Navrafund & Sharemarket Crashes

Trouble is they must have been fully invested by now, so may not be able to take advantage

 

Navra, direct shares, whatever! Lots of good opportunities at the moment.

Mark

 

A good opportunity today could be a better opportunity tomorrow
Who knows eh???

Cheers

 

I'm sure this will be a comforting thought to those about to get a margin call

 

My LVR is very high at the moment - uncomfortably high for some people I would hazard a guess. But I've been hoarding as much cash as possible waiting for good opportunities. It's all about prudent money management.

Mark

 

True that Bill! But eh, I don't know where the bottom is, so just buy when I think it's cheap. Who knows - next month, the current price could seem expensive! But it could also have been the cheapest, no one knows. I like to buy when I think it's cheap long term and hold on.

Mark

 

well if your LVR is uncomfortably high your next good opportunity may well be a margin call so then would you still like to "bring it on"

 

just do it,

I deliberately wait until my LVR is almost at the brink, then put money in at that time. The way I look at it is that's the cheapest I can get more assets without getting a margin call. I've actually gotten a few in the past cause I waited a bit too long, but it didn't bother me, cause I had the money and got just a little too greedy. I'm not afraid of margin calls - like I said, prudent money management.

Mark

 

Mark, assume you are not using Steve's recommended Warrant Hybrid product from ABN AMRO ?

Also, website shows unit price at 0.8121 as at July 15. Hopefully this goes up after today's higher close ?

 

Anyone have any predictions on what price they think the unit value will drop to and in what time frame? I smashed my crystal ball because I could never figured out how to use it.

 

Mark - at what stage do you decide whether the funds you've hoarded will get tipped into the loan (ie pay it down), or used to purchase more units (which could lose even more value)?

In my case, I have sufficient funds so that as at today's price I calculate that purchasing additional units will mean the unit price has to go to .52 before a call comes, whereas tipping the same monies directly into the loan lets the unit price get to 0.5 before I get a margin call. Although if either case eventuated I think there would be blood on the streets.

OLI - no predictions from me other than if the reporting season is not good (and it's not going to be) then the market will typically slide some.

 

At this stage I am reticent to tip more money in - either via buying more units or paying down the loan. My possible plan is to sell units to manage LVR with a view to buying back in when the market has stabilised. I think there are further falls to come before that happens ie I will be buying better value by waiting.

Thoughts?

 

Active Trade - no, I don't use the warrants.

For my personal situation, I don't consider selling down units or payng down the margin loan. Over the long term, I believe the unit price is low, so I buy more units because I've got the chance to purchase them at a lower value. In 10 years, I'll be laughing. I'll have units at a much higher value that I bought when the market was in the doldrums and I'll be getting a nice income from them. Win/win.

Mark

 

So what strategy do you use when a margin call looks like it might be coming? You've said that you have an LVR that some people might consider uncomfortably high - so presumably you just wait til you're near the upper end of your buffer, then what? No value judgement here, I'm just interested in different strategies as I'm well into the 60s (LVR wise) when I'm normally <50, so this is relatively unchartered territory for me from a strategic point of view.

 

Income is tied to unit price.

You return 10% in a year with your trades.

unit price 1.00 then you return 0.10 increase in value
unit price 0.80 then you return 0.08 increase in value

It's different to say the value of a house with a rental attached. The house might go down in value and the yield will then go up assuming constant rent, not so with trading, it's tied to capital.

 

Mark - it would be great to hear reasons why you would not consider using warrants. Particularly as you work closely with Steve and he is quite passionate about these.

 

ActiveTrade, I didn't say I wouldn't consider using them, I'm just happy with my margin loan is all. That simple, really.

Mark

 

The way I look at it is I prefer to wait until I'm 'forced' to buy. That is, I'll be on the verge of getting hit with a margin call. This is the pont where at the time I can get the units at the lowest price possible and is something I personally am comfortable with, but it's certainly not for everyone!

I can't pick the bottom of the market, but I'm confident that a unit price in the mid 80's is low in the long term, so for me it's just an opportunity to pick up units at a low price. It works for me. Keep in mind though that I'm fairly aggressive and always make sure that I have enough cash on hand to cover my bum.

That's about as far as I'm willing to go to explain it - the law says I can't say anything that could be construed as advice, so I have to be pretty careful what I say.

Mark

 

Admitably agressive but seems like good logical thinking in terms of how to buy value in my books.

Cheers