GOODX just made it back on my radar screen; noticed a link to the annual report. As of the end of Nov, it was, in round numbers, ~ 70% stock, 20% cash, and 10% misc., including corporate bonds, bank loans, Treasuries, and a tiny sliver in a U.K. investment trust -- 24 holdings in all, and $99 mil in assets. Most of the stock is in tech, financials, and industrials. (No big banks except what Buffet et al. own in Berkshire, which is a top holding ...)
It's been several months since anyone commented on the fund; I wonder who's watching, who's bought in, who's dropped it from the watchlist, and in any case, how come?
It's fairly high on the list at this house, for possibly deploying some profits from other funds. I think I like the go-anywhere and all-cap nature of it - but of course it's still less than a year young. At this point, as limited as the view from here is, it's looking somewhat better than FVALX and APPLX, funds that I consider as fairly similar in approach.
TIA, AJ
Comments
Sorry guys, but you are demonstrating a penchant for picking stocks which makes me wonder if you will both do better buying stocks instead of funds
Thou are talketh Greek and Latin to me. I buy mutual funds from active management because I rely on them making decisions for me. I find it a little strange you have the time to follow a fund to see what stocks it owns, presumably so you may buy the fund if the stocks you would rather it own show up in the portfolio. Which I might add will be at least 3 months old before released to public.
So what exactly are we thinking here?
Meanwhile, Sears has taken one loss after another in the last several quarters. CEO Eddie Lampert was a tremendously successful hedge fund manager, but he's never made a real attempt to bring Sears into present day, neglecting the stores in favor of one buyback and short squeeze (see the recent ridiculous move) after another. He's wound up making a once great American brand increasingly irrelevant. People continue to believe in Sears because of the Lampert factor (and to some degree the real estate value factor, although I question whether mall real estate occupied by Sears is as valuable or has even the demand some may believe it does - retail is overbuilt in this country and technology is increasingly chipping away at B&M stores and forcing them to be increasingly competitive), but I believe the options for Sears are dwindling.
If Lampert (who owns a massive amount of shares, much of which were likely bought higher) can manage to sell the thing, good for him. I don't see the grand plan for taking the thing private. Everyone expected Lampert to turn the thing into his Berkshire Hathway, but while 2008 hampered those plans, he hasn't made any motion towards it since and I think anyone still waiting for that to occur will be disappointed.
The question becomes what is the intrinsic value of Sears. My view: every day that it's not a well-run retailer, it's less and less. Every day the brand becomes less relevant is a day the brand and everything that revolves around it becomes less valuable. I asked who would want to own Sears when it was trading over $100. It's now much less, but my question is, has anything changed about the company?
This fortune article also makes a more detailed case:
http://finance.fortune.cnn.com/2011/05/12/eddie-lampert-dementor/
I've said in other threads that I think - even if things are better - retail is going to have to really evolve in the next 5-10 years, with technology resulting in more and more people shopping online or online via their phone. Everyone thought Best Buy was going to do well with Circuit City gone, but they haven't and are planning to reduce store space.
http://articles.latimes.com/2011/jun/23/business/la-fi-best-buy-bigbox-20110622
"Big-box has already seen its heyday," said Brad Thomas, a retail analyst with Keyblanc Capital Markets. "Retailers just don't need as much space as they once did. Across the retail industry there is an effort to reduce the size of your stores as retail and purchases increasingly occur online rather than through brick-and-mortar stores."
Stores are increasingly subleasing portions of stores to other companies, but there's definitely both positives and negatives to that, as well as the question of how successful it will be. I question the value of non-prime commercial real estate in an environment where many retailers are continuing to downsize and look at things like subleasing.
I like the differentiation of the middle-or-high-end outlet concept, such as Simon Property Group's Prime Outlet subchain or Tanger Outlet Malls. I don't have an investment in either, but I think the outlet concept will continue to attract a following and you'll likely see more malls with stores like Nordstrom Rack and Saks Off 5th, among other similar concepts. I think the era of having 10 fairly generic strip malls all within a few miles of one another is over, as well.
Whereas retailers once had to go coupon-heavy to get people to try their online store, now I think retailers are going to have to get increasingly creative to get people in the B & M store. Shopkick is an app example that rewards people for going into stores, and PointInside, a mall app that shows mall directories and coupons linked to the directory for various retailers, is another example. Shopkick and things like it are at least a fairly creative way to get people into stores and based upon things like these, I think there is potential to use apps and other electronic means to get people into stores. I don't think it will solve the issue that retail will need to change in coming years, but they are an example of retail having to evolve and change and try to use these electronic tactics in their favor.
In terms of retail, I just see change as inevitable and necessary over the next decade (or less), whether or not things get noticeably better.
I definitely have funds where I have disagreements regarding some of the management's decisions (Marketfield being a main example, although at least Marketfield has significant flexibility and it acts as a contrarian view against a large portion of the remainder of my portfolio), but in terms of funds making *large-scale* (especially when it starts to become a matter of the fund being reliant upon a specific or very specific bet) moves into something I don't agree with, then I am more than happy to be critical or just not buy it or sell it if I own it. People do buy active management to have managers to make decisions for them, but people bring their own thoughts to the table and can take actions based upon that, as well - and sometimes the person making the disagreement call is right.
In terms of Leucadia mentioned above, I just thought that's a compelling way to get some exposure to Jefferies, as well as a number of other businesses under the Leucadia umbrella, and Berkshire-esque Leucadia (which co-owns a company called Berkadia with Berkshire) has demonstrated an excellent (2008 aside) long-term track record itself.
http://en.wikipedia.org/wiki/Leucadia_National
At this point, I'd imagine the options and resources available to Sears are less than what they were several years ago, with things like this: "CIT is keeping the operator of Sears department stores and the Kmart discount chain on a tight leash, the sources said, after the company posted 18 straight quarters of sales declines.": http://www.reuters.com/article/2012/01/31/us-sears-cit-idUSTRE80U1BZ20120131
While the CIT issue is a small part of Sears' business, it's certainly not a positive sign.
I wouldn't expect any Berkshire-like transformation at this point, and the best I would suggest is likely is some sort of break-up or sell-off (someone like Target gets some of the brands, someone like SPG gets the real estate), but I don't think that would bring that much of a premium to shareholders.
I'd be somewhat more interested if Lampert's hedge fund (Lampert has a remarkable history as a hedge fund manager, but that has not translated at all to running a retail operation) was under the SHLD umbrella or had some connection/participation, rather than having ESL investments entirely separate. It's not that there's no value in Sears - there are brands, real estate, etc - but every day the company is run like this (and I'm curious how much longer the company can go on this current path w/18 straight quarters of declining sales), the value erodes and I don't think there's the demand some believe for some of the assets.