The Week in Charts (04/15/23)
A tour of the markets covering the most important charts & themes, including the global trend of lower inflation, the Fed predicting a recession, the consumer pullback, investors showing love for McDonald's, a bull market in auto parts, and much more.
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@hank, D&C funds are cheaper than a lot of ETFs. Helps that it's privately held, group managed, and they eat their own cooking.
I wish it had been 10K instead of 1K. Most of the other investments from that time are gone with the wind except for VWGIX discussed in another thread here.
The biggest chunk were in an IRA I cashed out to make a down payment on a house in Marin County. We're pretty happy about how that worked out. Only took equity out once to buy a new roof.
Looking back, I should have scrounged up 500 bucks to get into NICSX. We'ld be on easy street. :)

:) Hi Catch. I’ve nothing against perversions. Sailing’s certainly within bounds. What I would dislike is disparaging remarks about personal lives of well known public figures - including Bezos. As Nick remarks in The Great Gatsby “I’m inclined to reserve all judgments.” I’m afraid some of us wouldn’t appear much better in the public eye if held under a 24-hour magnifying glass.
(Deleted previous). I was able today to cancel Prime. The phone rep was sympathetic to my reasoning. Over $100 refund of the $139 paid in January. As I noted earlier, little, if anything, bought at Amazon arrives in the advertised 2 day delivery time. Typically takes 5-7 days now for most purchases. The link below is about a pending class action lawsuit over that very issue.
https://www.cbs17.com/news/investigators/lawsuit-customers-not-fine-with-amazon-prime-delivery-promises/

April 15, 2023: Navy Federal: 12 months. Rate = 4.74%, yield = 4.85%. $3k maximum. Gotta have direct deposit and a checking account with them. I have those bases covered, but I won't buy-in, just because they're being niggardly about it.

Today is the 32nd anniversary of my purchase of DODGX. It was neck and neck with SPY up until the dot com bust. From then on, SPY never caught up. What happened the last 1-3-5-10-15-20 years doesn't make any difference.

Congratulations!
Most D&C funds carry ERs around .53% - probably a bit higher on international funds. Couple that with good management and it should pay off longer term. What I don’t know - but would love to hear - is how does a stable investor base affect a fund’s long term performance? And - while we’re on the subject … Indexes, like the S&P don’t have to contend with “flighty” investors moving in and out. Probably another reason they outperform active management..
Incidentally, looks like D&C’s domestic funds held up better than most yesterday. Likely their financials helped soften the downturn in overall market. Of course - that cuts both ways.

Today is the 32nd anniversary of my purchase of DODGX. It was neck and neck with SPY up until the dot com bust. From then on, SPY never caught up. What happened the last 1-3-5-10-15-20 years doesn't make any difference.

This is is ground-shaking. Amazon revolutionized publishing in 2007 with the release of the Kindle e-reader, the first of its type,
Half correct. Amazon popularized e-Readers, but it wasn't the first. It wasn't even the first of the second generation.
The first generation, prior to e-Ink and cost-effective Wi-Fi, was the Rocketbook, created in 1997 and first sold in 1998. Bezos expressed interest in the company, but insisted on exclusive rights and lost the opportunity then.
https://goodereader.com/blog/electronic-readers/the-tale-of-rocketbook-the-very-first-e-reader
Second generation? Think Betamax. Yup, Sony. Amazon may have popularized e-readers, but Sony was first with an e-Ink product in 2006.
https://www.fastcompany.com/1669160/how-the-kindle-stomped-sony-or-why-good-solutions-beat-great-products
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As of March 9, 2023 Amazon is no longer offering magazine and newspaper subscriptions for the Kindle. This includes The New York Times Daily Edition for Kindle. The full Amazon announcement and FAQ are available from the Kindle Newsstand.

https://help.nytimes.com/hc/en-us/articles/115014889068-Read-The-New-York-Times-on-Kindle

The announcement seemed to go mostly unnoticed … when Amazon turned off Kindle Newsstand and print magazine subscription orders on March 9. The ability to renew annual Kindle Newsstand or print subscriptions was also removed. Now a banner appears at the top of the Kindle Newsstand page making it clear that subscriptions are gone.
Amazon spokesperson Julia Lee explained the decision: "As part of our annual operating planning review process, we always look at each of our businesses and what we believe we should change ... Following an assessment of our magazine and newspaper subscriptions and single-issue sales, we have made the difficult decision to discontinue these services. We don’t take these decisions lightly and are winding down these offerings in a phased manner over several months. We will continue to support customers, sellers and publishers during that time."
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Ground-shaking. Amazon revolutionized publishing in 2007 with the release of the Kindle e-reader, the first of its type, and at the time began selling print subscriptions formatted for the device. (It sounds like books will still be available for purchase. And there may be limited access to periodicals for subscribers to “Kindle Unlimited”.)
ISTM the dumbing down of America continues. Here was an easy affordable way to sample and enjoy works from a comprehensive platform of top-notch publishers - not only in the U.S. but from literally anywhere in the world. Maybe folks are too consumed by Farcebook & Tweeter today to have any interest in solid periodical literature? While publishers may benefit near-term as former Kindle users migrate to direct subscriptions, I suspect longer term it will hurt them more than it helps.
Amazon stock (AMZ ) is down about 33% over the past year. That’s after a 19.5% rise in 2023. / Andy Jassy - You’re no Jeff Bezos!
Source

Lots of investors like to beat these annual/historic active PM vs passive statistics* to death.
But inside those numbers, and usually left out of these endless (IMO, usually worthless) discussions and articles, you can find PMs/funds that consistently, and over most/sometimes all of the interim periods, beat the indexes.
Those are the PMs/actively managed funds you want to own. (Read it s-l-o-w-l-y and try to understand it.)
If an investor does not know which PMs/funds those are, or can't scope them out, then, yeah, go ahead and invest in the indexes, and use the widely ballyhooed statistics as your justification.
And no, I have no plans to spoon-feed what I consider the best PMs and/or actively managed funds as posters on this forum are more than capable of finding them, or are already invested in them.
That said, we are current and LT holders of FSELX, a classic example of how rewarding it is if an investor can identify just ONE of the best of the best. Back in the day, almost 100% of our portfolio was in FLPSX during Tillinghast's glory days. Before that, ditto for Lynch's Magellan.
In semi-plain English: The % of PMs who beat the indexes for a given period is largely comprised of that period's hot PMs/funds, and the ones who consistently do it.
*Three kinds of Lies:
1. Lies
2. Damned lies
3. Statistics
EDIT: FWIW, I am 85% active and 15% passive, about my usual allocation.

It's more than simply an AUM-weighted average of fund returns. It considers cash flows - investor dollars going in and out - and calculates how much each extra investor dollar earns. That's still asset weighted, though the assets being weighted are those attributable to investor trades rather than assets under management.
https://awgmain.morningstar.com/webhelp/InvestorReturnsFactSheet.pdf
It's not perfect. A single large investor with lousy timing can skew the results to the downside. Much as a few billionaires can make it seem like average workers are earning a whole lot more than they are.
"Closest" is a matter of perspective. Take a category returning, say, 8.04%, and let's say the average investor dollar returns 0.69% less. The investors are failing to capture 8.58% of that 8.04% return.
Compare that with a category returning 13.2%, where the average investor dollar returns
1.17% less. The investors are failing to capture 8.86% of that 13.2%.
Investors are failing to capture nearly the same fraction of returns either way. Those figures are what M* calculated for allocation/balanced funds and for domestic equity funds from 2010 to 2020.
https://www.morningstar.com/articles/1056151/why-fund-returns-are-lower-than-you-might-think
Perhaps the investors aren't sticking around longer for the allocation/balanced funds. The differences in the category "gaps" (as M* calls the 0.69% underperformance) could be due primarily to the relative magnitude of category returns.
If one category returns 1.5x that of another category (with exactly the same performance graph, just 1.5x the amplitude), then one would expect the "gap" for that category to naturally be 1.5x as large as well.

Buffet could considered be the elite 5.2%???

14 April, 2023.

Thanks, @Crash, had forgotten to look up this week's show. Interesting stuff -- noted especially the comment about duration ~ 5 as the sweet spot for adding duration per Bory. I'll have to do some figuring on that -- maybe a BND or BOND with a shot of a short duration fund would be in that ballpark, if he's right.
Rod's comment about the 2y T yield being too low for the situation was also interesting. (The 2y pretty well tracks with the Fed rate over time, but right now, it sure isn't.) Wouldn't mind locking in a large chunk of 5% 2y Treasury yield; my early T bills are maturing and more cash is building at 4.45% mm rate, which will not be there forever.

It's easy to see that REITs and MLPs get different tax treatment. The former falls under corporate tax rules (with significant exceptions), while the latter falls under partnership tax rules.
REITs are defined in the tax code (26 U.S. Code §856) as entities taxed as corporations with certain enumerated exceptions (26 U.S. Code §857), such as pass through income. In contrast, Master Limited Partnerships are partnerships taxed under Subchapter K - Partners and Partnerships
There's nothing in the tax code that is specific to MLPs. Though, since the vast majority (but not all) of MLPs are publicly traded partnerships (PTPs) - a subcategory of partnerships - PTP special rules usually apply to MLPs.
Here's an example of a restriction specific to PTPs (and thus to most MLPs): one cannot offset net income from a PTP (a PIG) with passive losses (PALs) from any other entity, whether PTP or not.
CCH, Passive Activity Losses of Publicly Traded Partnerships
Unless there's a similar special rule that prohibits PTPs from doing 1031 exchanges, then they have the same ability to do 1031 exchanges as do "regular" partnerships.
As to the piece on private REITs, it says (emphasis in original):

Private REITs technically don’t exist (except for a temporary designation given to a pre-public REIT). It is really just a marketing term to communicate to investors they are buying pools of real estate like a REIT, but in a private company.
When most people refer to a ‘private REIT,’ what they mean is private equity real estate. Private equity real estate is another phrase investors may have heard, and mostly is interchangeable with Private REITs (except for those “pre-public” REITs).
Private equity real estate investments are generally held in LLCs, meaning they are non-tax-paying, pass-through entities.

Who'dve thunk that one could not have a private offering of a real, honest to goodness REIT? That it's all just marketing hype. If only we could find a counterexample - an actual private offering of a REIT. Where to look, where to look.
How about the Fidelity offering?
The cover page of the offering is titled in part: Private Placement Memorandum. And the Form D says that it is exempt from SEC registration under Rule 506(b). Clearly this is a private offering.
The first paragraph of the memo ends with (emphasis in original): "We expect to qualify as a real estate investment trust (“REIT’) for federal income tax purposes."
In a nutshell, this is why I look to the tax code, SEC regulations and the like. Anything coming from a company with a vested interest in a product may be helpful but is also suspect.

14 April, 2023:
https://www.bloomberg.com/news/videos/2023-04-14/-bloomberg-real-yield-04-14-2023
Thumbs-up on short-dated TIPs. The jury is out on whether Fed will hike by .25% next time. Short-duration Treasuries and corporates, yes.
It's all about prudence and safety.
But G. Bory says extending duration by now does make sense. (Still not talking about junk. Later in the show, he asserts he selectively likes junk). Rodilosso finds junk and corporates "relatively attractive," particularly BBs.
Video clip: O'Connor Juanas of UBS: IG fixed income and Treasuries look particularly good. Reduced risk, decent yield, currently.
Near the end, the "footer" proclaims: "Junk's longest winning run in 3 months."

ALMOST makes the entire managed (non-index) MF industry seem like a scam...
"Consider these tallies for funds that invest in S&P 500 stocks through the end of 2022:
Over three years, 74.3 percent of actively managed funds trailed the index.
Over five years, 86.5 percent underperformed.
Over 10 years, 91.4 percent underperformed.
Over 20 years, 94.8 percent underperformed."

Anyone looking at the stats recognizes it's just brutal for active managers over the long-term. It's that fee drag that accumulates over time. There are a few lessons to be learned in it. It's really hard to win in large-caps that are widely covered by analysts. Fees really matter, so if you go active, look generally for a low-cost manager. Career risk matters too. This last one I think many investors don't know. I think many managers hug the benchmark because if they deviate too much and just a handful of, for instance, FAANG stocks are driving the market higher, not holding those stocks is a significant bet that could lead to job loss if you're wrong. So, many managers feel pressured to hold those popular names, end up being closet indexers as a result, and fall just as much as the market plus their fees when downturns occur. You need a manager who thinks differently, has the research team, intelligence and trading chops to execute his/her strategy effectively and low fees to boot--a tall order. Hence you get awful stats like the one in this article about large-cap managers versus the S&P 500:

Over 20 years, 94.8 percent underperformed.

https://www.sec.gov/Archives/edgar/data/1026977/000139834423007351/fp0083232-1_497.htm
497 1 fp0083232-1_497.htm
CITY NATIONAL ROCHDALE FUNDS
CITY NATIONAL ROCHDALE INTERMEDIATE FIXED INCOME FUND
Servicing Class (CNRCX)
Institutional Class (CNRIX)
Class N (RIMCX)
Supplement dated April 14, 2023, to the Prospectus and the Statement of Additional Information dated January 31, 2023
The Board of Trustees of City National Rochdale Funds has approved a Plan of Liquidation for the City National Rochdale Intermediate Fixed Income Fund (the “Fund”), which authorizes the termination, liquidation, and dissolution of the Fund. In order to effect such liquidation, effective as of the close of business on April 18, 2023, the Fund will be closed to all investments by existing shareholders, and no new Fund accounts may be opened. Shareholders may redeem their shares until the date of liquidation.
The Fund will be liquidated on or about May 26, 2023 (the “Liquidation Date”), and shareholders may voluntarily redeem their shares until the Liquidation Date. Prior to the Liquidation Date, the Fund may declare and pay its shareholders of record one or more dividends or other distributions consisting of any undistributed income and net realized capital gains. On or promptly after the Liquidation Date, the Fund will make a liquidating distribution to its remaining shareholders equal to each shareholder’s proportionate interest in the net assets of the Fund, in complete redemption and cancellation of the Fund’s shares held by the shareholder, and the Fund will be dissolved.
In anticipation of the liquidation of the Fund, City National Rochdale, LLC, the Fund’s adviser, may manage the Fund in a manner intended to facilitate its orderly liquidation, such as by raising cash or making investments in other highly liquid assets. As a result, during this time, all or a portion of the Fund may not be invested in a manner consistent with its stated investment strategies, which may prevent the Fund from achieving its investment objective.
Please contact the Fund at 1-888-889-0799 if you have any questions.
Important Information for Shareholders with IRA Accounts
If you hold your shares in an IRA, you should consult your tax adviser regarding the liquidation of the Fund. You may have 60 days from the date you receive your proceeds to “roll over” your proceeds into another IRA and maintain their tax-deferred status. You must notify the Fund prior to the Liquidation Date of your intent to roll over your IRA account to avoid federal and potential state withholding deductions from your proceeds. If the Fund has not received your redemption request or other instruction, your shares will be liquidated on the Liquidation Date, and you will receive your proceeds from the Fund, subject to any required withholding.
If you have questions or need assistance, please contact a shareholder services representative of the Fund at 1-888-889-0799.
*****
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
CNR-SK- 070-010

https://www.sec.gov/Archives/edgar/data/1026977/000139834423007354/fp0083232-2_497.htm
497 1 fp0083232-2_497.htm
CITY NATIONAL ROCHDALE FUNDS
CITY NATIONAL ROCHDALE GOVERNMENT BOND FUND
Servicing Class (CNBIX)
Class N (CGBAX)
Supplement dated April 14, 2023, to the Prospectus and the Statement of Additional Information dated January 31, 2023
The Board of Trustees of City National Rochdale Funds has approved a Plan of Liquidation for the City National Rochdale Government Bond Fund (the “Fund”), which authorizes the termination, liquidation, and dissolution of the Fund. In order to effect such liquidation, effective as of the close of business on April 18, 2023, the Fund will be closed to all investments by existing shareholders, and no new Fund accounts may be opened. Shareholders may redeem their shares until the date of liquidation.
The Fund will be liquidated on or about May 26, 2023 (the “Liquidation Date”), and shareholders may voluntarily redeem their shares until the Liquidation Date. Prior to the Liquidation Date, the Fund may declare and pay its shareholders of record one or more dividends or other distributions consisting of any undistributed income and net realized capital gains. On or promptly after the Liquidation Date, the Fund will make a liquidating distribution to its remaining shareholders equal to each shareholder’s proportionate interest in the net assets of the Fund, in complete redemption and cancellation of the Fund’s shares held by the shareholder, and the Fund will be dissolved.
In anticipation of the liquidation of the Fund, City National Rochdale, LLC, the Fund’s adviser, may manage the Fund in a manner intended to facilitate its orderly liquidation, such as by raising cash or making investments in other highly liquid assets. As a result, during this time, all or a portion of the Fund may not be invested in a manner consistent with its stated investment strategies, which may prevent the Fund from achieving its investment objective.
Please contact the Fund at 1-888-889-0799 if you have any questions.
Important Information for Shareholders with IRA Accounts
If you hold your shares in an IRA, you should consult your tax adviser regarding the liquidation of the Fund. You may have 60 days from the date you receive your proceeds to “roll over” your proceeds into another IRA and maintain their tax-deferred status. You must notify the Fund prior to the Liquidation Date of your intent to roll over your IRA account to avoid federal and potential state withholding deductions from your proceeds. If the Fund has not received your redemption request or other instruction, your shares will be liquidated on the Liquidation Date, and you will receive your proceeds from the Fund, subject to any required withholding.
If you have questions or need assistance, please contact a shareholder services representative of the Fund at 1-888-889-0799.
*****
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
CNR-SK- 073-0100

https://www.sec.gov/Archives/edgar/data/1026977/000139834423007355/fp0083232-3_497.htm
497 1 fp0083232-3_497.htm
CITY NATIONAL ROCHDALE FUNDS
CITY NATIONAL ROCHDALE CORPORATE BOND FUND
Servicing Class (CNCIX)
Class N (CCBAX)
Supplement dated April 14, 2023, to the Prospectus and the Statement of Additional Information dated January 31, 2023
The Board of Trustees of City National Rochdale Funds has approved a Plan of Liquidation for the City National Rochdale Corporate Bond Fund (the “Fund”), which authorizes the termination, liquidation, and dissolution of the Fund. In order to effect such liquidation, effective as of the close of business on April 18, 2023, the Fund will be closed to all investments by existing shareholders, and no new Fund accounts may be opened. Shareholders may redeem their shares until the date of liquidation.
The Fund will be liquidated on or about May 26, 2023 (the “Liquidation Date”), and shareholders may voluntarily redeem their shares until the Liquidation Date. Prior to the Liquidation Date, the Fund may declare and pay its shareholders of record one or more dividends or other distributions consisting of any undistributed income and net realized capital gains. On or promptly after the Liquidation Date, the Fund will make a liquidating distribution to its remaining shareholders equal to each shareholder’s proportionate interest in the net assets of the Fund, in complete redemption and cancellation of the Fund’s shares held by the shareholder, and the Fund will be dissolved.
In anticipation of the liquidation of the Fund, City National Rochdale, LLC, the Fund’s adviser, may manage the Fund in a manner intended to facilitate its orderly liquidation, such as by raising cash or making investments in other highly liquid assets. As a result, during this time, all or a portion of the Fund may not be invested in a manner consistent with its stated investment strategies, which may prevent the Fund from achieving its investment objective.
Please contact the Fund at 1-888-889-0799 if you have any questions.
Important Information for Shareholders with IRA Accounts
If you hold your shares in an IRA, you should consult your tax adviser regarding the liquidation of the Fund. You may have 60 days from the date you receive your proceeds to “roll over” your proceeds into another IRA and maintain their tax-deferred status. You must notify the Fund prior to the Liquidation Date of your intent to roll over your IRA account to avoid federal and potential state withholding deductions from your proceeds. If the Fund has not received your redemption request or other instruction, your shares will be liquidated on the Liquidation Date, and you will receive your proceeds from the Fund, subject to any required withholding.
If you have questions or need assistance, please contact a shareholder services representative of the Fund at 1-888-889-0799.
*****
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
CNR-SK- 072-0100