Australian (ASX) Stock Market Forum

HLI - Helia Group

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Rainman said:
If it is a bargain at $2.44, it will be even more of a bargain at a lower price.
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Who says that it is a bargain? that is just your opinion.

I would be asking if it is such a good value buy now why is the rest of the investment community not getting behind it and pushing the price up? but rather the price has been pushed down.

Obviously not everyone is sharing your enthusiasm for this company.

The numbers only tell half the story always remember that...
 
Rainman said:
I couldn't comment on the value of gold stocks. But I know a little bit about insurance.

For any of you who are yet to be convinced that GMA is probably one of the most undervalued companies currently trading on the ASX, you might benefit from a post by a guy called dannyboyLIAC who is a member on the forum Hot Copper. He has written on GMA and has crunched the numbers. He also knows the mortgage insurance business like the back of his hand.

His post on GMA, apart from being quantitatively compelling, confirms my initial belief that, fundamentally, GMA's undervaluation is due to ignorance of the mortgage insurance business. That ignorance has bred fear. But fear, thankfully, brings opportunity.
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I agree with the valuation. I think GMA is a bargain as well but I'm afraid of one uncertainty.

What's your opinion on the likely effect on GMA if a housing market crash or correction occurs?
 
Triathlete said:
Who says that it is a bargain? that is just your opinion.

I would be asking if it is such a good value buy now why is the rest of the investment community not getting behind it and pushing the price up? but rather the price has been pushed down.

Obviously not everyone is sharing your enthusiasm for this company.

The numbers only tell half the story always remember that...
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Stick to your knitting, my friend. You're a technical analyst guy. You're not competent to comment on valuation - with respect.
 
Tooth Faerie said:
I agree with the valuation. I think GMA is a bargain as well but I'm afraid of one uncertainty.

What's your opinion on the likely effect on GMA if a housing market crash or correction occurs?
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I think the fear of a "housing market crash" in Australia is largely influenced by conceptions of the US subprime crisis that occurred in 2007 and 2008. But if you understand the causes of the US subprime crisis, you will see why such a meltdown did not spread to Australia at the time and why it will not happen in Australia in the foreseeable future.

The US subprime crisis was due to many factors - too many to go into here. But chief among them were:

1. slack underwriting standards (and in many cases outright fraud);

2. loans being made for 100% of property values where property values were already grossly inflated;

3. securitization which allowed those underwriting crap mortgages to get them off their books;

4. the failure of the ratings agencies to properly investigate what they were rating;

5. the peculiarity under US law where mortgage claims losses cannot be pursued, making walking away from a mortgage almost consequence-free for the defaulting mortgagor.

We have point 3 above in Australia. I don't believe that we have point 2 and we certainly don't have points 1, 4 or 5.

I don't mean to suggest by this that we won't see an uptick in mortgage defaults in Australia, particularly in the mining states. But once you understand GMA's business, factor in the enormous size of its investment portfolio and realize that it would really take a US-style subprime mortgage crisis (which is simply not going to happen in Australia) to materially weaken GMA, then you will see that all the current hysteria about GMA and the Aussie housing market is just that - hysteria.
 
Rainman said:
Stick to your knitting, my friend. You're a technical analyst guy. You're not competent to comment on valuation - with respect.
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See Rainman you jump to conclusions...I always start my analysis with the companies Fundamentals,and only then do I do the technicals to ensure myself that the fundamentals are being supported....I have seen too many companies that had great looking Fundamentals only to go out of business.....with respect.
 
Rainman said:
I think the fear of a "housing market crash" in Australia is largely influenced by conceptions of the US subprime crisis that occurred in 2007 and 2008. But if you understand the causes of the US subprime crisis, you will see why such a meltdown did not spread to Australia at the time and why it will not happen in Australia in the foreseeable future.

The US subprime crisis was due to many factors - too many to go into here. But chief among them were:

1. slack underwriting standards (and in many cases outright fraud);

Think you will found the same situation here, our acceleration of credit in Oz is not based on fundamentals

2. loans being made for 100% of property values where property values were already grossly inflated;

95% LVR's, Low Doc Loans and the truly big one IO only, a significant part of the mortgage market

3. securitization which allowed those underwriting crap mortgages to get them off their books;

4. the failure of the ratings agencies to properly investigate what they were rating;
And how is different here

5. the peculiarity under US law where mortgage claims losses cannot be pursued, making walking away from a mortgage almost consequence-free for the defaulting mortgagor.
This is the one that pisses me off the most and clearly shows your lack of research on this matter. You will find less than 12 States in the USA have non recourse loans

We have point 3 above in Australia. I don't believe that we have point 2 and we certainly don't have points 1, 4 or 5.

I don't mean to suggest by this that we won't see an uptick in mortgage defaults in Australia, particularly in the mining states. But once you understand GMA's business, factor in the enormous size of its investment portfolio and realize that it would really take a US-style subprime mortgage crisis (which is simply not going to happen in Australia) to materially weaken GMA, then you will see that all the current hysteria about GMA and the Aussie housing market is just that - hysteria.
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GMA looks like an excellent company to go short on, given we are the most highly indebted nation per capiter in the western world and how much lower can IR's go, not much.

Good luck with your valuations, I stick with trend following and charts, the market does what it does.
 
Triathlete said:
See Rainman you jump to conclusions...I always start my analysis with the companies Fundamentals,and only then do I do the technicals to ensure myself that the fundamentals are being supported....I have seen too many companies that had great looking Fundamentals only to go out of business.....with respect.
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I'd be interested in knowing the names of those companies which you say had "good looking fundamentals" but then went out of business.
 
Ok, satanoperca, so you think Australia is headed for a US-style mortgage meltdown based on some superficial resemblance that you find between the current housing market in Australia and that which existed in the US between 2003 to 2007. How about backing that up with research?

In relation to the contribution of non-recourse loans in some US states to the subprime crisis, you say that less than 12 US states have laws making loans non-recourse. Firstly, you're wrong. It is 12 states.

Secondly, it is interesting that you did not name the states. Which states are they? They are Alaska, Arizona, California, Iowa, Minnesota, Montana, Nevada, North Carolina, North Dakota, Oregan, Washington and Wisconsin. And which US states were the epicentre of the subprime crisis? California, Arizona and Nevada.

Now it is true that Nevada only introduced laws forbidding lenders recourse on defaulted mortgages in 2009 (see here: https://www.cga.ct.gov/2010/rpt/2010-R-0327.htm). But whether the law had been in place in Nevada prior to 2007 or after is irrelevant. The effect of it is the same: lenders cannot recover from defaulting mortgagors.

satanoperca said:
GMA looks like an excellent company to go short on, given we are the most highly indebted nation per capiter in the western world and how much lower can IR's go, not much.
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Do it then. And be sure to share with us your success.
 
Rainman said:
Ok, satanoperca, so you think Australia is headed for a US-style mortgage meltdown based on some superficial resemblance that you find between the current housing market in Australia and that which existed in the US between 2003 to 2007. How about backing that up with research?

In relation to the contribution of non-recourse loans in some US states to the subprime crisis, you say that less than 12 US states have laws making loans non-recourse. Firstly, you're wrong. It is 12 states.

Secondly, it is interesting that you did not name the states. Which states are they? They are Alaska, Arizona, California, Iowa, Minnesota, Montana, Nevada, North Carolina, North Dakota, Oregan, Washington and Wisconsin. And which US states were the epicentre of the subprime crisis? California, Arizona and Nevada.

Now it is true that Nevada only introduced laws forbidding lenders recourse on defaulted mortgages in 2009 (see here: https://www.cga.ct.gov/2010/rpt/2010-R-0327.htm). But whether the law had been in place in Nevada prior to 2007 or after is irrelevant. The effect of it is the same: lenders cannot recover from defaulting mortgagors.



Do it then. And be sure to share with us your success.
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You make me laugh Rainman. You imply the whole of the states and I am out by less than 5%.

Seen your type many times on this forum. You need to proves to yourself your investment worth, I do not.

Good Luck living the dream.
 
satanoperca said:
... You imply the whole of the states and I am out by less than 5%.
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You really need to bone up on your knowledge of the US subprime crisis. The subprime crisis did not occur in every state in the US. For example, the New England states were hardly touched by it. The subprime crisis occurred principally in California, Arizona, Nevada and Florida. Three of those states had or now have laws preventing recourse by lenders against defaulting mortgagors. What is your point?

satanoperca said:
You need to proves to yourself your investment worth, I do not.
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My friend, I have zero interest in proving anything to you.
 
Rainman said:
You really need to bone up on your knowledge of the US subprime crisis. The subprime crisis did not occur in every state in the US. For example, the New England states were hardly touched by it. The subprime crisis occurred principally in California, Arizona, Nevada and Florida. Three of those states had or now have laws preventing recourse by lenders against defaulting mortgagors. What is your point?



My friend, I have zero interest in proving anything to you.
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:eek:

My point was don't make grand statements without detail. Seems you have found wiki, all power to you.

Hope it doesn't rain tomorrow.So easily baited. Hate to be proven wrong or dare I say to question your thoughts or beliefs.
 
Rainman,

Bargain to be had today, even cheaper than yesterday.

The only thing that might save it in the short term is the gap downs that need to be filled.

From purely a charting view point, there is nothing to suggest that this stock will reverse and start trending up again no matter what the fundamentals say.

Happy to be proven wrong
 
satanoperca said:
Rainman,

Bargain to be had today, even cheaper than yesterday.

The only thing that might save it in the short term is the gap downs that need to be filled.
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Is it really that hard to provide commentary on the chart without taunting people with different views or methods?

Rainman has provided plenty of arguments supporting his assertion. He's contributed to the richness of the content in this thread... regardless of whether he's right or wrong.

He's definitely forced me to take a closer look and try to learn more about GMA.

satanoperca said:
From purely a charting view point, there is nothing to suggest that this stock will reverse and start trending up again no matter what the fundamentals say.
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Technical analysis is all about seeing what others are doing through price / volume etc. If ALL market participants use solely technical analysis, there will NEVER be any reversal in price. The reversal in price action you see in the chart are results of people who don't subscribe to technical analysis. The chartist is trying to follow the trend set by someone else... someone who doesn't use charts. And the chartist will be following the new trend set by someone whom they have just mocked for not respecting the previous trend.
 
skc said:
Is it really that hard to provide commentary on the chart without taunting people with different views or methods?

Rainman has provided plenty of arguments supporting his assertion. He's contributed to the richness of the content in this thread... regardless of whether he's right or wrong.
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Big +1 on this skc. You know what? Any random can screenshot a chart with some lines or whatever. The only interesting thing, the thing that actually builds a discussion is the fundamentals. What can a technician add to the conversation? Pretty much nothing, only an analysis of what happened in the past and unscientific predictions about the future that are only relevant in the context of a broader trading system and completely useless in the idiosyncratic sense.

The trend is down? Wow thanks for nothing. Tell me something I can't figure out from looking at a 6 month price chart for 3 seconds.

NB: Saying this as an avid technician and quantitative analyst, before the chartists jump down my throat.
 
skc said:
Is it really that hard to provide commentary on the chart without taunting people with different views or methods?



Technical analysis is all about seeing what others are doing through price / volume etc. If ALL market participants use solely technical analysis, there will NEVER be any reversal in price. The reversal in price action you see in the chart are results of people who don't subscribe to technical analysis. The chartist is trying to follow the trend set by someone else... someone who doesn't use charts. And the chartist will be following the new trend set by someone whom they have just mocked for not respecting the previous trend.
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sinner said:
Big +1 on this skc. You know what? Any random can screenshot a chart with some lines or whatever. The only interesting thing, the thing that actually builds a discussion is the fundamentals. What can a technician add to the conversation? Pretty much nothing, only an analysis of what happened in the past and unscientific predictions about the future that are only relevant in the context of a broader trading system and completely useless in the idiosyncratic sense.

The trend is down? Wow thanks for nothing. Tell me something I can't figure out from looking at a 6 month price chart for 3 seconds.

NB: Saying this as an avid technician and quantitative analyst, before the chartists jump down my throat.
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I love you guys
I wont clutter this thread but will post another with regard to these comments.
 
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