FYI: The audio tape of David Giunta is from this morning's Money Life Show.
Regards,
Ted
http://www.marketwatch.com/story/proof-most-investors-are-clueless-2014-05-12/print?guid=5DFB7E6C-D9CF-11E3-B131-00212803FAD6
David Giunta Interview:http://www.moneylifeshow.com/highlights.asp
The Natixis Study: http://ngam.natixis.com/docs/352/754/562014_FINAL_Individual Investor Survey Full Report _4292014.pdf

Here's link to David's latest update on RGHVX:

Informative description on the strategy. Goes to show that the M* L/S category is way too broad covering a wide variety of strategies and investment styles and so the average for that entire category is meaningless to compare against.
A couple of small problems with the writeup:
For the retail fund, it is misleading to compare its performance against the SP500. It would be more meaningful to compare it to a midcap value index given its portfolio. Comparing it to something like IWS will make the cost of hedging apparent in rising markets rather than make it look like it is a free lunch. The downside protection is evident but nothing to get excited about. The yellow line is IWS.

The style may have been different when it was a hedge fund but if they had the same style even then, they are not being "honest" by calling themselves large value and dipping into the higher returns in riskier midcaps to compensate for hedging costs. :-) That is how the "strategy works".
This is why I suggested that it is a fund to consider in the midcap value allocation, not LCV as the writeup suggests.
Also, you don't sell call options to nervous investors unless one is talking about investors nervous that the market will go up! You sell it to bullish investors that want to bet on the upside so you can hedge your downside as you keep the premium if the market falls or remains the same. The more you sell, less exposure to the market's upside as you have to pay the increase over the strike price + premium.
You sell put options to nervous investors as insurance who are trying to hedge their downside and so not what the fund would want to do since the fund also wants the same protection. The fund could buy put options for downside protection but then it would land up paying the premium.
The writeup is a bit confusing on what they are actually doing because of the above.

@JohnChisum, what is the rationale for owning a fund like ACDJX over an SP500 index or a large value index? Not trying to make any indexology points, just trying to see what I might have missed in this particular fund. Any positive alpha generated by this fund seems to have gone primarily into paying their ER.

I max out my Roth IRA every year, and currently contribute up to the maximum company match in my traditional 401k (I have the option to contribute to a Roth 401K). As it stands my total retirement accounts are about one-third in Roth IRA, and two-thirds in traditional IRA/401K. My goal is to be able to retire at 60 (I'm 45). My guess is I will be in the same tax bracket when I retire. I like having money in both Roth and non-Roth to hedge against the unknown of what taxes will be in 15 years compared to today. Since my non-Roth accounts total more than my Roth, I am thinking of changing to contributing to the Roth 401K instead. I think it might be good to have a balance. Another thing to consider: what if you are paying state income tax during your working years, but move to a state such as Florida when you retire, and won't have to pay state income tax. In that case, putting money in a Roth might be disadvantageous.

FYI:
Regards,
Ted
http://www.bloomberg.com/news/print/2014-05-08/one-of-the-best-retirement-deals-9-out-of-10-people-ignore.html

FYI:
Regards,
Ted
http://online.wsj.com/news/articles/SB10001424052702304101504579543673513809210#printMode

LM has other asset classes. I referenced the one that has been around the longest but there is a retail class sold through fidelity that is currently load waived. It's net expense ratio is 1.65. I also worry about the whiff. Just surprised with a fund out there for almost five years that has been performing so well that there wouldn't be more out there. I would note that holding mortgages is in line with DBLTX, which also outperforms, and especially so when it was much smaller. I guess I was hoping for an unknown. DBLTX.

I realize this blog post is like preaching to parts of the MFO choir. Yet, bringing The Known to the frontal cortex ever so often, and singing along, can prevent "cognitive slippage," if not fortify, no?
http://www.ritholtz.com/blog/2014/05/pay-close-attention-to-whats-motivating-market-commentary/?utm_source=The+Big+Picture+Updates&utm_campaign=e7ecbb96e8-big_picture_email&utm_medium=email&utm_term=0_662cf1de86-e7ecbb96e8-39124121
"Where one stands is often a function of where one sits."
Your cross, counselor....

What shim my faith in FAIRX more than his portfolio moves was: (a) the number of really odd personnel issues he has had over the past 10 years, his judgement in this regard has been spotty if not poor at times; (b) his traveling road show schtick at the height of his popularity (claiming that it was all about communicating with current investors not garnering AUM).
I respect him as a manager but for these reasons keep my allocation to. FAIRX modest and in check.

++++++++++
The issue of "the number of really odd personnel issues he has had over the past 10 years" influenced me quite a bit too. Inability to retain the excellent Larry Pitkowsky and Keith Trauner was most unfortunate, and other issues.
online.barrons.com/article/SB50001424052748703927304576637270740785508.html#articleTabs_article%3D2
Regarding "his traveling road show schtick at the height of his popularity": what was that? Never heard about it.

I didn't do a perfect job on timing FLVCX selling in October 08 and buying back in early may 09. The relevance to this thread is that first the fund has already been mentioned but more important was that it was clear the FLVCX was a bull market fund and should not be held in a bear market but was good investment once the bear ended . In contrast it was less obvious to investors in FAIRX that it would do badly in a bear market. I have not done the math to confirming missing 5 months of the bear and two months of the bull was better than remaining fully invested. It was certainly good for my sleep.

Over ARLSX lifetime, it's a top quintile L/S fund in risk adjusted return (through Mar '14):

And ARLSX, it too has kept up pretty well since inception:

Come on guys...give Whitebox WBMIX some credit. It's kept up pretty well since inception against some other notable L/S funds:

"A new study finds that the average investor in all U.S. stock funds earned 3.7% annually over the past 30 years—a period in which the S&P 500 stock index returned 11.1% annually."
I find that very hard to believe. You'd have to work very hard to do that.

+++++++++++
It is amazing.
I guess investors would have had to pile in during 1999 and Jan-March 2000, when sentiment was exuberant.... then sell out towards the latter part of 2002 after they had lost 40+%; buy back in during 2007 when the fear of the 2000-2002 bear market had waned and greed rose again......sell during the last half of 2008 when sentiment got very pessimistic....and stay out until 2012 or 2013 when sentiment picked up again

"A new study finds that the average investor in all U.S. stock funds earned 3.7% annually over the past 30 years—a period in which the S&P 500 stock index returned 11.1% annually."
I find that very hard to believe. You'd have to work very hard to do that.

FYI:
Regards,
Ted
http://www.investmentnews.com/article/20140509/FREE/140509908?template=printart

FYI:
Regards,
Ted
http://blogs.wsj.com/moneybeat/2014/05/09/just-how-dumb-are-investors/tab/print/

OTCRX came crashing out of the gate. I'm watching it.
AZDDX. Sorry. 5 managers. Not a cent invested in fund by anyone. Not happening.

This is where a little bit of understanding of technicals would be useful. You can get a better perspective of the big picture than hoping every wiggle means something. There is also a lot of technical trading going on that makes these a self-fulfilling prophecy.

Technically, small caps are very broken. They are below the 200 day SMA and bouncing along the lower bounds of the channel in a strong downward trend. You can have several bounce backs up to the 20 day SMA (2%) without changing the trend as has happened all of April. It has to break through that and perhaps even the 50 day SMA (about 6%) before technical trading snowballs it the other way.
Technically, biotechs have a much better chance of recovering sooner than small caps.
Risk off and momentum trades from too much money floating around is what this current market is all about and may continue through the summer.
Sit tight or momentum trade, only two options.

FYI:
Regards,
Ted
http://www.marketwatch.com/story/small-caps-slide-reflects-a-market-in-trouble-2014-05-09/print?guid=8B0B0924-D702-11E3-9095-00212803FAD6