Was just trying to get a sense of what owners of PVFIX are thinking at this time. I know besides me, we at least have 2 more who own this fund.
Energy and now Financials which seem to be rolling over has what kept this fund down. While over 40% of the fund is in cash, as per the latest information available, almost 70% is in Energy and Financials. I have always maintained it is silly to run out in the rain to find a narrow break in the clouds so you can stand with rain falling all around you but not on you. Relative Value, Absolute Value, whatever, no one can get it right if the sector is suffering. Can't expect miracles from the manager.
This fund has been good to me. I've taken lot of money out over the years in distributions and I'm still above my cost basis. I've been waiting to send money to it, but have refrained from doing so. My long term holds, I always do my ANALysis to see which parts of markets I think are doing well, but when I'm too wimpy to act on my conclusions, I take look at my funds to see who owns those parts of the market and send some money to those funds. Right now, that means *not* sending money to PVFIX, until XLE and XLF show some promise.
Would appreciate any thoughts on PVFIX from current or prospective owners.
Comments
I don't own PVFIX, but I do own ICMBX which has a similar tract record and small-mid stock value mandate. I'm not buying anything right now, but if I were, a fund like PVFIX or ICMBX might make sense. Either you hold the cash or you give it to a good management team to hold the cash and buy when their analysis gives the signal - unless you have lost faith in their selections of course.
Just my 2 pennies.
I remember a couple of years ago his number one holding was "Capital Southwest (CSWC)" which I still own today including its spinoff, CSW Inc.
Question: Have we learned anything that would change the March 2015 Commentary on PVFIX?
“By any rational measure, for long-term investors Pinnacle Value is the best small cap value fund in existence.
There are two assumptions behind that statement:
1. Returns matter.
2. Risk matters more.
The first is self-evident; the second requires just a word of explanation. Part of the explanation is simple math: an investment that falls by 50% must subsequently rise by 100% just to break even. Another part of the explanation comes from behavioral psychology. Investors are psychologically ill-equipped to deal with risk: we hate huge losses and we react irrationally in the face of them but we refuse to believe that they’re going to happen to us, so we rarely act appropriately to mitigate them. In good times we delude ourselves into thinking that we’re not taking on unmanageable risks, then they blow up and we sit for years in cash. The more volatile the asset class, the greater the magnitude of our misbehavior.”
The problem I have with funds that hold lots of cash, and this fund even more, is that we know the statistics about how hard it is for a manager to overcome his/her expense ratio over time. It seems to me when a manager holds large amounts of cash the hurdle is even higher unless they're good or lucky with their timing.
Unfortunately there's no evidence that this guy is good or lucky with his timing and he's charging a 'high' expense ratio for the privilege. He did great during the credit crisis and then he plodded along until the S&P caught up with and surpassed him. He ranks in the 72nd percentile of small value funds over 10 years, the 97th percentile over 5 years and the 88th percentile over the last 3 years. Anyone who's psychologically ill-equipped to deal with volatility should be equally ill-equipped to deal with poor performance for so long.
I don't think there's anything wrong with wanting a smooth ride if you're willing to pay for it and this fund has been very good at that. IMHO, however, the price here is too high.
Regards,
Ted
http://money.usnews.com/funds/mutual-funds/small-value/pinnacle-value-fund/pvfix
"By any rational measure, for long-term investors Pinnacle Value is the best small cap value fund in existence'
I would like to address my original question to David: Since then, have we learned something that would change your March 2015 Commentary on PVFIX?
Thanks
My ANALysis only informs me when to buy and DCA. Only if I would say so, its working. I was all set to buy in February but waited and it was the right decision. FWIW, I will announce here when I think it is time to buy. Let's see
Regards,
Ted