I'm sure there's a take here someplace but I'm not quite sure what it is.
As one scrolls down the list of discussion headers/topics notice those with the most 'views.'
"What are you buying..."
"Best performing fund..."
"Suggestions for investing..."
"Portfolio construction..."
"Global fund suggestions..."
"Emerging markets..." (I think this relates to the best fund(s) and should you be in or out)
Notice too the number of comments versus the number of views. If the topics noted the number of 'contributors' rather than the number of 'comments' you could probably count them on one hand. So much for group think.
Comments
Regards,
Ted
Given some of the strength of personalities and opinions involved, it took me sometime to chime in. But generally I think this board, quirks and all, is far better than anything else I've found out there for its niche.
Let's hope it's the former
Take care of you and yours.
Catch
I don't want to get off track or rile everyone up but one of the initial considerations for my post was grounded in the disparaging comments by some about how MFO board participants engaged in "group think" and were all porn addicted junkies chasing the same blue & red marbles. I ain't buying it. Opinions here are as varied as anywhere else. I don't see any group or individual pounding the table telling some poster that you absolutely must buy XYZ fund.
However, more to the point, what I do feel is that possibly many who come here are wandering about and really need to spend a lot more time, first and foremost, in defining their investing goals, plans, objectives rather than hoping to land those one or two fund choices which will put them over the top. Once they have that plan in hand they can begin to choose the investments and investing process that may help them achieve those goals.
But you know, sometimes a poster asking for LCV recommendations may have gone through all the gyrations and is just curious about what might be out there that they overlooked. Wealthfront and others may be sites for those who swallow the MPT koolaid and need help in the planning arena but MFO is good at digging up those hidden other marbles.
Regards,
Ted
But the fact remians, at least in my opinion, groupthink is more prevalent here than just about any forum out there. The granddaddy of groupthink funds goes back to the Fundalarm board. There the prominent poster of the day (and actually a friend of mine from the old usenet days) went on, and on, and on, endlessly about $2000 to $3000 gold and $100 to $200 and higher silver. His fund fave was PRPFX and sure enough all his table pounding had the whole board seemingly entralled with PRPFX. I left the board right before it changed over to MFO because enough was enough. And sure enough, like most groupthink funds, it has had a dismal return over the past three years, like 2.74% per annum dismal.
When I returned I found groupthink alive and well here as the risk parity funds were all the rage ala AQRNX. A dog of a fund if there ever was one. Then came ARIVX and then SFGIX to name just a few. All dogs. In fact, SFGIX has lost 5% already year to date. A 5% loss in less than a month!! Not my idea of how to accumulate wealth.
But some say, give a fund a chance, like a few years because time is on your side. Well that may be the conventional wisdom (which I never subscribe to) but time is never on our side. I wake one day and find I am about to turn 67. I look back (where did all those years go) and thank the Lord that I never wasted so much as a year or even six months in some groupthink dog of a fund. Time is a precious commodity and not to be wasted on underperforming dog funds.
1. The best time to buy is when no one else wants it.
2. Disregard the majority opinion. It is probably wrong.
3. It is OK to plan, but keep it alive. A plan is never finished.
4. Resist the allure of diversification.
5. Always play for meaningful stakes. You won't get rich by betting small.
6. Always take profits too soon.
Regards,
Ted
Reducing funds and going with what I think is the best way to make some cash.
Regards,
Ted"
Yogi Berra describe groupthink this way:
"No one goes there anymore, it's always too crowded."
Seems to me the great thing about this forum is the opportunity to continously review, reflect upon, and reconfirm investing ideas. When an idea starts to get a strong following groupthink can overshadow other more important things, but sharing information here doesn't always led to group concensus. When it does it's usually worth celebrating with others. I'm always glad to have spent part of my day here.
I guess that's the price of sharing occasional good investing ideas here with others, but I say,
"Thanks all!"
If you go back and reread my post I basically agree with both of you (Junkster and cman) in that people need plans first, funds second. Furthermore, because a possible handfull of posters engage with a particular fund is not necessarily a sound basis for calling out an entire discussion board. If you believe otherwise then you can offer opinions without labels. Or maybe not. In fact I suggested that you do that in another discussion topic which as far as I know you haven't.
With respect to the PM poster alluded to he can fight his own battles without my help. However he always qualified his obsession as being on the nutty side and often stated that he felt 5% in those areas were part of a diversified portfolio construct. Not everyone bought it. The only fund of that nature that I have ever owned was CEF and that was for trades when the momentum sun was shining.
Ditto, risk parity funds. I can't even explain in 50 words what one is, haven't a clue actually, and never felt the need to own one. What I do think is that if you go back to those discussions you might find the same 5-10 people bantering about representing a minority of the MFO discussion board rather than a majority. Again, hardly a reason to call out an entire board. However if you felt strongly enough about that particular fund did you express your thoughts and explain why, maybe offer an alternative, or did you just label them as groupthinkers and walk away clean?
Honestly I don't care one way or the other. I invest in very few mutual funds and the less than handful I own constitute less than 10% of my entire portfolio. What I did feel was a need to challenge some opinions that I felt were off-base on an otherwise civil and well run discussion board. I based a lot of that opinion on the numbers I noted for certain topics with respect to 'viewers' versus 'posters'/'comments'.
I'd be all for someone digging up our dirty laundry at MFO and hanging it out to air - because David keeps the old threads active and easily retrievable. However, am not aware of any such archive from Fund Alarm and so would be careful about references as to who said what back than. My recollection is that the fellow so mentioned kept only a modest sum (no greater than 20%) in PRPFX and that his recommendations were more related to the fund's unique mix of holdings than to any particular performance numbers. I also like the fund for its holdings and continue to own it. How's that for being hopelessly out of step?
As for the gold bugs, no need to lament for those who bought it a decade ago. At $1250 an ounce it's still triple where it was in January 2004. How many other investments can you say that about?
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Disclaimer - Guess I'm in the minority here with a solid seldom-changing core of about a dozen funds - most held for 10-15 years or longer (and an occasional small speculative play just for fun). So, the board is to me a wonderful way to engage some very bright people in discussion about the investing process as well as broader related themes like the global economy, specific industries, tax policies, Federal Reserve decisions, etc. I don't perceive MFO as strictly an "advice forum" as some may. No axes to grind or favorite funds to promote - and pretty much stuck on auto-pilot. FWIW
Mark, you are on a rant mixing up two entirely different views that perhaps irk you. If something, someone said bothers then be direct about it than this passive aggressive behavior of ranting against unnamed people that might hide your own misunderstanding. The inferences about view numbers are silly. It may just be that such threads have content that people find interesting and check and read often. Nothing more, nothing less.
The group think idea and favorite fund pushing regardless of context are two very different issues. The only thing common between them is that they offend you and both lead to kitchen sink portfolios without a plan.
Group thinking as I understand it is what happens when a group of people, especially vocal ones all become enamored of a fund or two at some point in time and promote it heavily even if they are not conscious of doing so. These funds often become must-have funds just by constant reinforcement. These funds aren't necessarily bad in the long run but often contain duds. So, the reinforced group thinking is not a good indicator of the quality of fund. Happens in all fan groups. The danger of this is that it stifles the very thing that you seem to want which is finding hidden gems or funds that are good based on context but not universally. It leads to kitchen sinks because people think they might be missing something by not having it.
Fund collecting/pushing is the penchant for people to offer up their favorite fund at the lightest pretext. Unlike group think, these funds don't need to have a consensus. "I like it" or "it works for me". The problem here is that a fund is good or bad relative to a portfolio context and they vary a lot in their profiles, not just simple things like ER but even manager strategy. For example, in the case of the LCV fund search even though most requests aren't that specific, there are funds offered that range from highly focused funds to wide allocation funds. They may all fit a particular portfolio strategy, but such suggestions are meaningless unless the portfolio strategy is a kitchen sink. Looking at some of the portfolios posted here, that is what they look like rather than any plan. Either these funds came out of group think or it was recommended by someone. Since there was no plan to decide the fit, people just add it to their collection if it looks good.
This is the context for the thread started by tp2006, so I used it as an example of a more disciplined approach. It is not MPT koolaid as you dismiss it, as I have said in that context it is a tool to create an unemotional base model that takes into account the particular risk profile of the user. Having such a base model allows the board to do what it is best at, which is fund selection. But the context prevents the type of suggestions which while well intentioned leads to kitchen sink selections. It could have been based on anything as long as it had some rationale.
Sorry, it has offended your sensibilities but it is what it is. Deal with it the way you want it including rants like this. But, it would be far more constructive to participate in the actual discussions of such threads with alternate views than this belly-aching.
The most recent groupthink fund I am watching is RSIVX. Looks OK so far but I believe it has a stash in junk bonds (?) and I think junk corporates are about as overpriced as ever. Time will tell.
Edit: Then ther's OSTIX. Definitely groupthink but not a dog fund at all, although I think there are much better choices. If I am wrong about this jump all over me, but the manager seems to chase whatever is hot in Bondville. Maybe that's why it's not such a bad fund.
EDIT - cman, I was not earlier aware of your attack on Mark in this post. Perhaps it was too late at night when I wrote an initial note of agreement. Anyways, I welcome frank and open dialogue like this whether from a veteran like Mark or a newbie like yourself. But I don't wish to get inter-mixed in this feud - whatever its basis and origin, so have moved some of the reflective comments I'd placed here to a different post further up. Regards
But Prof. Snowball recently noted in a monthly commentary that site viewership is up. I wonder if there isn't a lot more traffic from newer investors looking for general guidance. Maybe this is because we're at the point of the market cycle where money comes back into stocks and people are out there looking for advice. They may or may not have such well defined plans. Maybe that's why there seems to be more of the discussion topics you mention: people looking for a shopping cart without knowing how the pieces fit.
Just me thinking out loud and anecdotally. But, if that is what happening, as Catch22 suggested, a regular post by someone like cman on portfolio construction might be useful. At the end of the day, however, you're both really saying much the same thing. It's just there might be an assumption of experience among certain posters that others feel might not always exist.
FWIW.
Thanks to you and Flack and others, I try to manage a large part of my portfolio with a strong momentum bent and drawdown control philosophy, as emotionless as possible.
But there is another, smaller portion of the portfolio that I've committed to for longer term...where I have direct deposits at the fund companies and just check-in periodically...these are FAAFX and SIGIX.
But if I am wrong, like I indeed think I was with AQRIX, I will punch and re-consider going forward.
I mean, not all buy & hold strategies are bad, right? Mr. Lynch and Mr. Buffet have certainly made superior returns by buying & holding the right companies, despite drawdowns. I believe BRK has experienced periods of significant drawdown, but its long-term return is profoundly strong.
Even DODGX. Its absolute returns are top quintile over past 20, 5, 3, and 1 year periods. And, 2nd quintile over past 10 years. You just had to endure a horrible 60% drawdown in 2008-09
Hey, let's hope market stabilizes tomorrow. Still cautiously optimistic about US equities.
After last week's carnage, looks like market is within 2% of M* fair value:
PS. Once I started thinking of ARIVX as a conservative tactical allocation fund, I'm good with it...although, it should have a lower er, which is what I believe about most actively managed funds.
I like to read the various posts from the various characters that contribute real content to MFO. I don't find the group to be group thinkers so much as people with overlapping common goals.
It makes sense that the more general the topic the more inclusive of view interest - especially lurker interest. Take me. I like to watch the general direction of various MFO member's investment choices. I also appreciate the effort and discussion that ensues when someone asks for help on a portfolio because it focuses the discussion on core holdings usually. (Remember CathyG and all the good subjects (to me) - I miss her.)
Anyway, there will always be an appearance of group think when people of common interest and experience come to together. It isn't bad when several doctors agree on a diagnosis, is it? It also isn't bad when a second opinion disagrees and leads to more thinking and testing, including technicals.
And some subjects that are very important and informative are also subjects that naturally attract a narrow audience. You can't judge by page views and responses entirely.
There is a teeny tiny vocal group here amongst thousands of lurkers. That they may all jump on the same fund bandwagon does not in my opinion lend itself to discrediting an entire board. I have a right to that opinion just as you have a right to yours. Ditto wealthfront, ditto MPT, ditto Monte Carlo for which I have no use other than as a possible vacation destination.
The tone of your responses to differing opinions is to to portray the poster as an idiot for not agreeing with you. Sorry but there are many paths up the mountain. As much as I'd like to, I'm not going to get into it with you because frankly I don't have a tall enough ladder to get up on the horse you're riding.
Still doing the same passive aggressive thing. When you characterize people (incorrectly) as drinking MPT koolaid, it is just offering a differing opinion consistent with the demeanor of the board. But if someone calls the inference silly, then it is an attack on the person being called silly not a differing opinion on the inference? Amazing.
And you think this this reply to catch22 is calling him/her stupid? Have you considered the possibility that all of your angst is coming from your own oversensitive misunderstanding and inferences?
Take a deep breath and read the posts without a chip on the shoulder before forming a different opinion. And respond in the same post when you call out someone so the context is clear and your inferences vs what is said is clear rather than these oblique swipes. That would be common courtesy I think.
Geez, Mark, how cold IS it up there in Minnesota?
I'm pretty much with Anna these days although I've been posting with you folks for a few years now - pretty much from the beginning of FundAlarm.
I'd venture to say the ratio of lurkers to participants is about normal. Occasionally there's been moments of group think and a few of 'the madness of crowds'. Yet it is very rare that any sort of group think exists other than in perhaps a lack of argument.
One thing folks really need to keep in mind is the Quality of the advice that this board offers in it's many services and participants. And it has forever. If there was anyone offering stupid advice, someone(s) would immediately speak up. The fact you don't get more conversation on the advice seeking posties is a good sign.
As for the regular contributors - I'm grateful. I'm happy that some good people have the time and inclination to answer Joe Sixpack. God knows, I did it for enough years.
I hope all you good people stay warm and safe,
peace,
rono