Managed Funds NavraInvest - 1st Quarter Performance Fee?

Hi Alan

That is supposed to be the criteria, but obviously not in this case. Take a look at the chart of GTP and it is headed south, how much further before a rebound I dont know although some suggestion if $2.70 is broken it will head to $2.40'ish before a turn around again. Time will tell, but I cannot see how it meets the criteria when companies like Lend Lease, Leighton and probably ten others are not included ahead of this one!!

 

I don't think the current price or even price direction was necessarily a stock selection criteria as long as a number of other factors such as PER etc were ok but I certainly take your point.

 

And then my suggestion ZFX goes up some 10% in 2 days as well (PDN may be a good buy after the market over-reacted this arvo on Ziggy's report).

Yes, I too wondered why GTP was in there.

 

I first read your post and got an adrenalin injection thinking of throwing them $5K worth of a few speculative stocks and let NI work it for me , and then my tiny amount of "Navra shareholder" logic took over as I thought if the company is struggling to earn a fee doing something it knows inside out in a very limited range of blue chips, that suit the 'conservative' aims, I'd be real worried about NI spreading its expertise and efforts any thinner.

I'm in for the long haul and I reckon NI will go gangbusters, but I think they need to do their thing within their biundaries and find a way to make money doing it, which might be a nice by-product ;-)

Interesting point about GTP that I had not noticed. Would be great to have some discussion on here by someone like, oh I dunno, Steve, to keep in touch with the grass roots. Or is it tree roots ?

For my part, I (continually) trust NI is sticking to its strict logic and methodology for the good of the fund and its shareholders. Hopefully, if GTP is there to support the tree marketing campaign, there's some goodness in there for the mum and dad shareholders in NI too, which I am sure there is ?

 

I don't want to get into an argument about the guts of the NavTrade system but I can't see how the system would be designed to distinguish between a blue chip and a penny dreadful.

My limited understanding of the system is that it performs best on volatility, so the more volatile the share price the better performance for the fund. This means it could be the most speculative stock in the market and on the verge of liquidation.
This where the fund manager comes in and only picks healthy stocks for the fund.

If the fund manager wants "blue chips" for the blue chip fund that's what they select but if they wanted some volatile speculative stocks for the high risk speculative fund then that's what they'd look for. The system would run the funds on the same buy/sell criterea but the speccy one would just do more work, in theory.

Of course somewhere between the two types of funds would probably be the best option for a lot of investors.

Does this sound right or am I off the rails a bit here?
Anyone know enough about the system to know wether this is a reasonble comment or not?

 

Without having seen "under the bonnet" of the system I suspect you're right Rick. I imagine the decision about which shares to include is an attempt not to follow a speculative stock into oblivion due to the increased buying as it dropped lower and lower.

The theoretical underpinning is that you want volatility without losing your shirt .

I suspect a mid-cap could be run. But remember you need there to be liquidity so you don't move the price too much and so you can get out of the stock on the way up...so a smallcaps fund may not be entirely suited to the system

I suspect Steve's response to all this would be "why increase your risk if you can get the desired return at a lower level of risk?" ...but perhaps I'm speaking out of turn.

Cheers
N

 

I have never heard of fund trading penny dreadful !!!!
This is completely different game which requires different system and risk/money management.
You can not use the same criteria to buy/sell speculative stocks and blue chips and penny dreadful quite often is a day or few days wonder only.
Also you must be able to find a "speccy" which is just about to move. If you want to play with a “speccy”, you need a live screen and you must be glued to the screen as long as you are in the trade (I've been there and I’ve done it).
Frankly I am unable to explain to you how OFF the RAILS you are on this if you never traded hands on.
Speculative stocks may give you higher gain in the short time, but if you get it wrong, you can lose your gains very quickly. Blue chips are known as "white elephants" because they are slow movers and relatively low risk stocks to trade/invest.
Basically, dealing with blue chips is like cruising in the limo, and dealing with a speculative stocks is like driving a rally car through the forest.


But you know we investors can get a little impatient at times.

If you are impatient, learn how to trade speculative stocks.