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Unfortunately, I own it. (:- Have been thinking of replacing it after holding it for more than year now, but the inertia is keeping me in it. Also, the thought of it performing well in the eventual downturn (whenever that happens).
If I replace it, I would like to do with something in the same category, but not finding any compelling choice.
I own a foothold in WBMIX, and was going to add to my position if it performed, but it never did. In the L/S space, QLEIX is the most attractive option.
@mrc70 You know we need to really examine why we own a fund. "Performing well in a downturn...". Scarier words have never been spoken.
I think one MFO measure of how long it takes to bounce back is telling. I have got my share of flak for holding HSGFX. The point is we see these funds underperform. Then if we see market tank 50% we will expect these funds to go up 100%. That's not likely to happen.
If we want to hedge, maybe we just buy short funds. If we buy HSGFX, WBMAX, etc. I think we need a different reason. I moved some HSGFX holdings out last year. If I owned WBMAX I would do the same unless there is some miracle bounce back. One of the sure things in life is taxes, so no reason to not at least take a tax loss at end of year.
Isn't it all about upside/downside capture ratio for these funds? Haven't looked, but I would believe HSGFX has a horrendous upside value and probably and okay downside. And since the market is up-side more then it is down-side, that is going to kill you. In fact, that is likely reason why these funds as a group don't do well.
Ok, curiosity got to me so I took a quick look comparative look in M* at up/down capture for HSGFX and WBMAX and it isn't even close. I don't own or want to own either fund, but HSGFX is far far worst in this category then WBMAX.
@MikeM, While the upside/downside capture ratio seems a useful stat, there is this lurking question of a repeatability. Funds that did well in one downturn may not do well in another. This is one of a number of hidden dangers I see in alternative funds, and I think before one buys one an investor should do a detailed analysis of how the fund is currently positioned, the manager's philosophy towards hedging and the manager's outlook for the market currently and then decide whether you agree with the philosophy or not. WBMAX seems to be designed around a value investor's philosophy towards hedging, buy the cheapest sectors of the market and short the most expensive. That has not worked well at all of late because the cheapest sectors such as energy and financial services have continued to underperform while the most expensive such as biotech have continued to outperform. That means WBMAX is losing on both sides of its bets, hence the underperformance. The question is do you agree with manager Redleaf's analysis or not and if you do agree, can you take the pain of him being wrong for a while?
@kevindow. I have sworn off all things AQR. They are not a retail investors friend.
PS How are you able to by institutional shares?
VF, I always hunt for brokerages which offer access to targeted institutional funds at a reasonable minimum. QLEIX is available at Scottrade for $100 minimums in taxable and retirement accounts with a TF.
Good points LB. Again, not in either of these funds so no skin in the game. I once thought "alternative" funds sounded cool, but now think they are useless, or at least not needed in a portfolio. At least for me.
Hey, I think that is what Ted has been saying all these last few years... Smart guy.
At some point we have to accept, just like we had "long" quacks pretending to be geniuses in the 90s, we've had "short" quacks pretending to be geniuses between 2000-2002, and 2008-2010.
I bought HSGFX because at least I didn't sense bulls*** from Hussy. I actually understand how he invests. This is not always possible for these types of funds. Admittedly him donating 66% of profits to charity had something to do with it too. I own HSTRX as well, which I have actually owned for quite a while and I'm fine with it.
Coming back to WBMAX. I'm surprised at the silence on the boards. I could have sworn half of us married Whitebox and had children with it.
VF, if donations to charity were a reason for sticking with Hussman, and I've seen you state that before, wouldn't it be more effective to just donate directly to those charities yourself while investing with a winning manager? Then at least 100% of your donation, or expenses, goes to a good cause instead of 66% and 34% into his pocket.
From what you stated, you seem to be happy paying for no-BS and a charitable individuals expenses. When in actuality, everything he has said for the last 10 years has turned out to be BS in investment sense. You don't mention how or why this fits your investment plan.
You are right about the silence on Whitebox though. Much like all the ballyhoo about Marketfield just a year or so ago. Which makes me feel even more strongly that none of these market timing funds are worth a hoot. They will look good until they're not.
@MikeM - I didn't say I was being smart. It is "unconscious bias". I'm thinking "at least the guy is not an ass****". So I own him in my "alternative" slot. Him donating to charity is not reason to buy him. However, that prevents him from being my first candidate to sell when taking a tax loss. I would put John Montgomery in the same category, Thankfully have had much better luck with my Bridgeway holdings.
Hindsight is always 20/20. I haven't owned HSGFX for 10 years. I have actually owned HSTRX for that time though. I thought I bought HSGFX about the time he could start being "right" again. Morningstar had summarily dissed him. Seemed to be good time. I was thinking lot of people would dump the fund based on M* comments. So I started creeping in.
Obviously I was wrong. So as I said, I keep rectifying my mistake a bit at a time. I could try rectifying it all at once but with my luck it will go up 20% the day I sell all my shares. As I keep telling people. "Hurry up slowly".
Now, I'm not sure we should call these funds "market timing" funds. They do seem to have some plan at work. The one irony in WBMAX Q1 report is this. They make a point about not being simply short given their negative view of the markets. The fact of the matter is, if they done exactly that, the fund would have performed better. Right now it is performing like a 2X short fund compared to the S&P 500.
Probably worth repeating that Mr. Redleaf believes the “path to victory” for the fund’s current “intelligent value” strategy is one of two ways: 1) a significant correction from current valuations, or 2) a fully recovered economy with genuine top-line growth.
Hi @Charles and all expressing thoughts in this thread.....
Not picking on you in this thread; but this group of words you wrote,"caught" my eye.....
"But markets have simply not supported their hedges."
This style of wording are what I might expect to read in a market report from a fund manager during a down period. They may also be words I could udder to myself or my spouse attempting to explain or rationalize a rough/down period in our personal portfolios.
IMO, all investors are hedged with or against a position(s).
Over the past few years we have greatly reduced our bond portions, moving to mostly U.S. centric, broadbased holdings at first, with particular direction towards more various healthcare postions. Within the last year more bond postions were sold with more direction towards the Euro area.
Hedging, be it at a fund level or personal level; is establishing an investment(s) based upon, at the very least; thinking and thought about what one determines at the time to be themes or movements and trends. I am not able to use an algo device to support whatever I see with investments. I must use personal assessment of factors here and there; and can readily throw in a batch of technical data and charts, at least to the extent that I understand what I am viewing.
To fit my view of the fund types in this discussion and the management methods is that rather than "markets have not supported the hedges"; is blaming the markets for the failures. I wouldn't get away with this type of thinking at this house. I would deserve and get a selfie arse kick and would expect the same another.
For whatever their knowledge, experience and the machines provide for these fund type managers and still they miss the "investment return" boat; at this house, with this failure status, there would be some very serious introspection to determine the problem area(s).
We're still "hedged", err, I mean invested, in areas of our choice for reasons we currently believe to be valid.
Finally sold it today. I bought it at the end of 2013 when they had an advisor class of share. I have to see what I can replace it with. I also sold MACSX and Trow Price Real Asset funds this Week. I already have SFGIX, that is why sold MACSX. Trow Price one is a meek attempt at buying energy sector. I think I would rather buy a pure play, so it is out.
Invested my wife's Roth allocation into VMVFX. Money was sitting in MM fund since April. I already have VMVFX in IRAs, moved into it as an exchange for VHGEX at the end of last year, making it the largest fund in portfolio. Still at 13% of Cash in the retirement accounts.
@kevindow. I have sworn off all things AQR. They are not a retail investors friend.
PS How are you able to by institutional shares?
AQR at Fidelity in an IRA is reasonable. I'm in their market neutral fund, QMNNX (investor shares' ticker), which at last check was single-digits long. The schtick is it's supposed to be market neutral over a full cycle.
WTF is going on at this fund. It is not as if the S&P went up another 4%. I thought maybe fund invested in gold or something, but I don't think that's the case.
I fear we will hear some disturbing news from this fund company in the coming weeks. I'm thinking of selling my WBLSX stake which is doing an order of magnitude "better", i.e. down -1.5% YTD.
I remember the hype on this board when this fund debuted. David was very skeptical of them (giving a very cautious review of the long/short fund) and it's very generous of him not to chime in with an "I told you so."
I'm glad I missed the bus on this fund, but there's no reason to brag, since I had my money in PAUIX instead. Finally sold it off last week. I do like the idea of these allocation funds as a diversifier and hedge against the traditional asset classes, but it seems their promise gets lost in their execution.
We made a lot of clients happy for a number of years when we owned MFLDX from late 2007 through 2013. While we are no longer in this fund, I think we learned a few lessons. 1) Independence is crucial. When Marketfield was bought by Mainstay, it was a boutique fund with strong performance record. Mainstay made it their marquee fund, and assets ballooned from $4B to almost $16B in less than a year. No management team with a unique strategy, no matter how smart and talented, can handle this inflow. 2) Our observation is that the team let their risk parameters widen to accomodate the massive flow of cash. That resulted in a 12% loss in 2014, something from which they have not recovered. 3) No longer a boutique fund used by RIAs, hot cash fled the fund, even faster than it went in, with assets dropping to only $3B now. Once the run starts, it feeds on itself. Do not try to stand in the doorway. Interesting to note that the best record in the Equity Long-Short sector belongs to Schwab Hedged Equity SWHEX, that also happens to have one of the smallest asset bases. I am not suggesting folks buy this fund, but if I did own it, I would watch fund flows very carefully. Another strong performer is Gateway GTEYX, which has been around a very long time and now has by far the largest asset base. It has remained independent, though it is part of the Natixis group (Oakmark, Loomis, Vaughn Nelson, et al), and just keeps plugging along. Nothing fancy and has by far the lowest expenses of the group.
As for Hussman, it just boggles the mind to think that HSGFX has lost money in going on 6 of the last 8 years. Shareholders have fled, but there are still some who have stayed (maybe Hussman and his relatives?).
Comments
Have been thinking of replacing it after holding it for more than year now, but the inertia is keeping me in it. Also, the thought of it performing well in the eventual downturn (whenever that happens).
If I replace it, I would like to do with something in the same category, but not finding any compelling choice.
Kevin
PS How are you able to by institutional shares?
You know we need to really examine why we own a fund. "Performing well in a downturn...". Scarier words have never been spoken.
I think one MFO measure of how long it takes to bounce back is telling. I have got my share of flak for holding HSGFX. The point is we see these funds underperform. Then if we see market tank 50% we will expect these funds to go up 100%. That's not likely to happen.
If we want to hedge, maybe we just buy short funds. If we buy HSGFX, WBMAX, etc. I think we need a different reason. I moved some HSGFX holdings out last year. If I owned WBMAX I would do the same unless there is some miracle bounce back. One of the sure things in life is taxes, so no reason to not at least take a tax loss at end of year.
Ok, curiosity got to me so I took a quick look comparative look in M* at up/down capture for HSGFX and WBMAX and it isn't even close. I don't own or want to own either fund, but HSGFX is far far worst in this category then WBMAX.
Kevin
Hey, I think that is what Ted has been saying all these last few years... Smart guy.
At some point we have to accept, just like we had "long" quacks pretending to be geniuses in the 90s, we've had "short" quacks pretending to be geniuses between 2000-2002, and 2008-2010.
I bought HSGFX because at least I didn't sense bulls*** from Hussy. I actually understand how he invests. This is not always possible for these types of funds. Admittedly him donating 66% of profits to charity had something to do with it too. I own HSTRX as well, which I have actually owned for quite a while and I'm fine with it.
Coming back to WBMAX. I'm surprised at the silence on the boards. I could have sworn half of us married Whitebox and had children with it.
From what you stated, you seem to be happy paying for no-BS and a charitable individuals expenses. When in actuality, everything he has said for the last 10 years has turned out to be BS in investment sense. You don't mention how or why this fits your investment plan.
You are right about the silence on Whitebox though. Much like all the ballyhoo about Marketfield just a year or so ago. Which makes me feel even more strongly that none of these market timing funds are worth a hoot. They will look good until they're not.
I'm crazy about many things this fund offers ... Whitebox does a lot right by shareholders, especially compared to say houses like AQR.
But markets have simply not supported their hedges. In fact, like mentioned above, getting hurt on both sides lately.
Still a younger fund ... time will tell if it ever lives up to the all-weather fund I had hoped it would be.
Losing a percent a month is always painful, but especially during bull markets ... would not mind so much if it just stayed even during such times.
Here are links to previous write-ups on the fund:
http://www.mutualfundobserver.com/2015/03/whitebox-tactical-opportunities-4q14-conference-call/
Might note chart about getting of the bus early. (BTW Dr. Hussman never gets on.)
http://www.mutualfundobserver.com/2013/10/whitebox-tactical-opportunities-conference-call/
c
Hindsight is always 20/20. I haven't owned HSGFX for 10 years. I have actually owned HSTRX for that time though. I thought I bought HSGFX about the time he could start being "right" again. Morningstar had summarily dissed him. Seemed to be good time. I was thinking lot of people would dump the fund based on M* comments. So I started creeping in.
Obviously I was wrong. So as I said, I keep rectifying my mistake a bit at a time. I could try rectifying it all at once but with my luck it will go up 20% the day I sell all my shares.
As I keep telling people. "Hurry up slowly".
Now, I'm not sure we should call these funds "market timing" funds. They do seem to have some plan at work. The one irony in WBMAX Q1 report is this. They make a point about not being simply short given their negative view of the markets. The fact of the matter is, if they done exactly that, the fund would have performed better. Right now it is performing like a 2X short fund compared to the S&P 500.
Not picking on you in this thread; but this group of words you wrote,"caught" my eye.....
"But markets have simply not supported their hedges."
This style of wording are what I might expect to read in a market report from a fund manager during a down period.
They may also be words I could udder to myself or my spouse attempting to explain or rationalize a rough/down period in our personal portfolios.
IMO, all investors are hedged with or against a position(s).
Over the past few years we have greatly reduced our bond portions, moving to mostly U.S. centric, broadbased holdings at first, with particular direction towards more various healthcare postions. Within the last year more bond postions were sold with more direction towards the Euro area.
Hedging, be it at a fund level or personal level; is establishing an investment(s) based upon, at the very least; thinking and thought about what one determines at the time to be themes or movements and trends.
I am not able to use an algo device to support whatever I see with investments. I must use personal assessment of factors here and there; and can readily throw in a batch of technical data and charts, at least to the extent that I understand what I am viewing.
To fit my view of the fund types in this discussion and the management methods is that rather than "markets have not supported the hedges"; is blaming the markets for the failures.
I wouldn't get away with this type of thinking at this house. I would deserve and get a selfie arse kick and would expect the same another.
For whatever their knowledge, experience and the machines provide for these fund type managers and still they miss the "investment return" boat; at this house, with this failure status, there would be some very serious introspection to determine the problem area(s).
We're still "hedged", err, I mean invested, in areas of our choice for reasons we currently believe to be valid.
Just my 2 cents worth.
Catch
share. I have to see what I can replace it with. I also sold MACSX and Trow Price Real Asset funds this Week. I already have SFGIX, that is why sold MACSX. Trow Price one is a meek attempt at buying energy sector. I think I would rather buy a pure play, so it is out.
Invested my wife's Roth allocation into VMVFX. Money was sitting in MM fund since April. I already have VMVFX in IRAs, moved into it as an exchange for VHGEX at the end of last year, making it the largest fund in portfolio. Still at 13% of Cash in the retirement accounts.
WTF is going on at this fund. It is not as if the S&P went up another 4%. I thought maybe fund invested in gold or something, but I don't think that's the case.
I fear we will hear some disturbing news from this fund company in the coming weeks. I'm thinking of selling my WBLSX stake which is doing an order of magnitude "better", i.e. down -1.5% YTD.
I'm glad I missed the bus on this fund, but there's no reason to brag, since I had my money in PAUIX instead. Finally sold it off last week. I do like the idea of these allocation funds as a diversifier and hedge against the traditional asset classes, but it seems their promise gets lost in their execution.
As for Hussman, it just boggles the mind to think that HSGFX has lost money in going on 6 of the last 8 years. Shareholders have fled, but there are still some who have stayed (maybe Hussman and his relatives?).