Brilliant!
"...What should this mean for readers of this publication? We at MFO have been looking for absolute value investors. I can tell you that they are in short supply. Charlie Munger had some good advice recently, which others have quoted and I will paraphrase. Focus on doing the easy things. Investment decisions or choices that are complex, and by that I mean things that include shorting stocks, futures, and the like – leave that to others. One of the more brilliant value investors and a contemporary of Benjamin Graham, Irving Kahn, passed away last week. He did very well with 50% of his assets in cash and 50% of his assets in equities. For most of us, the cash serves as a buffer and as a reserve for when the real, once in a lifetime, opportunities arise. I will close now, as is my wont, with a quote from a book, The Last Supper, by one of the great, under-appreciated American authors, Charles McCarry. “Do you know what makes a man a genius? The ability to see the obvious. Practically nobody can do that.”

Let's assume that the S&P500 is overvalued. What's to say it couldn't become a lot more overvalued. You can lose a lot of cash by shorting. Shorting is a high risk and speculative activity. You can make more in the long run (decades) by taking good risks, rather than being big roller of the dice.

If you went on things like valuation, you would have either sold a lot of things too early in the last few years or missed things that didn't seem appealing from a valuation standpoint. I can come up with quite a few examples of things that I thought seemed expensive that I didn't get into and they've only gotten more expensive. Church and Dwight (CHD) is one that definitely comes to mind, there are a number of others.
Again, my view is to own the best ideas and just hold them long-term and reinvest dividends and there are things that I've tried to trade in the last few years, would have just been better off sitting and holding instead and that's really what I've decided to do. I have a great deal of respect for those who can sit and trade, I just find the route I've taken to be far less stressful and actually, much more enjoyable than micromanaging.

@JJM58
One finds that you have had a total of 7 visits to this site since joining in March of 2014.
Now, it is possible to login and remain logged in, in order to read everything @Junkster has written at this site. Perhaps you have done this; but have not understood what he has written.
Junkster explained that he is invested in junk bonds at this time and will remain so until his sell signals show him it is time to leave. This is a future investment, for as soon as the clock ticks one minute after the initial purchase of any investment, one's investing future with that holding, has begun.
Otherwise, you are very much out of place with your comments.
MFO is not Yahoo forums or some of the other dysfunctional investment web sites, where the screaming and fighting outweight the wisdom.
You noted:
"Interesting to read your past moves.....however
what are you planning to do in the future is the
most important issue today.
No offense to you, sir, but I tire of posters who
provide us their "wisdom" of PAST maneuvers....
most of it I would bet is "revised" to a certain
extent...!"
The next several times that you are logged in here; you would serve your knowledge and apparent desire to learn (or you wouldn't be here) to review all of Junkster's posts.
Catch

Hi Maurice,
Thanks for stopping by.
There is no doubt in my mind that the S&P 500 Index is overvalued and overbought. But, currently it is the best house in the neighborhood and with that it now draws a premium price. It will not always be this way.
I am not buying much ... but, I have a great deal of cash and its got to go somewhere. At least if I buy out of favor securities then I have a chance, in time, to make some profit. If I buy securities that are selling at a good premium ... well the chance of making good money off of them is a whole lot less. It would be a momentum type of position and I like my positions to be supported by good fundamentals.
Just my thinking,
Old_Skeet

Hi Junkster,
Thanks for stopping buy.
I for one enjoy reading about what you got cooking, so to speak ... and, what your thoughts are. In addition, I enjoyed reading your book "How I Trade for a Living." Your post have been very insightful; and, I am sure if JJM58 had been on the board as long as the most of the rest of us he'd perhaps not have step of the Junkster's toes (so to speak).
I mentioned your book not to bring notoriety to you but thought he might be interested in seeking a copy of your book out for his own reading. You have earned your stipes with me.
Take care my friend, and, again ... Thanks for stopping by.
Old_Skeet

Junkster
Interesting to read your past moves.....however
what are you planning to do in the future is the
most important issue today.
No offense to you, sir, but I tire of posters who
provide us their "wisdom" of PAST maneuvers....
most of it I would bet is "revised" to a certain
extent...!
May 1st profits are made by March 2 decisions.
Best regards to you.......

Whoa! Bad morning? I posted numerous times last year beginning in January what my position was duruing 2014 which was primarily 100% in junk munis. Now I am 100% in junk corporates and posted this January as I was exiting the junk munis for the junk corporates. I trade in the present as I am unable to predict the future. Do you want me to send you my brokerage statements or something from last year?

In my case, I haven't switched banks because the only bank service I use at a bank is a safe deposit box, where physical proximity trumps all.
Sure, I have a few $0 balance/$0 cost accounts elsewhere for promotional services (e.g. TDBank will let me use their coin counter for free), but I don't really "bank" at any bank at all. I use brokerages to provide fee-rebate ATM cards and bill pay service. I generally keep enough cash in those accounts to cover expenditures.
Spare cash goes into whichever internet bank pays a solid, stable rate (high, doesn't have to be the highest), so that I don't feel compelled to move money every six months. But that money is only so sticky. If/when that bank is no longer competitive, I move.
T. Rowe Price - they give free M* premium membership at $100K household balance. That's $200/year (if you value the membership) - much more than Fidelity will give you if you move a $100K IRA to them - 2.5% of your IRA contribution each year, or around $140/year. Different form of promotion, same idea - keep the money around.
VBS - everything I read suggests that they are improving, some day they may reach the service level of places like Schwab and Fidelity. Low cost - sure, if you're a Flagship customer, but otherwise it's more expensive to trade TF share classes there than at Fidelity. Cash management services? VanguardAdvantage isn't even offered unless you have $500K in Vanguard funds with them; then they charge $30/year, and an extra $5/mo for bill pay. 'Course, like most stuff there, the freebies kick in at $1M.
I'm not knocking any of these providers. Each has its strengths and weaknesses. But that's why its not accurate to suggest that any one of them is the cheapest/best in general.

IMO, the S&P 500 is fully valued, but earnings forecasts are currently
being revised downward.........so I am thinking the S&P 500 is ready
for its usual 3 to 5 % re-tracement back to its 100 day moving average....
Seems like the S&P 500 has been following this behavior since
November of 2012 ........
With the ECB and the BOJ printing the money, I think there is continued
liquidity to support stock & govt bond prices for quarters to come.....

I hope you are right. Some of the sentiment indicators ala Investors Intelligence look real nasty for the bulls. As for U.S govt bond prices I think it is game, set, and match and the only direction is up for yields. But then I was dead wrong about that in 2014 so who knows. Fortunately in 2014 I traded what I saw and not what I thought. Doing the same in 2015 by being in junk corporates (with the usual tight leash) even though they look very pricey. What's it been now, something like a record setting 30 consecutive up trading days in the H0A0

Hi Tampabay,
Thanks for stopping by.
I too have bought since the first of the year mostly though in the energy and materials sectors that currently are out of favor and I also bought some foreign stuff as well. There are only a few sectors within the S&P 500 Index that are not currently overbought by my thinking.
Old_Skeet

I don't buy indexes so really don't care about "market" valuations
but have to admit bargain prices are harder to find...bought JNJ last week for $98.50,(today $103.00) More healthcare/consumer products but that's ok
still able to find some stuff

Hi JJM58,
Thanks for your comments.
I too am looking for a decline in the three to five percent range from its recent 52 week high of about 2115. However, I am not sure when this will come to pass but my thinking is by early summer. That would put the Index somewhere between 2050 and 2010 if this were to occur in the near term ... and, with this we would be back of where we started the year at about 2060.
Old_Skeet

@linter,
It seems to me that the bigger possibility is that the larger biotech companies with cash will buy out the weaker ones during a big downturn, provided they have a promising pipeline. In other words, it is 50% off sale time.

Love Ed's writing, analytical skills and his wealth of experience. Still, I'm having trouble coming to grips with what seems a very bearish (dire?) forecast.
As a conservative retired investor who can't afford to loose a big chunk of the nest egg (exactly the type Ed refers to) I've spread it around as best I can. Total equity exposure probably less than 40%. Another 20% directly exposed to commodities, which I view as an equity alternative. 15% cash and about 25% in short and intermediate duration domestic/international bond funds - largely investment grade. So he may be preaching to the choir in this case.
I think one reason my view of equities is more sanguine than his is I think the central banks and indebted governments will to a large extent be bailed out by inflation. Without a hefty dose of inflation (as opposed to the headline deflation now front-stage) I'd agree equities are in for a long cold shower. This cheerier outlook, however, might be described by some as investing "on a wing and a prayer."
:)
Thanks to everyone who contributed to this informative and entertaining publication. Interesting insights by David on the new bond funds from TRP. I bailed from PRHYX way too early (am locked out), but somehow don't feel I want to dive into their global version at this time.
Cold? Currently packing for the Keys. Nice week coming up.

as much as i fear the bio bear, going back to 2005 via FBIOX, near as i can tell, there's never been a correction where you had to hold "for years" before you got out of the hole if you bought at the top. are you talking about some pre 05 mania? i mean, if nothing else, it looks to me like the wildly up has been going on for at least a decade.

FYI: Low-fee index funds do a better job of meeting benchmarks, but some see specific uses for actively managed funds.
Regards,
Ted
http://www.wsj.com/articles/are-index-funds-really-better-than-actively-managed-1425271058

FYI: ( Click On Article Title At Top Of Google Search)
Institutions are piling into exchange-traded bond funds at the fastest pace on record, driven by forces reshaping the increasingly illiquid corporate-debt market and their desire to stay nimble ahead of expected interest-rate moves.
Bond ETFs took in $32 billion globally this year through Feb. 26, according to data from Bloomberg LP, in what has been the strongest start to any year since the funds began in 2002.
Regards,
Ted
https://www.google.com/search?newwindow=1&site=&source=hp&q=Institutions+Pour+Cash+Into+Bond+ETFs+wsj&oq=Institutions+Pour+Cash+Into+Bond+ETFs+wsj&gs_l=hp.3...4747.7908.0.9129.5.5.0.0.0.0.58.268.5.5.0.msedr...0...1c.1.62.hp..4.1.54.eqFaWBk2204

FYI: Matthew Tuttle is a big believer in tactical investing, and a fan of “smart beta” approaches. One of his preferred strategies is to combine pure style S&P 500 ETFs—one focused on growth, the other on value—to outperform long exposure to the Tuttle Tactical Management U.S. Core ETF (TUTT.
Regards,
Ted
http://www.etf.com/sections/features-and-news/beating-spy-pure-style-sp-500-etfs?nopaging=1

@JJM58
Prof. David got a tip about this change and posted a heads-up about it recently, here:
http://www.mutualfundobserver.com/discuss/discussion/19092/building-the-new-artisan-emerging-markets-team/p1
You might want to check it and the comments out; some of the ruminations have come to pass. Needless to say, we are hopeful and await the details (Artisan probably will be slow to release).

I have followed Lewis Kaufman who ran Thornburg Developing World Fund
for about 3 years. Good EM fund performance while carrying approx $ 2.3 bill.
Kaufman has a strong performance and investment reputation at Thornburg.
Just saw tonight in the MFO "mger changes" section that he has joined
Artisan Funds and will start his own autonomous investment team for
EM stocks.....by "mid 2015"
Getting a chance to own a new Lewis Kaufman EM stock fund where assets
will be (much) lower & where he gets to call his shots will be a good thing.....
No load but maybe 1.75 % exp ratio (IMO)...?
I will be interested in following this opportunity as it unfolds this summer.........

Was just reviewing some of David Snowball's earlier Funds in Registration feature earlier tonight and was curious myself.
Greenhouse MicroCap Discovery Fund
BCDSX:US
PENDING LISTING
GREENHOUSE MICROCAP DISCOVERY FUND (BCDSX:US) IS PENDING LISTING
Greenhouse MicroCap Discovery Fund an open-end fund incorporated in the USA. The Fund seeks long-term capital appreciation. The Fund invests in equity securities of micro-cap companies. The Subadvisor seeks to uncover companies run by disciplined management teams possessing clear strategies for growth and that the Subadvisor believes trade at a discount to intrinsic value.
http://www.bloomberg.com/quote/BCDSX:US
GREENHOUSE MICROCAP DISCOVERY FUND
Greenhouse MicroCap Discovery Fund will pursue long-term capital appreciation by investing in 50-100 microcaps “run by disciplined management teams possessing clear strategies for growth that … trade at a discount to intrinsic value.” The fund will be managed by Joseph Milano and James Gentile. Mr. Milano was portfolio manager of the T. Rowe Price New America Growth Fund (PRWAX) from 2002-2013. Morningstar described his investment preferences as “idiosyncratic … somewhat defensive … [tending toward] cyclicals.” He beat the S&P by about 2% a year over his career. The initial expense ratio is capped at 2.00% for investor shares. The minimum initial investment is $2500, reduced to $1000 for various sort of tax-advantaged accounts.
http://www.mutualfundobserver.com/2014/11/november-2014-funds-in-registration/
Also curious here:
RIVERPARK FOCUSED VALUE FUND
RiverPark Focused Value Fund will seek long-term capital appreciation. The plan is to focus on large cap domestic stocks, with particular focus on “special situations” such as spin-offs or reorganizations and on firms whose share prices might have cratered. They’ll buy if it’s a high quality firm and if the stock trades at a substantial discount to intrinsic value. They’ll sell when the stock approaches their target price for it
http://www.mutualfundobserver.com/2015/01/january-2015-funds-in-registration/