Something about to happen?, page-9

I agree with the comments made by both Slooi and Value Snatcher in response to my post, and I agree with what BenGrahameReborn wrote earlier about the quality of CCP.

On Donald McClay's selling, I hope he keeps it up long enough for me to accumulate a reasonable holding ($100K or more) at a reasonable average price. I like investing heavily in a few stocks, which makes it worth while trying to understand them well.

On today's 20c SP uplift, being human it pleased me, but as I plan to accumulate more, the words of Warren Buffett apply – namely, “. . . Emotions, however, too often complicate the matter: Most people, including those who will be net buyers in the future, take comfort in seeing stock prices advance. These shareholders resemble a commuter who rejoices after the price of gas increases, simply because his tank contains a day's supply.”

I have been interested in CCP for years, so I am aware that in the PDL game, it is easy to fool investors, and in the case of managers, fool themselves, that all is well. This is because a large percentage of the reported profit in any year depends on the valuation of the profit-generating PDL asset, a subjectivity-fraught process. The Loan Book falls into the same box – much depends on provisioning and collection ability. CCP fell into an over-valuing-under-collecting-expanding-too-fast trap in the years leading up to 2007, but fortunately, Peter Beregi was at hand to rescue the situation, and learn from it. Consequently, I feel more comfortable investing in CCP than its peers.

CCP can for a short while, do well without buying more PDL's, so the fact that the November guidance only reflected an uplift in PDL purchases does more for the outyears than for FY2015, and I think that may have made investors more comfortable, and hence uplifted the SP fractionally.