Group Think Funds What an interesting thread. Thanks Mike for starting it. Because of this site I've bought over the last 2 years SUBFX, RPHYX, RSIVX, RNCOX, GPIOX, HUSIX, MAINX, ARIVX and SFGIX -- half my fund portfolio. (My other, older positions, mostly due to M*, are ARTKX, FAIRX, FAAFX, MPACX, BRAGX, BRUSX, CIPSX and VPCCX -- all great funds.) I dropped ARIVX after six months and replaced it with half HUSIX and half RPHYX, a decision I feel has both increased my returns and lowered my risk. Aside from ARIVX, about which I've posted a few times already (I lost faith not because of poor performance, but because his management reports convinced me he was a tea partier, convinced that government debt was going to smother the recovery before it started and that the thing to do was load up on miners and precious metals) I've been happy with all these funds. Sure, MAINX is down a few points since I bought it, but it's way overperformed its category, and I do think you need to give a fund at least 3 years if its management seems talented.
In retrospect, like Mike I probably didn't need an Asian bond fund, but the excitement/groupthink about MAINX drove me into it. But MAINX is doing what it is supposed to (not its fault that I chose to buy right before mon pol tightening in the U.S. came into view), it is a small position, and I will probably hold on to it at least through the next cycle of irrational exuberance about Asia.
Group Think Funds And don't forget AQRNX. But you are right, a MFO groupthink fund is not necessarily a bad thing. As mohan pointed out, RPHYX is a good example. Albeit with that one, some seem to have bought it for reasons beyond what it is intended for - a consistent 3% to 4% per annum.
Don't get me going on the granddaddy of groupthink funds, PRPFX. That one goes back to the Fund Alarm board days and has quite a backstory.
Of course, when any groupthink fund doesn't pan out, you get all sorts of rationalizations. The primary being it's in my portfolio to act as a buffer for the next down market/cycle or at least it's not losing me money (unless of course it's Hussman's fund) or give it a few more years.
Edit: Groupthink funds seem to arise from *prolific* posters here who are seemingly articulate, intelligent, and research driven or simply have a magnificent and engaging online personality.
Edit #2 the only drink the kool-aid fund I ever bought from this board was PONDX (because it fit my trading style at the time) and that worked out well, albeit long gone there.
Group Think Funds I would certainly include RPHYX as a GTF that has more than proved itself. Hopefully, RSIVX will follow its sibling's footsteps.
Monday: talking with David Sherman tonight, 7:00 Eastern Reply to
@AndyJ: Thanks, Andy, that helps. What about my second question on the projected return for RSIVX? Morty's explanation and conclusion don't conform to what I see in my own RSIVX portfolio. In contrast, the returns they quote for
RPHYX perfectly match with mine.
Monday: talking with David Sherman tonight, 7:00 Eastern I had recommended RPHYX to every friend who wasn't being served similarly by a private account and I bet I end up doing the same with this strategy. David's work is pure alpha.
Monday: talking with David Sherman tonight, 7:00 Eastern Reply to
@David_Snowball: Yes, the conference call was informative and very helpful. I'm still not sure about two things: 1) I didn't catch precisely the %securities overlap between RSIVX and
RPHYX. He recited lots of numbers but I missed it; 2) I'm still not sure how they compute the target return for RSIVX on the basis of performance data to-date. Morty explained it but I didn't get it and had no opportunity to question him. David, could you shed some light on these two issues? Thanks.
Open Thread: What Have You Been Buying/Selling/Pondering I've been doing a serious portfolio makeover the last few months. Recently sold WEFIX and added to my RPHYX. For the rest I've been buying global, selling local:
Bought IVSIX, JPPIX, TWEBX, FPRAX, SGHIX, RPGAX, GPROX. Sold FPACX, PRWCX, VDIGX, GPIOX, BERWX.
Also recently bought two closed end global bond funds: BGH and VGI. The double digit discounts tempted me. BGH is now down to single digits, VGI has widened a bit. I hope that tax selling is about over for them.
Hope to settle down to buy-and-hold now. I think these are funds which are amenable for that.
Monday: talking with David Sherman tonight, 7:00 Eastern I'd like to know how big they plan on allowing this fund to become before closing it? The expenses seem relatively high, but they did a good job of closing RPHYX early, which mitigates high expenses in my mind.
Also, I've read that the fund buys bonds that the manager is comfortable with holding to maturity. Do they plan on normally holding their bonds to maturity?
Thanks.
Open Thread: What Have You Been Buying/Selling/Pondering Reply to
@Mindy: RHYPX is the same as
RPHYX except different. Thanks for the catch. Don't get old. :-) :-)
More Limits @RPHYX What this means is that previously Financial Advisors would establish new accounts on this 'closed' fund if they had other clients in the fund. Now, new clients of Financial Advisors will not be accepted to the RPHYX.
Open Thread: What Have You Been Buying/Selling/Pondering Reply to
@Maurice:
Just added to RPHYX.
Bragging not allowed on the board.
More Limits @RPHYX
As Investors Buy, Managers Sock Away Cash What made me sell ARIVX in April was reading his management reports. He seemed to be making a macro call -- that the economic recovery was a debt-fueled mirage -- that struck me as very wrong. Had he just said he could not find inexpensive stocks I probably would have stuck with him. I have happily stuck with managers (Bridgeway, Fairholme) through multiyear periods of underperformance if I agree with their strategy. I did not agree with his. I was up 17% or so on ARIVX (I'd bought it the day it opened) and I put half the proceeds in RPHYX as a cash substitute, half in HUSIX. I've been happy with that move but I may sell HUSIX if the market keeps going up.
Unless Cinnamond admits at some point that he has seriously messed up, you may wait a long time for him to invest his cash. Even the Q3 2011 dip, which sent small value stocks down 20%, was not enough to get him to bring his cash level below 50%.
As Investors Buy, Managers Sock Away Cash At least 7% is positive; some of my M* driven stocks remain negative 6 years later.
I stopped my AIP with ARIVX, leaving the money, but wishing the ER were lower. I have some more in my TDA IRA, where my allotment is finally in the green. I check in infrequently, but I expect to shift funds from RPHYX TO ARIVX, among others, when the market drops and let Mr. Cinnamond decide when it has dropped enough to justify investing. I assume this will occur within 2 years, which might qualify me as one of the too frequent traders (but which suggests to me that PRESSmUP might as well wait - can't imagine what one could confidently transfer funds to now, although RSIVX might work, if it didn't cost too much to leave when you want the money for equities - TDA has a fee for 6 months). I presume I will resume the AIP also, depending whether the 2 weddings next year have been paid for. Active management probably is justified in small caps and Cinnamond has now reverted to or below the mean, so I hope he's ready to outperform.
Still have my AIP going in FPACX - can't chase hot funds with AIPs, and Romick is still positive, even if he lags the indexes. Will see how I feel about this in 2015.
