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.
This will be my last post to the forum having decided to move on. As they say in diplomatic circles, "it wasn't a good fit". Hope I have helped as much as I have irritated in my brief stay.
My first reaction on reading the statistical analysis in t…
In this world of cognitive biases, an expert is the one that confirms your biases to be used to appeal to authority for your opinions and the rest considered part of the charlatan group since experts as a whole don't do well in the standards we set …
@old_skeet, separate out the benchmark issue from the use of a single fund.
Regarding a benchmark, typically it is an index IF one is available. For example, if you were focusing entirely on domestic, you would use either S&P 500 for large caps…
@old_skeet, I am confused by your use of yield to evaluate a world allocation fund for a fit. What does this have to do with benchmarking?
The idea of a benchmark is to see how your portfolio is doing relative to the benchmark as a relevant proxy …
It would have been worth the price of admission just to see the reactions to this sermon from the Financial Planners in attendance at this trade conference. :-)
Since probably at least 50% of the people in attendance at such a trade confetence, pri…
There should be something available within their alphabet soup (the thing I don't like about American Century) amongst the Global Balanced or Capital Income Builder funds.
GLBLX or HCORX (if available at your broker) are good alternatives in this …
@Old_skeet, your portfolio performance seems to be tracking the global balanced fund GBLAX, I suggested a while ago as the right benchmark for your extensive fund collection. Couldn't you just replace your 50+ funds and constant monitoring and buyin…
Yes, it would be interesting to find out what is under the hood for this fund. From the outside, it looks like a slightly lagging index hugger in many years without any evident downside protection but short periods of opportunistic buying under cert…
Ok.
I am just pointing out that Bill Sharpe's paper cannot be used to claim anything about active investors relative to passive/index investing in practice as so frequently done by indexologists. It would require not only that the passive fund that…
@jlev, I full agree with you that cash can be active and can have positive relative performance over losing stocks!
The problem is that you might then lose any correlation between performance and active share measure because funds with high cash t…
@jlev, just so there is no confusion about terminology, total market is the sum total of all stocks in that market of interest, total market index is an index definitiontypically composed of a small or large subset of the total market (so it is not …
It's also exceedingly straightforward to alter the active share equation to include cash
Care to suggest a formulation? :-)
Have been thinking about this and it should be simple if there is an agreement on what the concept is supposed to capture. I…
@davidrmoran, thanks for the suggestion. This might help get over the inertia for creating an account at M* or reviving the very old one I had. Rekenthaler might be objective about this, since it didn't come from M*. He certainly doesn't subject his…
http://www.stanford.edu/~wfsharpe/art/active/active.htm
Nowhere does Sharpe argue that active fund managers must purchase only Index stocks. His analysis addresses the global market.
Wrong. From his own definition at the very beginning in the l…
If I were prone to be skeptical, the skepticism would begin with the observation that "an enthusiastic supporter of active shares is using circumstantial ad hominem to cast doubts on the criticism of active shares". :-)
But I am reading both sides.…
To me, it seems like a reaction to pressure on world currencies to weaken relative to the dollar from "easing" planned in Europe and elsewhere.
US Treasuries seem the safest to hold reserves in at the moment without currency risk creating a lot of …
Amusing demagoguing to deflect the problem he has - BlackRock is #1 in line to be classified as SIFI of all the financial institutions. "I am not the ugliest, look at them...".
If BlackRock breaks a buck as the largest cash management provider, no…
If drawdown/volatility/capital protection, etc aren't necessary for you, then I don't see a case for these active funds as opposed to just using index funds VMVIX and VISVX or equivalent from any fund family.
HIMVX loses more in down markets and do…
Signal to noise ratio in the submission is more important than length, so I agree with Hank.
Until we have an automatic S/N ratio filter, length will have to do I guess.
This might help if the problem is with length of post.
There is a limit on the number of characters in any post. The text box will allow you to enter more than that without warning (unless you are on a mobile device that has auto save enabled by de…
@Ted, re leverage, if you can't hunt with the big dogs, stay on the porch. :-)
My leveraged funds - QLD 2.52% (8.1% up since purchase), GLL 4.30% today.
@Ted, that would be like 2010 as I have noted before. See a lot of similarities this year in sentiment. Worries about the run up previous year and yet readiness to jump on a "correction".
@ron, OP seems to be looking for value funds.
I don't know if there is an extended market value index fund. That would fit the bill IF the goal of the OP is pure and full market exposure with no downside protection. Or a combination of mid cap val…
There doesn't seem to be a problem given this post. :-)
Seriously, it is always useful when you ask for technical help in any area to describe in some detail what happens when you try and what you did rather than what you cannot do.
For example, …
@davidrmoran and @MikeM seem to be talking past each other.
@MikeM is right because RGHVX is a Long/Short fund, @davidrmoran is right because it is a dominant mid cap in its long positions with rest in large caps with shorting primarily for downsid…
Opining on the funds meaningfully would be difficult without knowing your portfolio strategy. Is it maximum market exposure to capture all the upside (and the downside)? Is it necessary to manage volatility and drawdowns at the expense of lower retu…
Sideways may be better than going down but markets usually don't go sideways for too long.
Seems to me, the sentiments for 2014 are very similar to 2010 after the big 2009 pop. Also a mid-election year.
People were expecting a correction and there…
A couple of years ago, I sold the funds and bought more individual issues so I can hold to maturity and not lose money.
Did you lose money relative to having bought equivalent Treasuries at higher yields instead? The inflation guarantee is not fr…
@rjb112, when you buy a TIPS bond, you are insured against "inflation" risk in theory. The premium you pay for this is the spread between the equivalent Treasury which on the average is about 2% and the opportunity costs when yields rise during that…
Wouldn't they say that cash is outside the investable universe they're talking about? I'd imagine they'd argue that it's impossible to judge which stocks are going to go down so successful use of cash is a random fluctuation. And of course, they'…
In the interests of spreading clarity and knowledge, will people please mention whether they are talking about the bond or the fund when they make a statement on the pros or cons of TIPS? And stop assuming that whichever one they have in mind when t…
@Ted is absolutely right on this.
TIPS serve the same category as Gold (even with the nominal dividends in the former).
Some, like me, use TIPS funds either as momentum trades for total return or as diversifiers for total return from capital gain…
Nevertheless, I'll provide you with more ammunition!
By my estimate, there are 6,281 stocks on the NASDAQ plus NYSE, so you are being too nice.....your argument is stronger than you stated it to be! So my guess is that there are 2,597 stocks unacc…
I wonder how much of an impact the entry of foreign brands in the home appliance sector has had on Sears? LG and Samsung are popular with their designs and features that appeal to a wide customer base.
A lot but not necessarily related to foreign b…
@vert, there are two separate points being mixed up here.
One being inside the box for Sharpe's mathematical guarantee. Obviously, bigger the box, the more difficult it is to find stocks outside it. Sharp's assertion is about ANY box. VTSMX is just…
Amazon's getting stretched pretty thin. Maybe eventually some "spin-offs" voluntarily or perhaps mandated by Justice and/or courts?
Courts cannot force Amazon to split up. It is not illegal to become a monopoly. They would have to either show th…
Is the information contained in William Sharpe's paper correct, which is essentially the identical information that Bogle talks about above, and has been talking about for decades?
Are you really saying the roughly 1400 stocks out of the total of …
