Managed Funds NavraInvest fund

I just attended Steve's one day course yesterday. As gregpatch has already mentioned elsewhere, it is rare for a fund manager to divulge so much of its trading methodology so Steve's presentation was certainly very interesting.

Having finally properly digested all the information provided on course, I have a couple of questions - for Steve or anybody else who is able to answer:

1. The dollar cost trading strategy involves buying in incrmements when the price is below the equilibrium ("actual value") and still falling, and selling in incrmements when the price is above the equilibrium and still rising. How is the equilibrium price determined? Is it through research (determining the "real" value of a company through due dilligence) or is it based on historical chart data? Or is it a combination of both?

2. Is there a time period in which a stock is sold if it does not reach the percieved equilibrium? Is it a matter of minutes, hours, days or months? Or are there different groups of traders implementing the strategy at different time scales?

3. It was mentioned that the NavraInvest fund is specifically tailored for investors implementing Steve's strategy of a portfolio of property, shares and cash. In what way has it been tailored? My only guess is that it focuses on dividends as a priority over growth to ensure that investors get the income stream they need. However, since shares are so liquid, could the same effect not be achieved with a high growth fund where the difference between the dividend and the required annual income is extracted from the fund each year? Exit fees notwithstanding. Or is there something about dollar cost trading in itself that makes it especially suitable for Steve's clients?

Thanks in advance!
Tom

 

Hi Tom.

I'll have a quick stab and I'm sure Steve will correct where needed....

1. I think you'll find that how the 'equilibrium price' is set(and maintained!) is part of the IP(Itellectual Property......not Investment Property! ).

Personally, from an intellectual curiosity point of view I'd be interested to know too, but that's obviously Steve's call and I think may be getting into a level of detail that may not be appropriate for general release.

Also, it was never my understanding(but I could be wrong ) that buying only ever occurred below the 'equilibrium price' or selling only occurred above the 'equilibrium price'. How and to what degree packets are bought and sold above and below the 'equilibrium' may vary though.

2. My understanding was that the main governing factor whether a Share was kept or totally disposed of came down to the Fundamental Selection Criteria of the Company itself. ie. if debt levels, dividend policy, management etc adversely changed then it was gone. If the Fundamentals stood up then it could still be kept for an extended period even though price may have deteriorated. Sometimes stocks can take a while to regain positive sentiment.

3. One of the main reasons why I would think the NavraInvest Fund is part of the overall 'Navra Strategy' is that Steve recommends property for maximum leveraged borrowing(usually negatively geared) and hence an 'Income Fund' that distributes 'cash' at regular intervals is an important tool in assisting with cashflow.

Let me see........why else? Ummm....holding some blue chip shares as part of an overall investment portfolio also diversifies your investments beyond property alone(and possibly reduces risk)............also demonstrated income from this type of Fund(Income) I believe should be able to assist with futher borrow capacity for the next IP(Investment Property in this case ) and off it goes again......one assists the other etc etc.

A couple of others come to mind but I'm off to put my feet up and have a cold beer.......I went in a big bike ride today and..........could it be I'm getting older? I certainly feel more tired than a few years ago.

 

Hey Alan! Not a bad summary! Of course we wouldn't want too much detail of how NavTraDE actually works out there in the public domain!

Your bike ride wouldn't have been the Sydney Cycle would it? I've done it a couple times and isn't it weird and great to be able to ride over the Sydney Harbour Bridge!!!!
Hopefully you weren't forced to go through that "u-beaut" new tunnel. I speak from one who has left Sydney to return to Canberra - much better cycling down this way!

 

Yes BSB........riding over the bridge in the early morning.........along with 10,000 other riders........viewing that beautiful harbour is really something.

So why are my legs trying to talk me out of it at the moment?

 

Don't listen to your legs dude - they are traitors!