Dear friends,
Well, the Patriots have the NFL’s best record (14-2) and have outscored their opponents by a league-high 191 points this year, which is a pretty good signal that New Year’s is upon us and the January issue of the Mutual Fund Observer has launched. You can find it at
http://www.mutualfundobserver.com/issue/january-2017/.
Highlights of our January issue include:
Snowball’s “publisher’s letter” shares a hard truth: despite everything you’ve heard in the past year, things are getting better. Distinctly better. Historically better. Globally better. He shares the evidence, offers you a chance to make a difference in the life of a child and presents “the 2% challenge.”
Leigh Walzer, president of Trapezoid LLC, looks at the role of investor activism in prying open the value locked away in closed-end fund portfolios; at base, the liquidation value of the funds routinely exceeds their market NAVs which leads more and more activists to look for quick gains through forced liquidations.
Ed Studzinski returns to the question of fund expenses. We celebrate expense reductions. Ed asks us to consider the cost of those reductions; when a fund dependent on talent fires its talent, who gains?
Bob Cochran reminds us that prediction is easy while getting it right is hard. Maybe impossible. That has distinct consequences for how you need to approach your finances. Bob lays out the case for humility for us.
Charles Boccadoro updates folks on developments at MFO Premium; the chief one is a reader-inspired change that eliminates the effect of loads on return calculations. That’s based on the observation that virtually all loaded funds are now available with waivers. See Charles for details.
Snowball also spends a moment trying to reason with the fund community, using the lens of an abandoned, sand-filled squatter toilet in the weeds behind a rural farmhouse as a way of focusing their attention. The question at the bottom line: are you stubborn enough to choose failure on your own terms to success that requires change? Cue Sinatra: “I did it myyyyyy …”
Dennis Barran completes an Intrepid trifecta with his extended profile of Intrepid International (ICMIX), a young fund that mirrors Intrepid’s absolute value, risk-aware, small cap value orientation.
One of the decade’s best emerging markets managers has re-emerged. Rajiv Jain, long-time star manager of Virtus Emerging Markets Opportunities (HEMZX), resigned from Vontobel Asset Management in March to start his own firm. On December 28, GQG Partners Emerging Markets Equity launched with Mr. Jain at the helm. It’s much like his previous charge, give or take the fact that he’s unambiguously in charge and is managing $30 million rather than $48 billion. We share a little detail in our first Launch Alert.
Our second Launch Alert focuses on Cognios Large Cap Value, which represents the strategy being the “long” portfolio at the five-star Cognios Large Cap Market Neutral Fund.
Last month we highlighted the launch of Rondure Global Advisors, a partnership between former star Wasatch manager Laura Geritz and her former Wasatch colleagues who launched Grandeur Peak. This month we provide first word about her two funds in registration which will be available to you in March.
But wait, there’s more! We detail a relatively modest 19 fund liquidations and Chip tracked down three dozen manager changes, one of which strikes us as quite odd. We found 16 funds in registration, including a suite from BNP Paribas and a couple other goodies. There’s other stuff, too.
If you prefer the long scrolling format, find it at
http://www.mutualfundobserver.com/2017/1/We hope you enjoy it all in the January Mutual Fund Observer at www.mutualfundobserver.com!
Comments
I found David's post a necessary tonic and I applaud that, but I think if we are talking big picture as he does, we also have to look at the even bigger picture of this globalization jigsaw puzzle. There is no question that the level of extreme poverty has decreased worldwide because of industrialization and globalization. But that has had consequences environmentally, economically and politically for more developed nations where people are accustomed to living on far more than $1.90 a day. One of the best pieces I've read on the recent election is this one: newyorker.com/magazine/2016/10/31/hillary-clinton-and-the-populist-revolt
In it the author states:
"Earlier this year, an economist named Branko Milanović published a book called “Global Inequality: A New Approach for the Age of Globalization.” It’s a progress report on the “system” that Friedman heralded. Milanović analyzes global economic data from the past quarter century and concludes that the world has become more equal—poor countries catching up with rich ones—but that Western democracies have become less equal. Globalization’s biggest winners are the new Asian middle and upper classes, and the one-per-centers of the West: these groups have almost doubled their real incomes since the late eighties. The biggest losers are the American and European working and middle classes—until very recently, their incomes hardly budged.
During these years, resistance to globalization has migrated from anarchists disrupting trade conferences to members of the vast middle classes of the West. Many of them have become Trump supporters, Brexit voters, constituents of Marine Le Pen and other European proto-fascists. After a generation of globalization, they’re trying to derail the train."
So there has been a trade-off that has occurred between the world's wealthiest nations and the world's poorest and that has caused political upheaval. I cannot view that political upheaval as things getting better. Nationalism--a particularly virulent strain of nationalism in my view--is on the rise in several countries as a result. That has led to a level of geopolitical uncertainty we haven't seen in a long time. And yes the world has always been uncertain--this is a fact of life--but the stakes are higher than they've ever been. That's what's different--the stakes. The world is far more interconnected economically than it's ever been and the weaponry far more powerful than it has been prior to the advent of the nuclear age. Having unstable political leaders like Trump and Putin with such weaponry at their fingertips is not things getting better in my view. I reject notions to normalize these leaders. There is ample evidence they are not.
Then there is a larger question David touched upon of climate change. That is also part of the jigsaw puzzle because the economic growth that has lifted so many out of extreme poverty as David rightly points out is a primary cause of carbon emissions and climate change. While the poor in emerging countries have every right to have dreams of living middle class American lives, there is a realistic question as to whether the climate can take more than one giant economy where people live like Americans do. In other words, the world's addiction to economic growth has environmental consequences. This seems to me to be the primary challenge of the generations to come so long as we don't end up in a terrible war before then.
So no, I can't see things as getting better in 2017, not with a climate science denying, nuclear missile embracing jingoist in charge. But then I'm a journalist--a glass half empty guy on such issues--as David rightly points out most of the media is. Perhaps somewhere between the pessimists and the rose colored glasses is the truth.
Just remember the ultra right wing French legionaries sang Piaf as they marched out of their barracks, after trying to take over the government in Algiers
>> Even if journalists don't like republicans, at least the market does.
Huh ? That isn't even truthy:
http://www.businessinsider.com/democrat-vs-republican-stock-market-returns-2015-12
I am referring to the post election rally. Seems like sentiment to me. So we'll have to see how things play out over time.
Facts are, by their nature, truthy.
Truthy is the opposite of factual. A joke.