VET - Vocation Limited

[McLovin]

And ACO is still suspended. Have you ever seen a sector crash and burn so bad and so comprehensively in such a short period of time.

It goes back to how silly our government is with their (our) money. The intention was good... the governance and control thereafter = non existent. Every men and their dog saw the scam and went hard with it... then dump it onto the public with a fistfull of IPOs.

Correct on that, mate. The government considered that even after the profit motive was introduced the industry would be driven by altruism and a desire to teach. What happened was the cowboys got in and decided hairdressers needed to do a course on touch-typing and tree surgery "to complement their skill set".

The implosion has been pretty spectacular.

I think my main learning here is a reminder that when gambling the house nearly always wins!

Sorry to hear you lost out, gal.

 

[McLovin]

And ACO is still suspended. Have you ever seen a sector crash and burn so bad and so comprehensively in such a short period of time.

It goes back to how silly our government is with their (our) money. The intention was good... the governance and control thereafter = non existent. Every men and their dog saw the scam and went hard with it... then dump it onto the public with a fistfull of IPOs.

Almost forgot ASH! Down 66% since the start of October.

 

[galumay]

Sorry to hear you lost out, gal.

Should probably have taken the money to the casino - would have had more fun losing it there!

 

[skc]

Hmmm...time to revisit my decision journal and see if there is some learning away to take from this experience.

First point is that my rule of only applying 'play' money I am happy to lose to speccy, currently unprofitable businesses saved me from real harm.

In my DJ I noted that the "Catastrophic Risk" was very real due to debt covenants and litigation, so I sized my position understanding there was a very real risk of total capital loss, but I also obviously saw some upside, if it could trade its way back from the brink.

I think my main learning here is a reminder that when gambling the house nearly always wins!

You can certainly choose not to be involved in this type of binary punts in the future... but I don't think it's worth being too upset with your decision. Noting the fact that you recognised it was binary. You saw an opportunity and assuming you made sensibly sized bet - it was the correct course of action.

 

[galumay]

You can certainly choose not to be involved in this type of binary punts in the future... but I don't think it's worth being too upset with your decision. Noting the fact that you recognised it was binary. You saw an opportunity and assuming you made sensibly sized bet - it was the correct course of action.

Thanks skc, your points lead to another observation, my position size was so small that even if it had recovered, it would have needed to be a multi bagger to really make any meaningful money from. So that makes me wonder even moe about the value of binary punts like VET.

 

[Faramir]

Damm you VET. Why were you so tempting and seducing for a stock purchase? As you hovered around 12c-20c mark, I thought I could buy just $500 worth. Let's wait until you drift below 10 cents first. You even infected me with FOMO because this year as each "good" news appeared - you said "I am going to fix myself - better get in now!"

How I managed to think "there must be some temporary bad news to send the price below 10 or 9 cents"? I will get in there. Well - the bad news was voluntary administration. It sent the price to nothing. Maybe the management fought as hard as they could to keep you alive and your staff employed.

Thankfully I brought nothing. There are many contributors to this thread I admire - was I thinking like them. VET - the great turnaround story of year 2018 (or years 2019? 2020? 2021?)

Why must NVT be punished for your sins? I think maybe it was Victorian Government, etc sins for setting poor auditing standards initially?

I feel for the staff and the students. What would they do now? I missed the good old days of TAFE.

Irrelevant and trivial rant over.

 

[galumay]

Can anyone tell me the process with writing off my failed punt on VET? Do I have to wait for some event to occour before I can record a capital loss?

Its the first time I have had a company I held shares in go under so I am unaware of the process from here!

 

[McLovin]

Can anyone tell me the process with writing off my failed punt on VET? Do I have to wait for some event to occour before I can record a capital loss?

Its the first time I have had a company I held shares in go under so I am unaware of the process from here!

The receiver needs to declare the shares have no value, or you wait until the court dissolves the company. Bit of a pain in the a$$.

 

[skc]

The receiver needs to declare the shares have no value, or you wait until the court dissolves the company. Bit of a pain in the a$$.

Or you can make an off market transfer of shares to someone like delisted.com and claim the loss earlier.

http://www.delisted.com.au/sell-worthless-and-other-securities

 

[McLovin]

Or you can make an off market transfer of shares to someone like delisted.com and claim the loss earlier.

http://www.delisted.com.au/sell-worthless-and-other-securities

Ha! Never knew about that. I thought you couldn't transfer shares in a company under admin. Guess I was wrong.

 

[DeepState]

As did our incompetent, syncophantic, external auditor.

You got off lightly Steve. All the best with your new job as a cost centre.

The ASIC actions against Dawkins and Hutchinson remain ongoing.

....not that I am particularly bitter and twisted about this episode of my investment experience...

 

[galumay]

You got off lightly Steve. All the best with your new job as a cost centre.

The ASIC actions against Dawkins and Hutchinson remain ongoing.

....not that I am particularly bitter and twisted about this episode of my investment experience...

Thanks for reminding me of my disasterous investment with VET,.... not!

 

[Value Hunter]

Reading this thread I still cannot believe Deepstate expended all of that time and brainpower to take a 0.1% position in the stock. I read his explanation for it but it still baffles me. Deepstate, you said you work 300 days a year. Do you not think it would be better to get rid of all positions under 0.5% and rebalance (concentrate) your portfolio a little so you can have more free time? Or are you that addicted to markets?

I am of the opinion that research of this nature is mentally draining and if you overwork your brain the quality of analysis will go down (and you will likely burn yourself out eventually). To me life just seems far too short to bother taking 0.1% positions.

Personally I have a rule I developed where I do not buy into stocks with questionable management no matter how apparently enticing the valuation/financials. Sometimes this has meant I missed out, other times I dodged a bullet. Overall though the rule has served me well.

I remember years ago there was an audio presentation with Fleetwood's (FWD) managing director and during question time an analyst asked him about the company doing a share buyback. He said he would have loved to do a buyback but the company was not in a financial position to do so but that the stock was cheap and he said something to the effect of "At these prices I encourage everyone to go out and buy shares in the company". That just seemed like such an overly promotional thing to say. That combined with a few other red flags at the time meant I avoided the stock (which subsequently more than doubled).

Another example many years ago I attended a microcap conference where Blue Sky was presenting. I spoke to the managing director after the presentation and he just struck me based on a number of comments he made as the sort of person who was more interested in promoting the stock than actually running the company well. Over the many years subsequent to that I watched the shares skyrocket to over $10 per share (was kicking myself a little), only to then crash back to one dollar something.

Long before Retail Food Group (RFG) plummeted I posted in the thread that given seemingly every year management flagged "one-off" costs and talked about "underlying earnings" that they could not be trusted. Some of the analytical posters would just look at the numbers and adjust them accordingly to arrive at a real figure for earnings and continue with their investment process. To me its a waste of time even analyzing a stock if management is not trustworthy.

It reminds of some of the things said by the mighty J.P. Morgan:

"Samuel Untermeyer: "Is not commercial credit based primarily upon money or property?"
Morgan: "No, sir; the first thing is character."
Untermeyer: "Before money or property?"
Morgan: "Before money or anything else. Money cannot buy it.” From Morgan’s testimony before the House Committee on Banking and Currency in December 1912. (For background reading, see: A History of U.S. Monopolies.)

"A man I do not trust could not get money from me on all the bonds in Christendom.” From the same testimony.

 

[galumay]

Good post VH, its an area of my analysis I am starting to try to pay more attention to, and give a greater weighting to. I have bought into some businesses that had what looked to be good financials, as well as an enticing narrative, but in the end management with incentives that didn't align with shareholder and business interests caused a destruction of shareholder value.

One level worse is the management that is deliberately seeking to defraud retail investors, I think that is a bit easier to spot because they tend to be active in small speccy businesses with undeveloped financials.

 

[Huskar]

To me its a waste of time even analyzing a stock if management is not trustworthy.

It reminds of some of the things said by the mighty J.P. Morgan:

"Samuel Untermeyer: "Is not commercial credit based primarily upon money or property?"
Morgan: "No, sir; the first thing is character."
Untermeyer: "Before money or property?"
Morgan: "Before money or anything else. Money cannot buy it.” From Morgan’s testimony before the House Committee on Banking and Currency in December 1912. (For background reading, see: A History of U.S. Monopolies.)

Call me a nerd but great to re-visit old threads and see lessons learned and not forget them myself... A study on sectors that have boomed and then crashed and burned could be on the cards. Also trying to revisit ASF more.

 

[greggles]

A legal postscript for those interested.

19-124MR Federal Court finds against Vocation Limited (In Liquidation) and three officers