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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.

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the April commentary is up

David_Snowball
edited April 2014 in Fund Discussions
Dear friends,

Ed and I spent a fair amount of time in the past month interviewing really experienced fund managers. We targeted, in particular, guys who had a lot of success in a larger firm but who then chose to leave (often in protest of asset bloat). Our conversations focused both on the performance of their new fund (or funds) but also on their view of what it takes to succeed, both as investors and as business owners. The only person we approached who didn't respond was Chuck Akre.

We'd imagined a story on what it takes to succeed as the manager of a newly-launched fund but Ed has been trying to get us to step back a bit and be sure that we're asking the right questions of the right people. Rather than hurry a story out the door, we agreed that I'd profile the funds this month and that we'd post a richer story next.

Beyond that, he and Charles have been doing some awfully careful thinking and writing of a sort that I don't see anywhere else in the financial media.

And, okay, I did sneak in a cheap shot or two at ill-considered maneuvers in the industry. We're still trying to imagine the shape of our organizational future, but I did spend a few lines sharing word about the direction that readers asked us to take.

And I've promised several folks: next month back to little, newer funds that you've never heard of.

For what all of that's worth,

David

Comments

  • glampig
    Congrats on yet another fine monthly commentary, David. In fact, thanks to the entire MFO team for such a major effort month after month. There’s not another commentary that comes close to what y’all accomplish so consistently. And of course, MFO discussion boards are also the best available. So thanks to the MFO contributors for the amazing comments and links. Confession: I’ve been negligent in sending in my tithe this year so I’ll get a check in the mail this week. And prayers for your new home in Davenport, David. My wife and I found the background check to purchase our house in August 2009 more invasive than a colonoscopy. Rick
  • David_Snowball
    (chuckles) Thanks for the kind words, Rick. I joked that the house had a colonoscopy last week; we ran a camera on a cable down the clean-out, out to the city main and back. Don't really want to repeat the experience.

    I'm much taken by the place - 1970s split foyer, which is regrettable (I'd way prefer an arts-and-crafts style cottage but they're rare in the vicinity of Will's soon-to-be high school), but the interior is immaculate. Very cool four-season sunroom. It's small but felt good the moment I walked in. And Will's already scoped the perfect spot for his PlayStation.

    Life is good and you folks are a big part of it.

    As ever,

    David
  • TedTed
    @David: Spent many a day fishing Old Man River in my youth upstream from Davenport at Dubuque. I agree life is good, and we all should be able to take a joke, especially on April Fool Day
    Regards,
    Ted
    Old Man River:
  • CrashCrash
    I don't care if this is not about mutual funds. Great stuff. I love it. Thank you.
  • kallerid
    Great job as always. Those 4 featured funds should send u a little something for the free pub and funds that come their way!

    I love the idea of the model portfolio of the best funds.

    Maybe one for Age 35, Age 55, Age 75..........
  • Turtle
    Dear David
    Many thanks to you and your team for your invaluable work.
  • CharlesCharles
    The article Who’s watching the watchers? is scary stuff David. I wonder how widespread is this issue...and worry it could be pretty wide.
  • hank
    I find Ed's contributions fascinating. Got me thinking more about fees, fees, and fees.
  • CharlesCharles
    edited April 2014
    Me too Hank.

    Hey, how about this...most actively managed funds charge too much versus say VWELX or DODBX.

    But, they charge what they think they can get away with...from their shareholders and boards.

    Is it that simple?

    Now, I do believe the industry has come a long way in reducing fees. Glancing over a list of 50 Large, Common Stock Mutual Funds from the mid 70s, I see most of them had front loads of 8.5%. Yes, in addition to the 1% management fee Ed mentions, plus admin fees.

    And, for what it is worth, I believe transaction fees are lower, certainly for stocks and I suspect for MFs too.

    But at the end of the day, the fees of most actively managed funds remain too high given their below average performance.
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