Hi Guys,
Regret minimization is not a new topic. It is studied in academic circles and oftentimes has rather sophisticated mathematical modeling coupled to it.
But a very thoughtful, practical column on that subject appeared in today’s “A Wealth of Common Sense” by Ben Carlson. Here is a Link to that article:
http://awealthofcommonsense.com/regret-minimization/
The piece discusses the tradeoffs between risk and reward, and the need for a balanced investment approach for portfolio survival during the down cycles. Long term thinking is mandatory. It concludes that risk can not be entirely eliminated. Therefore an investor must develop a resilience capability.
Just this year a book that emphasizes the need for resilience and how to learn it has been published. The book is titled “Stronger”. It was written by three men who have terrific backgrounds in this field including one Navy SEAL. I recommend the book although I have only part way finished it.
The book identifies five resiliency elements: active optimism, decisive action, a moral compass, persistent tenacity, and a reliable support structure. The good news is that the authors believe resiliency can be learned. Failures are learning experiences. To sharpen resilience, study history and successful investors from the past. And keep things simple. I look forward to more tips as I complete the book.
In the end, I suspect that keeping cool under duress, having a diversified portfolio, having a reserve that allows the markets to return to you, and having a long term perspective will again be the advice offered. Not too much new there, but the repetition from experts gives comfort. Bogle’s “staying the course” is again practical wisdom, but sometimes difficult to execute.
By the way, in the article, Carlson asked this series of questions: “Some investors will regret missing out on huge gains while others will regret participating in huge losses. Which regret will wear worse on your emotions? Missing out on future gains or future losses?”
Kahneman and Tversky’s answer to those questions are embedded in their Prospect Theory. In Prospect Theory, expected gains and losses have an asymmetric impact on an individual’s emotions. Gains are appreciated one-half as much as losses are feared. Therefore, most folks would not accept a potential 10 dollar gain if a 10 dollar loss was equally possible. The wager would only be accepted if the potential 10 dollar loss was matched against an equally likely 20 dollar winning reward.
Please give “Stronger” some consideration.
Best Regards.

"...let’s look at China from the 30,000 foot view. From this perspective we observe two things that will unfold over the next decade. First, investment as a share of GDP will fall from almost 50% of GDP to closer to 35% of GDP, if not lower. Second, consumption as a share of GDP will rise from 38% to around to 50%, if not higher...Companies that feed off of Chinese investment in infrastructure will likely struggle and companies that benefit from Chinese consumption will do ok, if not great."

"...all the common benchmarks for diversified developed or emerging markets (MSCI, FTSE, Vanguard, etc) are around 50% (or more) allocated to the economic sectors with the largest headwinds in the decade ahead. That means that any diversified EM or DM investment products (mutual funds or ETFs) that look anything like the benchmark are by default leaning into the wind rather than letting it push them. "
See: GaveKal

DoubleLine's Gundlach: Fed hike 'no-go more likely than most people think' Paris attacks alone are unlikely to play a factor in next month's decision.
Reuters By Jennifer Ablan Sun.Nov 15th
DoubleLine Capital co-founder Jeffrey Gundlach said on Sunday that the Federal Reserve may hesitate to raise rates given rocky economic and financial conditions, though the Paris attacks alone are unlikely to play a factor in next month's decision.
The influential money manager, who recently warned that the U.S. Federal Reserve should not tighten monetary policy in December, said the Paris attacks could pressure stock markets around the globe, "which we know Fed officials have been watching, even if they try not to admit it."
Gundlach cited a number of asset classes that are signaling deteriorating conditions: The S&P Leveraged Loan Index, which is at a four-year low, the SPDR Barclays High Yield Bond Exchange-Traded Fund "very near a four-year low" and the CRB Commodity Index at a 13-year low. "You also have the Eurozone doubling down on stimulus. Fed raising rates? Really?"
http://www.reuters.com/article/2015/11/15/us-doubleline-gundlach-idUSKCN0T417Z20151115#Xa4BZzDyQ3V3uC0h.97

Krauss' concerns are absolutely legitimate -- especially about ETFs failing to approximate NAV during moments of market stress.
OTOH, Krauss' concerns are self-serving too. -- lower-fees which ETFs provide are working counter to the profitability of the old-line money-management industry. For any retail investor who was ever sold a "class A" fund for a 7% load, you know that load-funds held a persistent, material difference between bid and ask.
Fink's comment is also self-serving --- he runs the largest ETF complex, so is quite willing to poo-poo concerns re the risks/shortcomings of ETFs.
If (a part of the ) problem is that ETFs encourage "short term-ism" by making it very convenient for institutional money, hedgies, etc to make very short-term, low conviction bets, perhaps tax policy could have an effect -- something like: for very short-term trades (say 3 days or less) a "proceeds tax" -- levied not on gains, but on proceeds of sale, of perhaps 5%. This might serve to discourage ultra-short-term speculation, in favor of real investment.
Too bad the relevant regulatory authority (SEC) are a bunch of hacks who have been co-opted/corrupted by Wall Street, and who have no concern for protecting the retail investor -- on the ETF issue or any other.
Caveat investor !

FYI: The deadly terror attacks in Paris are likely to strike financial markets, too, when trading resumes Monday. But the initial losses expected in risk assets like stocks and the shift into safer holdings like U.S. government bonds and cash are likely to be short-lived, history says.
Investors’ knee-jerk reaction to terror attacks and other "shocks" is to sell so-called risky assets until they have a chance to measure the resulting economic fallout, according to data compiled by Sam Stovall, U.S. equity strategist at S&P Capital IQ. The good news is the losses tend to be recouped relatively swiftly as Wall Street typically concludes that both the domestic and global economy won’t be derailed by acts of terror.
Regards,
Ted
http://www.usatoday.com/story/money/markets/2015/11/15/terror-and-markets-sell-offs-tend-short-lived/75822426/

@VintageFreak You can do some homework @ the link below.My largest holding.Often some deep value and thinly traded securities in portfolio.In times like '08-'09, value can get a lot deeper and if few want your IBM shares who's going to buy your Alanco Technologies, Inc. shares.Yes that was an extreme draw down for a M* moderate allocation fund but the long term performance is exceptional.Father/Son managed fund,Consider age and experience?
One of Ted's favorite links:
http://www.marketwatch.com/tools/mutual-fund/screener?FundType=0&FundValue=0&ReturnFundPeriod=11
Management’s Discussion and Analysis REPORT TO SHAREHOLDERS 1
BRUCE FUND, INC.
Annual Report
June 30, 2009 ( Bold added)
The Bruce Fund (the “Fund”) shares produced a total return of -24.31% for the six months ended December 31, 2008,
compared to a total return of -28.48% for the S&P 500 Index for the same period. The first six months of our fiscal year
were dismal. While we thought we were prepared for the onslaught, we were wrong. Positions in low rated convertible
bonds dropped precipitiously with no support from interest payments. Likewise our common stocks were punished,
much worse than we anticipated. The U.S. Government bonds showed appreciation in the period and the cash balances
remained above normal.
The outlook for capital appreciation is muted. The economy could be weaker for much longer than most believe.
Preservation of capital is job one. Gains will be hard fought.
Bear markets do several things; they wash out inefficient companies and create values. There will come a time to be
more aggressive and we hope we will be ready. Management will continue to screen investment opportunities for their
capital appreciation potential and profile that against the risks the investment might present. Areas of recent interest
have been various bonds selling at discounts to par value offering reasonable yields. The bonds as well as the stocks in
the portfolio encompass significant investment risks, which are again outlined in the prospectus
Footnotes to some of BRUFX holdings
(a)
Non-cash income producing security.
(b)
In default.
(c)
Private Placement and restricted security under Rule 144A of the Securities Act of 1933.
(d)
Variable rate securities; the money market rate shown represents the rate at June 30, 2009.
(e)
This security is currently valued according to the fair value procedures approved by the Board of Directors.
(f)
This security has no expiration date, it will convert to common stock at a future date
http://www.thebrucefund.com/document-library.aspx

Mairs & Power
http://www.mairsandpower.com/news-and-updates/208-2015-capital-gains-and-dividends
"The Medtronic acquisition of Covidien earlier in the year created a taxable event for all Medtronic shareholders, including the Mairs & Power Balanced [& Growth] Fund. "

What made you get out of AKREX, Akre Focus fund?

I got out of AKREX because it was a great performer for me. I had lot of capital gains and I needed to sell something to offset loses elsewhere. Lack of manager succession planning decide me. I sold MXXVX and AKREX after buying them in the dumps after the great recession.
My "when you buy more important than what you buy" mantra kept me out of both. I regretted selling AKREX, but that is more like a mosquito bite. There have been times I haven't sold when I felt like I should have and felt like I was punched in the face. I believe money is not made until you sell. I keep rotating assets in funds I like after they have run up.
SEQUX, GOODX were on my list. WGRNX, MXXVX, SMVLX are on my list now. WGRNX, MXXVX have started to falter. I will be patient, and even more so with SMVLX.

Bridgeway: http://knowledge.wharton.upenn.edu/article/why-bridgeway-capital-gives-away-half-of-its-profits-to-charity/
Still maintaining its 7:1 salary ratio (top to bottom) for full time employees.
Nice podcast from Knowedge@Wharton.

Wish there were more people like Montgomery in this world. Wonder why no one calling him socialist / communist yet. I think he would be disqualified for a job at Goldman Sachs.

Bridgeway: http://knowledge.wharton.upenn.edu/article/why-bridgeway-capital-gives-away-half-of-its-profits-to-charity/
Still maintaining its 7:1 salary ratio (top to bottom) for full time employees.
Nice podcast from Knowedge@Wharton.

Well, ask and sometimes the World hears you.
http://www.ft.com/intl/cms/s/0/e86a211e-847f-11e5-8e80-1574112844fd.html?siteedition=intl
"US interest rate swaps, popular derivatives that track government bond yields, have experienced a spectacular collapse this month with an array of reasons being suggested by traders. [...] Analysts at Deutsche Bank say the recent swap spread tightening reflects 'tighter macro prudential regulation, higher capital requirements and reduced dealer balance sheet capacity.' Also playing a role is swapping activity from companies selling debt.
Some say swaps are a broken market... Under normal market conditions the current inversion should be swiftly reversed, but thanks to tougher bank capital regulation, derivatives trading appears to have entered a new era. Currently, no one appears willing to normalise the relationship between swap rates and Treasury yields.
Trading Treasuries and swaps relies on funding via the repurchase or repo market. Thanks to balance sheet constraints, the use of repo by dealers is shrinking, another factor sustaining negative swap spreads."
So, as I read it, the consequences for us would be that our bond/income fund managers, for the time being, have just had a hedging tool taken out of their toolkit. And, once again, we see that the repo market is involved, a part of the shadow banking system that remains largely under-regulated because of humongous efforts by the global financial players to keep it that way.

#6 Use all those stock gains as collateral for something tangible, yeah, like "real" assets. Even with a recent bankruptcy, and a FICO 500, looks like you can buy and flip another house, or two, or three--- terms seem mighty "reasonable" (yes, it's happening again). :) Lever it up.

@VintageFreak,
While George Schipp manages the Sterling Capital Special Opportunities Fund, the bigger question will be will Sterling allow an exchange from one grandfathered Stratton Fund, which will be an "I" class fund, to another Sterling "I" class fund?
I've looked through the some of the prospectuses, but I am not sure if there is specific language permitting the exchange proposed above.
You will need to get in a Stratton application pretty quick if you are interested.
Here is the some language from the new acquired Sterling Stratton Funds concerning "I" shares,
http://www.sec.gov/Archives/edgar/data/889284/000119312515260495/d24863d485bpos.htm
* Investors purchasing shares through Branch Banking and Trust Company, its affiliates or other financial service providers or intermediaries approved by the Fund, employees of Sterling Capital, trustees of the Sterling Capital Funds, and investors who were shareholders of the Predecessor Fund at the time of the reorganization between the Predecessor Fund and the Fund are not subject to a minimum initial investment requirement.
Here is the language concerning "Exchanges" from the same filing:
Exchanging Your Shares:
You generally can exchange your shares in one Fund for shares of the same class of another Sterling Capital Fund, usually without paying additional sales charges (see “Notes on Exchanges” below). You must meet the eligibility requirements for the Sterling Capital Fund into which you are exchanging. Exchanges from one Fund to another Sterling Capital Fund are taxable. You may deposit redemption proceeds into the Sterling Capital Deposit Account. Institutional Shares may also be exchanged for Class A Shares of the same Fund if you cease to be eligible to purchase Institutional Shares. Institutional Shares of each Fund may not be exchanged for Class C Shares. No transaction fees are currently charged for exchanges. Furthermore, the exchange of Institutional Shares for Class A Shares will require payment of the sales charge unless the sales charge is waived. Please consult the Class A and Class C Shares prospectus for more information.
Finally, there is this for institutional funds:
Closing of Small Accounts:
If your account holding Institutional Shares falls below $1,000,000, the Fund may ask you to increase your balance, except investors who were shareholders of a Predecessor Fund at the time of the reorganizations between each Predecessor Fund and its corresponding Sterling Capital Fund. If your account is still below $1,000,000 after 60 days, the Fund may close your account and send you the proceeds at the current NAV.
I hope I am wrong, but looking on surface of the above information, I am not sure Sterling will allow an exchange from a grandfathered Stratton fund "I" class to another "I" class fund.

Patience is not about running out of it and then finally selling. Patience is about waiting to buy.
When vs What. No one wants to admit it, but THAT is singular factor behind which investors are successful and which are not. Even DCA don't work if you are DCAing as the market goes up. If you are lucky to DCA when matter goes down then good.
You should be happy you bought it near inception, at least you enjoyed some gains. Everyone has some reason to sell a fund and that's his own and no one else's to question. For instance, I bought AKREX near inception. Sold it last year since to me succession planning was not clear and it is where I had a lot of gains to offset losses against other funds. Never looked back.
Good luck with your next OSTVX. Meanwhile, with a $5K minimum, I will not DCA here. I will wait till I think I can take the risk. My DCA candidate for next year is BRUFX with its $1K minimum.

@TheShadow
Oh dear, scrolling down the est. 2015 distribution list for Baron Funds, at your link here
http://www.baronfunds.com/Mutual-Funds/Distribution-Information-2015/
I see that investors will be getting a little surprise--- a "spillback distribution."
"Spillback distributions are taxable to investors who hold shares on the record date, even though they represent ordinary income and/or capital gains earned by the funds in 2014."
Don't know how you want to handle it on last year's record book, or if you even want to be bothered; just thought I'd point it out. Don't see that very often, never happened to me.

A few more...
Baird Funds
http://content.rwbaird.com/BairdFunds/PDF/Estimated-Capital-Gains-10-31-15.pdf
Lazard Funds
http://www.lazardnet.com/_images/23-25741YE_Estimated_Distribution_Rates_LFI.pdf
Payden & Rygel Funds
http://www.payden.com/mutualFunds/distribution/2015CapGains.pdf
PIMCO Funds
https://www.pimco.com/handlers/displaydocument.ashx?wd=Portfolio Statistics&fn=2015 Capital Gain Estimates - PIMS.pdf&id=GZhEoIFgTsGbVM+4E55j/7h95nQXrPeOGFtC2v8TNDr6g2kWEipXL7lZipsANjHSwTQV/ORCa0ytzCBtF1N/nr/9SLhMFwNIElTDTlxzvSkwEvlf1CfeYu6kBJ5wid6cRIDP1l7w8F2V4venFk/bZxpRD+QPIj+64r0qs6uhX843xMh5McTv8HNodoIyehG+RXzElQy4+dMwOiWadKR9suyKtzZMrp83MGxXJ7d/iiAAIFfSkEN+DciFsiR+rBrug4rB6UJSrr/XDOUbisWDWCHnf5a8FMnI7w4lpWQ3mSNBffdTffbn4tjV3G/RheC7
PIMCO EQS Funds
https://www.pimco.com/handlers/displaydocument.ashx?wd=Portfolio Statistics&fn=2015 Capital Gain Estimates - EqS.pdf&id=v8jsax1nRilx0NUcm3XvHx492TgQxsjuu+lz4b7j4R13gqFUjIRNfjri7AfC1bh1uDmTsofWjYzXv5etYkMsH3OyAZ9rZ5pJtDy0RQqq6d12H54xyoDGHFovwRNZFRzvaASLlqWvU5UMo1P8agOMi1qb6HdzggHZj08atsvpTuiwUtf7pWcDq3N0WTyxjtQeeIxBGtT7mLQW+QIjXi/Bh7Vgl9xeRs7gIJotehtDjrOESIWNh/2eVHchenER97lS4uh1fWd2hoce55ZRyRTwTp9Rdwq+Igr7KR0+vaZ3QkWoWzzDOgW7n8G6ctezpbO7
Voya Funds Trust
https://investments.voya.com/Investor/Products/Mutual-Funds/Tax-Center/General/2015-Estimated-Capital-Gain-Distributions.htm
Weitz Funds
https://weitzinvestments.com/funds_and_performance/distribution_and_tax_information.fs

Doesn't this article ("Retirement Planning..." by Larry Siegel) scream that anyone with access to a TIAA qualified account should put all or at least most of his or her fixed income allocation in the TIAA (guaranteed) Traditional Retirement account? Larry Siegel: (With interest rates this low), "you would be locking in capital losses" (by investing in bonds). The TIAA Traditional guarantees a minimum return of 3% annually and is currently paying 4% on new money. At age 70 and semi-retired, I'd rather lock in positive annual returns than capital losses. Agree or disagree?

Summary: Here's a way to gain entree into the Institutional Class of Sterling funds:
Sterling Capital Special Situations Fund Institutional (BOPIX) is one of the "A Decile" funds listed in the Trapezoid study in the November issue of MFO; it also sports a "Class Probability" of 72%, one of the highest on the chart and is part of the BB&T empire. Morningstar shows the minimum purchase to open an account is $1 million. Perhaps you've already discovered some way to buy it with less but I'll share a method I've discovered. If you act quickly, you can still OPEN AN ACCOUNT DIRECTLY WITH THE FUND (rather than through a broker) and buy the no-load Stratton Small Cap (STSCX) with a minimum purchase of $2,000, you will eventually gain entree into the institutional class of the Sterling funds. (I bought STSCX after learning that BB&T was acquiring Susquahanna Bankshares which owned the Stratton fund manager, because I figured that, after the BB&T / Susquahanna merger, I'd be able to buy the institutional class of any of the front-end load Sterling funds (after the Stratton funds are assimilated into the Sterling family). I did this knowing that, at the present time, BOPIX is probably the only Sterling fund worth buying, and was glad to see that Trapezoid's research gave BOPIX good marks. N.B.: merely buying STSCX through a third-party platform (i.e., a broker) won't give you entree to the Institutional class of Sterling funds - you MUST hold your Stratton fund directly through Stratton.
The assimilation of the Stratton Funds into the Sterling Fund family will happen in "coming weeks," according to my sources. The shareholder vote has already occurred.

Here are some of my additional "finds" I do not see in this thread. Of course, these are available through capgainsvalet.com (yes, a shameless plug).
Blackstone Alternative Investment Funds
http://www.blackstone.com/docs/baif/2015-estimated-distribution-table---mfs.pdf?sfvrsn=2
Calvert Funds
http://www.calvert.com/resources/tax-center/estimated-distributions
City National Rochedale Funds
http://www.citynationalrochdalefunds.com/fundinformation/download/CapGainsDistributions_2015_Equity.pdf
Domini Funds
https://www.domini.com/shareholder-services/tax-center/december-2015-distributions-estimates
Invesco Advisers Inc
http://www.invesco.com/static/us/investors/contentdetail?contentId=9a64a8c235512410VgnVCM100000c2f1bf0aRCRD
Jensen Funds
https://www.jenseninvestment.com/jmf/jensen-funds/forms-documents/distributions/
Morgan Stanley Funds
http://www.morganstanley.com/msamg/msimintl/docs/en_US/publications/forms/Tax/2015_estimated_yr-end_distributions.pdf
Nationwide Funds
http://www.nationwide.com/mutual-funds-distributions.jsp
Parnassus Funds
http://www.parnassus.com/parnassus-mutual-funds/DividendInfo
RBC Funds
https://us.rbcgam.com/resources/docs/mutual-funds/pdf/other/RBC_Cap_Gain_Distribution.pdf
Transamerica Fund Asset Management Inc
https://www.transamerica.com/images/capital-gain-distributions_tcm73-37718.pdf

@Sven
https://www.sec.gov/litigation/admin/34-49741.htm
(Above link sometimes doesn't work. You should, however, be able to pull up this 2004 SEC document doing a Google search. It's good reading.)
From the SEC Complaint: "From 1998 through 2001 and in 2003, Strong frequently traded 10 Strong funds, including one over which he was the portfolio manager, making approximately 660 redemptions inconsistent with the limitations of the prospectus in the forty accounts that he controlled. As a result of his trading, Strong had gross profits of $4.1 million and net profits of $1.6 million. SCM failed to disclose Canary's trading agreement, and the inherent conflicts of interest involved in allowing such trading, and Strong and SCM failed to disclose Strong's frequent trading activities, to the Boards of Directors of the Strong funds or to the shareholders of the funds ..."
---
Regarding his personal accounts, 660 redemptions (1998-2003) is an eye-grabber. Anybody here ever come close to that number of trades over a 5 year period? As a former shareholder I can tell you they didn't tolerate such frequent trading by most clients. I was cautioned once after doing about 6 trades in one of their funds over a year's time.
Here's a story detailing the rise and fall of Strong Capital Management and which references the takeover by Wells Fargo in May 2004.. http://www.pionline.com/article/20120806/PRINT/308069980/one-time-powerhouse-strong-financial-down-to-a-staff-of-1
Strong appealed to many small investors in the Midwest. Low minimums, flashy literature and promotion, and a sizeable stable of competitive funds. Strong himself, through one of his publications, taught me: "Pay Yourself First." That saying probably didn't originate with him, but I heard it first from him and it was inspiring and helpful at the time. A fairly charismatic figure, he appeared as a guest once on Rukeyser's Wall Street Week - though you could tell old Lou wasn't too impressed.