Navrafund & Sharemarket Crashes

The Navra unit price is currently down to 84 cents per unit! That's over 30% since its peak of $1.22 last June.

Here's one of Steve Navra's old posts:

“I recommend a 50% margin, (Aggressive Category will go higher) because this allows for a 40% market decrease. (By comparison Sept 11th dropped the market by -14.7%.)”

So how is this downturn shaping up against previous ones? Has someone got a list of historical sharemarket crashes they can post? I did a search but couldn’t find it.

P.S - Who else is stressing about getting a margin call any day now?

 

How about this image from Vanguard. It shows declines over the last 30 years and the time taken to recoup.



Note: This is with divs reinvested.

 

"Has someone got a list of historical sharemarket crashes they can post? I did a search but couldn’t find it."

2000 Stock Market Crash


10th Worst Stock Market Crash:
Date Started: 1/15/2000
Date Ended: 10/9/2002

Total Days: 999
Starting DJIA: 11,792.98
Ending DJIA: 7,286.27
Total Loss: -37.8%

9th Worst Stock Market Crash:
Date Started: 11/21/1916
Date Ended: 12/19/1917

Total Days: 393
Starting DJIA: 110.15
Ending DJIA: 65.95
Total Loss: -40.1%

8th Worst Stock Market Crash:
Date Started: 9/12/1939
Date Ended: 4/28/1942

Total Days: 959
Starting DJIA: 155.92
Ending DJIA: 92.92
Total Loss: -40.4%

7th Worst Stock Market Crash:
Date Started: 1/11/1973
Date Ended: 12/06/1974

Total Days: 694
Starting DJIA: 1051.70
Ending DJIA: 577.60
Total Loss: -45.1%

6th Worst Stock Market Crash:
Date Started: 6/17/1901
Date Ended: 11/9/1903

Total Days: 875
Starting DJIA: 57.33
Ending DJIA: 30.88
Total Loss: -46.1%

The 5th worst stock market crash:
Date Started: 11/3/1919
Date Ended: 8/24/1921

Total Days: 660
Starting DJIA: 119.62
Ending DJIA: 63.9
Total Loss: -46.6%

4th Worst Stock Market Crash :
Date Started: 9/3/1929
Date Ended: 11/13/1929

Total Days: 71
Starting DJIA: 381.17
Ending DJIA: 198.69
Total Loss: -47.9%

3rd Worst Stock Market Crash:
Date Started: 1/19/1906
Date Ended: 11/15/1907

Total Days: 665
Starting DJIA: 75.45
Ending DJIA: 38.83
Total Loss: -48.5%

2nd Worst Stock Market Crash:
Date Started: 3/10/1937
Date Ended: 3/31/1938

Total Days: 386
Starting DJIA: 194.40
Ending DJIA: 98.95
Total Loss: -49.1%

Worst Stock Market Crash Ever:
Date Started: 4/17/1930
Date Ended: 7/8/1932

Total Days: 813
Starting DJIA: 294.07
Ending DJIA: 41.22
Total Loss: -86.0%

 

I am now officially into buffer territory at 75.5% LVR. This doesn't take into account today's hammering of the ASX.

I should have reinvested the distribution, but had already commited the funds elsewhere

Chris

 

It would be interesting to know how many Margin Calls are made by Lenders today.

With the increase in number of Margin Loans out there over the last few years, 'unwinding' positions could really make thing worse.

 

LVR

62percent for me. Any one else like to share?

Bob

 

I've always tried to reduce margin loan from day 1, but even doing this still has me looking over my shoulder (so to speak).

Only got a 50% margin loan at the beginning but can't deny I am a bit concerned.

Even when (if) market corrects itself, or stops falling by as much as it has been, I wonder how long it will take to get my holdings up to the value I initially invested.

Other funds must be suffering as well but the Navrafund is of utmost concern to me as this is where the majority of my holdings are.

 

This is why you listen to Steve and invest in a warrant. It allows you to sustain up to a 90% LVR before a margin call with the new ABN AMRO Hybrid product.

Steve coudn't have picked a better time to go on vacation huh ?

I continue to stay positive and think that in the long run markets will eventually recover around the world.

 

I am sitting at around 77% (including today's drop) ie in buffer territory. This is the worst my LVR has been and I must admit I am very concerned. Certainly speaking to Navra about switching into warrants but not really convinced about that product. Yes it gives you a 90% LVR and is supposedly non recourse but my current margin loan allows me to go to 86% before a margin call. Realistically if I switched to warrants and the LVR hit 90%, I will get a 'margin call'. Now you could chose to walk away at that point(thatis the non recourse bit) but I doubt I would , I would either sell and buy more units with whatever spare cash/LOC I had.

 

Well I guess to look on the bright side there's been 3 or 4 distributions of income contributing to that fall in unit price. There'd be some people in direct shares that have dropped 30% or more but received no income to offset it. Fingers crossed for a recovery for everyone's sake with money invested in anything except cash

 

Hi all - long time lurker (since the 1990s on the Somersoft forum) but first time poster on this forum, prompted by my increasingly precarious LVR!

Two questions:

1. Has anyone given any thought as to whether you'd (a) lower LVR by injecting money into paying down the loan, or (b) instead you'd buy more units? Obviously, both would reduce LVR initially, but if you paid (say) $20k off your margin loan, it would remain $20k, but if you bought more units it could be worth substantially less very quickly! Then again, you'd miss out on all the upside. What should you do with extra cash (distributions, savings, etc)

2. I am currently in a SGB margin loan which (like gazza) would call at 86% - moving into warrants with a 90% call doesn't seem to provide that much more security, but seems a fair bit of effort? If we're having that much of a train smash, that 4% could go overnight.

Thoughts?
KJL

 

Thanks Carlos & Tropo for the interesting yet very worrying data on past sharemarket crashes. Scary stuff, maybe I would have been better off not asking!

I started at 50% but decided to be a bit more aggressive and increased it to 60% LVR. My current LVR, not including todays fall, is now 83%. I lodged some additional security with my lender today in the form of unmargined Managed Funds which I was holding as my own personal buffer. This should drop the LVR back to around 77% so I'll be in the same boat as gazza - which unfortunately is still in buffer territory.

 

Hi Gang,

If it wasn't for Australia's stroke of luck with the resource sector the All Ords and ASX 200 would really be starting to look pretty sad.

Some suggest this could continue to get a lot worse and persist for another 2 - 3 years.

I'm now starting to agree with this given the sources of these points of view. Although I have been steadily buying into certain stocks recently I intend to make sure that there continues to be funds on hand to take advantage of rare opportunities that are likely to present themselves over this period.

Now and going forward it seem is not the time to be heavily geared.

Cheers

 

“Now and going forward it seem is not the time to be heavily geared”.


On the contrary, now is a good time to ‘heavily gear’ in...few beers in the pub.

 

Hey Tropo,

Yeah well that's a nasty thing to say given that I have run out of beer and I'm probably a fraction over the limit and can't drive down to pick up more

More appropriate wording would be "heavily beered"!!!

Cheers

 

Currently 138 points down in pre-trading.
Somethings gotta give here.

Either the fed or US government need to do something overnight , or world markets will really tank tomorrow.
The 4757 level (at this rate) looks like it will be smashed through tomorrow for the asx200....

David

 

Quote of the day I heard from our CEO today ...

"At times like these it's important to remember that we have always had times like these"

Happy Tuesday !

 

Bring it on! The lower it goes, the bigger the savings!

Mark

 

Savings ? Assume you are talking about Navra Fund buying at low prices ?