Managed Funds Its official, 4% Navra distribution for March 2007 quarter

Hi guys,

Posted up on the NavraInvest website now.

NavraInvest Limited - Distributions

And the current retail application price post-distribution is 1.1533 making the real price 1.1983 if you add back the distribution. That's a great price for trading the recent volatility, and that's as at COB yesterday so doesn't take account of the 1.3% jump in the ASX200 today.

Happy days are here again!

Cheers,
Michael.

PS I bought back in early enough to get the distribution. That means my $35K distribution goes straight off the home loan and converts $35K of non-deductible debt to deductible debt. Another one like that and I'll hame paid off my PPOR! Come here Steve and let me give yer a big kiss.

 

Fantastic stuff Michael regarding your PPOR debt

How many years until you throw in the job and become a full time dad/property developer?

 

Hi Michael, may I ask what you're developing? You're 'status' of 1D & LE seems similar to mine. I did well from the 'correction' considering. I made a 2.2% profit for the 1/4. I purchased additional units @ 1.285 (which is luck).

 

Hi Craig,

I'm developing a site in Mona Vale on Sydney's Northern Beaches. I'm putting one townhouse and two units on it. Plans are due to go into council this month, but the pre-DA meeting with the senior planner went well and the architects I selected are well regarded by council so it should be a smooth approval. Gross valuation on completion should be around $2.5M and my total costs are shaping up to be around $1.8M at this stage.

What is it you're developing, and have you posted about it here? I'd be interested in your background too...

Cheers,
Michael.

PS I hope you didn't really pay 1.285 for your Navra units...

 

G'Day Glebe,

Stop teasing me! Just the thought of being able to chuck in the job and go full time developer is a huge tease...

But I reckon its about 2-5 years away. If Mona Vale goes as planned then it comes out Neutral and maybe even positive and we're then holding around $3.5M in properties in Sydney and about $1M in shares. Properties being neutral with PPOR debt at zero means I could effectively just opt out of the rat race and let the income from those shares fund my lifestyle. But I'd probably keep doing developments to continue to build my equity.

Its very VERY enticing...

And thanks for the support re my PPOR debt. Will be nice to see that at zero soon.

Cheers,
Michael.

 

Hi Michael, I'm but a 1/4 the size. I have a small DA for 2x2 dwellings in Ipswich, but I'd rather be in your shoes with beach front land.

 

Michael

I know one of the reasons you sold your NI holdings and then bought back in was to switch your holdings into your HDT.

Aside from that, do you think the exercise was worthwhile? There has been talk of people trading the Navtrade system and I have certainly been thinking about it but given the time lag to get out and then back in (espcially with margin lenders involved), I has been wondering about whether it's cost effective.

I seem to recall you sold out at around 1.16. What price did you buy back in at? Given that price was in excess of your original purchase price (around 1.07??), it would now mean you have a lot less units than your originally had meaning less by way of distributions each quarter (assumming you invested the same amount the second time around). Also similar to me you purchased just before the end of the quarter which has the advantage of getting that quarter's distribution but also means you are sitting on a capital loss(albeit a paper loss) of a similar amount directly after the distribution.

cheers
Gazza

 

Gazza,

I think I posted an answer to that elsewhere already, but just so its obvious:

Sold out at 1.1624
Bought back in at 1.1884 (I think)

So a paper loss of 2.6c per unit.

Wasn't at all happy with the outcome and would have been better off just paying the 0.6c name change fee. The time lag was too long to trade that pullback. But I'm ahaed again now so not all is lost. I wanted to buy back in when I saw it at 1.15 but by the time the paperwork was processed it had run to 1.1884.

Burnt me to the tune of some $20K in lost earnings as the spread between my sell/buy. Had I been able to buy when I wanted to I would have made $10K instead of lost $20K. An expensive little lesson in why not to trade a margined manage fund in a new name.

I margined up too, so am now in for $250K more than previously.

Life goes on...

Cheers,
Michael.

 

How many days till the distribution is paid to our accounts (for those not reinvesting it)?

 

Thanks Michael, must have missed your earlier reply. Good lesson for those of us contemplating trading the fund. It can work but if your timing is out, you can lose out. Sorry that happened to you but things have picked up since then (another good day today) so not all bad and as you say life goes on and all good experience.

Gazza

 

gazza:

why bother trading Navra? The time lag (even if it is one day) will severely limit your abililty to enter/exit a position.
Why not look at one of the publicly listed funds? then you can go long, go short, or use stop losses etc.
Seems much more flexible.

 

Hi Coopranos

Agreed, I wasn't looking at trading it on an ongoing basis. What I wanted to do was lock it my gains and then buy back in at a much lower entry price a) to increase my units and therefore my income and b) to then reduce the chances of a capital loss over time. As seen in Michael's case for that to work you need all the circumstances to come together. Michael was able to lock in his CG but the market didn't fall far enough to reduce his new entry price (in fact it rebounded so strongly that he paid more to get back in than he sold out at).

So it my case it might be worth just living with the entry price and working to mitigate any future capital loss.

cheers
Gazza

 

Michael, how many days did it take to fill the order? What about the interest you saved not being invested during the correction? People who were invested have paid a month of interest for no gain.

 

Michael, don't feel bad, you haven't lost capital, it was just shifted from your shares to your PPOR. And the interest on the 20k in shares is less than the 20k interest on your PPOR.

 

Hi Michael,
Just wanting to clarify, is there no tax due on the distribution?
I thought the distribution being income, it would attract tax ?
How does this work...?

Kevin

 

Its probably worth mentioning that...as far as I know, MW not only had to sell and buy but was also organising a new margin loan which took a couple of weeks to finalise. Had he used his old structure he may well have been out and back in with a profit.

As I understand it MW was setting up a new structure at he same time.

P.S. this is common knowledge as MW has posted about it so I felt it OK to discuss it.

MJK

 

Yes you pay tax.
At the end of the Fin Year you get a statement from NI as you would with any other fund. Distributions are broken down into the various groupings such as interest,franked divs, unfranked divs, capital gains, franking credits and cash distribution. All adds to the mix for your annual taxable income.

MJK

 

It usually takes 2 weeks. I have not seen anything come thru yet ... anyone else ?