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”.

The problem with being critical with respect to OAKLX: $10 invested in this fund at inception now became $98, whereas the same $10 invested in S&P 500 during the same time became $39.

I'm afraid that LLJB's joke might not be far from the truth. The site went down last night at almost exactly midnight Eastern. A sense of a disturbance in The Force caused Chip to wake around 1:00 a.m. Eastern to discover a series of alarm notices on her cell phone. She tried restarting our server but without effect. She filed an emergency assistance request with the server firm and had an online chat with the overnight tech. She describes him as coming across as completely overwhelmed, using two different accounts and attempting to field questions from ten different people simultaneously.
We received, throughout the night and today, periodic status reports on the attempts to get us back online. The latest did raise the prospect that one of another of our Cold War adversaries might well be flexing their muscle:

Thank you for your patience with us getting this resolved. We have identified the problem as a large incoming DDoS [distributed denial of service] attack against our network. While we have mitigated most of the attack and are seeing services restored for some clients, the incoming flood of traffic is still causing intermittent service which you may still be seeing with your VPS [virtual private server].
This incoming attack only causes congestion on our network which is slowing down access to services. There has been no breach of security or access to any of your website files. You can expect intermittent access to your VPS until we are able to fully resolve the DDoS attack. Unfortunately we still do not have an ETA for you at this time, however we will be sure to update you as soon as we confirm a potential ETA.

There's a fascinating report out of new malware, called Spike, that's able to infect devices in "the Internet of Things" - that includes household devices like thermostats and dryers which are subject to being remotely activated or programmers - and use them as agents of DDoS attacks.
We have no way of establishing that our outage was as a result of Russian or Chinese activity, but both groups have been active of late; the Russians seem particularly irked by Western sanctions and prone to malicious disruptions.
For those into neat visuals, there's a live global map of DDoS attacks that's both fun and frightening to watch.
I'll keep you as informed as I can. Regrets for the down time.
David & co.

Headline key words trigger The Algos. Meanwhile, carbon-based fixed income traders say, "nah, I don't think so" and stay put.
@Charles Share buybacks are spent out, and balance sheet tricks work until they don't. From what little I've read that has leaked out, the whisperers are not optimistic re. 3Q margins and SP500 stabilization. In some sectors, the analysts appear to be brake-tapping. Throw in an end to QE (or will they?), and IMO "we have a sit-u-a-tion" approaching.

@Tampabay Ha, hammer to nail, that's probably it, plus (I would add) an almost resolute belief that 2008-2009 never ever happened. :)
But to stay true to JohnN's post, several months ago I started to feel uncomfortable and, in step with what older wily veterans have already posted here, I did some trimming and took some gains from my stock funds. Hardest step is the first one; several weeks later, I realized that that had felt pretty good and sold a few shares here and there in stocks that had become overvalued. This brought cash to around 10%. If the 10yr T goes on down to between 2.25% and 2%, I'll be giving a trim to some fixed income, bringing cash up to circa 12.5%. Combined with cash held in mutual funds (some are rather defensively elevated right now), total cash I figure will be about 15%.

@heezlsafe - no delusion here. That's just part of my overall approach to allow up to 50% DODIX in the most conservative portion. (On my spread-sheet it's labeled "AA" - signifying approximate credit quality). You are correct, however, that an intermediate term bond fund behaves quite differently than cash.
If you require cash only, it's about half the cited number or 12%. I hope you don't mind that the ultra-short term bond fund TRBUX is included in that. If we knock that out too - geez don't know --- probably less than 5% cash consisting of various money market funds and FDIC insured bank accounts.

Cash: 0.02%
Money Market Funds: 0.73%
Stocks: 74.34%
Fixed-Income: 13.59%
Mutual Funds: 11.32% (Equity Funds)

Rare indeed.
Nice for a change.
Trust 3Q earnings will help stabilize SP500, if not keep it going up.
If AA is indicative, should be good season.

FYI: The S&P 500 fell 1.51% yesterday, but it followed up that big loss with a gain of 1.75% today. Over the two-day period, the S&P is up about 4 points.
Big down days followed by even bigger up days have been rare during the current bull market that began on March 9th, 2009. In fact, situations like the last two days where the S&P fell more than 1.5% only to rally back even more the next day have only occurred six other times, and we highlight them in the table below.
Regards,
Ted
http://www.bespokeinvest.com/thinkbig/2014/10/8/big-down-day-followed-by-even-bigger-up-day.html?printerFriendly=true

Experience has taught me I am not good at market timing. So, I mostly let fund managers do this for me. My major fund holdings with substantial cash positions include FPACX, FPIVX, ICMBX, ARIVX, YAFFX, WEMMX, COBYX, and BERIX. The fund analyzing tool I use tells me my portfolio currently has 18% allocated to cash/near cash, with most of that coming from these holdings. I also have 6 % of my portfolio set aside in funds including RPHYX and MWCRX for use if there is a MAJOR (maybe 35% or more) decline in the stock market. I would be comfortable selling those two holdings with some loss in that situation. So, all told, I have about 25% of my portfolio currently waiting for a better time to invest in more volatile stuff. I also have just over 50% currently invested in the stock market and the remaining 25% in bond funds including OSTIX and RSIVX. The bond funds presently mostly tend towards short term and high yield.

Huge quarter. Triple profits, year over year.
Strong aerospace growth. Strong auto demand.
Price run-up in basic materials.
Predict strong organic growth in 4Q.
Klaus Kleinfeld has to be one of best CEOs in America.
He's key chart driving strong performance...

Here's more...

at 32% healthcare holding, I too have the same morningstar message like @tampabay
"You have a lot of exposure to sectors marked by this icon. You should take special note of your large position in healthcare stocks. Healthcare issues generally offer good growth potential but come with a lot of risk." In my holding PRHSX , VHCOX, VTSAX, PRWCX,VCVLX, VPCCX each has more than 15% exposure to healthcare.

Oh, good Lord (or whoever) have mercy! Here we go again, justifying investments in criminal banking enterprises, who continue to use accounting gimmickry (FASB rule 157) to hide a bunch of 2008 toxic debt they still hold, and who continue to be caught manipulating just about every market of any significance, after doing it for over a decade. Your investments in them support them in these endeavors; what kind of a world do you want?
Get out ALL the shovels 'cause it looks like, with Oakmark, we're gonna need 'em--- it's getting so deep. "Private equity perspective"---- oh, pulleeze!

A bit dated, but FWIW...
http://www.mutualfundobserver.com/2013/10/whitebox-tactical-opportunities-conference-call/
Will be interesting to reassess at the three year mark, which is couple months away...I believe they will rank just above "average" in the long/short category, which as Scott points out is pretty diverse.
Here's snapshot since its inception:

I remain heavy WBMIX and a fan of Whitebox. They has lived up to their word regarding openness of fund strategy, communication with shareholders, consistency in implementation, and elimination of loads. Its er is low for the category, but it could be lower.

Well 5 days with no answer from Matthews. I find that disappointing because even if they weren't willing to tell me whether they had an thoughts about hedging currency they could have at least just written and said so. Maybe the turmoil in Hong Kong delayed things and I'll get an answer in the next few days, but I'm not holding my breath.

Brother Joe.
My bad for not being more specific.
AA - Alcoa
Aluminum Company