HGH - Heartland Group Holdings

[LoungeLizard]

HGH has lost 28% of its SP since the cap raise (and lost nearly 5% today) and yet the stalwarts on the other other site are still saying what a great buy it is. Have they seen the economic forecasts? Read the news? Looked at the charts? Crazy stuff. This is not a time to be buying just about anything, but especially not banks. In times like these I go with advice from the great philosopher, K.Rogers: "You've got to know when to hold 'em, know when to fold 'em."

[Breezy]

HGH has lost 28% of its SP since the cap raise (and lost nearly 5% today) and yet the stalwarts on the other other site are still saying what a great buy it is. Have they seen the economic forecasts? Read the news? Looked at the charts? Crazy stuff. This is not a time to be buying just about anything, but especially not banks. In times like these I go with advice from the great philosopher, K.Rogers: "You've got to know when to hold 'em, know when to fold 'em."

They all seem pretty happy with their HGH investment so good luck to them i say. I don't hold any but have a good lot on TD with them.

[LoungeLizard]

They all seem pretty happy with their HGH investment so good luck to them i say. I don't hold any but have a good lot on TD with them.

Well, I agree - good luck. Luck isn't a strategy though and I get the feeling that some don't want to admit which way the wind is blowing and are doubling down. When has doubling down against the all the data ever really worked? The old adage that it's better to own the bank than have money in it, doesn't hold true here. A 6% term deposit at HGH is better than investing in them right now.

[lorraina]

Short term you are right.
Long term I am happy to continue to hold.
I have used my HGH a bit differently from most.
When I have made a good profit on a share I recycle some of the funds to add to my HGH holding.
When I want to buy something I often sell a few HGH to pay for it.
Sort of a cash management account, that has worked well for me for a good number of years.
Expect it will continue to work well for me in the future too.

[lorraina]

Remember that the stock market is a manic depressive."
 
For any consumer of daily financial news, this will ring true. Equity markets swing wildly from day to day on the smallest of news, rally, and crash on sentiment, and celebrate or vilify the most inane data points. It's important not to get caught up in the madness. Instead, stick to your homework.
 
Always stay rational.
 
So the spare cash I have I have decided not to place at 6% with HGH.
Rather I have bought more shares at $1.62 today,because I am looking for nearly 24% total return,ie 4 times what I would get at 6%.
I expect HGH will pay a 7% yield and the share price will  appreciate by 17% [or more].

[LoungeLizard]

Short term you are right.
Long term I am happy to continue to hold.
I have used my HGH a bit differently from most.
When I have made a good profit on a share I recycle some of the funds to add to my HGH holding.
When I want to buy something I often sell a few HGH to pay for it.
Sort of a cash management account, that has worked well for me for a good number of years.
Expect it will continue to work well for me in the future too.

That seems like an eminently sensible strategy Lorraina and if it works for you, who am I to say otherwise. More power to you.

But I suppose my position is this.
I am not a trader and I agree that over time, provided you have backed the right horse, any losses sustained in bear markets will be recouped in the next bull run. But I do think that even those with a long term focus, can mitigate or even avoid those losses, by being pro-active and by either exiting their positions or selling down before everything hits the fan. That's not to say to get panicky at the first blip in the market (the old buy high and sell low trap) but I believe we are at a moment where even ordinarily defensive stocks like HGH are not safe havens.
No-one has a crystal ball, and I could well be completely wrong about the resiliency of the markets to absorb the coming macro-economic shocks. But my gut feeling is that a lot of stocks will take a further 20% haircut from where they are now, in fairly short order.
I suppose it's all to do with one's risk appetite. The risk of being too passive at times like these is too high for me, especially when you can get 6% risk free. Is the risk of losing 20% of your capital in the next 6 months worth the extra 2% in dividends? And are you comfortable having to wait perhaps two years for the SP to get back to the sort of level that you could have sold at a by taking a more cautious approach?
We are living in interesting times that's for sure. I've sold down nearly 50% of my portfolio and may sell down further depending on the coming news from the US, which will as usual, have a big effect here.
Good luck to all!

[lorraina]

I think we all must do what suits us.
I believe NZ ltd has a bright future.Both leading political parties seem to be middle of the road.
Consecutive Ministers of Finance have been "safe pair of hands".Cullen,English,Joyce and Robertson.
Good businesses have good years and bad years.Good businesses in NZ have a lot to look forward to.
I look for good businesses.Buy a few shares,and if they do what they said they would do, I buy more.
If the reasons that I bought in change, or the company does not do as they say they will do ,I usually sell.
If it is taking longer to achieve what they said they would do I usually give them more time.
HGH set themselves a course when they were formed.Get a banking licence for cheaper funds and look for profitable areas to grow.Still on course.
I think the business is still the same business it was when their share price was over $2.
I do not think any of "the news" on Swiss or USA Banks will make one iota of difference to HGH's growth path.
In 3 or 5 months time we will look back at it and say,,been there when dairying was looking sick,been there when car loans looked sick,been there when some USA and Swiss banks were sick,and should have bought more when HGH's share price was down..
 

[LoungeLizard]

I think we all must do what suits us.
I believe NZ ltd has a bright future.Both leading political parties seem to be middle of the road.
Consecutive Ministers of Finance have been "safe pair of hands".Cullen,English,Joyce and Robertson.
Good businesses have good years and bad years.Good businesses in NZ have a lot to look forward to.
I look for good businesses.Buy a few shares,and if they do what they said they would do, I buy more.
If the reasons that I bought in change, or the company does not do as they say they will do ,I usually sell.
If it is taking longer to achieve what they said they would do I usually give them more time.
HGH set themselves a course when they were formed.Get a banking licence for cheaper funds and look for profitable areas to grow.Still on course.
I think the business is still the same business it was when their share price was over $2.
I do not think any of "the news" on Swiss or USA Banks will make one iota of difference to HGH's growth path.
In 3 or 5 months time we will look back at it and say,,been there when dairying was looking sick,been there when car loans looked sick,been there when some USA and Swiss banks were sick,and should have bought more when HGH's share price was down..
 

I would disagree that HGH is the same bank as it was when the SP was $2. I don't think it is.

 It pivoted away from NZ and left small shareholders scrambling to try and make sense of a rushed cap raise which pretty much forced them to buy into the OZ expansion plans, whether they agreed with it or not. That was the moment when I sold out of HGH completely (at $1.80) as I couldn't see the logic of expanding at a time of an oncoming recession. I also believe the dividend will be under pressure as a result of increased costs. So for me, that was the moment when HGH went from a steady, organically growing organisation to one that was prepared to roll the dice in favour of institutional investors and against the interests of the smaller investor, who has greater exposure to the risk of the expansion going wrong.

As I said, the SP is now firmly 25% or more down on where it was before the cap raise was mooted. The market didn't like it then and the odds of this turning out well, have lengthened since. We'll resume this in 3 to 5 months time then 

[lorraina]

Perhaps you are being proven right.
Yet I believe the expansion into Aussie is the right course of action. They already have  strong foundations in Australia.
Stockco will perform well.RELs will continue to grow, and Challenge Bank will reduce funding costs.
Makes good sense to me,as they are not doing anything that they have not done successfully before..
Perhaps it is in fact the right time.?

[Breezy]

I would disagree that HGH is the same bank as it was when the SP was $2. I don't think it is.

 It pivoted away from NZ and left small shareholders scrambling to try and make sense of a rushed cap raise which pretty much forced them to buy into the OZ expansion plans, whether they agreed with it or not. That was the moment when I sold out of HGH completely (at $1.80) as I couldn't see the logic of expanding at a time of an oncoming recession. I also believe the dividend will be under pressure as a result of increased costs. So for me, that was the moment when HGH went from a steady, organically growing organisation to one that was prepared to roll the dice in favour of institutional investors and against the interests of the smaller investor, who has greater exposure to the risk of the expansion going wrong.

As I said, the SP is now firmly 25% or more down on where it was before the cap raise was mooted. The market didn't like it then and the odds of this turning out well, have lengthened since. We'll resume this in 3 to 5 months time then 

The market hasn't liked much of anything for some time now, take a handful of good stocks on the NZX and calculate what % they are down from their highs of a year or so ago and you will find many are down near 25% or more. You couldn't say that because those stocks are down X% that its all going to go badly for them, the market only gets it right sometimes, the rest of the time it oscillates between exuberance and despair.

[BlackPeter]

HGH has lost 28% of its SP since the cap raise (and lost nearly 5% today) and yet the stalwarts on the other other site are still saying what a great buy it is. Have they seen the economic forecasts? Read the news? Looked at the charts? Crazy stuff. This is not a time to be buying just about anything, but especially not banks. In times like these I go with advice from the great philosopher, K.Rogers: "You've got to know when to hold 'em, know when to fold 'em."

The funny thing is - solid companies (like HGH) are a much better investment when their shares are cheap (as now). Just can't get my head around why some people praise shares when they are dear and trash them when they are cheap. I like to buy good companies at a discount.

[Plata]

What to do what do to, does one ignore the ongoing banking crisis and buy some cheap HGH? Can the FED outprint a bank run?

[lorraina]

From Milford today;
All of this is to point out that the banking system as a whole is much more robust than a decade ago. Depositors should be much more confident that their money is safe in banks and the risk of another GFC is extremely low. In many respects, the SVB collapse has illustrated that the regulations and process to protect depositors have worked. All depositors in the failed banks were given access to their deposits on the Monday following the Friday collapse. But whilst depositors have not lost a cent, shareholders have borne the loss of their investment, illustrating that investments in banks still carries risks.

*It's worth noting that if the depositors didn't require their money bank and simply left them in the bank, the bank's assets would have appreciated in value over time and the bank would have likely remained profitable. This was not an issue of profitability but one of risk of liquidity, i.e. deposit flight.

[LoungeLizard]

The funny thing is - solid companies (like HGH) are a much better investment when their shares are cheap (as now). Just can't get my head around why some people praise shares when they are dear and trash them when they are cheap. I like to buy good companies at a discount.

It's not the cheapness I am trashing, it's the direction and timing of HGH's expansion. The SP decline is a combination of bad market reaction to the cap raise, and a bad market generally.

I totally get buying at discount, but NOT on a downtrend. The fundamentals may well be fine, but when macroeconomic forces align, as I believe they are doing now, even a fundamentally solid stock will be trashed.
It is always difficult, dare say, next to impossible, to predict when the index as whole is in for a tough time, but my punt is that this is one of those times. Some, like yourself will ride it out, and even buy more, but for me this is too risky - I'd rather cash up and wait for the upswing. I think I might be waiting for some time..

[LoungeLizard]

The market hasn't liked much of anything for some time now, take a handful of good stocks on the NZX and calculate what % they are down from their highs of a year or so ago and you will find many are down near 25% or more. You couldn't say that because those stocks are down X% that its all going to go badly for them, the market only gets it right sometimes, the rest of the time it oscillates between exuberance and despair.

Your right - the index as whole is taking a bit of a beating. Which is why I cashed up 50% of my portfolio a little while ago. HGH I got out of completely because of the general market conditions and issues specific to banking and HGH itself. 
I think equities as a whole are going to have a bit of a rough ride, particularly if the gap between stocks and bond yields in the US continues to narrow. And you know what they say - when Wall Street sneezes, the rest of the world gets a cold. The FED has got one hell of a juggling act to perform and I don't rate its chances of not dropping a few balls!