Steve Navra - Guru or Ghost?
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Isn't this the very same reason we don't want to see repeated again?
Well yes and strong control in Australia means this is level of scam is very unlikely but not infeasible.
Great Southern had a business model and even a business. It simply didn't work when the market changed.
I remember being told by a friend to invest and it seems to good to be true so I applied the old rule of "if it is too good to be true then it usually is!"
Apply that and you should be OK.
Peter
Would you do what you did again?
Once red:
Good decisions come from wisdom,
Wisdom comes experience,
Experience comes from bad decisions
Thus, I didn't have a chance to do anything different to what I did
What would you do differently?
I had made money in property and had lost money in the stock market. So, guess what I'd do differently from now on (and I'm not concern of other will think
What would you not do again?
Would no invest in anything I have no direct control and that I don't fully understand. Simple is beautiful.
Also, I realised there are no gurus out there. Only lucky and unlucky people (some more articulated than others). When you think about all the highly paid CEO's and directors of Banks, Managed Funds,heads of State, etc that couldn't see what was coming and could only react to it. It makes you wonder in what sort of mess we all live in.
Hope this helps!
Hi agent007,
Not knowing your situation or Steve's Managed funds situation as I am not one of his clients.
But do you think excessive debt might have played a big role in the huge losses? I mean debt could be margin loan that you took, and/or excessive debt taken by companies in which Steve invested?
Based on my investing experience and what I have read, there are two types of debt. Bad debt (holidays, cars, gadgets etc.), and good debt (property, shares, managed funds etc.). But I think what ppl forget is when the debt becomes excessive it doesn't matter even if it is used for investments it can still be a very bad thing. And the GFC is a great example proving it.
Cheers,
Oracle.
This post has been removed and an updated post will be reposted at a later date.
CW
CW
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In general I wouldn't say the issue was due to excessive debt but, rather that no one planned to such massive drop. I understand that some unit holders were close or at margin calls and could not cover those calls without selling units. Personally, I was in the position to hold since I had enough resources to cover margin calls. However, the fund was taken to cash when it was at a very low point. Thus, even though I understand why it was done, that action itself went against the main "philosophy" of the fund to "buy low and sell high". So, when the market bounced back (as it always eventually does) we missed a good portion of the "recovery". I also know that in retrospective it is easy to look back and talk about it. However, at that time there was great confusion. Neddleless to say that (IMO) the fund never recovered after that action. When it went to cash I decided to leave and never come back
Today, there was an interesting article in the fr. They mentioned that Super performance in the last 10 years or so was between 3.8 and 5 percent. Nonetheless, i believe that in AUS we pay $50m daily in fees. It looks there is
something wrong with the entire financial industry. Therefore, who we should blame?
A few questions:
Why is it that when financial advice companies go under, everything is to blame except them selves?
Why can they take millions and millions of commission for non performance of funds?
Why do investors that have lost huge amounts of money mostly don't blame the FA company but blame the GFC, market correction etc? (I think it's cognitive dissonance at play here, they don't want to admit they were party to the bad decisions)
And why do most owners/directors of the FA compnaies have their affairs structured that they live lavish lifestyles in rich suburbs during (and after) the loss of millions of investors money, who mostly are normal working people who can't afford to lose any money.
As for myself, I went to a couple of Navra seminars in the early 2000,s and thought the concepts werre pretty average, and designed to impress beginner (or zero experience) investors but were mostly the opposite of normal, risk averse investing strategies.
I have done well before, during and after the GFC, mostly by being risk averse most times and absolutely staying out of the market when times are bad. As for not seeing the GFC coming, so what, whatever happened to using the boring old trailing stop losses?
If an average Joe like me can make money and at least not lose my shirt in bad times, why can't people charging others a shirt load of money for bad advice, with zero accountability?
Why is it that when financial advice companies go under, everything is to blame except them selves?
Why can they take millions and millions of commission for non performance of funds?
Why do investors that have lost huge amounts of money mostly don't blame the FA company but blame the GFC, market correction etc? (I think it's cognitive dissonance at play here, they don't want to admit they were party to the bad decisions)
And why do most owners/directors of the FA compnaies have their affairs structured that they live lavish lifestyles in rich suburbs during (and after) the loss of millions of investors money, who mostly are normal working people who can't afford to lose any money.
As for myself, I went to a couple of Navra seminars in the early 2000,s and thought the concepts werre pretty average, and designed to impress beginner (or zero experience) investors but were mostly the opposite of normal, risk averse investing strategies.
I have done well before, during and after the GFC, mostly by being risk averse most times and absolutely staying out of the market when times are bad. As for not seeing the GFC coming, so what, whatever happened to using the boring old trailing stop losses?
If an average Joe like me can make money and at least not lose my shirt in bad times, why can't people charging others a shirt load of money for bad advice, with zero accountability?
Sim
Administrator
You make it sound as though advisors should be omniscient?
I hear a lot of people make similar claims.
My only suggestion is to consider that risking your own money is a vastly different exercise to risking other people's money.
Think about a typical fund manager ... if you are too risk averse (eg: going to 100% cash when the market is crashing), you get slammed by the investors for not being in the market. If you stay in the market, you get slammed by investors for losing too much money. If you aren't in the market when it starts rising, you get slammed by investors, if you are, you get slammed by investors because you aren't performing as well as fund XYZ. You simply can't win.
I tell you, it's a mugs game - you can never keep everyone happy all the time, you can never be all things to all people.
Then look at what the people giving advice need to deal with - they are supposed to make all the right decisions all the time, and are not allowed to make mistakes. Ever. That's an impossible ask in my opinion.
I'm not defending any individuals or companies here - I'm just saying, I don't think it's as simple as many people make it out to be after the fact.
Sim
Administrator
They are charging commission because people have (generally) been unwilling to pay a fee-for-service. At the end of the day, you either pay a commission or some kind of fee based on the costs of the work that is done (whether that be fixed fee, percentage of funds managed, time-and-materials, etc) . Either way, the people doing the work need to get paid for the work they do.
The whole concept of not being paid unless you perform is overly romantic (in my opinion) and ridiculous (in the long term) and assumes you can effectively get something for nothing. Even when the market is down and you are "losing" money, someone is still managing your money (I'm talking in generalities here, applies to both fund manager and advisors). People can't be expected to work for free.
Think about the situation that's coming next year when commissions are banned - you'll be expected to pay up front for your advice, and then when your investments go down, you'll not only have lost money, but you'll also already be out of pocket for the advice you've been given. Is that really a better scenario? My guess is that even more investors will be upset than before!
But look at it from the advisors point of view ... they have bills to pay, rent, staff, office equipment, plus being able to put food on the table. Do you really expect them to work for nothing just because the market goes down?
The advisor doesn't control the markets, nor do the fund managers they invest with.
You might argue that the advisors / fund managers should be more actively managing the money to deal with negative market conditions ... but there is a strong counter-argument against churning investments which leads to inefficiencies (transactions cost money), and the potential for timing mistakes ... so again it's a case of damned-if-you-do-damned-if-you-don't. At the same time, the more actively you manage a portfolio, the more time it takes, and hence, the more it's going to cost you, regardless of performance.
Once again, my stance is "it's complicated" and can't be simplified down to mere wishes like only paying for performance and never losing money, etc etc.
With all respect I think you have an overly idealistic, maybe romantic view of the industry. I have a close friend who is an FA. He's actually pretty clueless when it comes to investing and is basically a salesperson for funds. He is pretty successful but is in debt up to his eyeballs and has left a trail of quite a few unhappy clients that have lost a bomb. "oh, it's the markets fault".
I don't think clients complain when a fund goes to cash - rarely 100%. as getting 6.5% in a negative overall market is pretty good But the problem is when fees and commissions come in and that is eroded to zero, or less.
But, re performing in a down market. I distinctly remember at a Navra seminar a presentation where Steve had this strategy to make money in any market by buying and selling the whip saw, small ups and downs within the major trends of the market, whether they be up or dow. My initial though was 'that cant be right, what about the massive transaction costs' and I actually brought that up but can't remember his reply.
This concept of course had a groovy label, just like "rental reality" which in my opinion, is another bogus concept designed to impress newbies.
The thing is with investing, the bad times are to survive (getting 6.5 % cash is awesome) and the good times are to make money.
I don't think clients complain when a fund goes to cash - rarely 100%. as getting 6.5% in a negative overall market is pretty good But the problem is when fees and commissions come in and that is eroded to zero, or less.
But, re performing in a down market. I distinctly remember at a Navra seminar a presentation where Steve had this strategy to make money in any market by buying and selling the whip saw, small ups and downs within the major trends of the market, whether they be up or dow. My initial though was 'that cant be right, what about the massive transaction costs' and I actually brought that up but can't remember his reply.
This concept of course had a groovy label, just like "rental reality" which in my opinion, is another bogus concept designed to impress newbies.
The thing is with investing, the bad times are to survive (getting 6.5 % cash is awesome) and the good times are to make money.
Totally agree with the point of this post. Will add that people need to understand the down side of the investment and that there are not silver bullets. It is just people dealing with people. And this is regardless of the fees/commissions and/or personalities behind the fund. There are no guarantees. People need to take responsibility for their actions and decisions too. Otherwise, IMO we should surrender our adult independence to a higher authority.
At the end, the only winners are the "participants" in the legal system. It is going to be a solicitors feast
But, that is always the case.No one said they were any silver bullets. And i dont think ist just people dealing with people. Its actually a commercial transaction. You pay someone money too perform a service.
Its gotta be one of the few industries where there is no guarantee on that service.
Yes, the lawyers are the winners. But the owners of the funds with their structures firmly in place (flash houses in upmarket suburbs in wife's names, assets hidden in trusts everywhere, commissions banked before the fund collapse, phoenix company's run by others emerging after the fund collapses etc etc) that are also not doing so bad at all.
You should say the only losers are the poor punters who have lost their hard earned....over and over again.
Its gotta be one of the few industries where there is no guarantee on that service.
Yes, the lawyers are the winners. But the owners of the funds with their structures firmly in place (flash houses in upmarket suburbs in wife's names, assets hidden in trusts everywhere, commissions banked before the fund collapse, phoenix company's run by others emerging after the fund collapses etc etc) that are also not doing so bad at all.
You should say the only losers are the poor punters who have lost their hard earned....over and over again.
Totally agree with the point of this post. Will add that people need to understand the down side of the investment and that there are not silver bullets. It is just people dealing with people. And this is regardless of the fees/commissions and/or personalities behind the fund. There are no guarantees. People need to take responsibility for their actions and decisions too. Otherwise, IMO we should surrender our adult independence to a higher authority.
At the end, the only winners are the "participants" in the legal system. It is going to be a solicitors feast
If we are sick we go to a doctor, if we have a toothache we go to a dentist, if our dog is poorly we go to a vet – the same holds true for financial advice (or so it should).
Financial planners have a fiduciary duty of care for their clients in that they should not be recommending products to their clients that are not suitable to them and their circumstances.
Horses for courses. High flyers that have big disposable incomes can afford to get involved in some of the more ‘sophisticated’ investment strategies, but for the majority of the mom and pop investors trying to safely grow a nest egg they should definitely not be exposed to some of the cowboy moves that can take place – lets face it, the more the FA can sell the more money they make, it takes a person of strong ethics to not be tempted to throw every conceivable investment opportunity to a relatively unsophisticated client base just because they can, and in most cases they can get away with it , however when situations like the GFC hit it’s then that the total inappropriateness of investment advice is exposed for what it is – but by then it is too late. Lives have been ruined and futures have been marred. But as evand pointed out – it is the financial advisors and fund managers who know how to work with legal structures that walk away from these train smashes relatively unscathed while the mom and pop investors who trusted their advice are left to pick up the pieces and in some cases after years of hard work they have no time left to do this, and watch while their dreams of a retirement evaporate in front of their very eyes and they are forced to sell their PPRs and live out their remaining years in the ‘spare bedroom’ of a relative. (I know of a few people like this). For those with young families, dreams of a better education for their children or being able to live in a better suburb also go out the window.
We are not talking about flying off to the South of France every few months or buying expensive waterfront properties or driving late model luxury German cars. We are talking about people who have had the very basic fabric of their lives torn from around them and it is a case of being able to continue to be able to afford to stay in their homes, continue to drive a mechanically safe car and go on a family holiday without blowing the budget and being able to pay for their kids swimming lessons. Real life, real people – not just some cipher representing x number of dollars in commission to the FA or fund manager.
I am glad that I can look at myself in the mirror every morning and be OK with who I am – I sometimes wonder if some others can do that, or do they only justify and rationalise their actions before scurrying off in search of their next dollar – no matter what the cost.
A view from the bright side.
CW
Financial planners have a fiduciary duty of care for their clients in that they should not be recommending products to their clients that are not suitable to them and their circumstances.
Horses for courses. High flyers that have big disposable incomes can afford to get involved in some of the more ‘sophisticated’ investment strategies, but for the majority of the mom and pop investors trying to safely grow a nest egg they should definitely not be exposed to some of the cowboy moves that can take place – lets face it, the more the FA can sell the more money they make, it takes a person of strong ethics to not be tempted to throw every conceivable investment opportunity to a relatively unsophisticated client base just because they can, and in most cases they can get away with it , however when situations like the GFC hit it’s then that the total inappropriateness of investment advice is exposed for what it is – but by then it is too late. Lives have been ruined and futures have been marred. But as evand pointed out – it is the financial advisors and fund managers who know how to work with legal structures that walk away from these train smashes relatively unscathed while the mom and pop investors who trusted their advice are left to pick up the pieces and in some cases after years of hard work they have no time left to do this, and watch while their dreams of a retirement evaporate in front of their very eyes and they are forced to sell their PPRs and live out their remaining years in the ‘spare bedroom’ of a relative. (I know of a few people like this). For those with young families, dreams of a better education for their children or being able to live in a better suburb also go out the window.
We are not talking about flying off to the South of France every few months or buying expensive waterfront properties or driving late model luxury German cars. We are talking about people who have had the very basic fabric of their lives torn from around them and it is a case of being able to continue to be able to afford to stay in their homes, continue to drive a mechanically safe car and go on a family holiday without blowing the budget and being able to pay for their kids swimming lessons. Real life, real people – not just some cipher representing x number of dollars in commission to the FA or fund manager.
I am glad that I can look at myself in the mirror every morning and be OK with who I am – I sometimes wonder if some others can do that, or do they only justify and rationalise their actions before scurrying off in search of their next dollar – no matter what the cost.
A view from the bright side.
CW
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Here's one. I have a friend whose cousin was recently divorced. She had an amount of money from the divorce settlement (app. $4 hundred k) and placed it with a fund advised by Financial planner while she rented and looked for a property to buy for her and the kids future.
It took longer than she planned. In the meantime, over 80% of the money was lost in a fund placed by the FA.
You think her and the kids are doing it tough? You bet.
No accountability, no recourse, GONE!! The FA drives a Merc.
Is this one step up from theft? I don't know how a lot of these guys in this industry lay in bed straight at night.
It took longer than she planned. In the meantime, over 80% of the money was lost in a fund placed by the FA.
You think her and the kids are doing it tough? You bet.
No accountability, no recourse, GONE!! The FA drives a Merc.
Is this one step up from theft? I don't know how a lot of these guys in this industry lay in bed straight at night.
When I first got my margin loan my bank insisted I consult one of their financial advisors. He was a nice kid, but didn't seem to understand that I didn't want any financial advice, just the loan sorted and I'd be on my way.
I feel sorry for some people, because they genuinely believe that a financial advisor will give them useful and relevant advice, yet few people I know who have used financial advisors have come away satisfied.
That said, investing is about being paid to take risk. As such, there is one person who is truly responsible for managing that risk: you.
I feel sorry for some people, because they genuinely believe that a financial advisor will give them useful and relevant advice, yet few people I know who have used financial advisors have come away satisfied.
That said, investing is about being paid to take risk. As such, there is one person who is truly responsible for managing that risk: you.
AMEN
On the point about:
Lets for a moment imagine that you are dropped into a remote rainforest location. You are a city slicker, you can find your way around a cafe latte and a chocolate croissant, but out here you find yourself alone, in a completely unfamiliar environment. There are crocodile infested rivers and swamps, bugs the size of cats, strange sounds and furtive shadowy movement wherever you look - get the picture? Pretty scary. Well that is how I felt when I consulted a Financial professional. A guide, someone who knows what to steer clear of (or so I thought) and what was safe. Like a jungle native inhabitant who had lived his whole life in the jungle and could navigate the terrain. Given this scenario, would you have trusted this native of the jungle? Well now that I am older and wiser I agree with you wholeheartedly - yes I am responsible for managing my risk, but just as the person in the above story, it's hard to manage risk if you don't even know what is risky and must trust and rely on someone to help you.
CW
That is the whole point of a forum like this, and all the books many of us have read (by Kiyosaki, Somers, etc etc) it IS NOT about trusting someone else with your life savings. It is about educating yourself to make better decisions. Then the jungle isn't quite as scary as before. Eventually you even start to feel less like someone's dinner.
However, the fund was taken to cash when it was at a very low point. Thus, even though I understand why it was done, that action itself went against the main "philosophy" of the fund to "buy low and sell high". So, when the market bounced back (as it always eventually does) we missed a good portion of the "recovery". I also know that in retrospective it is easy to look back and talk about it. However, at that time there was great confusion. Neddleless to say that (IMO) the fund never recovered after that action. When it went to cash I decided to leave and never come back
I did exactly the same thing. I got out when the fund went to cash as I thought at that time the whole lot was going to custard. I really thought that the Navra Group would declare bankruptcy and me stuck in the middle with a margin loan !!!!
I still have the Great Southern "investment" to contend with.
Similar to me...
I exited my managed funds when the market dropped to 5400. It was day 12 of the consecutive drops bear run from the peak. If I'd held one more day it would have bounced back 4%, shame. I remember calling my NFS consultant to ask them their opinion and they said I should stay in and that their experts were all saying the ASX would be back at 6800 by the end of the year. I knew I couldn't absorb any more margin calls having lost $200K in that 12 day streak so exited there and then. I can recover from that loss, my new Mona Vale development is creating $500K equity alone, but more than that would have been pretty catastrophic. I still have that $200K LOC loan against my former PPOR that owns nothing but air now and service the interest every month. It was a good, albeit expensive, lesson. I too have a GSP loan and ongoing legal battle to work through as well. But at least I capped that at one years investing after realising it was too good to be true. NFS recommended I go again, but I politely declined the following years. One wonders why I as a layman could run the numbers and they couldn't.
At least I still hold all my properties and will turn back CF+ once finished my current big development in Mona Vale. This has been a major hiccup in my strategy but thankfully not as permanently destructive as some others have had to experience.
My big learning was to trust my own experience and ability. In all instances, my decisions and actions have been superior to FPs that I have had dealings with, NFS or otherwise. My second big learning is to steer clear of managed funds and structured investment schemes. Both are way to cutting edge and volatile. Sure and steady value add property for me now where I am the master of my own destiny. I might even slowly build an ASX50 direct portfolio of shares in time for tax effective yield, but not any time soon and never through a MF again.
Cheers,
Michael
I've invested in Palandri because Great Southern was all sold out and lost it all.
I wanted a tax effective scheme, and they gave me, but the consequences I had to suffer was big. I will have to keep paying the loan for the next 7 years.
I knew what risks I was taking, and I am taking full responsibility for it but I will never invest in another managed or structured fund again, and never with MF.
I wanted a tax effective scheme, and they gave me, but the consequences I had to suffer was big. I will have to keep paying the loan for the next 7 years.
I knew what risks I was taking, and I am taking full responsibility for it but I will never invest in another managed or structured fund again, and never with MF.
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