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Navra performance on recent market drop

Discussion in 'Managed Funds & Index Funds' started by perky, 28th Feb, 2007.

  1. perky

    perky Well-Known Member

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    In case you guys are wondering... I spoke to a very tired sounding Steve this arvo - he says that the fund outperformed the market by around 1%.
    Not too bad.
     
  2. Jenny

    Jenny Well-Known Member

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    Thanks Perky, I was wondering.

    Good news.

    Jenny
     
  3. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Dave,

    Makes sense when the market drops 3% and the fund is holding 1/3 in cash (your post) really doesn't it. So a 2% drop for Navra (1% outperformance of market) means it matched the market with its invested portion. No surprises there.

    PS...

    Well at least it looks like I timed that correctly! :D If Navra is down 2% relative to the market's 3% drop then that's a $12K call. I reckon there will be a bit more jitters yet too and a steady at around 5750 - 5800 but time will tell. I've also renegotiated a great rate with LE and will be buying back in soon with these conditions:

    • A 2% discount to my sell price (circa $12K saving)
    • A 50 basis point discount on my previous margin loan rate
    • In the HDT name instead of my wife's name

    All in all a nice little outcome...

    Cheers,
    Michael.
     
  4. coopranos

    coopranos Well-Known Member

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    I am sure I dont understand the Navra fund trading philosophy, but wouldnt you assume that yesterday would have been the ideal trading conditions for it? I would have thought it would have been buying all the way down yesterday, and as things are going up (which they seem to be doing today) they would do quite well?
    Claims of outperforming the market yesterday seem a little bit weak, unless you are going short (in which case we now call you guru because there didnt seem to be any real fundamental reason for the drop). I would think the better test is how much is made on the way back up?
     
  5. MJK

    MJK Well-Known Member

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    Yes , but thats exactly where we want the fund to be during a correction. In Cash. I imagine all the other funds where copping it sweet. No surprises is what we want:D .

    MJK
     
  6. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Spot on! :D

    I like the conservative nature of this fund and the fact that it showed itself to have correctly divested stocks to take a trading gain on correction. I just extended that position myself somewhat and sold all my holdings at an inflated unit price. I'll buy back in this month when the market settles down a bit at the new pull back level. I think there's a fraction more of this to play out yet.

    Cheers,
    Michael.
     
  7. Chris.R_WA

    Chris.R_WA Well-Known Member

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    Has anyone got an up-to-date price for Navra Retail (as in: today!)?

    The NI website is only showing price from the 27/02/07, and my margin lender price from 26/02/07 :mad:

    Thanks guys, Chris
     
  8. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Just spoke to NavraInvest an hour ago and they said check their site this afternoon. There's always a lag between close and new price calculation. My experience has been post 3pm the following day you get the close prices from the day prior.

    But it should be down about 2% if its 1% outperformance of the market as Steve mentioned to Perky. Expect a 2c to 2.5c drop in unit price I'd suggest.

    Cheers,
    Michael.

    PS ASX All Ords back below 5800 in late day trading today. Down 1/2 a percent intra-day. There's a bit more of this to play out I think...
     
  9. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I "scrape" the unit price daily directly from the NI website, and as Michael said, it is typically 3pm or so when the prices are updated with the previous day's unit price.

    The earliest I've seen it in recent weeks is 1pm, the latest was 4:18pm. I ususally expect it between 2pm and 3pm.
     
  10. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Unit prices are posted now ... Wholesale fund down only 1.89% ... not too bad at all.

    ... and to keep the drop in perspective ... here's a chart for the financial year to date ...
     

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    Last edited: 29th Jun, 2007
  11. voigtstr

    voigtstr Well-Known Member

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    Are those big dips when the dividends are paid?
     
    Last edited by a moderator: 1st Mar, 2007
  12. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Nope - the yellow dots represent dividend payments on the graph, but the graph is calculated assuming dividends are reinvested - so there's no real impact from the payout.

    The dips represent real drops in net asset value because of drops in the value of the underlying shares.
     
  13. redrover

    redrover Well-Known Member

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    If the fund made a 1% outperformance to the Index because it lost less, I cannot get very excited about that. I am still waiting for an outperformance on the up side. Maybe this "correction" is what the fund needs to kick it along. If it does not outperform now with all the buying opportunities that have been presented, I cannot see how it ever will! This of course assumes that the market does not fall further but trades in a range of rises. After a "Spann" briefing last night market forecast is to head towards 8000 by end next year - time will tell. How will this impact on the fund as it does not perform all that well on a continuing rising market.
     
  14. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Unfortunately the fund needs more than just a single correction - we've had two or three of these now in the last few years, and each time the fund has outperformed during the short term, but not in the longer term once the market resumed it's steady rise.

    The fundamental thing missing from the market at the moment is ongoing volatility. We're seeing isolated volatility in periods like the last few days, but in general the volatility is still very low compared to long term averages.

    While (and if) the market continues to trend strongly up, I don't see the fund outperforming ... that's not to say it won't make a lot of money, it just won't strongly outperform like some people expect.

    ... and as for 8000 by the end of next year ? That's certainly possible - 25% increase over the next 18+ months ... if the market continues to see strong inflows of capital, and interest rates stay about where they are (perhaps even slightly higher to discourage the movement of cash back to real estate without hurting the economy too much), and no real economic surprises ... then I think we could well see that level in the timeframe mentioned. I'm certainly hopeful.
     
  15. artgul

    artgul Well-Known Member

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    Hi all,

    This may be a very basic question and would like to see if any one of you can clarify ir for me:

    I undertand that the basics of the Navra trading system is to buy low and sell high. My question is whether or not those highs and lows are the pricess within the same day trading (for a given stock), or between trading days?

    Thanks a lot!
     
  16. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    It's not just buy low sell high (although in broad terms I guess that's it) ... it's more "buy as share price drops, sell as it rises" ... they don't wait to try and time the market - they react to the movements in the market as they happen.

    Yes, they are doing intra-day trading, so they would have been buying up as the share prices dropped yesterday, and possibly even starting to sell again as they rebounded (depending on whether the share price increased enough from the low point to start triggering sales).
     
  17. Tropo

    Tropo Well-Known Member

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    "I am sure I dont understand the Navra fund trading philosophy, but wouldnt you assume that yesterday would have been the ideal trading conditions for it? I would have thought it would have been buying all the way down yesterday ...."

    You may be correct, assuming that yesterday NI's system generated buy signal.
    :cool:
     
  18. voigtstr

    voigtstr Well-Known Member

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    If the price keeps going up, and what stage do they stop selling? I mean they want some exposure to the market rather than just holding cash?

    Or is the grain much finer than this top level view? Is the system buying and selling based on much smaller fluctuations at the multiple transactions an hour level?
     
  19. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    They are constantly trading - but only a relatively small percentage of the portfolio in each trade.

    I believe it is a form of exponential weighting ... the more the price increases, the larger the parcel they sell ... but there would be reset conditions so that they don't ever sell out of something completely. In theory, the fund could be 100% in cash - but in reality it is extremely unlikely this would happen.

    The exact mechanism being used is not clear - that would be part of the intellectual property that went into the design of the system - so most of us only know the broad theory of how it works.

    You'd need to ask Steve about how it works in specific conditions - don't necessarily expect a detailed answer (it is very complex and took Steve literally years to develop) ... but you'll usually get an answer which gives a good broad understanding of the concepts.
     
  20. Insight

    Insight Brisbane Buyers Agent

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    This is interesting.

    My understanding is the trading is done using EOD data only, certainly that is the idea of all the AIM trading I have seen and tested. Also the data Steve N posted on SSoft some time ago with actual listed trades (I believe one stock was LEI if memory serves) would indicate trading off EOD data only.

    The basic idea of AIM systems is that they can kick backside during trading ranges, as was the case in the markets during the 1970's in the US when the original AIM system was first invented by Lichello. AIM can be particulary potent on stocks with high beta, though this means you are dancing with the devil to an extent as the ideal AIM stocks are also the ideal candidates for delisting often (though some of the returns need to be seen to be believed, GreatPig has done some excellent work in this area on aussiestockforums if anyone is interested in furthering their knowledge).. If you mitigate this by trading a blue chip universe (say the ASX20 or 50) then AIM doesn't strike me as a way to generate outperformance of a similar index such as the ASX200, at least I couldn't find anything that worked when I did my testing.

    The more I learn about mech systems after 2 years in the markets making a living has made me really appreciate the power of index funds. Yes I think they can be beaten, but good luck in trying.

    I could go into greater depth about AIM but if anyone is interested it's all on the net anyhow. All you need is google, Excel and EOD data to run your own tests and gain an understanding of Lichello's idea.