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Tom Alexander wrote: " It's not the fund that determines wether or not one
is being aggressive."
I agree completely. I guess I was trying to warn novis investors
in my criptic way of the potential risks of holding such a fund alone without
a hedge stratagy. Unlike an index fund, The Nova fund trys to outperform the
S&P by 150% (from their Prospectus) using verious derivatives. They do not
seem to hedge within the fund in any way, (I.E. it's not a hedge fund) but as
you said, leave it up to the money manager. (Usually at this point someone
says "Don't try this at home kids"). The Ursa fund tries to produce the
inverse (opposit) of the S&P, again using all available derivatives, and
again does not hedge within the fund. The same is true with bonds using the
Gov. Bond Fund and the Juno Fund.
In responce to David Pearson's forcast of a major down market,
Steven C. Walker responded that he could not time the market very well so he
was speculating (thow well educated and perhaps well founded) on the market
direction by buying the Ursa Fund, a very bearish position. I personally
have held the Nova Fund at various times over the last three years as a
bullish position (up 48.8% in one year ending June 16, 1997, source
Kiplinger's Magazine). Lately it has turned down as one would expect. Just
look at a three year chart of the S&P to see why.
My concearn is we often throw things out over the net without any
cautions to new investors, not out of mallice or superority, but because we
forget others are reading them and may not fully understand the implications
(very costly).
Good luck and good trading,
Ray Raffurty
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