Columbia Acorn Shareholders' Meeting 9-24-14 A few highlights:
The management seems sensitive to lackluster performance of Acorn funds and treated us as adults, explaining in depth more of their approach.
A few snippets:
1. ACRNX performance seems partly joined at the hip to M&A activity. More of its holdings became takeover targets this year (repeatedly referred to as "takeout," which sent the aging audience into 10-minute revery on Peking duck) than in previous 18 months; portfolio managers very excited about that.
2. In their purchased-equity field, companies with low PE and poor earnings or negative earnings did slightly better than others over past investment year (begins midyear, maybe), but their GARP philosophy led them to purchase slightly higher up the PE and earnings ladders, generally, and not to overweight the lower end. The fund, ACRNX, still benefited from bounces at the low end. (The differences were very slight, such as 25% and 26%, not 10% and 60% -- in terms of buying low PE + neg or small earnings versus higher up the ladder.)
3. Company philosophy is to ignore macroeconomic events (at least as decision drivers).
Answers to audience Qs:
1. Where to put $10k? Ask a registered investment adviser.
2. Long bull market run: going to cash? No. Mngt does not time cash. It is up to investors to sell their own holdings and go to cash. (Per M*, ACRNX, ACINX, and CEFZX all hold zero cash.)
3. Doing what else? Harder to find great cos. with no problems. So portfolio managers are looking for companies with good business model and some problems that co. mngt might be able to turn around in short- to mid-term (within 5 years).
Cookies; wraps, with and without meat or cheese; coffee, soft drinks, iced tea. Free coffee mug.
Grandeur Peak MF Wire Article @LLJB: The way the Jack White brokerage did it was interesting. You put your name on a list at Jack White, telling them what funds you wanted to purchase and how much.
They took care of the rest. This worked great to buy load funds without paying the load, and to get into mutual funds that were closed.
Let's say you wanted to buy a fund with a
5.7
5% load, but you didn't want to pay the load. The brokerage would contact you when they had a seller. Your only contact was with the brokerage firm. They would charge you a flat fee, and give the seller half of it. You could purchase as much of the fund as was being sold for the flat fee.
I also got into two closed funds privately, by finding someone online who was willing to sell me shares of the fund! It was surprisingly easy. Two perfect strangers sold me shares of two different closed mutual funds, both highly regarded funds. I'm still in both of those funds today, as well as the load funds and closed funds I got into thru Jack White.
Rant on Printing Mutual Fund Docs (SAI) on M* and [deleted by Maurice]
How much do fund companies pay to be on fund supermarket platforms? FT: Pimco, WisdomTree join Schwab’s ETF platform
By Jackie Noblett Sep 23, 2014Quote from Jackie Noblett's FT article:
Schwab charges ETF sponsors a fixed yearly fee of up to $2
50,000 to participate in the OneSource platform ...
Sponsors also pay an asset-based fee based ...once it has been added to the platform. Those fees can range up to 0.1
5 per cent annually.
Here is link to search for complete article:
https://www.google.com/#q="Pimco,+WisdomTree+join+Schwab’s+ETF+platform"
Federal Reserve Says it will Raise the Fed Funds Rate 3.75% by the end of 2017 Kyle Bass (sitting in as special guest) on CNBC this AM: "I can't imagine a Fed funds rate at 4%."
Edited to add:
The Chicago Fed's Charles Evans doesn't disappoint his dovish fans urging the FOMC to "err on the side of patience in removing highly accommodative monetary policy," and not to worry about an inflation rate moderately exceeding the 2% target for a limited time."I am very uncomfortable with calls to raise our policy rate sooner than later. I favor delaying liftoff until I am more certain that we have sufficient momentum in place toward our policy goals."
lol.
http://seekingalpha.com/news/1999685-evans-fed-needs-to-be-extraordinarily-patient-on-rate-hikes
Grandeur Peak MF Wire Article
Grandeur Peak MF Wire Article "Global Microcap, the micro-cap subset of Global Reach"
Hmmm.....Global Reach only has a market cap average of 718 million.
Sounds like a micro-cap subset will probably have a market cap of 200-300 million
Two questions about recent market action I'm not sure why number matters? I was more wondering if "wide moat" approximates quality?
jlev, I think you may be right, and "wide moat" probably is a decent approximation of quality.
The reason why the number of stocks matters:
Let's say you are asking how small caps have done YTD. You would look at the entire Russell 2000 index, all 2000 stocks. You wouldn't look at an actively managed fund of 20 carefully selected small cap stocks.
If you were asking how the stock market has done YTD, or last year, or whatever: you would look at a Total Stock Market Index fund like VTI, or some people would look at the full S&P
500 index. But you wouldn't base it on how an actively managed fund of 20 or 30 carefully selected stocks did.
Same with the question of how is "quality" doing this year. If you look at a fund whose job is to pick the 20 most undervalued wide moat stocks, you are getting more information about how that specific fund did, rather than the entire universe of "quality" stocks.
Another example is that a lot of people think the Dow 30 is "the stock market", but it's only 30 stocks, even though it is chosen to be representative of the stock market as a whole. But there's over 3600 stocks in the U.S. total stock mkt index, so there's no way any 30 stocks can be representative. The Dow 30 is up 4.
5% YTD, but the S&P
500 is up 8.8
5% YTD.
Grandeur Peak MF Wire Article The big picture at Grandeur Peak (from our August 2013 issue)
In the course of launching their new Global Reach fund, profiled below, Grandeur Peak decided to share a bit of their firm’s long-term planning with the public. Grandeur Peak’s investment focus is small- to micro-cap stocks. The firm estimates that they will be able to manage about $3 billion in assets before their size becomes an impediment to their performance. From that estimate, they backed out the point at which they might need to soft close their products in order to allow room for capital growth (about $2 billion) and then allocated resource levels for each of their seven envisioned strategies.
Those strategies are:
- Global Reach, their 300-500 stock flagship fund
- Global Opportunities, a more concentrated version of Global Reach
- International Opportunities, the non-U.S. sub-set of Global Reach
- Emerging Markets Opportunities, the emerging and frontier markets subset of International Opportunities
- US Opportunities, the U.S.-only subset of Global Opportunities
- Global Value, the “Fallen Angels” sub-set of Global Reach
- Global Microcap, the micro-cap subset of Global Reach
President Eric Huefner remarks that “Remaining nimble is critical for a small/micro cap manager to be world-class,” hence “we are terribly passionate about asset capping across the firm.” With two strategies already closed and another gaining traction, it might be prudent to look into the opportunity.
Grandeur Peak MF Wire Article Some news of interest to many at MFO:
Two questions about recent market action I'm not quite sure if it's the right comparison, but I use MOAT as a proxy for this concept
http://www.vaneck.com/funds/moat.aspx"a rules-based, equal-weighted index intended to offer exposure to
the 20 most attractively priced companies with sustainable competitive advantages according to Morningstar's equity research team."
This is more of a play on a very limited number of companies, actively selected by Morningstar's stock analysts. I might now consider it a 'proxy for this concept', mainly because there are too few stocks to represent the concept of quality.
http://news.morningstar.com/articlenet/article.aspx?id=665790In the lists above, I see that GMO has a quality fund.
Federal Reserve Says it will Raise the Fed Funds Rate 3.75% by the end of 2017 From Junkster's linked article: "The yield on the two-year note, which rises when bond prices fall, dropped to 0.537% during today’s market action."
Folks, that's before your short term bond fund takes its cut (the ER). So, that "safe" investment's going to earn you essentially nothing. OK - Should Armageddon occur within 2 years, prices might spike higher.
Two questions about recent market action I like QUAL. Good concept. Great low fee. Volume still on light side, despite $500M AUM. So, use stops to help prevent getting stung by spread.
@Charles, how do you distinguish a bid-ask spread from a premium-discount to NAV?
Which of those 2 are you trying to minimize?
Changes in Fairholme's portfolio??? 1. Fannie Mae up 4.36%
2. Sears up 1.02%
3. St. Joe up .95%
