Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Year-to-date, the five FAANG stocks account for 79% of the performance of the S&P 500. The market cap of FAANG is $3.2 trillion. For the same price, one could own every single company in the S&P 400 and S&P 600 and still have nearly $500 billion left over! That $500 billion could buy five blue chips such as Dollar General, Stanley Black & Decker, Honeywell, Bank of New York, and Aetna, leaving almost $250 billion to spare.
Its interesting to contrast this view of the stock market with the one noted in @bee 's 7/31 post regarding earnings driven valuations (see The Tell: (Caution!) Morgan Stanley warns prepare for the biggest stock market selloff in months!!!) from which this is excerpted:
No manager refers to fiscal periods in investment letters. You will read multiple times FMI referring to the "second quarter" because that's what it is. All this fiscal stuff is nonsense.
@Old_Joe. Exactly. Sometimes an observation is an observation. The extreme version of this is some people at work who say things like "I find this interesting" - means absolutely nothing and they could have just kept their mouths shut.
Now I own all 3 funds, but frankly, one reason to own FMI is to not have to bother with knowing how they invest. Investing with an active manager means to trust them. It does not matter how intelligent they are as long as they perform for you.
Finally, what I want to know is given S&P 500 is market weighted in first place, wouldn't it be normal to expect few stocks to dominate performance? Whether it is 5 or 15, both are fractions of 500. I really don't think it helps individual investor anyway regarding how to invest. I'm not any more appalled it is 5 stocks than it would be if it was 15 stocks.
PS - I've been taking profits in FMI funds and buying back too? When my ANALysis told me international was tanking I sold. Recently I bought FMIJX again.
All 3 in taxable. FMIJX additionally in IRA as well. A wise man once told me 2 things. I didn't listen to him when he told them to me, but in time I came to live it.
1) Invest only a 3rd of your assets. If you are feeling reckless, then invest the other 3rd. If you invest all of your assets, you are a consummate idiot (hint: I'm not a consummate idiot) 2) No one became poor paying taxes.
@VF Short term or long capital gain ? Just wonder. I'm a firm believer in different strokes for different folks. As for paying taxes my father said he didn't mind paying them as long as he had the money to pay ! As for me I think the taxation has been out of hand for to many years !!
@Derf all Long term. I'm not a day trader I've ranted about WHEN vs WHAT when it comes to investing. I take profits regularly just like I take losses. I never carry a loss over to next year, so I will take some profit somewhere. I always pay capital gains taxes every year. I'm sure I'm not maximizing my profits on paper in the perfect la-la-land world of buying once, holding for 30 years and paying taxes once in your life. I'm happy with my real world situation regarding capital gains taxes.
All 3 in taxable. FMIJX additionally in IRA as well. A wise man once told me 2 things. I didn't listen to him when he told them to me, but in time I came to live it.
1) Invest only a 3rd of your assets. If you are feeling reckless, then invest the other 3rd. If you invest all of your assets, you are a consummate idiot (hint: I'm not a consummate idiot) 2) No one became poor paying taxes.
That seems like dreadful advice if by "invest" you mean that everything that is NOT invested is essentially stuffed in a mattress. And I'm as conservative as they come in terms of how I manage my portfolio. Even putting 2/3 of one's investments in CD's over the past decade would have been a strategy that would have lagged horribly. To make up the difference the 1/3 invested would have to be in the riskiest spaces. There is no free lunch. Now if by invest you mean equities with the remaining 2/3 in bonds and some cash, I can see that...that's pretty much what I do.
Comments
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Perhaps the future will continue to be a little different this time for a while longer.
Derf
I agree with you; c'est la vie.
Now I own all 3 funds, but frankly, one reason to own FMI is to not have to bother with knowing how they invest. Investing with an active manager means to trust them. It does not matter how intelligent they are as long as they perform for you.
Finally, what I want to know is given S&P 500 is market weighted in first place, wouldn't it be normal to expect few stocks to dominate performance? Whether it is 5 or 15, both are fractions of 500. I really don't think it helps individual investor anyway regarding how to invest. I'm not any more appalled it is 5 stocks than it would be if it was 15 stocks.
PS - I've been taking profits in FMI funds and buying back too? When my ANALysis told me international was tanking I sold. Recently I bought FMIJX again.
Derf
1) Invest only a 3rd of your assets. If you are feeling reckless, then invest the other 3rd. If you invest all of your assets, you are a consummate idiot (hint: I'm not a consummate idiot)
2) No one became poor paying taxes.
As for paying taxes my father said he didn't mind paying them as long as he had the money to pay !
As for me I think the taxation has been out of hand for to many years !!
Good investing to all,
Derf
I've ranted about WHEN vs WHAT when it comes to investing. I take profits regularly just like I take losses. I never carry a loss over to next year, so I will take some profit somewhere. I always pay capital gains taxes every year. I'm sure I'm not maximizing my profits on paper in the perfect la-la-land world of buying once, holding for 30 years and paying taxes once in your life. I'm happy with my real world situation regarding capital gains taxes.
That seems like dreadful advice if by "invest" you mean that everything that is NOT invested is essentially stuffed in a mattress. And I'm as conservative as they come in terms of how I manage my portfolio. Even putting 2/3 of one's investments in CD's over the past decade would have been a strategy that would have lagged horribly. To make up the difference the 1/3 invested would have to be in the riskiest spaces. There is no free lunch. Now if by invest you mean equities with the remaining 2/3 in bonds and some cash, I can see that...that's pretty much what I do.
Some people do bungee jumping. Some people don't. I'm just telling you I don't do bungee jumping. Heck, I'm scared to Ski.
Someone asked, I answered. I would say "Sue Me", but in this case even that does not seem appropriate.
My mattress gives me 2% now, but mileage varies.