KFL - discount to diluted NAV

[rmbbrave]

quote:Originally posted by duncan macgregor

quote:Originally posted by rmbbrave

I bought it this week and am up 7% what's wrong with that!

RMBBRAVE, Nothing wrong with that if you can pick when it will happen. The trouble with that is you cant. Managed funds are for people that think it is also complicated that its beyond them.
I to had a win last week with PPP without having to pay someone to do it for me. RMBBRAVE i thought that you were above the managed funds level TUT TUT. macdunk

I buy and sell for many different reasons. I bought KFL for the following reasons:

1 The SP has been going up.

2 The unaudited net asset value per ordinary share excluding performance fees as at 5 July 2006 was $1.8261 (fully diluted $1.4245). ie at 1.25 the shares were cheap.

3 This article appeared in the herald on the 5th of July http://www.nzherald.co.nz/search/sto...EC83027AF1010E
As "news drives the SP" I figured it would send the SP up a bit.

4 They hold some great companies
The five largest portfolio holdings at 5 July 2006 are approximately as follows:

Ryman Healthcare - 17.7%
Mainfreight - 14.8%
Pumpkin Patch - 10.0%
Metlifecare -10.4%
Freightways - 9.8%

5 Sharemarkets around the world are going up.

[rmbbrave]

quote:Originally posted by duncan macgregor

quote:Originally posted by rmbbrave

I bought it this week and am up 7% what's wrong with that!

I to had a win last week with PPP without having to pay someone to do it for me.

As a long term holder of PPP I shared that win!

[winner69]

One thing missing from your rant and rave Phaedrus was the cost of operating this fund

Management fees of 1.25% of gross assets every year plus when they have a good year (like this year) some 15% of the excess returns over the benchmark (some of it by issuing new shares)

For those who think that buying KFL is a 'cheap entry' into the stocks they like do the sums

For those who rely on Fishers judgement the dice is loaded in their favour

For those who treat it as atrading stock all this stuff doesn't matter does it

[warthog]

quote:Originally posted by Phaedrus


Their trade management is surprisingly loose. On occasion thay have lost 50% of an individual investment before selling out. This fund is obviously not very actively managed and doesn't believe in the use of trailing stops.

Trading in large parcels of shares on NZX is not as easy as trading in small parcels of shares on NZX.

[duncan macgregor]

quote:Originally posted by warthog

quote:Originally posted by Phaedrus


Their trade management is surprisingly loose. On occasion thay have lost 50% of an individual investment before selling out. This fund is obviously not very actively managed and doesn't believe in the use of trailing stops.

Trading in large parcels of shares on NZX is not as easy as trading in small parcels of shares on NZX.

You are right as usual WARTHOG Its harder trading in large parcels you require more money for starters. Sorry about that mate i couldnt stop myself. macdunk

[warthog]

quote:Originally posted by duncan macgregor

quote:Originally posted by warthog

quote:Originally posted by Phaedrus


Their trade management is surprisingly loose. On occasion thay have lost 50% of an individual investment before selling out. This fund is obviously not very actively managed and doesn't believe in the use of trailing stops.

Trading in large parcels of shares on NZX is not as easy as trading in small parcels of shares on NZX.

You are right as usual WARTHOG Its harder trading in large parcels you require more money for starters. Sorry about that mate i couldnt stop myself. macdunk

Well done MacDunk. Try "The lack of liquidity on the NZX makes trading large holdings of shares harder than if liquidity was not an issue".

[duncan macgregor]

quote:[i]Originally posted by warthog[/i

Well done MacDunk. Try "The lack of liquidity on the NZX makes trading large holdings of shares harder than if liquidity was not an issue".

You are wrong WARTHOG, it is easier trading with larger than normal ammounts. The difference being you buy the company not a few thousand shares, you do it completely differently.
We have the richest man in nz buying carter holt harvey about to split it up and sell it on as a prime example. It is the WARREN BUFFET followers that are the mugs, they dont know their place in the market and miss out big time. macdunk

[Phaedrus]

"You seem to be condemning KFL because it is a managed fund." (rmbbrave)
Not at all. Managed funds have their place - I thought I made quite a sensible list of the characteristics and expectations of appropriate potential buyers. In my opinion, KFL fails to meet such expectations and I am criticising it for its mediocre performance.

"As a trader shouldn't all you be interested in is whether the SP is going up (or down)" Firstly, I do not consider myself a trader in NZ - my approach here is more that of an "active investor". While I would not buy a share that was going down or sell a share that was going up, there is a whole lot more to it than that. I even consider fundamentals!

KFL a good trading stock? Again I have to disagree. Even with a reliable and well proven system, trading KFL has produced far lower returns than simply Buying and Holding better stocks. Why bother? In addition it is very lightly traded - its average daily turnover is less than $14,000! Not a lot of room for trading there. (A good rule of thumb is never try and trade any stock where your stake is greater than 10% of the average daily turnover). If you want to trade, you would be better employed trading the constituent stocks of KFL, rather than the fund itself.

When Warthog says "...lack of liquidity .. makes trading large holdings of shares harder than if liquidity was not an issue". he is, of course, quite right. This is simply commonsense.

So, KFL is not good for those seeking above average capital gains.
It is not good for those wanting a reasonable dividend yield.
It is not good for traders.
Who is it good for?
Its managers!

[rmbbrave]

Thanks very much Phaedrus,

Good points to consider.

[warthog]

quote:Originally posted by duncan macgregor

quote:[i]Originally posted by warthog[/i

Well done MacDunk. Try "The lack of liquidity on the NZX makes trading large holdings of shares harder than if liquidity was not an issue".

You are wrong WARTHOG, it is easier trading with larger than normal ammounts. The difference being you buy the company not a few thousand shares, you do it completely differently.
We have the richest man in nz buying carter holt harvey about to split it up and sell it on as a prime example. It is the WARREN BUFFET followers that are the mugs, they dont know their place in the market and miss out big time. macdunk

Interesting perspective MacDunk.

Try offloading 200k WHS in one go and see how you get on versus 10k WHS.

Hart doesn't deal in large parcels of shares - he deals in large chunks of companies.

Listen MacDunk, the warthog knows you're just being pedantic for ego-related reasons, but you could at least be a little more subtle about it.