Hi, guys.
Just so you know, I'm slated to meet a fair number of folks over the day-and-a-half at Morningstar. A more-or-less complete roster includes:
- Abhay Deshpande, Centerstone funds, former First Eagle Global
- Amit Wadhwaney, Moerus funds, formerly Third Avenue Int'l Value
- David Marcus, Evermore Global
- Jon Angrist, Cognios Market Neutral Large Cap
- Abhi Patwardhan, FPA New Income
- Satya Patel, Matthews Asia Credit Opportunities
- Patrick Drum, Saturna Sustainable Bond
- Matt Berquist, Intrepid funds
- one of the other of the Strausses, Appleseed
- Grant Kennaway and Jeff Ptak, Morningstar
- someone or another from the Scout Funds
And, with luck, Charles and Ed, a couple nice people in the media relations end of things and a couple MFO readers.
If you have specific questions for any of the folks, please to share them. I'll do my best to raise your concerns and get them posted here.
Wishing you the best,
David
Comments
Regards,
Ted
http://www.morningstar.com/company/MIC
Recently, @Catch22 made a post that something is just quite not right in the Mroningstar Xray tool. I have provided a link to his post along with the comments of others including myself.
http://www.mutualfundobserver.com/discuss/discussion/32653/double-check-me-on-this-statistic-will-yooz-thanks#latest
Perhaps, if the opportunity presents itself you can note this concern to the Morningstar folks.
Thanks.
Old_Skeet
Trailing note: Correcting post as noted by Catch 22's below comment. My bad @Crash.
Nope, it was Crash.
David
The first response was something like "it was an expression of Abhay's legacy at First Eagle." The second was, "but we weren't on-board yet when the decision was made, so we're not 100% on that.
So far the no-load institutional share class holds 90% of the fund's assets, the "A" shares - often load-waived - hold 9% and the archaic "C" shares are under 1%.
I'm going to try tracking Abhay down and asking him directly, since I forgot to ask in our original meeting. (My bad.)
David
I got your question a bit after the conference ended, so reached out to the Centerstone folks on your behalf. Here's the short version:
1. Abhay is supported by two research analysts, both with substantial experience (at Ariel and Manning & Napier in one case and Third Avenue in the other) and strong support from experienced outsiders.
2. They're not sure that the size of the analyst team is a great predictor of success. They quoted Jean-Marie Evilliard's maxim, "it's not always the biggest battalion that wins." That's especially true now that they can leverage technology to do much of what used to be time-consuming groundwork, leaving the management team more time to test ideas.
3. The nature of a low turnover portfolio is that it needs fewer new ideas, which mitigates some of the analytic pressures.
4. They'd love to talk with you. Orli Peltz, their director of marketing, another Third Avenue alum and a good person, hides behind the address [email protected]. She invites you to drop a note.
For what that's worth,
David
Here's what I got back from the Morningstar folks though, in reality, it might be best for us to hook you up directly with one of their data folks.
David
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“The user “Crash” notes “X-Raying my portfolio at Morningstar. "Projected Earnings Per Share Growth" over the next 5 years = 10.78%, where the SP 500 standard is 1. (Or does the constant 1 just apply to SP 500 YIELD, in the next column?) So, the thing is telling me that, compared to SP 500, my portf is projected to grow earnings at 4.83%. That's 4.83 times better than SP 500? What did I do right?”
Morningstar.com’s Portfolio Manager X-Ray value for Projected EPS Growth - 5 Year %, available at http://portfolio.morningstar.com/Rtport/Reg/XRayOverview.aspx, is an aggregation of the same projected five-year EPS growth for stocks - including those owned through funds - within the user’s portfolio. For a stock, projected five-year EPS growth is the mean estimate of long-term EPS growth, derived from estimates by analysts who cover the stock. The five-year earnings growth forecast shows what the consensus is among analysts concerning the company's long-term growth rate. For a mutual fund (and other managed products), projected five-year earnings growth is essentially a weighted average of the five-year EPS growth estimates of each fund's stock holdings, though there are some refinements made in aggregating the underlying numbers.
As a baseline for comparison the projected five-year EPS growth for the S&P 500 is 2.22% as of 4/27/2017. A portfolio with a Projected EPS Growth - 5 yr of 2.22% would be equal to the S&P 500, or 1.0 relative to the S&P 500. A simple portfolio of just Apple Inc stock, which has a projected five-year EPS growth of 6.8% is 3.06 times better as measured relative to the S&P 500.
Crash notes the Projected EPS Growth - 5 yr for their portfolio is 10.78%. Relative to the S&P 500’s 2.22% that is 4.83 times better than S&P 500 which is likely what shows in the “Relative to the S&P 500” column for this portfolio. To unpack where that is coming from I would suggest adding the same column of Projected EPS Growth (%) - 5 Year to the “My View” at http://portfolio.morningstar.com/Rtport/Reg/MyView.aspx (click “Customize My View.”) That added column will break down the projected five-year EPS growth by holding to give a sense of which holdings are contributing a higher value than the S&P 500’s 2.22%.”
Best regards,
Mary Kenefake
Communications Specialist, Corporate Communications
Best,
Lewis