HLI - Helia Group

[Rainman]

I am still here and watching with interest....

On the 22/09/15 I said I would not buy at this point in time because the stock was still trending down and could not tell how further it was likely to fall at that point the stock was at $2.41.As we now know it continued down till 30/09/2015 at $2.21 or 8%...

And after bottoming at $2.21, it is up over 20% in just over 2 months - 120% return on an annualized basis. If it was cheap at $2.40, it was even cheaper at $2.21.

Whether one bought the stock or not is a matter for the individual concerned. But I really don't understand the rationale behind an approach that agrees that the stock is fundamentally cheap (or at least not fundamentally expensive) but then waits until everybody starts buying, thereby making the stock more expensive, before one starts buying oneself.

By your reasoning, one should only buy a stock once it is really expensive because by then everybody is buying and pushing up its price.

 

[CanOz]

Hmmm, 20% off the low? I know of one trend following momentum system that would buy it if the index filter was all go....

 

[Rainman]

The more important point in all of this, of course, is merely that the recent performance of GMA should serve to humble those who claim to be able to see the future on the basis of some deciphering of lines on a chart. The future is uncertain and any claim that it's not is the snake oil of charlatans.

As every wise gambler knows, the race may not always be to the swift nor the battle always to the strong but that is the way to bet. Similarly, with undervalued stocks, the way to bet in the long run is to be long.

 

[Triathlete]

And after bottoming at $2.21, it is up over 20% in just over 2 months - 120% return on an annualized basis. If it was cheap at $2.40, it was even cheaper at $2.21.

Whether one bought the stock or not is a matter for the individual concerned. But I really don't understand the rationale behind an approach that agrees that the stock is fundamentally cheap (or at least not fundamentally expensive) but then waits until everybody starts buying, thereby making the stock more expensive, before one starts buying oneself.

By your reasoning, one should only buy a stock once it is really expensive because by then everybody is buying and pushing up its price.

I see what you mean but what I am looking for is confirmation that the move has started. If we go back over and do the sums at the time we started and the actual time I would have had my money exposed to the market I come out with this below:

Buy and Hold 22/09/15 @$2.41........
Closed and holding still 19/11/15 @ $2.87.........8 weeks = 114% annualised

Trading 06/10/15 @ $2.40.......
Exited trade and money in the bank 19/11/15 @ $2.76........6 weeks =130% annualised

So in this scenario the holding time was less for the trader and has a higher return at this stage with the money already in there account so if the price falls from here it is of no concern to the trader as his money is out of the market and if the stock continues higher which I hope it does based on your valuations they should get another chance to trade it when the time is right.

 

[Rainman]

...

Trading 06/10/15 @ $2.40.......
Exited trade and money in the bank 19/11/15 @ $2.76........6 weeks =130% annualised...

Where are you getting $2.76 from? On 19 November 2015 GMA's price closed at $2.87.

In any event, if you bought at $2.40 and sold at $2.76, that's a 13.05% return over 6 weeks. A 13.05% return over 6 weeks does not work out to be 130% annualised. It works out be about 113% annualised. Are you saying you earned the difference between 113% and 130%, i.e. 17%, in interest? In which bank?

 

[Triathlete]

Where are you getting $2.76 from? On 19 November 2015 GMA's price closed at $2.87.

In any event, if you bought at $2.40 and sold at $2.76, that's a 13.05% return over 6 weeks. A 13.05% return over 6 weeks does not work out to be 130% annualised. It works out be about 113% annualised. Are you saying you earned the difference between 113% and 130%, i.e. 17%, in interest? In which bank?

My mistake with the date

Should have been exited on 16/11/2015 @ $2.76 as I showed on the chart I posted previously

$0.36/2.40 =15%

15%/ 6 weeks =2.5% a week

2.5% x 52 weeks = 130% annualised

I have attached the spreadsheet

 

[satanoperca]

Looking very shaky.

Wait until the sheepie realize that property just dosn't always go up and those 1000's of apartments sold off the plan aren't settled on.

Charts are useless if you don't look at them.

We must be getting closer to peak private debt.

 

[satanoperca]

And after bottoming at $2.21, it is up over 20% in just over 2 months - 120% return on an annualized basis. If it was cheap at $2.40, it was even cheaper at $2.21.

Where are you know Rainman, seems you got caught without an umbrella. The market must be wrong once again.

Shame you pissed off a valued contributor to this forum.

 

[Rainman]

Shame you pissed off a valued contributor to this forum.

Clearly, you can't be referring to yourself.

 

[satanoperca]

Still holding this undervalued stock, Rainman.

Even more undervalued since you did you evaluation on it.

Shame Tech/A has taken leave from the forum.

Cheero

 

[Rainman]

Ok I'll play
$1000
it's lower than $2.44 in 12 mths.
If I lose Joe gets a grand.
If you lose you send Joe a grand.

GMA closed at $3.10 on 23 May 2016 after earlier reaching a high of over $3.16.

In light of the proposed capital reduction and share consolidation, it is probably appropriate to draw a line under the bet that tech/a offered to make with me on 25 September 2015.

The return from the low on 25 September 2015 to the high on 12 May 2016 works out to be around 20% with the dividends and return of capital included. It's more, of course, if you annualise it.

Now, I hope this serves as a lesson to the newbies. That anyone with any experience of markets would offer to make a bet as to whether a stock that was as cheap as GMA was in the last quarter of 2015 and, what's more, was paying the enormous yield that GMA was paying (and has continued to pay by way of the recent return of capital to shareholders) in an environment where bond yields are barely above 2% shows you just how dumb some people are.

Oh, and before I forget... Tech/a, you can make out that cheque to my favourite charity and to your old school: Midvale, School for the Gifted.

 

[tech/a]

Is anyone else in this stock? On my calculations it is incredibly cheap and to all appearances a solid company.

I have been steadily building a position in it since it dropped below $2.70. It is now trading at just over 60% of book value.

So at this time anything under $2.70 is great buying.
You valued it at $4.50.

Stock reaches $2.81 and your crowing loudly.
Back to mid $2s and your silent.

THEN--------

GMA closed at $3.10 on 23 May 2016 after earlier reaching a high of over $3.16.

In light of the proposed capital reduction and share consolidation, it is probably appropriate to draw a line under the bet that tech/a offered to make with me on 25 September 2015.

The return from the low on 25 September 2015 to the high on 12 May 2016 works out to be around 20% with the dividends and return of capital included. It's more, of course, if you annualise it.

Now, I hope this serves as a lesson to the newbies. That anyone with any experience of markets would offer to make a bet as to whether a stock that was as cheap as GMA was in the last quarter of 2015 and, what's more, was paying the enormous yield that GMA was paying (and has continued to pay by way of the recent return of capital to shareholders) in an environment where bond yields are barely above 2% shows you just how dumb some people are.

Oh, and before I forget... Tech/a, you can make out that cheque to my favourite charity and to your old school: Midvale, School for the Gifted.

View attachment 66918

Price closes at $3.10 and a week later after you've waited to see if it goes higher----you clearly decide
the Fundamentals have changed---

In light of the proposed capital reduction and share consolidation, it is probably appropriate to draw a line under the bet that tech/a offered to make with me on 25 September 2015.

So GMA is no longer valued at $4.50---$3.10 is great value.

The lesson to be learned here is that ALL Analysis can change over time.
Currently technically GMA is STILL not a buy---hasn't been since Sept last year.
There is NOTHING here to be learned at all---YET.

This poster has been on about LONGTERM investing in undervalued instruments yet wants to make his point on minor short term peaks and troughs. Infact if you read back his case is compelling over a number of pages---even when faced with contrary argument. Now he is I think --Confused.

Joe has had a grand of mine---not the first---since early October---I don't mind supporting ASF.

Rainman on the other hand -------

ME

I await September and will note if in that time the stock is a technical buy.

Strange that at $2.70 its a great buy and at $3.10 its not!! (15% higher). Long way short of $4.50---my---how that's changed!!!

So what your saying Rainman is that the fundamentals have changed and you sold all your accumulated shares at $3.10---that's a great price and should be grabbed.

My personal opinion is that RM is so concerned about his $1000 and seeing the stock immediately returned to $2.60 ish after reaching $3.10 + he has hurriedly posted to appear vindicated---a week after it happened!!

Clever little Rainman??

Ill leave that to you the masses to form your own conclusions.

 

[kid hustlr]

omg hes back

 

[Ves]

Not sure why there's a need to bag the guy. I know Rainman is pretty arrogant Tech/a, but you too have been the same in some cases IMO. You're like a Fundie / Techie reverse of each other. Passionate, stubborn, ruthless, and call a spade a spade.

But hasn't this company paid out $0.532 per share (plus franking credits of $0.082 per share) or so in cash since the bet started?

Also issued shares got reduced in quantity by a multiple of 0.8555.

Think the bet was at $2.44.

So basically if you purchased at $2.44 you currently have the following:

$0.532 per share cash in the bank. Plus $0.082 per share in tax credits you can use against your taxable income.

And shares that are trading on the market at the equivalent of $3.22. This is calculated by dividing the current market price of $2.755 by the share consolidation multiplier 0.8555.

Unrealised market gain of $0.78 + $0.532 cash + $0.082 tax credits = $1.394 per share gain current.

$1.394/$2.44 = 57.1% return in about 7-8 months.

Not bad. I don't know if the current valuation is sustainable as I haven't looked at the fundamentals for a while, mind you. But those are the facts to date, whatever method you used to buy.

 

[skc]

Not sure why there's a need to bag the guy. I know Rainman is pretty arrogant Tech/a, but you too have been the same in some cases IMO. You're like a Fundie / Techie reverse of each other. Passionate, stubborn, ruthless, and call a spade a spade.

But hasn't this company paid out $0.532 per share (plus franking credits of $0.082 per share) or so in cash since the bet started?

Also issued shares got reduced in quantity by a multiple of 0.8555.

Think the bet was at $2.44.

So basically if you purchased at $2.44 you currently have the following:

$0.532 per share cash in the bank. Plus $0.082 per share in tax credits you can use against your taxable income.

And shares that are trading on the market at the equivalent of $3.22. This is calculated by dividing the current market price of $2.755 by the share consolidation multiplier 0.8555.

Unrealised market gain of $0.78 + $0.532 cash + $0.082 tax credits = $1.394 per share gain current.

$1.394/$2.44 = 57.1% return in about 7-8 months.

Not bad. I don't know if the current valuation is sustainable as I haven't looked at the fundamentals for a while, mind you. But those are the facts to date, whatever method you used to buy.

No this is incorrect. You've calculated the consolidation the wrong way.

Say you started with 4,000 shares @ $2.44 = $9,760 capital invested in Sept 2015, you return consists of:

+ 19.3c dividend per share = $772
+ 8.3c franking credit per share = $332
+34 capital return = $1,360

Your holding is consolidated into 4000 x 0.8555 = 3,422 shares. At current price of $2.76 stake is worth $9,445.

So total value = $9445 + $772 + $332 + $1360 = $11,909. Or ~22% on capital invested (as per Rainman's calculation).

And yes... all these back and forth are totally silly. It's was silly to start. It's still silly now. It's just silly all round.

 

[Ves]

No this is incorrect. You've calculated the consolidation the wrong way.

So I have!!! Thanks mate.

 

[Joe Blow]

There's nothing wrong with spirited debate but can I ask that everyone please resist the temptation to provoke, insult and attack others. It's not only completely unnecessary but makes reasonable discussion all but impossible.

For the sake of the thread, please stick to the topic at hand (i.e. Genworth Mortgage Insurance Australia).

 

[Value Hunter]

Rainman its good to see somebody else standing up for fundamental analysis and denouncing tea leaf reading a.k.a. technical "analysis" as they should.

 

[galumay]

The more things change, the more they stay the same.

 

[Rainman]

So at this time anything under $2.70 is great buying.
You valued it at $4.50.

Stock reaches $2.81 and your crowing loudly.
Back to mid $2s and your silent.

Tech/a, stop dodging the issue and distorting your original position.

On 25 September 2015, you wrote:

Ok I'll play
$1000
it's lower than $2.44 in 12 mths.
If I lose Joe gets a grand.
If you lose you send Joe a grand...

Your words.

The bet was not about whether GMA's stock price would dock with my valuation of it like a space shuttle docks with its space station.

The bet was, as you said above, that GMA would be lower than $2.44 in 12 months - and lower here meant, self-evidently, lower after factoring in dividends and, as it has turned about, the capital return and reduction of the share float.

Now, so far, the return from holding GMA from the time of the bet has been around 22%.

But you're right: perhaps I am being premature. We should wait until the close of the market on 25 September 2016. Perhaps GMA will end up giving up all the gains that it has managed to earn to date. I am prepared to do that.

One final point: this bet arose because of your dismissive attitude to my initial view that GMA was undervalued. I could marshall dozens and dozens of posts of yours on this forum where you have rubbished other members who have ventured opinions on stocks which you disagreed, typically in derogatory terms, were good investment candidates because the technical picture looked unfavourable.

You would do well to take that on board the next time you consider dismissing someone as an idiot for liking a stock that happens at that particular point in time to be out of favour.