not zero news.

I'm going with the lack of capital in the market as the main explanation.

Until interest rates, then followed closely by the Nzd reflect the current environment then stocks will stay at these lows.

Sometimes tough times can make us over analysis company's and look for something that is not actually there.

[SailorRob]

The gradual sp ski slope doesn't look to unfamiliar to the majority of NZX stocks currently. There are alot of 52 week lows happening this week on more often than not zero news.

I'm going with the lack of capital in the market as the main explanation.

Until interest rates, then followed closely by the Nzd reflect the current environment then stocks will stay at these lows.

Sometimes tough times can make us over analysis company's and look for something that is not actually there.

Good post.

Trend OCA against Argosy or trend all the property companies together.

[alokdhir]

The gradual sp ski slope doesn't look to unfamiliar to the majority of NZX stocks currently. There are alot of 52 week lows happening this week on more often than not zero news.

I'm going with the lack of capital in the market as the main explanation.

Until interest rates, then followed closely by the Nzd reflect the current environment then stocks will stay at these lows.

Sometimes tough times can make us over analysis company's and look for something that is not actually there.

Yes market is in low spirits but SUM vs OCA will show divergence ...both in same business and in same market ....but I am not going to go on and on ...all are smart and sensible enough to come to their own conclusions . :t_up:

[SailorRob]

Yes market is in low spirits but SUM vs OCA will show divergence ...both in same business and in same market ....but I am not going to go on and on ...all are smart and sensible enough to come to their own conclusions . :t_up:

SUM is a better business but you pay for it. All that matters is return from today.

[Toddy]

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]

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?

[SailorRob]

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.

[winner69]

Sales, sales and even more sales is the message

Property market activity still on up …annual volume sales up 17% from a year ago

Not that far to go to get back to more normal levels

Updated this for Mav

[bull....]

wake up and see OCA heading into the 40s :scared:

[winner69]

wake up and see OCA heading into the 40s :scared:

"DEEP VALUE" currently ..... "DEEP VALUE NEVER SEEN BEFORE" if shares in 40's

[Daytr]

OCA down 1.9%, RYM up 5% on no news as I can see.

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.

[Bob50]

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.

Effectively it’s borrowing to invest.

Thoughts?

[Toddy]

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.

[SailorRob]

"DEEP VALUE" currently ..... "DEEP VALUE NEVER SEEN BEFORE" if shares in 40's

Exactly. The money I made last time was epic, then compounded it into other similar opportunities a few times over again.

I wouldn't say never been seen before but you could be right as business has grown a lot.

Imagine how winner from 2011 would react.

[SailorRob]

OCA down 1.9%, RYM up 5% on no news as I can see.

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.

The higher the 'debt' to equity the better. Like seriously better.

Thanks for playing.

[Daytr]

The higher the 'debt' to equity the better. Like seriously better.

Thanks for playing.

Well only if it pays off.
Otherwise it becomes a problem, a serious problem.
Buy that's only with both eyes open.

No comment on the staff ratios or the fact that RYM are making money day to day?

I also like RYM's exposure to the Australian property market.

[bull....]

"DEEP VALUE" currently ..... "DEEP VALUE NEVER SEEN BEFORE" if shares in 40's

value or deep value
deep value terminolgy meaning for the brave lol

[SailorRob]

Well only if it pays off.
Otherwise it becomes a problem, a serious problem.
Buy that's only with both eyes open.

No comment on the staff ratios or the fact that RYM are making money day to day?

I also like RYM's exposure to the Australian property market.


You are talking about conventional debt....

No comment as I don't know and I don't trust your research.

I don't care if money is made day to day or once every 10 years, it's how much, how likely and the return it provides you.

[Daytr]

You are talking about conventional debt....

No comment as I don't know and I don't trust your research.

I don't care if money is made day to day or once every 10 years, it's how much, how likely and the return it provides you.

Look it up. It's there for everyone to see.
That's the problem with your one eyed approach, I don't care about the day to day. 🤣
I invest in good management. I.e look after the day to day. I think if you apply the Buffett approach so does he. Picking & choosing your Buffet rules?
Man, if there is a definition of a spruiker, you are it.

[SailorRob]

Look it up. It's there for everyone to see.
That's the problem with your one eyed approach, I don't care about the day to day. 藍
I invest in good management. I.e look after the day to day. I think if you apply the Buffett approach so does he. Picking & choosing your Buffet rules?
Man, if there is a definition of a spruiker, you are it.


It's BuffeTT

I did not say that I dont care about the day to day.

I said 'I don't care if money is made day to day'

Warren and I are alike in this regard, he doesn't care about volatility. Neither of us would care if a business lost money in 9 out of 10 years, provided it still made sense, which it could.

[Daytr]

It's BuffeTT

I did not say that I dont care about the day to day.

I said 'I don't care if money is made day to day'

Warren and I are alike in this regard, he doesn't care about volatility. Neither of us would care if a business lost money in 9 out of 10 years, provided it still made sense, which it could.

Oh buddy you are full of it.
Making money day to day should be the premise of any business that has been in business as long as OCA. RYM don't seem to experiencing that same volatility in the day to day. So what does that say? Perhaps they are just better run.
They were also smart enough to reduce debt.
As I have said before OCA should have done the same when the going was good, and at at a much less cost to shareholders.

[SailorRob]

Oh buddy you are full of it.
Making money day to day should be the premise of any business that has been in business as long as OCA. RYM don't seem to experiencing that same volatility in the day to day. So what does that say? Perhaps they are just better run.
They were also smart enough to reduce debt.
As I have said before OCA should have done the same when the going was good, and at at a much less cost to shareholders.


How long a business has existed for has nothing to do with it, many very successful businesses have varied and long periods between profits.

Many deliberately run a loss day to day.

[SailorRob]

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!.


Hi Toddy,

Interested to know what you would buy on the NZX.

As there are many companies with 10 and 20 years wiped off the SP I have been looking through the wreckage and aside from retirement sector I can't see anything that remotely interests me, would appreciate some leads on say the top 5 ex retirement sector that you would like to buy.

If you don't mind me asking, what type of farm are you running and what cash returns on the money you have invested does it return average over 5 years. No problem if you don't want to discuss.

[SailorRob]

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?


Only even consider doing this if you have a long term track record of investing in equities and earning a return that is a good spread over the average cost of debt over a normal cycle.

Business debt I assume has a rate north of 8% at the moment and probably 7 over a normal cycle, so you'd want a record of doing at least 10 and without too much vol for it to make sense to do this. You'd also want a long record of behaving appropriately in a severe crash, GFC/Covid style.

Even with all this, you're going to earn a max 3% spread over the debt and take on a lot of risk to do so where you might get a lot less than the 3% spread.

Is it worth it?

There are certainly times that it does make sense, I borrowed significantly to buy more Berkshire at and around $250 for example.

Nothing at all wrong with what you are suggesting but...

[Daytr]

How long a business has existed for has nothing to do with it, many very successful businesses have varied and long periods between profits.

Many deliberately run a loss day to day.

OK buddy. You stick without philosophy.
In tough times, which the sector is experiencing that's what becomes very important.
In fact it's what can tip a business over in tough times even when in the longterm they could have been a good prospect.
I'm not suggesting OCA is facing that yet & if they get through the cycle they will do well.
Just a lot less risk with RYM with potential the same or I think likely better returns.
I hold neither so no axe to grind.

For a stock that is only 5% of your portfolio you seem to spend an extraordinary amount of time defending a stock that is completely out of favour.

[ValueNZ]

Exactly. The money I made last time was epic, then compounded it into other similar opportunities a few times over again.

I wouldn't say never been seen before but you could be right as business has grown a lot.

Imagine how winner from 2011 would react.
Worth noting that at the same time when OCA was 40c, everything else was also dirt cheap and dropping. But this time around, everything else is much more fairly priced. Of course there's exceptions but on the whole owning OCA now seems more attractive relative to everything else compared to then.

All depends on each individuals personal opportunity cost / discount rate.

[SailorRob]

Worth noting that at the same time when OCA was 40c, everything else was also dirt cheap and dropping. But this time around, everything else is much more fairly priced. Of course there's exceptions but on the whole owning OCA now seems more attractive relative to everything else compared to then.

All depends on each individuals personal opportunity cost / discount rate.


Great point.

[SailorRob]

OK buddy. You stick without philosophy.
In tough times, which the sector is experiencing that's what becomes very important.
In fact it's what can tip a business over in tough times even when in the longterm they could have been a good prospect.
I'm not suggesting OCA is facing that yet & if they get through the cycle they will do well.
Just a lot less risk with RYM with potential the same or I think likely better returns.
I hold neither so no axe to grind.

For a stock that is only 5% of your portfolio you seem to spend an extraordinary amount of time defending a stock that is completely out of favour.


If you'd be following my posts like you should be you'd know I bought plenty more during the recent weakness.

I'd run you through the Math, but just trust me that it makes the % weight go up.

What tough times are OCA going through exactly?

[SailorRob]

For a stock that is only 5% of your portfolio you seem to spend an extraordinary amount of time defending a stock that is completely out of favour.


For a stock that you don't own you seem to spend an extraordinary amount of time pontificating incorrectly about it.

[Daytr]

If you'd be following my posts like you should be you'd know I bought plenty more during the recent weakness.

I'd run you through the Math, but just trust me that it makes the % weight go up.

What tough times are OCA going through exactly?

Seriously? Look at the share price buddy.
It's not just OCA of course, it's the sector you know the macro you ignore. 🤣
Any of the SailorBoy fan club following this?
You can only blame yourself, you have bought into the SailorBoy hype whilst your investment has plummeted. Meanwhile what are other stocks doing outside the sector SUM excluded.

If the property market turns positive so does OCA. If the opposite happens, watch out.

This really is comedy hour.

[mistaTea]

For a stock that you don't own you seem to spend an extraordinary amount of time pontificating incorrectly about it.

Why will you not take my advice?

Psychic vampires are the worst. They will never stop needling for an emotional reaction.

They must feed. They can’t stop.

But you can.

Beware of Dandelo.

[Daytr]

For a stock that you don't own you seem to spend an extraordinary amount of time pontificating incorrectly about it.

Yep I do spend a lot of time on OCA, not so much now as I've concluded my research.
The Fandom as Winner points out is interesting. I was also looking at it as a long term investment perhaps. But now I prefer RYM.
Less risk and potentially more reward.

But much better reward I think in the resources sector.
I just invested in a company the will spit out 50% more cash than RYM with a market cap of 2.5 times less than RYM. But like all stocks the macro could impact it. I'm thinking positively but I'm biased.

Good luck. I truly hope OCA does well.

[SailorRob]

Yep I do spend a lot of time on OCA, not so much now as I've concluded my research.
The Fandom as Winner points out is interesting. I was also looking at it as a long term investment perhaps. But now I prefer RYM.
Less risk and potentially more reward.

But much better reward I think in the resources sector.
I just invested in a company the will spit out 50% more cash than RYM with a market cap of 2.5 times less than RYM. But like all stocks the macro could impact it. I'm thinking positively but I'm biased.

Good luck. I truly hope OCA does well.


I'd suggest looking at its EV sport.

We should really be friends. We could start a new age trading ship. We could sail around raising capital, you could be the Cabin boy, ValueNZ first mate. Baa_Baa could forecast the weather using TA. We'd let you run a paper trading account - just so the crew could have the entertainment. Yes winner would be the Purser.

[Baa_Baa]

I'd suggest looking at its EV sport.

We should really be friends. We could start a new age trading ship. We could sail around raising capital, you could be the Cabin boy, ValueNZ first mate. Baa_Baa could forecast the weather using TA. We'd let you run a paper trading account - just so the crew could have the entertainment. Yes winner would be the Purser.

Just to be clear, I don't do boats, they make me sick, or forecasts (especially the weather, even Metservice and NIWA can't get that right!) but maybe the probabilities of SP movements with careful price trading controls, i.e. never a one way trade. Always have a trading contingency in case it doesn't work out. Run with gains, cut losses quickly.

Been awhile since I traded US listed options, albeit fun at the time, staying up all night eventually lost its appeal. Now that's an instrument class that has absolutely no underlying value at all, nada, nothing, just a paper promise, but it still traded purely on perceived or anticipated future prices of the underlying stock. The only way to track it was price charts. One day for example, I woke up and 1200% gain on a gold miner's option, bought the Call at 4 times out of the money, but they struck it rich. The Mrs said, "have you sold?" Um, ok, wait, doing that now. Kaching, money in the bank.

Besides, I'd never join a troupe with Daytr on it, attention seekers lost in a morass of logical fallacies don't interest me, they're just bogged down with redefining everything (the straw man argument) and persist with factual inaccuracies trying to justify it.

I'd consider the 2011 Winner69, but lately, not so much with the Wah's nonsense. Lost the plot lately imo.

Final thought, Daytr reckons RYM is better 'value' now when the SP has gone up a few % than last week when the SP was bottoming. Go figure, higher SP = better value. WTF?

[Daytr]

Just to be clear, I don't do boats, they make me sick, or forecasts (especially the weather, even Metservice and NIWA can't get that right!) but maybe the probabilities of SP movements with careful price trading controls, i.e. never a one way trade. Always have a trading contingency in case it doesn't work out. Run with gains, cut losses quickly.

Been awhile since I traded US listed options, albeit fun at the time, staying up all night eventually lost its appeal. Now that's an instrument class that has absolutely no underlying value at all, nada, nothing, just a paper promise, but it still traded purely on perceived or anticipated future prices of the underlying stock. The only way to track it was price charts. One day for example, I woke up and 1200% gain on a gold miner's option, bought the Call at 4 times out of the money, but they struck it rich. The Mrs said, "have you sold?" Um, ok, wait, doing that now. Kaching, money in the bank.

Besides, I'd never join a troupe with Daytr on it, attention seekers lost in a morass of logical fallacies don't interest me, they're just bogged down with redefining everything (the straw man argument) and persist with factual inaccuracies trying to justify it.

I'd consider the 2011 Winner69, but lately, not so much with the Wah's nonsense. Lost the plot lately imo.

Final thought, Daytr reckons RYM is better 'value' now when the SP has gone up a few % than last week when the SP was bottoming. Go figure, higher SP = better value. WTF?

RYM was better value yesterday, 5% better or so. I made the claim re RYM a few days ago.
Keep up & it wasn't about a 5% gain.
Less risk with what suspect might be higher reward. But I don't care as not in either.

Being a sailor myself, risk assessment is key.
I would want to be stuck on a boat with either of you for the company that resorts to shallow insults let alone that doesn't know when to put in a reef.

[SailorRob]

Been awhile since I traded US listed options, albeit fun at the time, staying up all night eventually lost its appeal. Now that's an instrument class that has absolutely no underlying value at all, nada, nothing, just a paper promise

Great post but on options;

I disagree, options almost all have a value, might be hard to determine but still exists.

This is something I actually think Daytr understands as his shock at my suggestion that he gave me a free option indicated.

The entire financial world you could say is just a paper promise - money especially, all debt instruments etc...

An option is a VERY formal and VERY regulated contract usually backed up by collateral as well.

Certain options I would find immensely valuable and be able to value precisely, others not at all.

[winner69]

value or deep value
deep value terminolgy meaning for the brave lol

Found this thing DEEP … The Roundhill Acquirers Deep Value ETF (“DEEP) aims to invest in deeply undervalued stocks. DEEP seeks to track the Acquirers Deep Value Index, an index of 100 small cap domestic companies identified using the Acquirers Multiple®.

If these are typical returns from deep value investing think I’ll give it a miss as a strategy ..but suppose we all buy cheap things anyway

https://www.roundhillinvestments.com/etf/deep/

[SailorRob]

Found this thing DEEP … The Roundhill Acquirers Deep Value ETF (“DEEP) aims to invest in deeply undervalued stocks. DEEP seeks to track the Acquirers Deep Value Index, an index of 100 small cap domestic companies identified using the Acquirers Multiple®.

If these are typical returns from deep value investing think I’ll give it a miss as a strategy ..but suppose we all buy cheap things anyway

https://www.roundhillinvestments.com/etf/deep/

Tobias recently took over.

Returns from deep value are exceptional over the cycle. Recommend his book, Deep Value.

Should do an easy 15 over time

[Rawz]

I listen to Tobias's podcast, Value After Hours, on spotify when im pushing bubs to sleep in the pram. Its quite good.

youtube link: The Acquirers Podcast - YouTube (https://www.youtube.com/channel/UCJ27FwJZ3hsMrPCviG5gCFg)
spotify: The Acquirers Podcast | Podcast on Spotify (https://open.spotify.com/show/4XKvjmFiZLxWZ58vBfT4v9)

[Valuegrowth]

Great post but on options;

I disagree, options almost all have a value, might be hard to determine but still exists.

This is something I actually think Daytr understands as his shock at my suggestion that he gave me a free option indicated.

The entire financial world you could say is just a paper promise - money especially, all debt instruments etc...

An option is a VERY formal and VERY regulated contract usually backed up by collateral as well.

Certain options I would find immensely valuable and be able to value precisely, others not at all.
How about put option and call option?

[Valuegrowth]

Found this thing DEEP … The Roundhill Acquirers Deep Value ETF (“DEEP) aims to invest in deeply undervalued stocks. DEEP seeks to track the Acquirers Deep Value Index, an index of 100 small cap domestic companies identified using the Acquirers Multiple®.

If these are typical returns from deep value investing think I’ll give it a miss as a strategy ..but suppose we all buy cheap things anyway

https://www.roundhillinvestments.com/etf/deep/

With full of overvalued stocks, it make sense to go behind deep value stocks. I added few deep value stocks into my portfolio.

[Joshuatree]

Found this thing DEEP … The Roundhill Acquirers Deep Value ETF (“DEEP) aims to invest in deeply undervalued stocks. DEEP seeks to track the Acquirers Deep Value Index, an index of 100 small cap domestic companies identified using the Acquirers Multiple®.

If these are typical returns from deep value investing think I’ll give it a miss as a strategy ..but suppose we all buy cheap things anyway

https://www.roundhillinvestments.com/etf/deep/

Sounds good but 5 year return 4.89% per annum (i think), unsure if net of 0.8% man fee .

[SailorRob]

RYM was better value yesterday, 5% better or so. I made the claim re RYM a few days ago.
Keep up & it wasn't about a 5% gain.
Less risk with what suspect might be higher reward. But I don't care as not in either.

Being a sailor myself, risk assessment is key.
I would want to be stuck on a boat with either of you for the company that resorts to shallow insults let alone that doesn't know when to put in a reef.


OCA has actually very dramatically outperformed Ryman since the OCA IPO.

[Rawz]

OCA has actually very dramatically outperformed Ryman since the OCA IPO.
Wow that’s some stat.

Just shows how far RYM has fallen

[winner69]

Wow …just seen the awesome new Oceania ad on TV

Whoever came up with using Bill Withers ‘Lean On Mw’ deserves a medal

From their Facebook page ‘ With the help of Bill Withers “Lean on Me” narrating this honest interpretation of the journey many of us face, we hope to relieve some of the guilt felt whilst navigating the best care decisions for loved ones“

Well done team Oceania

[Daytr]

OCA has actually very dramatically outperformed Ryman since the OCA IPO.

So what? A new listing eclipsed an established player in percentage terms.
I would hope so.

But really, who invests looking backwards?

[SailorRob]

So what? A new listing eclipsed an established player in percentage terms.
I would hope so.

But really, who invests looking backwards?


Hi Daytr,

You have chosen to go with Ryman, you therefore have no further interest in this thread.

It's been nice having you around.

Goodbye.

[Baa_Baa]

OCA has actually very dramatically outperformed Ryman since the OCA IPO.

In what way has it out performed, SP or something else?

[mistaTea]

I listen to Tobias's podcast, Value After Hours, on spotify when im pushing bubs to sleep in the pram. Its quite good.

youtube link: The Acquirers Podcast - YouTube (https://www.youtube.com/channel/UCJ27FwJZ3hsMrPCviG5gCFg)
spotify: The Acquirers Podcast | Podcast on Spotify (https://open.spotify.com/show/4XKvjmFiZLxWZ58vBfT4v9)

If you look at last years report…even if you ignore the $927M ORA and just use the debt… you are looking at an acquirers multiple of 78 based on current market cap.

One year is nothing to go by, but it will be interesting to see the next report and run the EV/EBIT calc again.

Perhaps another dimension to explain why OCA might not be ‘cheap’ at current market cap given everything that is going on.

[Daytr]

Hi Daytr,

You have chosen to go with Ryman, you therefore have no further interest in this thread.

It's been nice having you around.

Goodbye.
Haha mate. I haven't 'gone' with either.
I just think RYM presents less risk for a similar return.

I look forward to OCA'S full report coming in the next days or so. Will the SP be in the 40s or 60s? Anyone's guess.

Good luck to both!

[SailorRob]

In what way has it out performed, SP or something else?

Share price

[SailorRob]

Yep I do spend a lot of time on OCA, not so much now as I've concluded my research. I was also looking at it as a long term investment perhaps. But now I prefer RYM.
Less risk and potentially more reward. Good luck. I truly hope OCA does well.


Haha mate. I haven't 'gone' with either.
I just think RYM presents less risk for a similar return.

I look forward to OCA'S full report coming in the next days or so. Will the SP be in the 40s or 60s? Anyone's guess.

Good luck to both!


Ok good one man.

[Habits]

Wow …just seen the awesome new Oceania ad on TV

Whoever came up with using Bill Withers ‘Lean On Mw’ deserves a medal

From their Facebook page ‘ With the help of Bill Withers “Lean on Me” narrating this honest interpretation of the journey many of us face, we hope to relieve some of the guilt felt whilst navigating the best care decisions for loved ones“

Well done team Oceania

Yes very well done and striking

[Baa_Baa]

OCA has actually very dramatically outperformed Ryman since the OCA IPO.


In what way has it out performed, SP or something else?


Share price

I'm not sure I would call this as OCA 'very dramatically outperformed' RYM on SP, but more like both have dramatically underperformed, since OCA IPO. Just that RYM has underperformed even more. OCA still fecked on SP in the scheme of things.

https://invst.ly/14v3w0

[SailorRob]

I'm not sure I would call this as OCA 'very dramatically outperformed' RYM on SP, but more like both have dramatically underperformed, since OCA IPO. Just that RYM has underperformed even more. OCA still fecked on SP in the scheme of things.

https://invst.ly/14v3w0


Well if two people each had $100,000

And one bought OCA on IPO, the other bought Ryman,

One would have $65,000 now and the other would have $48,000. Dividends not factored in.

So the $65,000 has outperformed by a fair amount.

[Gunner]

Well if two people each had $100,000

And one bought OCA on IPO, the other bought Ryman,

One would have $65,000 now and the other would have $48,000. Dividends not factored in.

So the $65,000 has outperformed by a fair amount.

Losing money is a good thing for some. Too much winning

[Baa_Baa]

Well if two people each had $100,000

And one bought OCA on IPO, the other bought Ryman,

One would have $65,000 now and the other would have $48,000. Dividends not factored in.

So the $65,000 has outperformed by a fair amount.

Yeah, like I tried to say, both SP's are fecked, but I don't care about that too much if I'm not selling, or better still buying! When I got into the RV's and OCA in particular, I would have never thought SP would be so volatile, it seems every year we have a one in a multi year calamity, Covid, property market collapse, recession, you name it.

All brilliant opportunities to accumulate for the long term, didn't expect that either.

[Baa_Baa]

Losing money is a good thing for some. Too much winning

It's not lost if you're not selling.

[SailorRob]

Yeah, like I tried to say, both SP's are fecked, but I don't care about that too much if I'm not selling, or better still buying! When I got into the RV's and OCA in particular, I would have never thought SP would be so volatile, it seems every year we have a one in a multi year calamity, Covid, property market collapse, recession, you name it.

All brilliant opportunities to accumulate for the long term, didn't expect that either.


Do you think all things considered, Ryman is a better buy here than OCA?

[SailorRob]

It's not lost if you're not selling.


Not quite.

It's not lost if the intrinsic value hasn't really changed.

When I got back to my mooring only to find the mast poking out, if I refuse to sell then it doesn't mean I havent lost

The not selling part has nothing to do with having lost or not, plenty of companies down 95% plus and will never recover, the person who hasn't sold has still lost 95% of their cash.

In this particular case I agree, asset value and float and cash generating ability is most likely higher now than when the SP was much higher.

Just like people saying you've made nothing unless you have sold for cash. Well try telling Warren who has never sold a single share.

[Baa_Baa]

Do you think all things considered, Ryman is a better buy here than OCA?

No. If I put a myopic SP hat on, and assume a multi-year 10 bagger SP target, OCA has to go to $5.40, whereas RYM has to go to $37. Neither might happen, but RYM is a lot less likely.

[SailorRob]

No. If I put a myopic SP hat on, and assume a multi-year 10 bagger SP target, OCA has to go to $5.40, whereas RYM has to go to $37. Neither might happen, but RYM is a lot less likely.


Yeah, 4 billion market cap isn't huge in NZ economy but 26 billion is massive, would be a lot for resistance to take that much slice of pie.

[Daytr]

No. If I put a myopic SP hat on, and assume a multi-year 10 bagger SP target, OCA has to go to $5.40, whereas RYM has to go to $37. Neither might happen, but RYM is a lot less likely.

So you are saying OCA can outperform its all time high by 3.4 multiple vs 2.3 for RYM.
Of course anything is possible and typically it's easier to double a lower smaller business than a larger one but then their is the added risk involved.

[SailorRob]

So you are saying OCA can outperform its all time high by 3.4 multiple vs 2.3 for RYM.
Of course anything is possible and typically it's easier to double a lower smaller business than a larger one but then their is the added risk involved.


*there....

[Daytr]

*there....

There there. Feel better?
Mate you need to take a break.
Been back what is it a week?
And totally fixated.

[Baa_Baa]

So you are saying OCA can outperform its all time high by 3.4 multiple vs 2.3 for RYM.
Of course anything is possible and typically it's easier to double a lower smaller business than a larger one but then their is the added risk involved.

I didn't say OCA can, or that either of them can, but yes purely on SP, I think OCA would be a better chance of a ten-bagger from here, than RYM. From the SP here and now, not about multiples to their ATH, that's your strawman.

Assuming SP is all you're into.

What I'd really like to see is that all of the RV's turn into a shareholders dream cash generating machines (which they could be) and payout excess profits as dividends. Of all sectors, the RV's are best placed to do that, whereas historically they're all hell bent on growth and have been in TOTO providing awful returns to shareholders.

It's either that, stabilise development and payout a decent share of operating profits, or show us how ongoing growth is going to significantly grow the SP. Currently they're doing neither.

Maybe I'm saying that I hope this market shock recalibrates the sector towards rewarding its shareholders with returns on their investment, rather than just relentlessly growing their pie for no return to shareholders, so far. None of them are at present focused on this. It's not an 'either or' binary choice, it's about balancing growth against returns to shareholders.

The current market is saying the RV sector investment model is screwed and it's rerating SP's accordingly. That's code for "if you don't or can't give us shareholders a return on our investment, we'll take our money elsewhere".

[SailorRob]

What I'd really like to see is that all of the RV's turn into a shareholders dream cash generating machines (which they could be) and payout excess profits as dividends. Of all sectors, the RV's are best placed to do that, whereas historically they're all hell bent on growth and have been in TOTO providing awful returns to shareholders.

It's either that, stabilise development and payout a decent share of operating profits, or show us how ongoing growth is going to significantly grow the SP. Currently they're doing neither.

Maybe I'm saying that I hope this market shock recalibrates the sector towards rewarding its shareholders with returns on their investment, rather than just relentlessly growing their pie for no return to shareholders, so far. None of them are at present focused on this. It's not an 'either or' binary choice, it's about balancing growth against returns to shareholders.

The current market is saying the RV sector investment model is screwed and it's rerating SP's accordingly. That's code for "if you don't or can't give us shareholders a return on our investment, we'll take our money elsewhere".

Great post and I have been thinking along these lines as well.

Following this model will do a number on future supply as well which could lead to a double whammy for the industry.

If what you'd like to see happens, or at least in part, then stand back, it will be spectacular.

[Mrbuyit]

I think we were talking inflection point ~500 pages ago.

[SailorRob]

I think we were talking inflection point ~500 pages ago.


Which was probably only a few days ago.

Let's talk in 2040, if that's too far away you shouldn't own equities.

[X-men]

Are we there yet?

[Mrbuyit]

For sure an amount of patience is required, how much patience who knows... I checked back to 2019, and the August dividend was 2.6c on a $1 share..

I guess like Baabaa is suggesting going from 5% div to zero is going to change the sentiment of some holders, and maybe others were holding as a dividend stock and have had to shift focus.

[mistaTea]

For sure an amount of patience is required, how much patience who knows... I checked back to 2019, and the August dividend was 2.6c on a $1 share..

I guess like Baabaa is suggesting going from 5% div to zero is going to change the sentiment of some holders, and maybe others were holding as a dividend stock and have had to shift focus.

Well, for a business in growth mode like OCA, investors should want zero dividend from the get go and have all funds reinvested back into the business.

When a dividend is being paid and is reduced or removed because of ‘tough times’ then that is different altogether and understandably adds some negative sentiment towards the business.

Investors should (logically) only want a dividend when OCA (or any other business for that matter) can no longer invest the money sensibly for long term growth.

[Baa_Baa]

For sure an amount of patience is required, how much patience who knows... I checked back to 2019, and the August dividend was 2.6c on a $1 share..

I guess like Baabaa is suggesting going from 5% div to zero is going to change the sentiment of some holders, and maybe others were holding as a dividend stock and have had to shift focus.

It was, as all RV's were and still are, sh1tty dividend holding shares, and lately severely down rated capital growth shares. They all need to refocus imo on what their investors want from them, it's not all about never ending growth, it's about ROI. And ROI to-date has been abysmal.

[ValueNZ]

It was, as all RV's were and still are, sh1tty dividend holding shares, and lately severely down rated capital growth shares. They all need to refocus imo on what their investors want from them, it's not all about never ending growth, it's about ROI. And ROI to-date has been abysmal.
Oceania should do whatever is most value-accretive for it's shareholders. So as long as they have the ability to grow its ORA account at 15-20% CAGR, that's what I want them doing.

Don't get me wrong, either way will create epic long term returns.

[Bikeguy]

I didn't say OCA can, or that either of them can, but yes purely on SP, I think OCA would be a better chance of a ten-bagger from here, than RYM. From the SP here and now, not about multiples to their ATH, that's your strawman.

Assuming SP is all you're into.

What I'd really like to see is that all of the RV's turn into a shareholders dream cash generating machines (which they could be) and payout excess profits as dividends. Of all sectors, the RV's are best placed to do that, whereas historically they're all hell bent on growth and have been in TOTO providing awful returns to shareholders.

It's either that, stabilise development and payout a decent share of operating profits, or show us how ongoing growth is going to significantly grow the SP. Currently they're doing neither.

Maybe I'm saying that I hope this market shock recalibrates the sector towards rewarding its shareholders with returns on their investment, rather than just relentlessly growing their pie for no return to shareholders, so far. None of them are at present focused on this. It's not an 'either or' binary choice, it's about balancing growth against returns to shareholders.

The current market is saying the RV sector investment model is screwed and it's rerating SP's accordingly. That's code for "if you don't or can't give us shareholders a return on our investment, we'll take our money elsewhere".

This is a very well written post,

[Daytr]

I didn't say OCA can, or that either of them can, but yes purely on SP, I think OCA would be a better chance of a ten-bagger from here, than RYM. From the SP here and now, not about multiples to their ATH, that's your strawman.

Assuming SP is all you're into.

What I'd really like to see is that all of the RV's turn into a shareholders dream cash generating machines (which they could be) and payout excess profits as dividends. Of all sectors, the RV's are best placed to do that, whereas historically they're all hell bent on growth and have been in TOTO providing awful returns to shareholders.

It's either that, stabilise development and payout a decent share of operating profits, or show us how ongoing growth is going to significantly grow the SP. Currently they're doing neither.

Maybe I'm saying that I hope this market shock recalibrates the sector towards rewarding its shareholders with returns on their investment, rather than just relentlessly growing their pie for no return to shareholders, so far. None of them are at present focused on this. It's not an 'either or' binary choice, it's about balancing growth against returns to shareholders.

The current market is saying the RV sector investment model is screwed and it's rerating SP's accordingly. That's code for "if you don't or can't give us shareholders a return on our investment, we'll take our money elsewhere".

I'm sure everyone wants there investments to turn into cash generating machines.
With debt much higher than the value of stock it's going to be a while before they could get into that position just from DMF & resales & obviously resale returns depends on the property market, nothing to do with company performance.

Paying out dividends goes against the compounding investment vehicle SailorBoy dreams about. But I would suggest you are right, that's very likely what they will do but only once they have reduced debt & if they keep expanding, that's going to be difficult to do for some time.

It's certainly a long term play, but anything good or bad could happen between now & then.
The payout really is around the sector's modus operandi & the property market rather than any individual company necessarily. Some operate better than others such as RYM as per the metrics I supplied earlier.

But why when a sector is the investment vehicle rather than the just OCA or just RYM etc, wouldn't you spread your investment across the sector?
This definitely would diversify the risk of management's ability to duck it up.

[SailorRob]

I'm sure everyone wants there investments to turn into cash generating machines.
With debt much higher than the value of stock it's going to be a while before they could get into that position


It is already a cash generating machine.

Baa_Baa is just suggesting that cash directed out of the company rather than reinvested.

Debt and 'value' of the stock have nothing to do with each other...

Debt is measured against the ability to service it from cash flows.

Asset values mean nothing outside of their cash generating ability.

[Daytr]

It is already a cash generating machine.

Baa_Baa is just suggesting that cash directed out of the company rather than reinvested.

Debt and 'value' of the stock have nothing to do with each other...

Debt is measured against the ability to service it from cash flows.

Asset values mean nothing outside of their cash generating ability.

Really is that what he was suggesting? No kidding.

Value of housing stock has everything to do with debt. Perhaps in your eagerness to defend OCA and cut off any questions at the pass, you read stock as the stock price.

You didn't answer the question, why wouldn't you diversify your investment, particularly as you are relying on such a long term payoff.

[SailorRob]

Really is that what he was suggesting? No kidding.

Value of housing stock has everything to do with debt. Perhaps in your eagerness to defend OCA and cut off any questions at the pass, you read stock as the stock price.

You didn't answer the question, why wouldn't you diversify your investment, particularly as you are relying on such a long term payoff.

Value of housing stock nothing to do with it, whoever values it will be wrong.

Remember these morons value the billion dollar float as a liability!

It's the net future cash flows the asset produces that matters.

I don't disagree with the theory but I know OCA far better and it's very likely cheaper and as Baa_Baa pointed out, smaller.

[Mrbuyit]

It is already a cash generating machine.

.

not for shareholders it isn't:).

[ValueNZ]

not for shareholders it isn't:).
You're confusing the market quoted price with the businesses cashflows.

[SailorRob]

not for shareholders it isn't:).

See ValueNZ post

[Balance]

You're confusing the market quoted price with the businesses cashflows.

Do you know how to read a cash flow statement?

Try page 19 : http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/422074/407731.pdf

OCA has been running cashflow deficits - funded by ever increasing debts.

[mistaTea]

Do you know how to read a cash flow statement?

Try page 19 : http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/OCA/422074/407731.pdf

OCA has been running cashflow deficits - funded by ever increasing debts.

Yes, ultimately the CF statement tells the story.

With debt (excluding ORA's) sitting a touch over $600M and the market cap hovering around $400M... all other things considered with the economy, staff shortages, regulatory risk, higher interest rates etc etc...

With the company being valued at an EV of around $1B, I don't think one can argue that OCA is way undervalued.