CP I did not write words to the effect that “CCP is not a buy...

CP

I did not write words to the effect that “CCP is not a buy unless it gets to $10”. That was my no-brainer price that the market offered until recently, and it was the price that I paid for my most recent parcel of 1,100 shares in April. In fact I wrote, “I'll reconsider that $10 hurdle price that I have held for a long time.” When I wrote further, “I may well not buy more CCP at current prices”, the word “may” left the door open for me to recalibrate my long-held $10 no-brainer price. Also, $10 was my personal no-brainer price as an investor, not necessarily a line in the sand appropriate for others, particularly traders.

I'll concern myself with the recalibration of my no-brainer buy price when my funds are available to buy more CCP. In the meantime, I'll pray for the SP to drop to a silly price soon, and rise again once I have topped up. I have not yet bothered to consider at what price I would sell, but $14.00 would incline me to think about it, other things being equal. One of the “other things”, is the change that the USA subsidiary might effect if it grew meaningfully.

You wrote recently that the rate of interest rising in the USA was a consideration. I do not recall CCP, or any similar company, giving the rate of interest much mention. A European collection company based in Sweden, Intrum Justitia, suggested that the only significant impact of interest rates was on its cost of borrowing, and that risk could be mitigated by diverting its considerable cash flow to reduce borrowings, if that made sense relative to the profitability of buying more PDLs.

The pig-weighing is an obvious accuracy fallacy. I was having a dig at those self-confident people whom one sees on talk shows. When discussing a stock, they tap into their laptops and opine with an absence of modesty what the intrinsic value of a stock is. The mathematics that I used is obviously flawed – it gives an infinitely high estimated share value if growth equals the IRR, and a negative value if growth eclipses the IRR. For a growth of about 5% and an IRR of about 10%, the formula gives a reasonable result, I think.