Originally Posted by
Baa_Baa
There’s a lot of folks who after means testing don’t qualify for government subsidy, they pay the full whack direct to the ‘home’ and it ain’t cheap! They can’t escape that, if they can afford it they pay it, no option regardless of whether listed company or not.
Snoopy over simplifies the rest home business model which is odd considering his dogged deep dives into other companies of interest.
The fact that a company makes a loss on care could be looked at a loss leader or even at a pinch COGS for the other highly profitable revenue streams. I don’t really care, looking at the revenue and profits in Toto.
I also don’t buy into the short or even medium term fluctuations in property values, in the long run NZ wealth for many is built on a property investment model that always goes up in value over time and has no tax on capital gains, speaking of which, the RH business model is also the beneficiary of very favourable tax treatment. RH’s are a proxy property play.
The forecast for demand for these services is both startling as it is encouraging for long term investors. Follow the money.
The only fundamental concern I have is the risk of a changed regulatory environment to the detriment of the listed companies. But that’s not apparent and neither is the need for the listed companies to continue to provide essential care services, that otherwise the state would become liable for.
At the end of the day if you don’t like the industry model or the company models within it, or the risks real or perceived, just don’t invest in it. You won’t be missed imo.