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The December 2024 issue of the Mutual Fund Observer has been posted.

Old_JoeOld_Joe
edited December 7 in Fund Discussions
The December 2024 issue of the Mutual Fund Observer has been posted.

Dear friends,
Welcome to the Remembrance Day / Start of Winter / Invite a Viking to Christmas / December issue of Mutual Fund Observer https://mutualfundobserver.us2.list-manage.com/track/click?u=a779898c08f5883a95650fcbf&id=3ed3901189&e=c40301c47d.
Financial markets are, in a technical sense, structurally chaotic. Beyond that structural chaos, there’s a prospect of political chaos that plays out over the weeks and months ahead. Chaos is not good for your portfolios or your sanity. Lynn Bolin and I, separately but with knowledge of what each was doing, have offered advice on crafting “a chaos-protected portfolio” (Lynn) and “a chaos-resistant portfolio” (me). Our recs are different but, we think, complementary.

Lynn also offers up advice for investing in 2025. He identifies key challenges for investors in the coming years:
1. High stock valuations and interest rates
2. Slow economic growth
3. Risk of another secular bear market
4. Sticky inflation
5. Increasing national debt and budget deficits

His analysis is somewhat at odds with the good folks at Kiplinger’s, who start with the assumption of six or seven interest rate cuts. Lynn’s prudent recs: anticipate lower long-term returns, trust active investment management during potential secular bear markets, and maybe ease back on equities if you’re of a certain age.

John Rekenthaler retired from Morningstar in mid-November. He and the other founders of Morningstar have helped guide a nearly unimaginable evolution of the power of individual investors, from a world where fund companies did not even deign to disclose the names of the people managing their funds to one where, for better and worse, investors have nearly unlimited choice and unlimited information. I wrote a short reflection on JR’s career and contributions.

Our colleague Charles offers useful new capabilities at MFO Premium (for the inflation-resistant price of $120, virtually unchanged in its decade of operation).

The Shadow keeps it real and keeps us grounded by reviewing the industry’s news, innovations, and twists in “Briefly Noted.”

And we haven’t forgotten fans of the long-scroll version (hi, Roger!): it’s here https://mutualfundobserver.us2.list-manage.com/track/click?u=a779898c08f5883a95650fcbf&id=8dedbfe7a2&e=c40301c47d!

(This post was copied from a recently received email.)

Comments

  • hank
    edited December 7
    ”Chaos is not good for your portfolios or your sanity.” I’ll affirm the latter.
  • CrashCrash
    great stuff to read, as ever.
  • Sven
    edited December 8
    Thank you for all your effort. We looking forward to the great articles. Happy holidays.

    Edits: another month of outstanding articles. It is time to review our portfolio going into 2025.
  • yogibearbullyogibearbull
    edited December 8
    MFOP update to include price-based stats (PB-TICKER) is great, @Charles. Here are some data for 2 funds that are cousins - OEF PIMIX, CEF PDI. 

    Name,        SD,        MAXDD/Date,             Sharpe Ratio,    MFO Risk
    PIMIX,         5.2%,     -10.8% / 09/2022,     1.07,                2
    PDI,           9.7%,     -24.1% / 03/2020,     0.97,                3               (NAV based stats)
    PB-PDI,       14.8%,     -31.9% / 03/2020,     0.61,                4               (Price-based stats)
    Price impacts are what CEF holders experience. Fund managers worry about NAVs only.
  • BaluBalu
    Thanks for starting the thread.
  • David_Snowball
    Hi, guys.

    Sorry for the delay. Hectic time. End of the semester. Chip was on the road at conference. And I was processing, both the outcome of the election (Mr. Trump made a modest and insightful comment about it this week, roughly "we won because of two issues: the price of groceries and the border") and my desire to submit a letter of resignation (effective 28 May 2026) from the faculty. A small step but after 40 or so years ...

    Lynn and I sort of agreed that "chaos" was an okay lens for encouraging folks to think, at year's end, about what they want to lean into ... and which risks they've decided they need not take.

    I'm close to finishing our January essay on infrastructure investing, which sort of resonates with this month's lead essays. I'm fascinated that the pace of internal migration into the country's areas with the highest climate risk is actually accelerating, apparently in pursuit of job opportunities and "amenities." That ties to the concern that we've sort of given up on limiting climate change at a national priority, which means that infrastructure investing is going to become a rising priority. Politicians can ignore a melting icecap but get toasted by local flooding, unreliable grids or water shortages.

    I've also changed the status of several discussion board members. After several flags and careful reading, one member has now been banned and a couple others are in the moderation pool. If they write things that are on-topic and reasonably respectful of the community, their posts will appear. Otherwise, not.

    Take great care.
  • Derf
    Now I'm wondering if this is a first time for banishment ?
  • David_Snowball
    Hi, Derf.

    No. Maybe a fourth in 13 years? The dude who set up multiple accounts so that he could post smack and be cheered by "others on the board" kind of stands out. But, as you might imagine, it takes a fair amount of provocation to stir me from my administrative lethargy!

    Off to listen to senior capstones!
  • Old_JoeOld_Joe
    "it takes a fair amount of provocation to stir me from my administrative lethargy!"

    That's the main reason why I'm still allowed here...
  • MarkMark
    A senior capstone was a new one on me. Good to get that new thing learned for the day in.
  • Old_JoeOld_Joe
    Me too.
  • Derf
    Me three .
  • BenWPBenWP
    I think Professor Snowball was on his way to listen to presentations of what used to be called senior theses.
  • yogibearbullyogibearbull
    edited December 12
    Thesis and capstone/project are different. Some undergraduate programs have both, but capstone/project is more common. In engineering programs, the name Senior Design (Project) may be used.

    Thesis is an in-depth individual effort.

    Capstone/project is an integrative group effort that involves the knowledge bases of multiple courses. Interestingly, whoever wants to devote most time and effort can become project leader. In some groups, it's hard to find a leader and those don't work out well.
  • rforno
    edited December 12
    I just got done grading my 25 graduate capstone papers, coincidentally .... ergo, scotch awaits!

    (And good call on infrastructure investing; it's been a large part of my portfolio for years.)
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