CCP - Credit Corp Group

[Buffettology]

Don't worry ROE, annalivia is obviously not bright enough to come up with his/her own analysis. Why else would he/she plagiarize CAM's October NTA report and post it here changing a couple of key words to make it look like his/her own? See attachment end of page 2 and start of page 3. I guess you get desperate when watching the value of your investments tumble.

ha ha ha ha ha ha ha ah ah ah aha ha aha, I once had a guy do that to me in a debate also. Found out he got his analysis off E-trade by Huntleys!

 

[ROE]

Don't worry ROE, annalivia is obviously not bright enough to come up with his/her own analysis. Why else would he/she plagiarize CAM's October NTA report and post it here changing a couple of key words to make it look like his/her own? See attachment end of page 2 and start of page 3. I guess you get desperate when watching the value of your investments tumble.

Ouch

Obviously they preach Benjamin Graham and Warren Buffett but not factoring in margin of safety just in case more brown sh*t hits the fan.....

Here is my analysis

In the world full of employment like we have here... it's very difficult to retain debt collector staffs.

Debt collection is a sh*t job, I wouldn't want to do it unless there are absolutely no job around.

Imagine you turn up to someone house and try to collect debt, you look pretty damn hostile to these people and they are not going to treat you nicely. You soon get depress and fetch up and look for other jobs and being a world full of jobs, it shouldnt be too hard.

and CCP will continue to train and replace high turn over staff and that going to cut into their bottom line.

Amen

 

[ROE]

I just finished read the article and according to the article if they bought more in Oct-Nov 2007 .. they would lost another 25% .... ouch that hurts.

I would talk to some of CCP collection staffs if these guys made time to talk to the CEO..The staff tell a much better story if i was to do a scuttle butt like Philip Fisher

I hope for their sake they are "vaguely right than precisely wrong" just like Uncle Warren always said

 

[dhukka]

Agree ROE, the turnover must be high in this line of work. Surely you can't put up with that chit for too long.

I like the business but when the downgrade came, I didn't feel the need to be a hero and rush to buy, particularly given the overall market climate. Clime obviously felt they were getting a bargain. From memory I think they currently value CCP around $6.40 or so. If they were loading up when the stock was trading in the $5's surely they must be loading up more now if they believe their own valuation.

I'm happy to wait until the half year report. If the company reiterates FY08 guidance and says their staffing problems are behind them I think $4 provides a decent margin of safety. However, if staffing problems linger and earnings are downgraded again, this stock could get a whole lot cheaper.

 

[annalivia]

OK. You caught me with my pants/dress down.
Some of my best work is plagarism. It did get a nice little debate going and I am glad to see people discussing things other than technical analysis on ASF.
IMHO(more H than normal) this is still a compelling buy. This is an outstanding company with one profit downgrade. Reminds me of Buffett buying AMEX when the salad oil scandal hit. The stock keeps going down and I keep buying it. Time will tell if I am an idiot or not. Anyway I promise not to cut and paste and come up with my own line of discussion from now on.

AL

"Be greedy when others are fearful" (Warren Buffett not Annalivia)

 

[dhukka]

OK. You caught me with my pants/dress down.
Some of my best work is plagarism. It did get a nice little debate going and I am glad to see people discussing things other than technical analysis on ASF.
IMHO(more H than normal) this is still a compelling buy. This is an outstanding company with one profit downgrade. Reminds me of Buffett buying AMEX when the salad oil scandal hit. The stock keeps going down and I keep buying it. Time will tell if I am an idiot or not. Anyway I promise not to cut and paste and come up with my own line of discussion from now on.

AL

"Be greedy when others are fearful" (Warren Buffett not Annalivia)

That's big of you to own up to it anna. FWIW I think CCP is a good business but as stated above I'll err on the side of caution until we see what they have to say at the half year. If it's positive, the stock could pop. If not, you might get a chance to average down some more.

Agreed it's nice to get a fundamental discussion without the tea leave readers. However it is amusing watching techies get dubfounded when their imaginary support lines get smashed. When you speculate on stocks without any reference to their value, you're bound to get stung.

As Mr Buffet said 'when the tide goes out, you get to see who's been swimming naked'

 

[Buffettology]

However it is amusing watching techies get dubfounded when their imaginary support lines get smashed.

LMAO!!!!!!!!!

However, I still think there might be something in using these supports in order to apply stop losses and buy in even cheaper...............

Havent had enough experience looking out for these supports yet and using them as a stop loss guide.

Dhukka or ROE have any opinion on this?

 

[Buffettology]

Cant beat technical backed by fundamental research

Ah, here we go, I guess ROE at least beleives in technical to spot the trends.

However, do you apply a stop loss ROE at all on your investments?

I guess if we didnt bother applying technical analysis at all (spotting trends) and simply bought in at our trigger levels (price at which we beleive is a good deal and undervalued), then we might as well all just sell naked put options.

Interesting food for thought, thats for sure!

 

[ROE]

Ah, here we go, I guess ROE at least beleives in technical to spot the trends.

However, do you apply a stop loss ROE at all on your investments?

I guess if we didnt bother applying technical analysis at all (spotting trends) and simply bought in at our trigger levels (price at which we beleive is a good deal and undervalued), then we might as well all just sell naked put options.

Interesting food for thought, thats for sure!

No I dont .. I usually get out when I think the stock is fair/over value (sometimes I am right and sometimes I am wrong) but I dont regret it as that how I like to play and lock my profit in Classic case that cost me a bit is Flight center (FLT)

I bought in around $10 or so ....private equity bit for $17 but failed..
then it hovering around 17-18 ...I think this stock is fair value and I made decent profit and private equity only prepare to pay $17 bucks for it so I guess this is all it worth but in my head I think it worth around $20...

but then I have doubt because the Private equity guys only want to pay $17.00.

I sold out around $18.70 only to see it hits $31 a few months later
all in space of 14-15 months.

that is a wong case, a good case is IFM I spot the trend and get out at 89 cents and its now 40 something cents
time to buy it again.

PS: I found charting is very cool to spot someone big about to exit the stock..if that happen I join them...because by the time they finish, the stock is way way lower and then I buy back in when they finished exiting.

I dont think I'm a techie guy or any good at charting and I dont use hundred of indicates they have.. I just use a few I know how to use well and that is all I know...

I dont really have particular tactics or anything special ...sometimes I just buy because I'm so sure of the stock and regardless if some big guy is selling or buying i still do..other times I'm not 100% certain, I consult the charts
and other information to reaffirm my decision and it is not always good news but on average it work out very well.

 

[dhukka]

LMAO!!!!!!!!!

However, I still think there might be something in using these supports in order to apply stop losses and buy in even cheaper...............

Havent had enough experience looking out for these supports yet and using them as a stop loss guide.

Dhukka or ROE have any opinion on this?

Buffettology,

Stop losses don't figure into my strategy because I don't trade stocks. Traders are not concerned with value. They don't need to be 'right.' In fact they can get it wrong more times than they get it right and still make money by cutting losses short (using stop losses) and letting profits run.

I, and I think ROE and probably yourself are trying to get it right or at least approximately right. If we do get it about right there is no need for stop losses. If I used a stop loss it would mean I am not sure, and if I'm not sure, I won't invest. Doesn't mean I can't be wrong of course.

 

[Buffettology]

Yeh Dhukka I agree. However, do you use any technical analysis such as ROE simply to spot trends before you buy? I mean, if you are about to buy a stock at your trigger price, but it appears its on a downtrend and you could get it cheaper, do you then hold off, or simply have a trigger price and execute once it reaches that trigger?

I am more like you ROE than Buffett, in that once I feel a company I am holding is above fair value, I sell out and take my profits. Like you, it has meant I miss out sometimes, but the majority of times I end up being able to buy that stock even cheaper only months down the track. However, sometimes I end up buying and selling within the year, which is bad for my tax!

Have any of you guys looked into naked put options and any thoughts? This of all options strategies I have read (not many), seems the most common sense for the value investor such as ourselves. Get to take a premium the majority of times and if the stock does hit a good price, get to own the stock instead. Income generation combined with value investing all at once and a good idea if its taking a while for a stock price you find applicable to come up (down in real terms).

 

[chops_a_must]

Have any of you guys looked into naked put options and any thoughts? This of all options strategies I have read (not many), seems the most common sense for the value investor such as ourselves. Get to take a premium the majority of times and if the stock does hit a good price, get to own the stock instead. Income generation combined with value investing all at once and a good idea if its taking a while for a stock price you find applicable to come up (down in real terms).

I've often wondered why value investors don't do this. Makes perfect sense to me.

The problem is you'll need to pony up serious money on a lot of blue chips if you do it. Otherwise, would look great to me from a value investor's perspective. Earn the premium if a stock you like doesn't get your preferred price. And the premium paid to you effectively makes the stock cheaper if you are excercised. Can't be guaranteed to be excercised when you want though...

Options writing strategies to me make a hell of a lot of sense especially for value investors/ buy and holders.

 

[Buffettology]

I've often wondered why value investors don't do this. Makes perfect sense to me.

The problem is you'll need to pony up serious money on a lot of blue chips if you do it. Otherwise, would look great to me from a value investor's perspective. Earn the premium if a stock you like doesn't get your preferred price. And the premium paid to you effectively makes the stock cheaper if you are excercised. Can't be guaranteed to be excercised when you want though...

Options writing strategies to me make a hell of a lot of sense especially for value investors/ buy and holders.

What do you mean by pony up serious money on a lot of blue chips? As in, keep that aside encase the option is exercised and you have to buy the stock?

The big factors here though, as you say, are that it is not excercised when you want and also that if the stock is in a serious downtrend (announces bad profit and the stock plummets), you end up with a stock of which the value has changed and your new rating maybe below your strike price. Your not as free to make improvised decisions, but thats your write-off for the premium.

What are options writing strategies? As in selling options?

 

[ROE]

I think everyone has their way of doing thing and I dont think there is a only one way or better way..Which ever way you are comfortable with stick with it if it works well. I like thing, dont fix if it aint broke

I am not a sophisticate investors and I dont like to involve myself in complex thing like derivatives such as options and CFDs when I don't have too.

I aint saying it bad or good but it's not for me.. I did the research and I did a fair bit of reading and I come to the conclusion too much un-necessary risk for me.

I just go slow and one step at a time... if I can make 10% this year, 15% the next or 5% the year after I'm very happy with it as long as I dont go backward.

My rule number 1 is NEVER lose capital.

 

[Buffettology]

Yeh, I dont think options (at least the simple strategies I have read) are all that risky (infact far less risky than stocks, other than buying Deep In the Money call options). But naked put selling and spreads (either trying to get the volatility edge or credit spreads) are not anymore risky than value investing. Either way, I am always looking out for ways to increase my investment returns, though I do beleive fundamentals are of paramount importance and will always be my key. Thats why the only reason I would ever buy any kind of option would be DITM calls and I would make sure they are LEAPS (of around 3 years, so fundamentals have time to work their magic on the price). Hope I have got all my terms correct

As far as returns, I look to always beat the index. I just cant take opportunity cost out of my mind, and if bank interest or the index are beating my returns, then I would be piZZed, considering the time and effort I put in myself (though I enjoy it). Thank god to this day I am still far superceeding both.

 

[chops_a_must]

What do you mean by pony up serious money on a lot of blue chips? As in, keep that aside encase the option is exercised and you have to buy the stock?

The big factors here though, as you say, are that it is not excercised when you want and also that if the stock is in a serious downtrend (announces bad profit and the stock plummets), you end up with a stock of which the value has changed and your new rating maybe below your strike price. Your not as free to make improvised decisions, but thats your write-off for the premium.

What are options writing strategies? As in selling options?

I mean, on a single options contract for a $30 stock, you would need to have 30k to not get into a margin call.

A far better strategy, I think, for value investors would be to pay for the stock in cash, and write covered calls at the value/ price you think is fair value, and that you would agree to sell at. At least to start off with. It's what I'm intending to do for stocks that aren't paying dividends, but that I don't necessarily want to sell.

Options writing strategies are when you initiate the option trade itself. So you accept the risk of being excercised. You sell to open a call, or you sell to open a put. I think that's how it works. I am very very much a noob on this topic, so you wont be that far behind where I am here!

I thoroughly agree with your other sentiments expressed here though. It's all about beating the index, inflation and achieving positive returns each year. That means using multiple means and strategies, and if that involves passive income alongside dividends, then great. It doesn't matter how you get there IMO, by whatever means, so long as that is the goal, and that is what is continually worked towards and achieved. To me that is success in the market.

 

[Buffettology]

I mean, on a single options contract for a $30 stock, you would need to have 30k to not get into a margin call.

A far better strategy, I think, for value investors would be to pay for the stock in cash, and write covered calls at the value/ price you think is fair value, and that you would agree to sell at. At least to start off with. It's what I'm intending to do for stocks that aren't paying dividends, but that I don't necessarily want to sell.

Options writing strategies are when you initiate the option trade itself. So you accept the risk of being excercised. You sell to open a call, or you sell to open a put. I think that's how it works. I am very very much a noob on this topic, so you wont be that far behind where I am here!

I dont get the first part, a margin call, dont even get what that means? For a $30 stock, the most you would need is 100X so 3k isnt that right? I mean if you sell the naked put option and it falls to zero, that is as far as your downside can go, 3k? After you are exercised and you end up with 100 shares in a stock worth nothing.

HA HA, funny you should mention covered calls, this is the part I just read and is my favourite of all the strategies. Setting the strike price at fair value, exactly what I thought when reading it and is something I will be doing a LOT more of once I set up an options trading account.

Isnt what you just said, about options writing strategies, selling to open a call or selling to open a put, just simply selling call or put options?

Yeh, this is definately all new lingo and does my head in sometimes thinking about it! As was in the thread by WayneL, I need this to become unconciously competent so I just do it by instinct. Until then, I will have to keep processing it everytime I think of the different strategies.

 

[Freeballinginawetsuit]

Good discussion Chops and Buffet...........the bank manager will love ya also (they always like a passive income stream off an asset base).

Cheers

 

[chops_a_must]

I dont get the first part, a margin call, dont even get what that means? For a $30 stock, the most you would need is 100X so 3k isnt that right? I mean if you sell the naked put option and it falls to zero, that is as far as your downside can go, 3k? After you are exercised and you end up with 100 shares in a stock worth nothing.

HA HA, funny you should mention covered calls, this is the part I just read and is my favourite of all the strategies. Setting the strike price at fair value, exactly what I thought when reading it and is something I will be doing a LOT more of once I set up an options trading account.

Isnt what you just said, about options writing strategies, selling to open a call or selling to open a put, just simply selling call or put options?

Yeh, this is definately all new lingo and does my head in sometimes thinking about it! As was in the thread by WayneL, I need this to become unconciously competent so I just do it by instinct. Until then, I will have to keep processing it everytime I think of the different strategies.

Yep. I took a first bite at learning all this last March. Decided to use futures eventually instead, because options did my head in at first. So keep at it, it will eventually come. It's like when I learn very complex philosophy. If I don't get it straight up, I will go away for a few days or whatever, think it through, and when it's not at that overwhelming level, re-think it. So it is with this. I'm pretty sure options writing would be exactly what you would be looking for, so spending the time on it will be well worth it.

I think in Australia, options contracts are in 1000 lots. So 1000x30 = 30k.

A margin call is when you don't have enough collateral to secure the debt. So, you don't have enough cash, or your asset level, i.e. stocks has fallen too low to cover the intended expenditure.

The example you posted, you would lose 30k (if my contract sizes are correct), this is why there is always a larger premium paid for puts than for calls. There is always a stronger motive to excercise puts than there is calls.

I think you are getting confused with selling to open (writing) an options contract, with simply selling an options contract. When you sell to open a contract, you haven't previously bought a contract. When you sell a contract, you already have bought a contract, which you are then selling, one in which you did not write. I think that is where you may be getting confused. If I have it correct myself!

Great minds with the covered calls... lol! It is the most popular basic strategy, or hedging strategy, I think. It's quite good for my learning, writing all this out actually. Hopefully you can get a toe hold on all this, because when you begin to learn complex things, it's mighty satisfying.

 

[Buffettology]

Yep. I took a first bite at learning all this last March. Decided to use futures eventually instead, because options did my head in at first. So keep at it, it will eventually come. It's like when I learn very complex philosophy. If I don't get it straight up, I will go away for a few days or whatever, think it through, and when it's not at that overwhelming level, re-think it. So it is with this. I'm pretty sure options writing would be exactly what you would be looking for, so spending the time on it will be well worth it.

I think in Australia, options contracts are in 1000 lots. So 1000x30 = 30k.

A margin call is when you don't have enough collateral to secure the debt. So, you don't have enough cash, or your asset level, i.e. stocks has fallen too low to cover the intended expenditure.

The example you posted, you would lose 30k (if my contract sizes are correct), this is why there is always a larger premium paid for puts than for calls. There is always a stronger motive to excercise puts than there is calls.

I think you are getting confused with selling to open (writing) an options contract, with simply selling an options contract. When you sell to open a contract, you haven't previously bought a contract. When you sell a contract, you already have bought a contract, which you are then selling, one in which you did not write. I think that is where you may be getting confused. If I have it correct myself!

Great minds with the covered calls... lol! It is the most popular basic strategy, or hedging strategy, I think. It's quite good for my learning, writing all this out actually. Hopefully you can get a toe hold on all this, because when you begin to learn complex things, it's mighty satisfying.

Yeh, I definately know what you mean about the going away and letting it sink in. I used to do the same at Uni with Economics when it became really complex, especially with trade models.

X1000, damn, ah well, I wouldnt buy 100 contracts anyways. Wont have to worry about the margin call, will only ever use what I actually have in my bank, and fortunately that is a decent amount.

Why is there a stronger motive to exercise puts than calls? I thought price came down to those 6 factors, strike price, volatility, contract length etc etc.

No idea what you mean about writing a contract. Isnt that what market makers do? We just buy or sell the contracts.......ha ha, my brain is fried, 12 hours straight of options today has done my head in.

Yeh, its slowly all sinking in, well at least just the basic strategies and terms. I think I have them downpat now, just need to reread as I start implementing them down the tack.

Ive only started learning about options 4 days ago I think now, so still a lot to learn!

Oh and as for writing it out it all out, thats why with every post now I try and relate an options strategy to it if I can, just so I can keep writing it out and let it sink in.

Think its about time for bed! What a way to spend a Saturday night he he, the joy of us investment nerds!