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Thread: Marlin

  1. #481
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    MFD I don't think you're 'fascinated by the psychology' whatsoever.
    You just don't like it. You don't like fund managers. Many don't.
    I don't like Lawyers myself but I still use them, despite their fees.
    I'll throw you bone..stop thinking about managed funds and start thinking about shares. That's all these instruments are.
    Shares go up and shares go down. We each chose when we buy and sell.
    It's a market place.
    Follow your own words and ignore the rest.
    Last edited by SPC; 05-05-2021 at 08:44 AM. Reason: Spelling

  2. #482
    Senior Member justakiwi's Avatar
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    Quote Originally Posted by mfd View Post
    I am not really a believer that past success as a manager has any correlation to future success but we all make our own decision. Their ability to outperform their fees is the only reason you could do better here than in a cheaper index
    I don't disagree with you, which is why I said I don't have "blind faith."

    Your returns could have been even higher <…> reduced their fees.
    Edited for clarification: I agree that their fees are too high and that my returns would be higher if their fees were lower. But at the moment their high fees are something I am prepared to tolerate, as long as my returns are acceptable. Which they are.

    I am also interested to see what happens to the fund in a bear market given the need to spit out dividends at 8% of NAV. With a rising market this is accounted for, in a falling market it could fall hard.
    You are correct. There are no guarantees. About anything. I guess my basic philosophy is:

    Watch and monitor
    Always remember that things can change
    Have faith but never blind faith
    Revisit my investing goals/plan and amend as necessary

    I'm a beginner. I still have so much to learn. I never lose sight of that fact.
    Last edited by justakiwi; 05-05-2021 at 10:30 AM.

  3. #483
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    If u study the last two warrant conversions of MLN and KFL then u will notice conversion rates of 90% and 91% respectively ....which means almost 10% warrants expired in spite of almost 40% discount being offered at conversion price to current SP ...Guess who lost that money ...Passive investors who didn't convert or sell their warrants and their holdings value got diluted . Who gained ...active , informed and timers etc type investors .

    Big question ...Do u invest in managed fund and pay high fees to let a manager do a good job ? Yes ...Do u want to continuously monitor or be hands on investor if u letting a Fund manager take a cut and do the job for u ...No

    Why listed funds of Fisher funds bring out warrants issue..To help investors make more money ...No ...they do for increasing corpus so that it increases their payout as its fixed %age of corpus .

    So if u dont want to be active investor or glued on investor then these are not for u ...U rather be in passive index fund or a mix of them for full diversification geographically as well sector wise ..all types are also Listed PIEs from Smartshres ...with NZG having just 0.2% fund charges and it exactly replicates NZX50 index ...mind u KFL has outperformed index by bigger margin only recently due to some excellent stock picks and weightages

    As there is never any free lunch in this world ...so all funds too have pros and cons ...Fisher fund's listed funds do well especially KFL and recently MLN and BRM too but then one need to learn to play these capital raising warrants issues too otherwise one will loose out to other active holders

    Having said that ...I am also fascinated by tremendous premiums for these funds ...even to extent of 30% to NAV ...being an investor in all and now only in KFL since 2010...this recent phenomena has thrown another challenge to long time holders ...to sell out and become passive investors in a index fund to take advantage of this 30% premium as it may not last ( to me its like paying $ 130 for $ 100 bank note ..putting it very simply ) or to keep holding and eventually see this premium gone or reduced considerably . Maybe long term holders of discount days to NAV ( like me ) have less to loose then recent participants who bought at hefty premiums ...but still loosing an opportunity to make extra returns will haunt old holders too ...Think about MEL / CEN holders who didn't sell out in Jan at huge surges due to ICNL buying indiscriminately .

    I am still wondering what should be done here ...there are always new challenges for holders in these funds ...ie to decide whats the right thing to do at that moment . Me surely dont look for such challenges for holders when investing in an actively managed fund charging hefty fees and taking performance fees too . But then they are doing so well that not easy to let go also
    Last edited by alokdhir; 05-05-2021 at 09:37 AM.

  4. #484
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    Quote Originally Posted by SPC View Post
    MFD I don't think you're 'fascinated by the psychology' whatsoever.
    You just don't like it. You don't like fund managers. Many don't.
    I don't like Lawyers myself but I still use them, despite their fees.
    I'll throw you bone..stop thinking about managed funds and start thinking about shares. That's all these instruments are.
    Shares go up and shares go down. We each chose when we buy and sell.
    It's a market place.
    Follow your own words and ignore the rest.
    I'm aware of what interests me but thanks for the psychoanalysis. I'm ok with fund managers, in fact thanks to my kiwisaver my largest position is in an index fund. I am skeptical of the ability for managers to consistently outperform, so I chose a nice cheap 0.3% fund and expect to do better than the fancy pricey funds over the long term, based on the extensive literature around this topic.

    But yes, I am fascinated and always curious to hear peoples reasons for investing in these funds. I see it as similar to bonus bonds, accepting a lower expected return in exchange for a little more excitement. Or a little like the helicopter payments in the US recently - free money from the government which is really just taxpayers giving money to themselves. Interesting psychology.

    The only reasons I've heard that make sense are a belief the management will outperform their high fees, or for retired people requiring simple cash flow options. Alokdhir has an interesting point regarding active investors making higher returns at the expense of the lazy, but that rather works against the 'simple cashflow option' for pensioners as they are likely to be the patsies.

  5. #485
    Senior Member justakiwi's Avatar
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    I think you are missing the point. The Fisher trio are not performing like your traditional managed fund. They are, and have been for some years, performing very well, and beating the index. So definitely not a “lower expected return.”

    As I have said, there are no guarantees this will continue, but in the meantime they are all excellent investments for overall capital and dividend return. For all the reasons you have mentioned, I would usually not invest in a managed fund, but these three are my “exception to the rule.” For now anyway.

    Quote Originally Posted by mfd View Post
    But yes, I am fascinated and always curious to hear peoples reasons for investing in these funds. I see it as similar to bonus bonds, accepting a lower expected return in exchange for a little more excitement.
    Last edited by justakiwi; 05-05-2021 at 12:48 PM.

  6. #486
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    MFD none of these listed fisher instruments are 'funds' to me.
    They are shares listed on the NZX.
    It's as simple as that.
    Normal share investment behavior applys.

  7. #487
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    I agree. They might be similar to managed funds in the sense that they actively manage their investments in companies, but we hold shares in KFL, MLN, BRM - not units in funds.

    Quote Originally Posted by SPC View Post
    MFD none of these listed fisher instruments are 'funds' to me.
    They are shares listed on the NZX.
    It's as simple as that.
    Normal share investment behavior applys.
    Last edited by justakiwi; 05-05-2021 at 01:52 PM.

  8. #488
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    Quote Originally Posted by justakiwi View Post
    I agree. They might be similar to managed funds in the sense that they actively manage their investments in companies, but we hold shares in KFL, MLN, BRM - not units in funds.
    U hold shares in Investment companies which invest in listed companies as per portfolio disclosed ...so easy to see actual per share value of the company ...thats why they disclose weekly NAV and quarterly portfolio ratios . As these listed companies are closed end funds with only way to trade in them is on NZX so their SP gets determined both on demand and supply issues and intrinsic NAV ( Mainly ) ....If these were open ended funds then companies would be buying and selling them directly based only on NAV . Also if they had market maker feature like all Smartshare ETFs then also they would trade on NZX based mainly on NAV

    Only reason they can deviate so much ( both ways ) from NAV is because of no market maker on NZX so demand and supply issues decide their SP in a big way

    At present they are the most efficient tax side investment vehicle too as their only tax rate is 28% which is final thus making them 11% more tax efficient for highest rate payers
    Last edited by alokdhir; 05-05-2021 at 02:41 PM.

  9. #489
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    That’s basically what I was trying to say. You did a much better job

    Quote Originally Posted by alokdhir View Post
    U hold shares in Investment companies which invest in listed companies as per portfolio disclosed ...so easy to see actual per share value of the company ...thats why they disclose weekly NAV and quarterly portfolio ratios . As these listed companies are closed end funds with only way to trade in them is on NZX so their SP gets determined both on demand and supply issues and intrinsic NAV ( Mainly ) ....If these were open ended funds then companies would be buying and selling them directly based only on NAV . Also if they had market maker feature like all Smartshare ETFs then also they would trade on NZX based mainly on NAV

    Only reason they can deviate so much ( both ways ) from NAV is because of no market maker on NZX so demand and supply issues decide their SP in a big way

    At present they are the most efficient tax side investment vehicle too as their only tax rate is 28% which is final thus making them 11% more tax efficient for highest rate payers

  10. #490
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    Things like MLN like normal stocks can actually be assessed as ‘cheap’ / ‘expensive’ using the Z-score - just like people use PE ratios to assess (normal) stocks

    Z-score represents how far away the current premium/discount is from its average premium/discount over a selected time period. The distance is measured in standard deviations and the sign indicates the direction away from the mean.

    MLN and KFL on this measure (on a 12 month time frame) are quite ‘expensive’

    In big markets there’s a whole industry that study and invests in these sort of funds.
    Last edited by winner69; 05-05-2021 at 03:07 PM.
    When investors are euphoric, they are incapable of recognizing euphoria itself.

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    Quote Originally Posted by winner69 View Post
    Things like MLN like normal stocks can actually be assessed as ‘cheap’ / ‘expensive’ using the Z-score - just like people use PE ratios to assess (normal) stocks

    Z-score represents how far away the current premium/discount is from its average premium/discount over a selected time period.
    The distance is measured in standard deviations and the sign indicates the direction away from the mean.MLN and KFL on this measure (on a 12 month time frame) are quite ‘expensive’

    In big markets there’s a whole industry that study and invests in these sort of funds.
    If MLN and KFL are expensive then BRM is just super duper expensive ...Cheapest or I should say least expensive is KFL

    I am also very pleasantly surprised with this new development of such huge premiums to NAV ...Dont know will they last ...what u think buddy ?

  12. #492
    Senior Member justakiwi's Avatar
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    Which is why I never buy on market, but take advantage of DRP and warrants (when the exercise price is at a significant discount to market price -which is almost always).

    Quote Originally Posted by winner69 View Post
    MLN and KFL on this measure (on a 12 month time frame) are quite ‘expensive’
    Last edited by justakiwi; 05-05-2021 at 03:25 PM.

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    Quote Originally Posted by justakiwi View Post
    Which is why I never buy on market, but take advantage of DRP and warrants (when the exercise price is at a significant discount to market price -which is almost always).

    Did u ever consider the opportunity cost of missing out on super inflated SP ? I understand U have a small holding which is growing nicely with DRP ( Even after 3% discount to 5 day average of SP is always over NAV as DRP issued shares these days ) plus u get FOC warrants which u subscribe to fully ...that just ensures your original holding is not getting diluted , no other benefit . What growth u seeing now is all because of SP trading much over NAV not that fund is doing that much special . But I do understand it gains for u at the moment . They call it Total Shareholder Returns .

    But if it reverts to its more long term SP pattern of 2-5 cents discount to NAV then almost 20% gains will go unless overall markets go up 20% thus boosting the NAV .

    Thats why I am confused as a long term holder to sell into this bubble or keep holding !!!

  14. #494
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    Quote Originally Posted by alokdhir View Post
    .... They call it Total Shareholder Returns .
    Yes I realize that

    But if it reverts to its more long term SP pattern of 2-5 cents discount to NAV then almost 20% gains will go unless overall markets go up 20% thus boosting the NAV .

    That is why I am confused as a long term holder to sell into this bubble or keep holding !!!
    The thing is, I do consider my Fisher trio to be long term holdings. So if that happens, I will just sit and ride it out. Because at some point things will change yet again and the SP will recover.

    I'm not clever or brave enough to try to play the "time the market" game.

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    Quote Originally Posted by justakiwi View Post
    Yes I realize that



    The thing is, I do consider my Fisher trio to be long term holdings. So if that happens, I will just sit and ride it out. Because at some point things will change yet again and the SP will recover.

    I'm not clever or brave enough to try to play the "time the market" game.
    As a holder since 2010 I can tell from experience that this kind of premium never happened before ..though I have seen 20 cents discount to NAV more commonly just before warrants exercise time . Thats why me more confused if this is special " Covid " phenomena or will keep repeating as u thinking to wait out till this type premium comes again .

    But me as well is really loving this recent market attraction to Fisher Funds trio

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    Quote Originally Posted by alokdhir View Post
    As a holder since 2010 I can tell from experience that this kind of premium never happened before ..though I have seen 20 cents discount to NAV more commonly just before warrants exercise time . Thats why me more confused if this is special " Covid " phenomena or will keep repeating as u thinking to wait out till this type premium comes again .

    But me as well is really loving this recent market attraction to Fisher Funds trio
    Over time MLN KFL etc have in the main traded at a discount to NAV - the discount was seen as the NPV of future management fees etc.

    Its only recently that they have consistently traded a premium. I think mainly because they are seen as just another stock (ticker code and all) and one that pays a decent dividend to boot in these low interest rate times. And for those who have come on bard over the last year (I would hazard a guess many have) its been a pretty lucrative investment eh

    Doesn't seem to make much sense for oldies but these are weird times.

    Question you ask is this the new norm ....and they will continue to trade at a premium to NAV forever.
    When investors are euphoric, they are incapable of recognizing euphoria itself.

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    Quote Originally Posted by winner69 View Post
    .......continue to trade at a premium to NAV forever.

    Naving is forever. But the premium isn't going to go away anytime soon. When money is cheap, every share is cheap.

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    Quote Originally Posted by Biscuit View Post
    Naving is forever. But the premium isn't going to go away anytime soon. When money is cheap, every share is cheap.
    The premium here is a little different to a high PE though. You could sell your marlin shares and divide the proceeds proportionally through their portfolio and even up with about 30% more shares in the components than before, minus whatever your trading costs are.

    You'd have to think the managers are worth paying a 30% up front fee to buy at the moment.

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    Quote Originally Posted by Biscuit View Post
    Naving is forever. But the premium isn't going to go away anytime soon. When
    money is cheap, every share is cheap.
    When money is cheap assets are not.

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    Quote Originally Posted by winner69 View Post
    Over time MLN KFL etc have in the main traded at a discount to NAV - the discount was seen as the NPV of future management fees etc.

    Its only recently that they have consistently traded a premium. I think mainly because they are seen as just another stock (ticker code and all) and one that pays a decent dividend to boot in these low interest rate times. And for those who have come on bard over the last year (I would hazard a guess many have) its been a pretty lucrative investment eh

    Doesn't seem to make much sense for oldies but these are weird times.

    Question you ask is this the new norm ....and they will continue to trade at a premium to NAV forever.
    Need yours and other learned and seasoned investors opinion about this important issue being faced by me and many like me ...Shall we switch from such pricy funds ( Z score basis ) or keep riding till it collapses ...What goes up must come down may happen ...Memory of CEN and MEL at lofty levels in Jan still fresh

    As MFD said sell funds and DIY portfolio and get a 30% head start ...

    Try to answer this for us please
    Last edited by alokdhir; 05-05-2021 at 08:13 PM.

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