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David Giroux interview on buying during the selloff
Giroux said that the fund typically makes stock selections slowly, as he takes “deep dives” into about 10 companies a year to analyze possible investments.
“That process usually takes a week. But I took 37 deep dives in the course of a week. We ended up choosing the eight best [for new positions]. I didn’t see my family and didn’t sleep a lot,” he said.
Coming out the steep decline, PRWCX has done very well comparing to the balance index.
What’s curious, I think, is how wrapped up in this market turmoil Geroux admits to being at the time. Recall that there were a number of 1,000-point up / down days for the DJI in March. But the down days were stunning in severity and across many sectors. Not only equities. Gold and miners, in particular, suffered a cardiac on several days. Oil fell by $15-20 in about a week’s time. In short, everything was in turmoil.
As one lone investor traveling at the time and often making buy / sell transactions using a cellular phone, I couldn’t perform the due diligence such transactions normally entail. Instead, it became a case of: “buy now because it looks cheap / make sense of it all later.”
So if you were managing money at the time, be it only a modest sum parked in an IRA or billions as Giroux is responsible for, it was a hectic period.
To me, this is one of the main reasons managed allocation funds like PRWCX interest me. Index funds ride the market up, but also ride the market DOWN...always fully invested. At best, Balance index funds can rebalance, but rarely are they opportunistic.
Good morning @hank. I take it your buy/sells were in equities that you own or did own ? Stay Safe, Derf
Hi Derf, It was crazy back than. I left enough “tracks” here back in March to provide a pretty good idea (and some verification) what I was doing.
- The largest move entailed several buys into PIEQX (from cash) which I did not own at the time. It wasn’t viewed as a “money maker”, but rather as a defensive area which I didn’t think would drop much further if held for a few years since Europe & Japan had been stuck in a deep rut going back decades. I’m still holding about 80% of that position, having cut it back just a bit this week.
- I also alluded back than to adding to DODBX which I did own at the time. The funds came both from DODIX and from RPGAX, a large holding I reduced (and suggested others consider).
- Smaller investments (not reported than) were made into DODGX and PRLAX after it briefly was down 50% YTD and for one-year as well. I did not own either of those at the time. I’ll occasionally scan T. Rowe’s listings looking for badly beaten up funds to buy (short-intermediate term holds). Hopefully, they appreciate that at least one client is buying a badly floundering fund when most are fleeing.
- Like many here I assume - some rebalancing took place around mid-late March. Without specifying all the funds involved, along with equity-centric funds, those invested in the natural resources areas badly needed some shoring-up. All very small moves compared to the others noted above.
@hank: Thanks for the reply. After reading your reply I do remember seeing some of your moves on MFO. I purchased two allocation funds mentioned here, SFAAX & VLAAX & bought VWINX at Vanguard. StaySafe, Derf
Giroux is one of the best managers of all time. Dodge & Cox just the opposite.
PRWCX is why you want to own managed funds. A flexible and correct approach for years. In most cases for most investors just use stocks indexes + managed bond funds, especially if your portfolio has a higher % in bonds.
Giroux is one of the best managers of all time. Dodge & Cox just the opposite.
@FD1000: Yes - Geroux has proven his worth. BTW - I’ve owned PRWCX since the 90s. Rarely mention it. It’s been a popular favorite here for at least the past decade.
I’m glad you don’t invest with Dodge and Cox. They attract an older, more mature and stable lot of investors. The managers themselves hold for very long periods. Those who trade frequently (as you seem to do) are anathema to the type of investor who owns their funds. Large inflows / outflows can detract from fund performance. (So, stay away.)
Seems like we’re talking the difference between a value shop and a growth shop. If you look at this chart and pull back the start to 3/2009 you can see that Dodge and Cox has done as well or better than the other value managers. Value wasn’t the right horse but you can’t expect a value manager to give up his knitting and buy Tesla and Facebook or pets.com, can you?
IMO, market moved up too far. too fast I don't really care. It seems like dot com days. You can fart in a bottle, hold it up and say "cloud" and your stock goes up. Meanwhile, I read this.
I've been earning good income on options for 2 months. I'm worried I'm getting addicted to it. I think I can make 10-12% this way, so I'm not rushing in and buying any more funds at this time. I own PRWCX and RPGAX in my MIL's account and am happy with both of them. If GMO is to be believed, then RPGAX should catch up with its higher allocation to international holdings.
Through the ups and down, flexibility (more like being skillful) is one of the reason I invested with Giroux through all these years. This article also revealed his personal toll as a money manager through this pandemic.
@FD1000: "...D&C is [one of the worst managers of all time]...". Oh my goodness. Really; what does one do with that?
I meant to say below average. EXample: DODGX trail the "stupid" index SPY for performance + risk attributes. See the (proof)
Please don't come back and claim it's not fair because DODGX is more value while SPY is blend. The goal is to make money and if your fund has worse performance + SD,Sharpe,Sortino it's a knockout. You can'y hide behind "VALUE" for years. Recent performance is another proof. YTD...DODGX -7.8...SPY -0.2%
I like to track DODBX, instead. Balanced. Stocks AND bonds. My numbers are from Morningstar. It sits today at 80th percentile among peers. But in real terms, down for 2020 now by just -3.77%. Given the recent uptrend, I'd say it will climb out and produce profit, as well as yield: currently at 2.57%. Looking at percentile rankings going back several, maybe a handful of years, there are some years where it underperformed peers, but most years are good to excellent. It is less consistently wonderful than PRWCX, but PRWCX is still CLOSED.
Back in 2010, reorienting a friend (and wife's) money, my intent was to spread the money out, to diversify. So, they own both DODBX and PRWCX, still, 10 years on. I guess you just can't have EVERYTHING. Life is like that. And, like me, they are investors, not traders. Trading just seems too much like real WORK!
@hank: Thanks for the reply. After reading your reply I do remember seeing some of your moves on MFO. I purchased two allocation funds mentioned here, SFAAX & VLAAX & bought VWINX at Vanguard. StaySafe, Derf
@Derf - Sorry for delayed response. I’m aware you were buying back than and either called the bottom or came darn close. I’m looking now at what you picked up. Lipper rates SFAAX quite high except expenses. I like that it has a long track record back to ‘86. VLAAX another pretty good choice, but another with high frees. VWINX is regarded as among the best in its class - but around 60% bonds. I was attempting (with limited success) to steer away from bonds back than. Don’t recall the reason. Possibly the Fed had already signaled their coming move to greater stimulus. That said, I do believe some income producing funds / assets are important to a balanced portfolio - unless of course you are very young. Sometimes it pays to act quickly. I didn’t buy after just a mere 1000-2000 Dow drop. But after 4,000 - 5,000 points down from around 29,500 it made sense to grab the net and start dipping.
(Cue the Forrest Gump impersonation:) Some here might remember the saga: we wanted to move wifey's 403b at a former employer and just convert it to a Trad IRA with VLAAX. It took them 3 months to even acknowledge that we exist (by mail) to tell us that a request had been made to the old custodian to transfer the money. THEN, we received a 2nd letter from Value Line telling us they were going to try a 2nd request to the old custodian. ("You know why it didn't go through the first time, you geniuses? Because the money isn't THERE any longer!")
Yes, after a couple of MONTHS, we went with Bruce BRUFX. Fast, quick, efficient, done. "And that's all I have to say about THAT." ******************************************** And honestly, the one whose money is already in DODBX? She's got it on cruise control, uninterested in doing any new paperwork with a new fund family. You can lead a horse to the water, but...
Here's Sam Browne with a hot and spirited version of George and Dhani Harrison's song, "Horse To The Water."
(Cue the Forrest Gump impersonation:) Some here might remember the saga: we wanted to move wifey's 403b at a former employer and just convert it to a Trad IRA with VLAAX. It took them 3 months to even acknowledge that we exist (by mail) to tell us that a request had been made to the old custodian to transfer the money. THEN, we received a 2nd letter from Value Line telling us they were going to try a 2nd request to the old custodian. ("You know why it didn't go through the first time, you geniuses? Because the money isn't THERE any longer!")
Why would you transfer your money to any fund company and not VG,Fidelity,Schwab? Do you open an account with each fund company? These 3 make it easy to see all your funds under one roof and exchange funds in the future. Fidelity transferred my 401K to rollover IRA in one day, both were at Fidelity and then I bought a fund and transferred it to Schwab to get another cash reward. I have transferred my 401K to rollover IRA thru my career each time I switched a job.
Comments
As one lone investor traveling at the time and often making buy / sell transactions using a cellular phone, I couldn’t perform the due diligence such transactions normally entail. Instead, it became a case of: “buy now because it looks cheap / make sense of it all later.”
So if you were managing money at the time, be it only a modest sum parked in an IRA or billions as Giroux is responsible for, it was a hectic period.
Stay Safe, Derf
Stay Safe, Derf
- The largest move entailed several buys into PIEQX (from cash) which I did not own at the time. It wasn’t viewed as a “money maker”, but rather as a defensive area which I didn’t think would drop much further if held for a few years since Europe & Japan had been stuck in a deep rut going back decades. I’m still holding about 80% of that position, having cut it back just a bit this week.
- I also alluded back than to adding to DODBX which I did own at the time. The funds came both from DODIX and from RPGAX, a large holding I reduced (and suggested others consider).
- Smaller investments (not reported than) were made into DODGX and PRLAX after it briefly was down 50% YTD and for one-year as well. I did not own either of those at the time. I’ll occasionally scan T. Rowe’s listings looking for badly beaten up funds to buy (short-intermediate term holds). Hopefully, they appreciate that at least one client is buying a badly floundering fund when most are fleeing.
- Like many here I assume - some rebalancing took place around mid-late March. Without specifying all the funds involved, along with equity-centric funds, those invested in the natural resources areas badly needed some shoring-up. All very small moves compared to the others noted above.
StaySafe, Derf
Dodge & Cox just the opposite.
PRWCX is why you want to own managed funds. A flexible and correct approach for years. In most cases for most investors just use stocks indexes + managed bond funds, especially if your portfolio has a higher % in bonds.
I’m glad you don’t invest with Dodge and Cox. They attract an older, more mature and stable lot of investors. The managers themselves hold for very long periods. Those who trade frequently (as you seem to do) are anathema to the type of investor who owns their funds. Large inflows / outflows can detract from fund performance. (So, stay away.)
https://stockcharts.com/freecharts/perf.php?VBAIX,FPACX,DODBX,OAKBX,LCORX,VWELX
https://www.zerohedge.com/news/2020-06-05/nfp-jobs-data-manipulated-all-paid-ppp-loans
I've been earning good income on options for 2 months. I'm worried I'm getting addicted to it. I think I can make 10-12% this way, so I'm not rushing in and buying any more funds at this time. I own PRWCX and RPGAX in my MIL's account and am happy with both of them. If GMO is to be believed, then RPGAX should catch up with its higher allocation to international holdings.
Please don't come back and claim it's not fair because DODGX is more value while SPY is blend. The goal is to make money and if your fund has worse performance + SD,Sharpe,Sortino it's a knockout. You can'y hide behind "VALUE" for years. Recent performance is another proof. YTD...DODGX -7.8...SPY -0.2%
Back in 2010, reorienting a friend (and wife's) money, my intent was to spread the money out, to diversify. So, they own both DODBX and PRWCX, still, 10 years on. I guess you just can't have EVERYTHING. Life is like that. And, like me, they are investors, not traders. Trading just seems too much like real WORK!
Yes, after a couple of MONTHS, we went with Bruce BRUFX. Fast, quick, efficient, done.
"And that's all I have to say about THAT."
********************************************
And honestly, the one whose money is already in DODBX? She's got it on cruise control, uninterested in doing any new paperwork with a new fund family. You can lead a horse to the water, but...
Here's Sam Browne with a hot and spirited version of George and Dhani Harrison's song, "Horse To The Water."
Do you open an account with each fund company?
These 3 make it easy to see all your funds under one roof and exchange funds in the future.
Fidelity transferred my 401K to rollover IRA in one day, both were at Fidelity and then I bought a fund and transferred it to Schwab to get another cash reward. I have transferred my 401K to rollover IRA thru my career each time I switched a job.