I'm with VintageFreak. I try to buy a fund with a great long term record and a great manager I respect when it's been in a period of underperformance, so long as I still respect the manager. For me FAIRX, with its mediocre 5 year record and great 15 year record, is one I'd rather add to than sell at this point. Berkowitz's investing style -- find a few great ideas, then go all-in -- doesn't go out of style, IMHO, precisely because (unlike, say, quant strategies which others can just imitate or which may not change with the markets) one of its key ingredients is courage and boldness.

That's fair enough Ted. FAIRX had one of the best performances out there, right out of the gate, upon inception. Bruce was Morningstar's manager of the Decade in January 2010.
Ted, I'm guessing that perhaps you used to watch Louis Rukeyser's show, Wall St. Week With Louis Rukeyser.
He used to say, "What have you done for me lately"?
Looking at the past 5 years as of 8/15/2014, a bull market the whole time:
FAIRX: 12.48%
SEQUX: 16.40%
And SEQUX has historically outperformed in down markets and underperformed in bull markets. As you know, the past 5 years has been bull market, so SEQUX was not at its best
Let's look at the $10,000 invested for those 5 years:
FAIRX: $18,004
SEQUX: $21,368
I calculated that using an excel spreadsheet. If someone wants to confirm the data, please do.
Of course, YTD, FAIRX is trouncing SEQUX.
the future returns of each: unpredictable

FYI: David Winters, the investor best known for criticizing the executive pay plan at Coca-Cola Co., has parted ways with another key player in the Coke saga: Warren Buffett‘s Berkshire Hathaway Inc. Now the question is will Wintergreen Fund shareholders dump Winter's by selling their shares.
Regards,
Ted
http://blogs.wsj.com/moneybeat/2014/08/15/winters-who-criticized-coke-sells-berkshire-after-buffett-didnt-criticize-enough/tab/print/

Valeant is an interesting animal, gobbling up other companies and attempting to squeeze more juice out of the lemons. It's really almost a private equity company with a healthcare focus. They've been buying up companies right and left.
It's been successful, so far, although its attracted a lot of shorts - most famously, Jim Chanos.
"Mr. Chanos, who is best known for predicting the fall of Enron, has made a bet against Valeant, arguing that it generates growth only by purchasing companies.
“There is a real business there, but there is no growth and the Street is paying up a huge amount for future growth based on acquisitions,” Mr. Chanos, president of the hedge fund Kynikos Associates, said on the sidelines of the Skybridge Alternatives Conference in Las Vegas."
http://dealbook.nytimes.com/2014/05/16/short-seller-chanos-turns-attention-to-valeant/?_php=true&_type=blogs&_r=0

"
So you have a fund going long and short based on what brilliant people think should work and they would have been better off just going long (and the more heavily shorted companies, the better) for the last 5 years or so.

Remember the Long Term Capital Management hedge fund?

Yeah, Jim Rickards - who I like quite a bit and follow (he's written two books and has an active Twitter) - was the principal negotiator in the bailout of LTCM. It's sort of like that - very intelligent people doing very complex things who are married (to at least some degree) to their economic theories.

"
So you have a fund going long and short based on what brilliant people think should work and they would have been better off just going long (and the more heavily shorted companies, the better) for the last 5 years or so.

Remember the Long Term Capital Management hedge fund?
If ever there were brilliant people, that was it. IIRC, possibly two Nobel Prize winners in that group of geniuses. It failed, and required a bail out from our government to prevent a wider spread financial crisis.
There was a book written about it [I haven't read it though]:

SEQUX has been great in recent years (from late 2009) until this year. As far as I know the problem is Valeant which is the largest position I think(till a few years ago the largest position was Berkshire)Since Feb. Valeant ,which has been in the news alot, is down about 20%
By the way can you get into the fund? They closed it late last year to most people.
As of December 10th, 2013, we have adopted a harder close for Sequoia. The Fund is closed to new investors, except for new accounts opened with us directly by existing shareholders of the Fund or existing clients of our firm, or members of their families. The Fund remains open to contributions from existing shareholders, though we reserve the right to reject any order to purchase Fund shares.

I've been in SEQUX for very many years, so regarding "can you get into the fund", I read what you posted below, on their website, and assume someone not in the fund cannot get in, unless they meet the very narrow criteria above.
Yes, regarding Berkshire, I remember that for a long time, Berkshire had a weighting of about 30% in SEQUX! I'm sure you know the historical ties between SEQUX and Warren Buffett......when Buffett closed his partnership, he told all his partners that if they were still interested in being in the stock market, he recommends Bill Ruane as the manager to go with. Bill Ruane established SEQUX for that express purpose.
Yes, Valeant is the largest position, and has a larger weighting than I feel comfortable with, at 18%. It never bothered me to have 30% in Berkshire Hathaway, but 18% in Valeant does bother me. Of course, Valeant went up 96% last year, and it sure wasn't bothering me then! But actually, I wasn't tracking the portfolio and wasn't even aware of it at the time.
Here's Valeant's amazing performance on a calendar year basis:

The Sequoia team is very aware of valuations, so it's interesting that their largest holding has had such a performance run up. Normally I wouldn't think SEQUX would hold a stock with such a run up, but Morningstar lists Valeant's forward P/E as only 10.5

"How would this strategy have performed during prolonged bull markets, like the one we have been in since the closing low on March 9, 2009, when the S&P 500 closed at 677?"
The implosion of the fund/s run by Andrew Lo (from the article below: "The idea what that Dr. Lo, perhaps one of the most brilliant quantitative scientists and academicians in finance (MIT, Harvard, all kinds of awards, PhDs out the ass, etc), would be incorporating a variety of approaches to manage the fund using all asset classes, derivatives and trading methodologies that he and his team saw fit to apply. You would write Dr. Lo a check ten seconds after seeing him speak somewhere, trust me.") are, I think, an excellent summary of one aspect of why these funds haven't worked.
A summary of the Lo situation:
http://www.thereformedbroker.com/2014/05/28/brokers-liquid-alts-and-the-fund-that-never-goes-up/
I think you have funds that are effectively quant funds run by very intelligent people who have a set of various rules and indicators who have done terribly in recent years because QE and ZIRP have effectively invalidated many of their rules that the investment decisions of these funds are based off of. These funds are black boxes, but as opaque as they are, there is highly likely a lengthy list of rules (and probably highly complex ones) that the fund operates with and uses to make its investment decisions.
So you have a fund going long and short based on what brilliant people think should work and they would have been better off just going long (and the more heavily shorted companies, the better) for the last 5 years or so.

From the Tactical Hedged Futures Strategy fund prospectus: "The Sub-Advisor forecasts index trading ranges based on its fundamental analysis of economic conditions, technical analysis of historical index prices and its general opinion of market direction. Additionally, the Sub-Advisor uses scenario analysis to assess risk and will adjust portfolio positions to reduce sensitivity to downside market movements."
Oy. Funds whose strategy just starts to get too esoteric.

I'm sure Warren Buffett would say he doesn't do this because he has no idea where the market is headed short term based on fundamental analysis....technical analysis.....and general opinion......and scenario analysis.
Is the market predictable short term based on these factors?
How would this strategy have performed during prolonged bull markets, like the one we have been in since the closing low on March 9, 2009, when the S&P 500 closed at 677?
I'm sure based on fundamental analysis, the market should not have gone up 32.4% in 2013....should not have gone up in 1997, 1998, 1999.
I haven't looked at the expense ratio, but funds like these often have high expense ratios.
This fund seems like it's all about trying to outguess Mr. Market.
I wish them luck, but I'm doubtful they will be successful over the longer term.

Sequoia to me would be a much more "get it and forget it" holding. Yacktman would be another option.

I also see SEQUX as being much more "get it and forget it", or "set it and forget it".
You have so many different analysts each covering different stocks, that you don't have to worry if one of the analysts has "lost it" or needs monitoring.
But if you're concerned that Bruce 'needs monitoring', or that he might possibly be on a rock super star manager ego thing, then you might be kept awake at night.
That's the advantage of a significant pool of highly qualified stock analysts. Maybe the analyst covering Sequoia's xyz stock didn't make a great pick or analysis, but there are a total of 44 stocks, and only 54.67% in the top 10 stocks, versus FAIRX below.
Oops, I made an error:
FAIRX has almost 49% in AIG. I didn't see the stock warrants, below:

Just a note, that there are some big Bruce Berkowitz fans on MFO, and I respect their position. With the exception of a gut wrenching 2011, FAIRX has had a great record.
As I mentioned, I was looking at the players, not the scoreboard, per Buffett's suggestion. The scoreboard for FAIRX has been xlnt, excepting 2011, when it underperformed the stock market by -34.53%. Yikes!

@rjb112 I've been in LSBRX since 2005. Last week, giving the most recent portfolio a little closer scrutiny than I usually do, I was struck by how.... tapped-down it seemed. Consistent with what Sven has posted. I've heard him say something very similar several months ago elsewhere, but not reflected in the port then--- now it is. I can't recall seeing LSBRX this subdued. Loomis is clearly concerned about something in a major way.

@Bitzer: "If I recall correctly, Bill Gross make a similar prediction some time ago and was flat out wrong"
I know for a fact [because I either heard him say it or read it in his monthly Outlook that he writes] that Bill Gross did say something to the effect that "the long-term bull market in bonds, which began in 1982, is over." I don't recall exactly when he said it, but IIRC, it was a few years ago.
I think Bill Gross is a super smart guy and an astute bond expert, but I also recall many years ago when he made a bold prediction about the stock market falling a LOT, which turned out to be completely wrong.
@expatsp: "Overall I did well, but it was too correlated with the equity markets for what I want in a bond fund"
There's a lot of interest in Kathleen Gaffney here at MFO, and I'm quite interested too. But I wonder about the 18.59% of her fund in stocks, and is that going to as you mentioned with respect to Loomis Sayles, will that make Gaffney's fund too correlated with the stock market to serve the needs of bond fund investors.
Seems to me that it would not serve the need of a stock heavy investor to diversify, but would serve the needs of a bond heavy investor to diversify! So if my portfolio was say 100% bond funds, it would serve me very well to have these aggressive bond funds that have junk bonds, emerging market bonds, and even some stocks in them. But if my portfolio had 80% stock funds and I wanted a mellow diversifier, I'd probably go towards Treasuries, or at a minimum investment grade bond funds.
@sven: "I do think their view on low future returns on bonds is realistic. This will pose considerable challenges for those who depends on bonds for income."
I agree that it is realistic, and has already been causing major problems for the income investor, retirees who always depended on safe certificates of deposit in banks and Treasury bonds. And probably will continue to do so in the future.
And of course many say that the stock markets are way overvalued, and will have poor returns over the next 5-10 years, e.g., Jeremy Grantham/GMO most recent 7-year forecast, posted on MFO.
If both the stock market and the bond market are way overvalued and will have poor returns going forward for the next 5-7 years, we are really in investment trouble!

Just my personal opinion.
I like the managers and analysts at Sequoia. I think the two managers are excellent, and they have a team of excellent analysts.
They have an investor day every year, and the document that comes out of it is always very informative regarding the analysts and managers.
http://www.sequoiafund.com/Reports/Transcript13.pdf
I think they are a highly experienced group of stock pickers, whom I trust. And very dedicated. With a storied tradition and history.
If I'm not mistaken, I believe that one of their analysts was or perhaps is seriously considered for the job to take over the main investing role at Berkshire Hathaway after Warren Buffett passes on. [In addition to the 2 former hedge fund managers that Berkshire Hathaway currently has].
Take a look at that Investor Day PDF referenced above. I'm extremely impressed with the depth of the analyst team, and how thoroughly they study the companies they invest in.
I own the fund both in a taxable account and an IRA.
I owned FAIRX for about 11 years. FAIRX is a one man show. It's the Bruce show. Night and day from SEQUX, which is a large team of analysts, each doing work and putting together the efforts in aggregate.
Berkowitz is obviously very smart and talented, but I gave up on him when I wasn't convinced my money was being managed with proper risk management.
When I saw over 50% in one stock [AIG, which is no longer over 50%, but still 42.8%], and generally the most concentrated stock portfolio of any stock mutual fund that I encountered, that concerned me. I was also concerned about Sears, St. Joe, Fannie and Freddie whose fate is in the hands of Congress.....a huge concentration in financials.....I lost my confidence in Berkowitz, and exited.
Also, I read a bunch of articles about Bruce Berkowitz, the sum total of which made me lack confidence in the person I was handing my money to, in FAIRX. Don't know if this is a super rock star mutual fund manager on an ego trip, but didn't want to take the risk, and I suspected it.
I was not making a forecast on the future performance of FAIRX, as that future performance will never be predictable. Warren Buffett suggested to 'keep your eyes on the players, not the scoreboard'. So although the scoreboard of FAIRX was good, I had my eyes on the player, and decided to make a sideways move to another fund.
Finally, although I do like the SEQUX team a lot, their performance over 1, 3 and 5 years is nothing to brag about.....although when I look at it by each calendar year, it looks better to me. Their YTD performance is awful, but who knows, this could be a great time to buy in........or maybe not.
I've been quite impressed by the benefits of just buying a stock index fund, where you don't have performance issues......you just get the market return minus the expenses [plus or minus a tiny tracking differential.] I like VTI and VTSAX.
Warren Buffett prefers a low cost S&P 500 index fund, like VFIAX, and has in his will that his wife's portfolio will be invested 90% in a low cost S&P 500 index fund, and 10% in short term government bonds
Any thoughts?

The page I get has no links.

JohnChisum, does this work for you?
http://online.barrons.com/news/articles/SB50001424053111904537004580085613480909700?mod=rss_barrons_this_week_magazine

What are the numbers below?
Are they since inception of MFO?

The numbers are since the inception of MFO. They reflect the total number of posts, topics, users, and views that exist in our database, today. I don't think they would reflect any deleted posts.

@Sven: It appears your link didn't register, here is the article.
Regards,
Ted
http://www.investmentnews.com/article/20140815/FREE/140819933?template=printart

Actually, the newer variation is "Strategery" - coined during a SNL parody of former President George W. Bush by comedian Will Ferrell. Here's the Wikipedia story.
http://en.m.wikipedia.org/wiki/Strategery
In the investment world I think "strategic" can mean about anything they want. But it may carry an underlying connotation that they are smarter and know more than you do. To me it's a little like some of the go-anywhere funds. You pay a manager a little extra to guess which way various market components (stocks, commodities, Treasuries, etc.) will move in the future.
One problem with that approach is that most of us have become very short-term focused nowadays. So, a manager might be "strategically" correct looking 5-10 years ahead and yet see investors flee his fund well before than if it doesn't produce solid near term returns - especially in comparison to whatever market segment(s) are currently hot.

FYI. Be aware of narrowly focused And actively managed ETFs.
http://investmentnews.com/article/20140815/FREE/140819933/ishares-and-pimco-to-shut-22-etfs

Our buddy, Vintage Freak, paints a dismally dark and uncompromisingly bleak portrait of the “Average Investor’s” investment acumen. Initially, his representative caricature has a moderately conservative investment approach. Unfortunately, he abandons his good intentions and does not stay the course. He fails the persistence and the patience tests.
Actually, quite to the contrary. I am castigating all the a-holes who screw up the life of the average investor. I am trying to explain that in the imaginary world of "if you had invested 100k in year X and held on for Y years you would have earned much more" people forget that a person has needs that make that impossible and he only contributes to his portfolio over a period of time.
I am very skeptical of fund returns vs investor returns published by various sources. I don't think they are capturing the problem properly. When you buy vs what you buy is always important for average investor to outperform. That determines over various periods of time whether at any given point of time ones portfolio is positive. As long as it is, that investor holds and continues to invest and not otherwise. Even if that position is cash or short term bond funds.
So quite to the contrary dear MJG I am not criticizing the investor at all. I am simply tired of reading articles mouthing the same thing again and again. Authors need to fulfill their writing quotas wi other topics. Maybe there will be Another mad off like scandal or something soon. I know Marilyn Monroe cannot die all over again to drive conspiracy theory articles. Seems to me after an extended bull market run, the average investor is now fair game.
Finally, we cannot nitpick time periods. from 1995 to 2000, DCA was a suckers game. Whether one wants to admit or not, what I stated tongue in cheek is exactly what happened. Let's not kid ourself everyone was diversified. Even those that thought they were were screwed by their fund managers all owning growth / tech stocks on the equity side and high yield bonds on the income side. Hindsight is always 20/20. However sincenyounhave the ability, is it possible for you to run your calculations for 20 years in prior period? Or even rolling 20 year periods? I think you will agree that would be a more sound way to conclude whether average investor sucks or not.

Excellent article.
MFOers, what do you all think of this?
Dan Fuss is as good as they get.........I look at Dan Fuss, Jeffrey Gundlach and Bill Gross as 3 of the most and possibly the most knowledgeable bond guys out there. 3 pillars of a stool.....
They think rates are going up, bonds will take a hit, and that we should go more towards short duration and high quality, e.g, more Treasuries.......less high yield/junk
"Dan Fuss and co-managers Matt Eagan and Elaine Stokes have put 27% of the fund's $25 billion fund in assets into short-term U.S. and Canadian government issues. Fuss says that's the highest weighting the fund has ever held in such super-safe instruments."
"It's increasingly difficult to find undervalued assets in any corner of the bond market. "Valuations across the spectrum are unattractive," he says."
"Eagan and his colleagues believe the long-term bull market in bonds, which began in 1982, is over, and that Fed action, combined with an improving economy, will push rates higher"
"....junk is now one of the riskiest places in the bond market."
"...the fund has tended to hold large stakes in junk bonds and emerging markets, two categories that tend to mirror the performance of stocks"
"........the fund will suffer some if rates rise. Should they climb one percentage point, the fund's price would fall by about 4%."
"......you'd be foolish not to pay attention to the fund's dramatic portfolio shift—given Fuss's long and superior record"