Navra managed funds

[Nick Radge]

Hi Ann,
The important element to consider here is to differentiate between trading and investing. This system is an investing method, so runs no more risks than a standard buy & hold portfolio concept. What is required to make this an outperformer is volatility and that is the key ingredient. Without volatility it dies.

If a stock is declining over a long period, as per your stage 4, then it will have the same risks as buying the stock as a long term investment. However, 2 major differences. Firstly, you do not invest 100% into the initial purchase which in turn means you will outperform a straight buy and hold should the price continue to drop. Secondly, if the stock drops, but does so on high volatility, then the system will trade around that volatility and can in fact be profitable even though the stock is falling.

The method can be tested using a spreadsheet template I have. Feel free email me at nick_radge@reefcap.com and I'll happily forward it on.

Nick

 

[Ann]

Thanks Nick,

I will be interested to look at your spreadsheet.

It will be very difficult to convince me to buy into a stock which has dropped below a critical level of support. I have a fondness for increasing my wealth not looking at a stock and watching my investment diminish. The thought of averaging down a stock price makes me think of the old saying. If you keep averaging down, you will have below average results!.....
.....with appologies to all the 'Value Investors' out there.

To my mind any stock which is on the downhill run should only be seen as a shorter's plaything. They create plenty of volatility as they sell and buy.

Best
Ann

 

[Nick Radge]

One doesn't necessarily need to buy a declining stock. The premise behind the system is trading in and out of volatility. Stocks move back and forth which is the only given in the market. A sustained uptrend is not a given, nor is a sustained downtrend. Ebb and flow is. So long as there is enough back and forth, then the theory works.

 

[Ann]

I see what you are saying Nick,

With the proper use and experience with charting and the various indicators which give you a decent indication of a reasonable entry point, one really shouldn't have to buy into a stock with a falling price. Then having bought within a well controlled trading plan, one should at the time of purchase, have placed a stop loss at a given point to protect one's capital.

I have taken a copy of the section in A.I.M which I mean about averaging down. I would have thought what is being described is truly an averaging down of a falling stock.

Example 2, Buying:
Portfolio Control = $10,000
Value when next checked = $7500
First add 750 to the $7500 to equal 8250.
Next subtract 8250 from 10,000
which equals = +$1750.
That's how much more stock AIM would want you to buy at that value

Still just looks like throwing good money after bad to me.

Anyway, maybe that is just me...lot's of people seem to love averaging down.

I wonder how many people value invested in TLS? Uuuurgh :

Best
Ann

 

[GreatPig]

This system is an investing method

Although I think could potentially create enough trades, if a reasonable size portfolio was held, that the ATO may consider it a trading business, in which case there'd be no CGT discount.

Cheers,
GP

 

[DaleGG]

Hi

No, the income for 2004 and for 2005 had only a small amount of tax credit attached to it.

Dale

Anyone know if the distributions are tax effective? Ie are they fully franked?

 

[GreatPig]

Hi Dale,

Welcome to ASF

Home of the discerning stock ramper

Cheers,
GP

 

[wayneL]

A little ASF necromancy....

The Robert Lichello AIM (automatic investment management) system inexplicably popped into my mind today.

Just curious if anyone has/is using such a system and how it is going?

I'm expecting the sound of crickets TBH, but thought I'd exhume the stinking carcus of this thread and just see ... Fwiw

 

[peter2]

Nice exhumation. I remember the system as N.Radge played with it and posted about some of his research on the method (Reefcap). I was a newbie back then. The system intrigued me and I did some basic spreadsheet research also. I couldn't overcome my concerns about buying more stock when the price is going down, then selling when price made new highs. That was long before ETFs became popular. The long term positive bias of the index ETFs would make this system much easier to apply (provided there was enough volatility). Leveraged ETFs should suit this system. [crypto investing?]

Managing the cash component is crucial at the beginning. Very important to not start investing with 100% capital, more like 40-50% to ensure multiple buys at lower prices (average down).

 

[peter2]

Downloaded an AIM Excel spreadsheet and worked through an example to refresh my mind on the mechanics.

Used the leveraged ETF - TQQQ. Started with $20K - $10K worth of TQQQ plus $10K cash for ave down buys.
Start date (18/2/2020), was just before Covid selloff that should suit the AIM approach as it would ave down quickly before the post Covid low rally. AIM strategy applied weekly.

AIM strategy built $20K to $45,707 over the period.

Buy and Hold built $20K to $48,926 over the period.

AIM strategy did not outperform buy&hold over the period 18/2/2020 - 29/9/2021. I think this is due to the lack of significant dips in the bullish rally after the Covid low. The AIM strategy sells small parcels to accumulate cash as prices go higher.