Art Cashin is one of the better personalities on CNBC.
http://www.businessinsider.com/art-cashin-on-sp-500-1925-2014-10

Please tell me some of these "leads" are generated automatically by a computer App limited to no more than a 50 word vocabulary. Either that, or these writers hand their finished work off to their teen-aged kids to supply the caption.

In my gradually expanding experience, buying 5* funds in fund categories (not including sector funds, where one has to get the sector plus the manager right), adds a bit to performance. Must admit that the health care sector seems a lock, and I think that health biotech will prove to have been a "lock" for anyone with a ten year horizon.

Thinking about this subject this weekend and I have a question or two. It seems to me that the benefit of these long-short funds only shows itself if one invests a large amount or all of their portfolio. Having 10 or 20% does not benefit the portfolio in a meaningful way.
On the bond side, how much percentage of your portfolios would you place in fixed income during a bear market? Also would a balanced portfolio of 50% fixed income and 50% L/S funds be a mix that might work? I am not thinking of doing that but just throwing the question out there.
Have a great weekend to all.

FAIRX actually had great relative performance today. Down 0.14%, versus -1.25% for the Total US Stock Market Index.

I was just over at the Pimco site earlier this evening. There are so many funds there that could be pruned out of their stable of funds. Too much money I guess

Yeah, way too many funds. I was looking at David's October commentary. Gross was responsible for 35 different funds. But one of those funds has multiple versions, e.g., "37 iterations of PIMCO GIS Unconstrained Bond". Not just blaming Pimco here.
"According to the last count there are more than 10,000 mutual funds in North America! That means there are more mutual funds than stocks."
investopedia.com/university/mutualfunds/mutualfunds1.asp

FYI: On Wall Street, as in life, the biggest surprise is often that anyone is surprised by the inevitable.
This week’s market turbulence, in which the Dow Jones Industrial Average fell 273 points, regained 275, then lost 335, is long overdue and should be utterly unsurprising.
Regards,
Ted
http://blogs.wsj.com/totalreturn/2014/10/10/how-scared-should-investors-be/tab/print/?mg=blogs-wsj&url=http%3A%2F%2Fblogs.wsj.com%2Ftotalreturn%2F2014%2F10%2F10%2Fhow-scared-should-investors-be%2Ftab%2Fprint&fpid=2,121

MY Choice: VYM 1yr +18.2%, 5yr.15.2% 2.8% yield 0.10% expense

Caught this on NBR last night. Umm ... Anybody know what Gross' track record on predicting the stock market is? I thought he was more of a bond guy.
What did he say? Equities will gain 5-7% a year going forward the next few years? Let's hope.
How does this man manage to stay in the spotlight? Maybe if we'd all stop talking about him he'd fade away like other stage legends of the past. :)
Pogo: We have met the enemy ...

US Aggregate Bonds AGG have enjoyed good week, month, and YTD (5%)...

Last time SPY dropped below 200 day average was November 2012 and then only for three days.
Last sustained time was late 2011, about three years ago. That one lasted about four months (August - November).
And before that...pretty much May through August 2010, which I had forgotten about.
And before that, well, no one wants to remember...November 2007 - May 2009, or 19 months.
For what it's worth...

Thanks Ted, but I'm pretty much done betting on the mutual funds world's best kept secrets. Pretty much a 50/50 crapshoot. Yes, a 10 year beat its peers performance record is impressive, but how long will it last?

Correction...HCP was also up. Actually, it has been strongest holding during recent chaos.

REITs have held up quite well over the last few days. O has done very well, as has WPC and BPY (although BPY is a real estate MLP.) O actually up about 4.5% last 5 days, I'm guessing people looking for what they believe is safe harbor.

@scott, are you referring to the 130/30 funds which are typically leveraged for returns?

I guess the idea is more that I would not expect a long/short fund to change - or be nimble enough - to take advantage of a 4-5% correction. A mutual fund isn't going to change in dramatic fashion because of what has happened over the last week, in other words. If this lasts months, then you may see movement and then you can look at results. It's just too short-term at this point to - I think - see major shifts in a fund's allocation.
As for the Managed Futures category, which has not done well broadly over the last few years but is something I'd not expect a moonshot from on a good year, to have a fund like Pimco's new one get double digit returns and be ahead of the category by more than 10% is certainly compelling, although the fund's prospectus language is very broad and doesn't give me a sense of the difference in this fund vs other MF funds. I will say that the Pimco fund has outperformed a large managed futures hedge fund - whether or not that continues, who knows - but I find it rather impressive.

If you expect alternative funds to reposition themselves suddenly in order to take advantage of a 4-5% drop, you are going to be disappointed with a lot of L/S funds that are already mostly long. These aren't hedge funds and they aren't going to be that nimble. If this volatility lasts through the end of the year, then it becomes how do these funds fare after 3-6 month period of volatility.
I will say, despite my reluctance to be in anything Pimco, I'm rather fascinated by the performance of their new Managed Futures fund, which has actually done better this year than one of the largest managed futures hedge funds and has had performance that is vastly superior to the category.

FYI: Just because winners decline doesn't make them a bad choice.
Regards,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=667868
How All the Funds Rank, Then and 10 Years Later
http://online.wsj.com/news/interactive/IFRANKING2014090820140906?ref=SB10001424052970203523204580116012154265320

Hey, a closer look at SEQUX...

Its UI is actually quite low this past year, even three years. Unfortunately, the SP500 UI is even lower. Compounding this issue is excess return. Compared to SP500, SEQUX has delivered only half the return.
During bull runs, equity volatility typically drops, and those funds that are more defensive, like SEQUX or many all-asset funds, drag, especially this past year as bond and commodity volatility is up.
But that does not mean they are "wrong," at least with regard to the way they chose to handle risk, but their ratings will invariably suffer. (Look at COBYX, for example, and the whole list above.)
Bottomline: If the market is always up, three years may not be very telling from a risk adjusted perspective.
That is something I think we are in-g on.
Thanks David. Hope all is well.

http://www.sec.gov/Archives/edgar/data/906352/000093041314004302/c78933_497.htm
497 1 c78933_497.htm
FIRST EAGLE FUNDS
First Eagle Global Fund
First Eagle Overseas Fund
First Eagle U.S. Value Fund
1345 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10105
(800) 334-2143
SUPPLEMENT DATED OCTOBER 9, 2014
TO PROSPECTUS DATED MARCH 1, 2014
This Supplement is intended to highlight certain changes to the Prospectus dated March 1, 2014. Please review these matters carefully.
Matthew McLennan and Kimball Brooker, Jr. are the Portfolio Managers for First Eagle Global Fund and First Eagle Overseas Fund, and Matthew McLennan, Kimball Brooker, Jr. and Matthew Lamphier are the Portfolio Managers for First Eagle U.S. Value Fund.
Mr. Abhay Deshpande has resigned from his portfolio management positions with First Eagle Investment Management, LLC and the First Eagle Funds. Please disregard any references in this Prospectus to Mr. Deshpande.
* * * *
The information in this Supplement modifies the First Eagle Funds’ Prospectus dated March 1, 2014. In particular, and without limitation, the information contained in this Supplement modifies (and if inconsistent, replaces) information contained in the inside front cover and in that section of the Prospectus entitled “The Adviser”.