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We Have Commentary! (New From October - The Month of Surprises)

edited October 2015 in Fund Discussions
David Snowball's Monthly Commentary for October 1, 2015
http://www.mutualfundobserver.com/2015/10/october-1-2015/

(Note to readers: I screwed up yesterday and linked David's September Commentary - which explains the initial reactions.)

Comments

  • Thank you, David and company. It brightens my day as I am looking forward to it every month. September has been a brutal month.
  • Uhhh ... dude? It's October. You know, past the date of the autumnal equinox and onto the baseball playoffs.

    Our October commentary will be posted quite late this evening. Chip is away on a job interview today (IT folks, as it turns out, don't relish the prospect of public presentations or hour-long question-and-answer sessions in front of potentially perplexed faculty and staff. who knew?) and won't be able to turn her frazzled attention to the task for a while. Charles, meanwhile, has been meeting folks (the famous, the fans and perhaps even Ed) at the Morningstar ETF conference this week. We'll share preliminary word on that event in the October issue.

    So, be patient. Pretend that tomorrow is the first and that it's September.

    Cheers,

    David
  • edited October 2015
    @ David: SORRY:(

    Over anticipation and how time flys!

    But in reading your analysis of media fear-mongering last month, I dare say the tenor today is eerily similar.
  • It just proves how much we love Mr. Snowball. We forget what he said last month, and read it again this month anew.

    :D
  • Great commentary (October), as always. Ed's general idea, that an ideal portfolio might be a mix of index funds for large caps, actively-managed funds for small cap and espcially foreign small cap, and cash for ballast is one that's growing on me.

    I just wish I didn't have nearly all investments in taxable accounts, making it costly tax-wise for me to move to that ideal portfolio.

    On the overall bear call, I have trouble seeing it when there does not seem to be any recession or interest rate shock on the horizon, but to my regret, I'm not particularly good at market timing.
  • Some good reading was found in this months newsletter. I enjoyed reading what Leuthold's perspectives were along with what Vulcan Value Partners had to say about small caps. Plus I found the blurb on utility funds informative.

    Skeet
  • @expatsp +1 I think value added active managers can also be found in the bond arena.
  • In the "PS: Where Eagles Dare" section, is the following sentence:

    "Of more interest is the fact that Blackstone Management Partners is reportedly purchasing a 25% stake in First Eagle that is being sold by T/A Associates of Boston, another private equity firm. As we have seen with Matthews in San Francisco, investments in investment management firms by private equity firms have generally not inured to the benefit of individual investors."

    I am not familiar with any transaction by a private equity firm as relates to Matthews. Can someone help me here? thanks,

    press
  • edited October 2015
    Hi, Press.

    The firm is supported by several minority owners:

    From today"s news: "Lovell Minnick Partners is almost home after a trip through Asia. The firm agreed to sell a portion of its stake in investment management firm Matthews International Capital Management LLC to Japan’s Mizuho Financial Group. Matthews International, also known as Matthews Asia, invests solely in Asia and serves as the investment adviser for the Matthews Asia Funds, a group of 16 open-ended equity and fixed-income mutual funds organized in the U.S. and 11 SIVACs registered in Luxembourg."

    The earlier stories are linked below. There is some concern from friends of the firm that the outsiders may have fostered a culture change of sorts, which might account for some of the manager departures and the launch of newer, narrow funds (their newest funds are Value, ESG, Emerging, Focus). As with all stories of institutional change, it's impossible for outsiders (and almost impossible even for insiders) to know quite why things transpired as they did.

    For what that's worth,

    David

    http://matthewsasia.com/matthews-news/press-releases/article-342/default.fs

    https://www.pehub.com/2015/09/lovell-minnick-sells-part-of-matthews-asia-stake/
  • As someone who (like so many here) studies the Commentary texts intensely, I am trying to fathom the extreme Leuthold valentine.

    >> They’re an independent firm that produces financial research for institutional investors.

    okay

    >> They do unparalleled quantitative work deeply informed by historical studies that other firms simply don’t attempt.

    Seriously, unparalleled?? Not just unsurpassed? Did you really mean to write that?

    >> They write well and thoughtfully. x 2

    Moreso than the best of the others who do so?

    >> Quite beyond that, they put their research into practice through the Leuthold Core (LCORX) ...

    k, who doesn't?

    >> Core was a distinguished “world allocation” fund before the term existed. $10,000 entrusted to Leuthold in 1995 would have grown to $53,000 today (10/01/2015).

    Lots of different managers were making decisions during those two decades, per M*, unless you are claiming Leuthold himself really ran the show, regardless of the group dynamics and inputs, until 2011, but also still, albeit mostly retired, that he has major say from jealousy-inducing Bar Harbor.

    >> Over that same period, an investment in the Vanguard 500 Index Fund (VFINX) would have growth to $46,000 while the average tactical allocation manager would have managed to grow it to $26,000.

    Not sure whether to go there, using many owned oranges. One would not want, over those two decades, to compare Core with FPACX or OAKBX; but are they tactical? One would not want to compare Core with FCNTX or FLPSX or PRBLX (management change here) or even GABEX, listed here since all equities (SP500) was mentioned.

    >> All of which is to say, they’re not some ivory tower assemblage of perma-bears peddling esoteric strategies to the rubes.

    All righty then.

    >> The bottom line is that a cyclical bear began in August and it’s got a ways to go.

    Huh. If they say so. Maybe they're right.

    Whence this valentine and pitch ?
  • Hi, Press.

    ...There is some concern from friends of the firm that the outsiders may have fostered a culture change of sorts, which might account for some of the manager departures and the launch of newer, narrow funds (their newest funds are Value, ESG, Emerging, Focus). As with all stories of institutional change, it's impossible for outsiders (and almost impossible even for insiders) to know quite why things transpired as they did.

    For what that's worth,

    David

    Thanks David....yes, that may be instructive and could give insight to recent departures. Certainly provides reason to be watchful of remaining Matthews holdings.

    press
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