@msf,
Are not CAPE / DSEEX / DSENX quant?

Hi Guys,
This Adam Robinson, the subject of the article, seems like one strange guy with a philosophy and an occupation that appear to conflict with each other.
These days he earns his living as a financial advisor to a number of International hedge funds. Yet he thinks the world is so complex that it is impossible to logically understand or explain. The explaining only comes after the fact. The understanding may escape us forever.
He said: " explanation is impossible. The world is simply too complex to understand, so I don’t bother trying." But he likely draws a heavy salary for recommending investments to take advantage of perceived economic and market trends. How honest is that?
My simple interpretation of his complexity perspective is that an investor would be wise to invest in broad Index products. If an understanding is impossible, covering the waterfront seems like a prudent strategy.
Pete Seeger said: “Any darn fool can make something complex; it takes a genius to make something simple.” I'm not that genius with respect to investing so I do the default Index option.
Best Holiday Wishes.

DLFNX is my only core (core-plus) dedicated US bond fund. It's just 2.51% of portfolio. But I think I can make better use of the $3,700.00 that's in there, particularly after the seismic shift following the election. I make few changes to my portfolio along the way because I do a lot of digging before choosing a fund. Originally, I wanted Gundlach's know-how at the helm, and I also did not yet have a domestic bond position at all. But such a fund as DLFNX, though respectable and reliable, will not help to get me where I want to go, in this changed landscape in 2017 and beyond.
Three-quarters of my stuff is with TRP, and if any change resulted in consolidating (and ergo simplifying) by putting more $$$ into TRP, that suits me. PRHYX is closed to new investors. What about RPIHX? I also see a very new fund: PTTFX which charges investors $20.00 above and beyond the ER if the balance is below $10,000.00--- but I could manage to initiate a starting position with $10K. ..... Seems to me that PTTFX is ostensibly the same sort of fund as MWTRX. "Total Return." But I can't even find a portfolio within that fund anywhere, even at the TRP website. ... I don't like RPSIX because it's a fund of funds.
.......Or, shall I just liquidate DLFNX? It's one of just 2 funds I own that are in a regular, taxable, investment account, rather than IRA. I could use the proceeds to step-up the size of my stake in PNM, an electric utility. PNM is in a transition, shedding nuclear and coal-fired plants but everything I look at tells me I should definitely commit more money to it. (It's less than 1% of portf. right now.)
Do I NEED a US domestic core-plus bond fund, after all? I am otherwise very well diversified. No question about THAT. Thanks for your responses. They are always helpful.

Inflation protection has been a recent topic on the board. I have linked below an article from M* and what they have to say on the subject.
"Surveying the fund & ETF landscape, from direct hedges like TIPS to indirect inflation-fighting plays such as floating rate loans and commodities" are covered in the article.
http://news.morningstar.com/articlenet/article.aspx?id=783695
In addition, I have linked the M* fund report on PRDAX as it is one of the more diversified inflation fighting funds that M* writes about in the article.
http://www.morningstar.com/funds/XNAS/PRDAX/quote.html
After reading the article and study of the above fund along with my review of a recent Xray report of my portfolio I have discovered that about a good third of my portfolio in some way offers inflation protection.
Perhaps, you will find the article of benefit as I did.
I wish all ... "Good Investing."
Old_Skeet

Hi Guys,
It would certainly improve the health of any portfolio if some pattern recognition would emerge from the countless historical investment studies that have been made. These studies have basically failed to yield lasting investment rules. Investment category returns are not persistent on an annual,basis. Here is one of many Links that visually demonstrate the commonplace marketplace vicissitudes:
https://www.mfs.com/wps/FileServerServlet?articleId=templatedata/internet/file/data/sales_tools/mfsvp_20yrsb_fly&servletCommand=default
If a pattern exists in these data, it surely escapes me. What is illustrated is that a rapid elevator is in operation. What is up will certainly go down, and in an unpredictable manner. Good luck on trying to time these events. I suppose that this is the data that supports the standard advice to broadly diversify and to be a patient investor by staying the course.
That conventional advice tilts the odds just a little. I am reminded of a famous saying by Damon Runyon: "The race is not always to the swift or the battle to the strong, but that is the way to bet". Going against market momentum is a tough way to consistently earn a decent return. The failures far outdistance the few success stories. The trend is your friend.
But getting down to the individual fund level, some winners do exist and persist. Good luck at identifying them early in their success cycle. Also, these outliers don't persist forever. Warren Buffett is a recent example of falling from grace. And that too is changing today as Buffett seems to be benefitting from Trump's election. Unlikely events do happen.
Best Wishes.

I suppose it is possible that Gund's secret bond sauce may suffer and the fund may just track CAPE. Not sure.
But while it did slump last Jan, like everything else (still less than SP500), it was flat prior, through the last rate mini-hike, from mid-Oct '15 onward until last early Jan slump.
Still outperformed SP500 at every interval.
So it may be largely unreactive.
I am wondering how PONDX will do. But then I trust that smarties like Gundlach and Ivascyn know what they are doing and that this next hike is baked in or planned for....

I can tell you that when an American Fund rep visited us when the F-class shares were introduced, he said they wanted to penetrate what they saw as a growing RIA landscape, access fee-based accounts (that term is such a crock), with lower-expense options. Unfortunately the expenses for many F-class shares are higher now than they were ten years ago.

Yup, it's currency effects and some bad carry trades being unwound, far beyond my pay grade to fully understand:
http://www.bloomberg.com/news/articles/2016-11-11/carry-trades-collapse-as-emerging-market-yield-advantage-shrinks
The duration effect remains rather striking (to me). If dollar-denominated with a short portfolio duration (as many MFs were not), there has been limited damage. e.g. DLENX. Of course, the longer a big shift plays out, the less likely it is that any fund will escape; it will reach the most sheltered, as well as their little dog, too.

I misspoke in using the word 'star'; Lipper does a 1-5 rating, no star graphic. If you go to www.lipperleaders.com now, you indeed find results for the two DoubleLine Cape Enhanced, so their ranking start point must be 3y, same as M*. Don't know why it did not turn up on Marketwatch, should doublecheck. Ah, today they do show up. So 3y is there answer to my query, and never mind :) .

@Old_Skeet
If this down draft continues,you might have to revive these threads.Your observations and insights were appreciated and well recieved by many of us.
From January 2016...............
Day Six & Day Seven ... Recent Selling Stampede Might Soon Be Ending
It's Day Eight /// Surprise ... Surprise ... Surprise!!
It's Day Nine ... Selling Stampede Continues ... Perhaps Plunge Protection Team Will Step In
Market Day Eleven ... It's Off to the Races
http://www.mutualfundobserver.com/discuss/profile/discussions/472/Old_Skeet
ARBITRAGE CREDIT OPPORTUNITIES ACFIX
Q3 2016 COMMENTARY
With several quarters of positive market performance
behind us, the fourth quarter could introduce new
volatility and opportunities given the upcoming US
elections, increased news flow detailing the UK’s plan
to exit from the EU, and the specter of December
interest rate hikes. As we saw during 2014 and 2015,
market gains can quickly reverse as investor
sentiment and direction rapidly change. While we may
not be able to predict political or economic outcomes
with certainty, we are aware of the risks and
outcomes that can result from changing events
https://arbitragefunds.com/restricted/get/Credit_Opportunities_Commentary.pdf
The death of retail isn't a problem for Starbucks
Nov. 4, 2016 3:50 PM ET By: Clark Schultz, Seeking Alpha News Editor
Starbucks (NASDAQ:SBUX) CEO Howard Schultz delved into some interesting large-scale retail issues during the company's earnings call yesterday.Schultz first noted that FedEx CEO Fred Smith shared some research with him confirming the significant drop in store traffic globally amid the 'Amazon Effect" across industries -- before he really turned up the retail bear rhetoric.
Q and A from SBUX conference call. Earnings Call Transcript (page 14-15)
John William Ivankoe - JPMorgan Securities LLC
Hi. Thank you. Howard, I was going to ask you to maybe apply the current environment in terms of what we're seeing both in the U.S. and around the world in the consumer environment,
Howard S. Schultz - Starbucks Corp.3rd Q
I was talking to Fred Smith just a couple of weeks ago about his situation at FedEx and he shared with me a piece of research which showed a significant drop in foot traffic on Main Street and in malls, not only domestically and around the world, as a result of e-commerce, the Web, and what I'll loosely describe as the Amazon effect. As a result of that, you're certainly seeing large companies and small companies not only not open new stores, but announce closures.
And let me just speak to that. I know this is a little long-winded but I think it's important. There's no doubt that over the next five years or so, we are going to see a dramatic level of retailers not be able to sustain their level of core business as a traditional bricks-and-mortar retailer, and their omni-channel approach is not going to be sustainable to maintain their cost of their infrastructure. And as a result of that, there's going to be tremendous amount of changes with regard to the retail landscape.
We believe, as we look down that pipe and look at the future, that our ability to maintain our growth in terms of new stores domestically and internationally, coupled with the fact that Starbucks still maintains a very special place in terms of a sense of community, the third place environment, and people looking for and seeking out human contact and a place to go, that as these store closures occur, and they will, that we are going to be in a very unique position five years, 10 years down the road because there's going to be a lot less people competing for those customers. I'm not talking about the coffee category; I'm talking overall.
But we are in the very, very early stages of a tremendous change in the bricks-and-mortar footprint of retailers domestically and internationally as a result of the sea change in how
people are buying things, and that's going to have, I think, a negative effect on all of retail.
http://seekingalpha.com/article/4019416-starbucks-sbux-q4-2016-results-earnings-call-transcript?page=15
Highlights of the Week:© 2016 Payden & Rygel
Equities Investors have been risk averse in light of the macro uncertainties, ignoring the first positive quarterly earnings growth in seven quarters.
Corporates: Corporate fund flows had a $2 billion out flow from mutual funds and ETFs
Securitized highlight of the week’s deal flow was the
$1 billion refinance of the Cosmopolitan Hotel in Las Vegas by Blackstone Real Estate
High Yield despite short-term volatility, the economic fundamentals that drive capital markets’ performance remain solid.
Municipals: Municipal issuance in October totaled approximately $53 billion, the largest total in 30 years and up 57% year-over-year...demand remained robust and municipal funds received approximately $1.7 billion of inflows during the month
.https://www.payden.com/weekly/wir110416.pdf

I disagree, fwiw. And not only w/ Edmond's #3 and the likelihood of an adviser "sniffing around for business." You could go to Vanguard and everyone here would cheer yay for you and not impugn --- and you might well get identical advice.
It all depends on her wishes and goals, such as she has them, and presumably in part on yours for her. If she is truly well-covered cashflow-wise by the current situation, and one goal might be to grow the nut, and if at 76 and reasonable health the horizon seems distant enough, then there is no reason ("logical") whatsoever not to increase the equity portion, depending on sleep-at-night. If unanxiety is paramount, leave as is. If not paramount, and all is well-met for now as static, then sure, increase equities, prudently, in low-vol etfs or value-oriented etfs, perhaps all-US, and perhaps algorithmically churned, like CAPE. Lots of options.
But I disagree with the advice above and the presumptions about the adviser, I think. Is derisking an actual goal?

Jeremy Siegel's research paper challenges the CAPE approach to forecasting returns:
Link to his paper:
The Shiller CAPE Ratio:A New Look by Jeremy J. Siegel

Hi Guys,
Please don't overreact to this headline. It is only a forecast made by the Reseach Affiliates outfit. Maybe they're prescient, but maybe not.
The Reseach Affiliates forecast is grounded on the assumption that a regression-to-the-mean of the CAPE ratio is imminent and will take that ratio to below or near below its historical average. That's possible, but is it likely? I surely do not know.
The Research Affiliates are saying that the CAPE downward adjustment will be so dramatic that it almost totally neutralizes the positive inputs of demographic growth and productvity growth in the US marketplace. Their prediction is that US equities would be marginally positive in this next 10-year cycle and small US equities ( Russell 2000 ) would deliver zero positive inputs. Meanwhile foreign markets will produce positive rewards that exceed their historical averages.
I fail to see this major disconnect between the US and foreign markets, especially with emerging markets. Our economies are just too intertwined. Although we now have a lower percentage of the world markets, we are still the dominant player. If we sneeze, foreigners will catch a cold.
I interpret the Research Affiliates projection with more than a few grains of salt. For the most part, forecasters accuracy records are miserable. As usual, buyer beware.
Best Wishes.

@Sven, yes indeed, most of our nut is there. And now that I have bailed from the Yackts and Parnassus, even more.
I have never owned CAPE on its own. I just track it irregularly, and am always (a little, but decreasingly) surprised to see it outperform all the other ones I like, or used to --- the half-dozen smart secret-sauce LC div / value etfs, e.g. And now SPLV.
@BobC, was not comparing with their benchmarks. SPHD has been superb at shorter times and also overall; I wish I had been in it.
As for ups / downs, just go to M* 10k-growth graphs (put in an mfund to start, like TWEIX or some Vanguard or some other that you favor), and then select time windows of, say, dips that made you jump. Myself, I do not see enough smoothing to matter with SPLV vs CAPE (which for some reason M* refuses to show today, hmm).
But notes from yesterday: over the pothole starting ~9/18/14, SPLV was notably better. The one starting ~8/13/15, pretty much equivalent. And the one starting before last xmas, meh, with SPLV slightly better.
So given the greater bucks I wind up with from holding CAPE, I would take it over SPLV if I had to choose b/w them only. That's all. I learned long ago (partly anyway, he claimed) not to sweat market potholes, or at least to ride them out and not flinch, or not do anything much more than flinch.

@davidmoran, as I recall you invest in Doubleline Schiller CAPE fund, correct?

Fwiw, CAPE has seriously outperformed SPLV (also SCHD and similar) the last 4/3/2/1y/ytd, and if you track closely during drops, much less jumps, you give up effectively nothing in terms of 'volatility.'
I myself ended flirtation w/ low-vol etfs some time ago simply because of subpar performance.
So maybe that is some of it. (Of course I was not in SPHD.)

@rforno
Totally agree re their excellence, but have been so satisfied with DSENX / DSEEX outperformance persistence that I am not missing Parnassus yet.
(Was reading recently about DOD, SDOG, RDIV, DTD and others in the uncovered-value space, and CAPE mostly matches or beats them as well. So that algorithm, if that's the right term, is working fine.)

Hi Old Joe,
Your recent attempt at subtlety totally escaped me,
indeed it was wasted on the wrong person. I am by training and practice an engineer. A failed design is not an option. Consequently, I attempt to be very direct and linear in my communications. To be somewhat trite, I say what I mean and mean what I say. There is surely enough uncertainty when investing to unnecessarily add communication misunderstanding to the mix. Clarity is a primary goal in my postings.
I sure was not expecting subtlety from your submittal. You have strong opinions and clearly document them. In the past you were precise about specific word selection and challenged a few MFOers on their choices. Nothing subtle about that.
Every submittal,or a portion of it, need not be a powerful truth or carefully nuanced insights. The MFO membership has a diverse set of investment wisdom and experience. What is trite for one member might be a revelation to another
I learn whenever I access these postings. I am a happy warrior and want to contribute. I sometimes wonder if that disturbs some MFO members.
Best Wishes..

Thanks for the post. I guess P. figures they don't know all they need to know, and they're being cautious.
Frankly, though, I don't think WF deserves any points for ripping off customers and then giving some of the proceeds to charity, and I doubt those 5,000+ employees who got scapegoated and fired are thinking of their former employer as running "a positive workplace."

Hi Catch22,
I thank you for reading my post, however I do not see any contradictions in my several sratements that you quoted. Interpretations can and do differ.
I was simply summarizing that I do not believe that the disappointing chart reflects something endemic to the culture, or teachings, or anything else imposed by the USA as a national standard.
I attribute the chart findings to individuals alone. Period. When summed nationwide it is not an encouraging picture. It is a ""cumulative failure" caused by individual bad decisions.
It appears you take issue with my word choice and not my baseline conclusion. You seem to be missing the forest because of the trees. When investing that's a recipe for the Loser's Game. I've managed to escape that game.
Thank you so very much for reading and reacting to my post. That's a signal that my post satisfied my goal of submitting an interesting post.
EDIT: Not only does the data not reflect a national goal, it runs contrary to it. Saving a fraction of an income is a prudent policy advocated by most everyone, including the government. We may talk that talk, but we sure don't practice it. Too, too bad since it makes us vulnerable to rather minor unexpected negative happenings.
Best Wishes.