Why do doomsayers like Rodriguez always focus on debt to GDP as a primary ratio to measure financial strength or weakness? That's like looking at a company's revenue and it's total debt and assuming that the principal has to be paid back tomorrow instead of just interest. It also ignores the company's assets on the balance sheet in favor of just cash flow. It seems like a facile analysis. Wouldn't it make more sense to analyze the ratio of GDP to interest payments on the debt to see if revenue is covering interest? And then look at the total assets of the nation relative to the total debt. A debt to GDP analysis ignores the fact that while the liability side of America's balance sheet has grown enormous so have its assets. There is immense wealth in America--well over $60 trillion--part of which could be used to pay down that debt gradually over time if capital gains, income and estate taxes weren't close to as low as they ever have been in the last 70 years. Rodriguez completely ignores this fact to attack entitlements and say they must be cut to save the nation. He never even mentions that maybe taxes should go up.

thank you. Very informative article. Another article mentioned from 2008 time frame before the housing bubble burst.
http://www.fpafunds.com/pdfs/commentaries/Crossing_the_Rubicon.pdf
Below is a recent article on FPA Capital fund and its 40% weighing in oil.
http://www.businessweek.com/news/2012-02-16/fpa-s-bryan-tops-peers-betting-on-volatile-oil-riskless-return.html

http://fpafunds.com/pdfs/commentaries/Caution_Danger.pdf
CAUTION: DANGER AHEAD
Speech to Institute for Private Investors
By Robert L. Rodriguez, CFA
Managing Partner and CEO
February 15, 2012
*
"I hope that this brief historical review of my career should help allay fears that what follows
does not come from the likes of a perennial pessimist and doomsayer. Neither does “CAUTION:
DANGER AHEAD” spring from recent capital market volatility. Oh, No! When I left to take my
sabbatical for a year in 2010, I conveyed to my associates and clients that the current crisis was
only Phase 1, and the coming year would prove to be simply an interlude. If the nation’s unsound
fiscal policies persisted, within 3 to 7 years, it would face another financial crisis of equal or
greater magnitude, and it would emanate from the federal level. I wish I had said sovereign level,
covering all my bases, but I did not arrive at this conclusion until once away on sabbatical when
my attention and thinking shifted to the international area--European sovereign debt in particular.
Phase 2 is now beginning and I think we are on the cusp of a decade of extreme economic and
financial market turbulence. Uncertainty as to the effects of high system wide
financial leverage and the outcome of the battle to determine what the proper roll and magnitude
of government should be within an economy are key elements in this future turmoil."
"In stocks, we are cautious -- defensive but opportunistic."

Howdy,
Again, a thank you to all who post the links and also start and participate in the many fine commentaries woven into the message threads.
For those who don't know; I ramble away about this and that, at least once each week.
NOTE: For those who visit MFO, this portfolio is designed for retirement, capital preservation and to stay ahead of inflation creep. This is not a buy and hold portfolio, and is subject to change on any given day; based upon perceptions of market directions. All assets in this portfolio are in tax-sheltered accounts; and any fund distributions are reinvested in the funds. Gains or losses are computed from actual account values.
While looking around..... Today and with the past few weeks; the markets, I suspect our house may fall within the "lucky" area of investing for this 2012 year. I seldom do not have a feeling about some flow of intuition about where the monies should be, based upon our risk and reward sentiment. I find little guidance at this time. Perhaps it is just me, the phase of the moon or the doldrums one periodically encounters with any task of thinking. I recalled the lines of Clint Eastwood/Dirty Harry asking whether the punk felt lucky or not. Lucky and chance of draw to being in the right place at the right time is my best guess right now for the markets. I have placed a short list of recent items that have caught my attention. There are many other areas and items, too. I do not attempt to show the list as negative in aspect; only to a few items that are floating around and in global events. Not that there isn't always something going on in some part of the world which may affect investments.
Random thoughts, no particular order of priority:
1. Who is really doing the deal in Europe, and why?
a. ECB okay with breaking existing rules for bond holders, who may bend over and take the medicine.
b. Dear EU, take the medicine and let Greece go its own way. If you (EU) mess this up in a bad way;
many others will be in line for the same handouts. The trap is already set.
2. Some EU countries agreed to sanctions and not buy Iranian oil beginning July 1.
a. Opps, Iran announces; well, you may all bite our back side, we'll stop shipping to you, March 1.
*****update, Feb 19; Iran announces crude ship stoppage to France and England
b. Iranian sanctions are supposed to stem flow of U.S. dollars to Iran.
c. Not so fast, say some countries; we need the oil and we'll pay with gold (India reported story).
d. Iran reportedly needs grains (poor crop production) and is willing to do a swap/barter.
e. Russia smiles, a "crude" smile indeed !
f. The big, "uh-oh"; will global trades in commodities move away from a $US basis?
3. What to do about Syria? UN gives the voted hand slap; excluding China and Russia votes....uh-oh.
4. Social economists express, housing problem will be helped from the young ones and family formations.
a. Okay, but familes can not form without real and lasting employment; other than minimum wage.
b. "a", a catch22; if I have ever seen one.....
5. Cheap money, U.S., Japan and more coming in Europe, where central bank rates have to move down again.
6. Elections coming in many places; with some likely changes in "styling and profiling" by candidates.
a. one French contender states that he will undo the Euro-Pact agreements.
b. Germany......well, who knows, eh?
c. U.S.; take your best guess. Politicians, most of whom are not business oriented; but lobbied by those who are.
I have noted a few things below, in the Buy/Sell/Portfolio section.
I have retained the following links for those who may choose to do their own holdings comparison against the fund types noted.
This 1st link to Bloomberg is for their list of balanced funds; although I don't always agree with the placement of fund styles in their categories.
http://www.bloomberg.com/apps/data?Sector=888&pid=invest_mutualfunds&ListBy=YTD&Term=1
These next two links are for conservative and moderate fund leaders YTD, per MSN.
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Symbol=$HF&Category=CA
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Category=MA&Type=&symbol=$HF
Such are the numerous battles with investments attempting to capture a decent return and minimize the risk.
We live and invest in interesting times, eh?
Hey, I probably forgot something; and hopefully the words make some sense.
Comments and questions always welcomed.
Good fortune to you, yours and the investments.
Take care,
Catch
SELLs/BUYs THIS PAST WEEK:
NONE
A reflection upon the links above; we attempt to establish a "benchmark" for our portfolio to help us "see" how our funds are performing. Aside from viewing many funds within the balanced/flexible funds rankings (the above links), a quick and dirty group of 4 funds we watch for benchmarking are the following:
***Note: these YTD's per M*
VWINX ....YTD = + 2.6%
PRPFX ....YTD = + 6.5%
SIRRX .....YTD = + 1.3%
HSTRX ....YTD = + .65%
None of these 4 are twins to our holdings, but we do watch these as a type of rough guage.
Portfolio Thoughts:
Our holdings had a + .16 % move this past week. For the better part of 2011 the investment grade bonds in our portfolios supported weakness in the equity and high yield bond holdings. The early part of this year shows a partial reversal forming; in particular since around January 17. No, investment grade bonds/funds have not become trash; but within the last month, a small sideways movement seems to be taking place. I have read this and that to find some knowledge about this; as usual one may find any number of conflicting viewpoints. Flows to many bond areas are still reported to be very large. New issues of bonds in many sectors are also very large. Perhaps a balance of money flows is meeting an issue flow. One still must consider how many big traders are watching Europe to find and know about a true agreement related to debt there. Very large holders (pension funds)of bonds will also maintain some long term positions in various bonds. Too many things in place right now to get a good feel for where equities and many bond types will be at the end of March. I note the month of March; as I feel this may begin to tell more of the story; as in theory, we may know about a resolution regarding Greece. I note this particular piece of writing to some bond sectors; but the equity sectors may be affected no less. Our house is not selling any bond funds at this time; as this area still may prove to be a smoothing factor again in 2012. I find little to convince this house that 2012 will be any less difficult to navigate than was 2011. A quick look at my words seems to find, at least for me; that I have not really written much of note. Me thinks I'm having an off-month for thinking. A summary may find: watching investment grade bonds for near term trends and sitting tight with all of our holdings until the end of March; barring a nasty event; and finding that this year, our house may just plainly be LUCKY. I better stop now; before the writing becomes more confusing. To the high praise of MFO and the members, it is very difficult to find a topic to note here that has not been placed into the discussion boards. Excellence, as usual.
---Below is what M* x-ray has attempted to sort for our portfolio---
U.S.Stocks 11%
Foreign Stocks 11.14%
Bonds 70.83% ***
Other 7.03%
Not Classified 0.00%
***about 35% of the bonds are high yield category (equity related cousins)
---This % listing is kinda generic, by fund "name"
-Investment grade bond funds 26.8%
-Diversified bond funds 19.8%
-HY/HI bond funds 23.2%
-Total bond funds 17.8%
-Foreign EM/debt bond funds 4.3%
-U.S./Int'l equity/speciality funds 8.1%
This is our current list: (NOTE: I have added a speciality grouping below for a few of fund types)
---High Yield/High Income Bond funds
FAGIX Fid Capital & Income
SPHIX Fid High Income
FHIIX Fed High Income
DIHYX TransAmerica HY
---Total Bond funds
FTBFX Fid Total
PTTRX Pimco Total
---Investment Grade Bonds
APOIX Amer. Cent. TIPS Bond
DGCIX Delaware Corp. Bd
FBNDX Fid Invest Grade
FINPX Fidelity TIPS Bond
OPBYX Oppenheimer Core Bond
---Global/Diversified Bonds
FSICX Fid Strategic Income
FNMIX Fid New Markets
DPFFX Delaware Diversified
TEGBX Templeton Global (load waived)
LSBDX Loomis Sayles
---Speciality Funds (sectors or mixed allocation)
FCVSX Fidelity Convertible Securities (bond/equity mix)
FRIFX Fidelity Real Estate Income (bond/equity mix)
FFGCX Fidelity Global Commodity
FDLSX Fidelity Select Leisure
FSAGX Fidelity Select Precious Metals
RNCOX RiverNorth Core Opportunity (bond/equity)
---Equity-Domestic/Foreign
FDVLX Fidelity Value
FSLVX Fidelity Lg. Cap Value
FLPSX Fidelity Low Price Stock
MACSX Matthews Asia Growth-Income

tgeno, I just now caught your additional remark about getting OUT in time. Makes sense to me! Except--- where to go after that? Unless the grave? My EM Bond fund, for example, is PREMX. At this point, I'm merely continuing to re-invest all divs and cap gains. It's a default position, cuz at the moment, there is no better thing to do, given my circumstances. I wish there were a magic recipe, but there's not.
Anyhow, PREMX gets just three stars and no "precious metals" rating from Morningstar at the moment. It's been that way for at least a few years. But I believe it is behaving and performing in a way which will earn it higher grades and more stars. Turnover is low, so volatility is low. The portfolio is very spread out, to mute volatility, too. Gov't and Corp. debt accounts for the lion's share, and now, there is local currency debt in the mix. In a volatile category, it behaves well and steady. I originally held it in a 403b, but it's now in a rollover IRA. I chose it to begin with because it was available and not completely lousy: the available choices for 403b investors are diminishing every day. And its ER is quite good, too. Rather low for its category.
PREMX:
ER = 0.95% ("Low" per M*)
YTD: 4.99%
1 year: 9.07%
3 years: 18.67%
5 years: 7.32%
10 years: 11.06%
...4% cash. Biggest holdings:
1. Russia
2. "Reserves SBI" (what is that, exactly?)
3. Brasil, Brasil and Brasil.
20.34% in top 5 holdings. But holdings are spread-out from hell to breakfast: Venezuela, Credit Default Swaps. (??????!!!!!!!!!!) Plus, Mexico, Vietnam, Turkey, Indonesia, Serbia, Iraq, Peru.......

Reply to @VintageFreak: I do hold some individual stocks and a number of funds, as well as a few ETFs. I'm usually not that critical of most funds, but I strongly disagreed with Fairholme's bet on financials a while back on fundalarm and in terms of Sears I've detailed my dislike of it in a few threads. I wouldn't dislike or not consider a fund entirely because of one or two smallish positions , but in terms of Sears, whereas some continue to see the value case, I continue to see a retailer who has neglected the stores while competition has been given a green light to move clear ahead of them.
Meanwhile, Sears has taken one loss after another in the last several quarters. CEO Eddie Lampert was a tremendously successful hedge fund manager, but he's never made a real attempt to bring Sears into present day, neglecting the stores in favor of one buyback and short squeeze (see the recent ridiculous move) after another. He's wound up making a once great American brand increasingly irrelevant. People continue to believe in Sears because of the Lampert factor (and to some degree the real estate value factor, although I question whether mall real estate occupied by Sears is as valuable or has even the demand some may believe it does - retail is overbuilt in this country and technology is increasingly chipping away at B&M stores and forcing them to be increasingly competitive), but I believe the options for Sears are dwindling.
If Lampert (who owns a massive amount of shares, much of which were likely bought higher) can manage to sell the thing, good for him. I don't see the grand plan for taking the thing private. Everyone expected Lampert to turn the thing into his Berkshire Hathway, but while 2008 hampered those plans, he hasn't made any motion towards it since and I think anyone still waiting for that to occur will be disappointed.
The question becomes what is the intrinsic value of Sears. My view: every day that it's not a well-run retailer, it's less and less. Every day the brand becomes less relevant is a day the brand and everything that revolves around it becomes less valuable. I asked who would want to own Sears when it was trading over $100. It's now much less, but my question is, has anything changed about the company?
This fortune article also makes a more detailed case:
http://finance.fortune.cnn.com/2011/05/12/eddie-lampert-dementor/
I've said in other threads that I think - even if things are better - retail is going to have to really evolve in the next 5-10 years, with technology resulting in more and more people shopping online or online via their phone. Everyone thought Best Buy was going to do well with Circuit City gone, but they haven't and are planning to reduce store space.
http://articles.latimes.com/2011/jun/23/business/la-fi-best-buy-bigbox-20110622
"Big-box has already seen its heyday," said Brad Thomas, a retail analyst with Keyblanc Capital Markets. "Retailers just don't need as much space as they once did. Across the retail industry there is an effort to reduce the size of your stores as retail and purchases increasingly occur online rather than through brick-and-mortar stores."
Stores are increasingly subleasing portions of stores to other companies, but there's definitely both positives and negatives to that, as well as the question of how successful it will be. I question the value of non-prime commercial real estate in an environment where many retailers are continuing to downsize and look at things like subleasing.
I like the differentiation of the middle-or-high-end outlet concept, such as Simon Property Group's Prime Outlet subchain or Tanger Outlet Malls. I don't have an investment in either, but I think the outlet concept will continue to attract a following and you'll likely see more malls with stores like Nordstrom Rack and Saks Off 5th, among other similar concepts. I think the era of having 10 fairly generic strip malls all within a few miles of one another is over, as well.
Whereas retailers once had to go coupon-heavy to get people to try their online store, now I think retailers are going to have to get increasingly creative to get people in the B & M store. Shopkick is an app example that rewards people for going into stores, and PointInside, a mall app that shows mall directories and coupons linked to the directory for various retailers, is another example. Shopkick and things like it are at least a fairly creative way to get people into stores and based upon things like these, I think there is potential to use apps and other electronic means to get people into stores. I don't think it will solve the issue that retail will need to change in coming years, but they are an example of retail having to evolve and change and try to use these electronic tactics in their favor.
In terms of retail, I just see change as inevitable and necessary over the next decade (or less), whether or not things get noticeably better.
I definitely have funds where I have disagreements regarding some of the management's decisions (Marketfield being a main example, although at least Marketfield has significant flexibility and it acts as a contrarian view against a large portion of the remainder of my portfolio), but in terms of funds making *large-scale* (especially when it starts to become a matter of the fund being reliant upon a specific or very specific bet) moves into something I don't agree with, then I am more than happy to be critical or just not buy it or sell it if I own it. People do buy active management to have managers to make decisions for them, but people bring their own thoughts to the table and can take actions based upon that, as well - and sometimes the person making the disagreement call is right.
In terms of Leucadia mentioned above, I just thought that's a compelling way to get some exposure to Jefferies, as well as a number of other businesses under the Leucadia umbrella, and Berkshire-esque Leucadia (which co-owns a company called Berkadia with Berkshire) has demonstrated an excellent (2008 aside) long-term track record itself.
http://en.wikipedia.org/wiki/Leucadia_National

Reply to @mnzdedwards: I don't think you need to apologize. This is a good question and it's something everybody needs to consider before investing in this fund.
Assume you have an asset allocation where you reserve a certain % in cash and a certain % to small caps. The purpose of this asset allocation is that you can periodically rebalance, with the goal that that you will buy more small caps when they are cheap and you cash in some gains when small caps are pricey.
If you are already holding cash and rebalancing then a fund like ARIVX may not be very suitable. In fact, the reason many funds stay fully invested in stocks is not because Eric Cinnamond is a smarter manager. It's because most funds believe it is their duty to stay fully invested -- i.e. investors pay them to manage stocks, not to hold cash.
This is just something to think about. Personally I like this fund, but I also hold PREOX which is more of a typical fully-invested fund with all the ups and downs (mostly downs). But as I mentioned above, I am hesitant about adding new money into this fund until the manager himself is convinced that there are new buying opportunities.

Reply to @kevindow: I certainly have nothing against ETFs and own a few of them myself, but I don't see them as "the future", but more as offering more options and in many cases more specific options than one can find in the mutual fund world. If I want to invest in fertilizer companies, there's not really a mutual fund, but there is the SOIL etf (and there is the FOOD/BARN etfs, although those apparently are ending.) Still, I have seen very few actively managed ETFs so far that have provided compelling performance - yet.
I'm looking forward to new ones, but there's been ETFs that have either been so far disappointing (Cambria Global Tactical) or funds that have turned in fine performance but have been so specific or eccentric - the TrimTabs Float Shrink etf (which is managed by TrimTabs head Charles Biderman, no less), for example, which has average volume of about 500 shares per day - that I can't see them continuing if they can't drum up more interest. While I think the amount of specific industries that one can invest in via ETFs is interesting and in many cases useful, many are going away because they aren't getting enough interest, either.
Do I think that there are many actively managed mutual funds that are too expensive and/or offer lackluster performance? Sure, but I guess I don't see how actively managed ETFs will not result in the same situation over time - tons of funds, some good, some bad, some expensive, some not (although given the industry, I think the "not"s will be the minority - I don't see actively managed ETFs being revolutionary, but more of a continuation.) I do think there's some interesting CEFs out there, such as tech private equity fund Firsthand Technology (SVVC), which someone mentioned the other day. The FPA-managed Source Capital (SOR) would be another, or even the recent Doubleline fund.

Hi Mike_E,
I would advise you not to worry about the cash position of ARIVX. Eric Cinnamond managed ICMAX from 10/3/2005 to 9/2/2010, and during this period an initial $10K investment appreciated to $17,613 vs. $10,391 for VBR. Since the inception of ARIVX, that same initial investment would have increased to $11,135 vs. $10,589 for VBR. These results indicate to me that he is a skilled investor. His skill was clearly evident when his ICMAX only lost 7% in 2008 and then managed to beat the SC indices in 2009 by gaining 40%.
I spoke with him over the phone when he worked at Intrepid Capital, and he was very friendly and patiently answered all of my questions as detailed here:
http://socialize.morningstar.com/NewSocialize/forums/p/243840/2697828.aspx#2697828
As you can see, Eric Cinnamond has had his doubters for a long time, and he continues to prove them wrong.
Kevin

Read Steven Romick's latest commentary dated 12/31/2011 for his current outlook on inflationary and deflationary arguments in the current investment environment.FPACX as most of you know is a go anywhere fund with a strong long term record of success and capital preservation.The fund currently has very minor positions in farmland ,an office building and residential mortgages which several posters have identified as inflation protections.The good thing about FPACX and it's newer sibling FPIVX is the opportunity for beginning investors to invest a smaller amount to start with. This from the fund's App. Minimum Investment Amount ($1,500 Minimum or $100 and establishment of Systematic Purchase Plan) Here: http://fpafunds.com/literature.html
Commentary here:http://fpafunds.com/hc_crescent.html

Sounds like a problem at your brokerage. It ended 2011 with a 3.83% gain. I purchased it July 5 and at that time it showed 2.48% YTD gain. It's currently up 0.66% YTD. Modest but consistant gains throughout with a couple of minor dips.

"SAN FRANCISCO (MarketWatch) -- Fairholme Capital Management's Bruce Berkowitz scaled back exposure to financial and telecommunications companies during the fourth quarter, according to a regulatory filing submitted Tuesday."
> When you go from over $21B at the beginning of the year (2011) to under $8B in assets by the end of the year (in fact they are at $7.4B now) --- you've got to (or actually forced to) scale back your positions especially if you want to keep at least some cash buffer space as that all got completely depleted from redemptions.

I also agree with that quote, but the article itself doesn't really explain why. It mentions that double and triple-leveraged funds can add to gains and exacerbate risk (usually more of the latter), but I don't think that's the point.

http://news.morningstar.com/articlenet/article.aspx?id=536868
budget alarm unnerved muni bond market
http://www.onwallstreet.com/news/muni-bond-market-reacts-to-obama-budget-proposal-2677358-1.html?ET=onwallstreet:e5807:2131761a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=OWS_Daily__021412
when bond ETPs don't make distributions
http://etfdb.com/2012/when-bond-etps-dont-make-distributions/
is there a bubble in dividend ETFs
http://www.etftrends.com/2012/02/is-there-a-bubble-in-dividend-etfs/?utm_source=iContact&utm_medium=email&utm_campaign=ETF Trends&utm_content=
RBC wealth investment weekly commentary:
RBC Wealth Management
Michael D. Ruccio, AAMS
Senior Vice President
25 Hanover Road
Florham Park, NJ 07932-1407
(p) (866) 248-0096
(f) (973) 966-0309
[email protected]
www.rbcwm-usa.com
Market Week: February 13, 2012
The Markets
Concerns about whether Greece would fulfill the conditions necessary to obtain a second bailout brought on the first down week of 2012 for the domestic equities indices (except for the Dow, which had a down week in late January). Meanwhile, 10-year Treasury yields remained relatively stable as investors continued to seek out bonds.
Market/Index 2011 Close Prior Week As of 2/10 Week Change YTD Change*
DJIA 12217.56 12862.23 12801.23 -.47% 4.78%
Nasdaq 2605.15 2905.66 2903.88 -.00% 11.47%
S&P 500 1257.60 1344.90 1342.64 -.17% 6.76%
Russell 2000 740.92 831.11 813.33 -2.14% 9.77%
Global Dow 1801.60 1976.98 1964.70 -.63% 9.05%
Fed. Funds .25% .25% .25% 0 bps 0 bps
10-year Treasuries 1.89% 1.97% 1.96% -1 bps 7 bps
*Equities data reflect price changes, not total return.
Last Week's Headlines
Greece's coalition government reached an agreement on austerity measures needed to receive the second bailout from its peers, and at the insistence of the eurozone's finance ministers, the agreement was approved by the full Greek parliament. To protest the measures, Greece's unions called a 48-hour strike over the weekend and demonstrators took to the streets.
Five major banks will pay $26 billion to settle a suit by 49 state attorneys general and federal officials over faulty foreclosure procedures, and nine other financial institutions are also in negotiations over the same issue. According to the agreement, $17 billion will be used over the next three years to assist homeowners, and 60% of that amount will help reduce principal on qualifying mortgages.
According to the Commerce Department, higher imports of autos, auto parts, and industrial machinery helped push the U.S. trade deficit to $48.8 billion, the highest level since June. Imports rose 1.3% while exports were up 0.7%.
Eye on the Week Ahead
European economic growth data and Wednesday's meeting of eurozone finance ministers, when final approval of the newest Greek bailout is expected in the wake of last weekend's parliamentary vote, will be a focus of attention. Domestic data on inflation, manufacturing, and housing also will be watched.
Key dates and data releases: retail sales, business inventories (2/14); Empire State manufacturing survey, industrial production, Federal Open Market Committee minutes, international capital flows (2/15); housing starts, wholesale inflation, Philadelphia Fed survey (2/16); consumer inflation, index of leading economic indicators, options expiration (2/17).

Reply to @msf:
USAA brokerage offers the advisor shares (TGBAX) with an initial transaction fee(max $75), but no load. I believe the minimum initial contribution is $25K. I am able to do automatic periodic contributions with no additional TF. This is also true for automatic periodic redemptions which I won't take for some time.
I consider this fund a long term hold and I try to add to it with periodic profits from other funds. TGBAX recent gains have come after an extended dip in 2011.

David - looks like Grandeur Peaks likes what you had to say --- on their website...
http://www.grandeurpeakglobal.com/
...they provide links to David's WSJ interview and glowing review of their fund.
So far I really like what they have to offer --- their passion for global investing, excitement in starting their own firm, lots of travel and time on the ground to visit companies, their global analyst team and ease of communication with their firm.
Here's a sample of some stocks mentioned by Grandeur Peaks in their 4th qtr report that they own:
====================================================
Hy-Lok Corporation
Hy-Lok is a $240 million market cap company based in Busan, South Korea. Hy-Lok generates about $100 million of annual revenue as a global leader in fluid control precision. They make very high-tech fittings and valves, which are distributed across the globe and used in a variety of industries. Founded in 1977, the company has been listed on the KOSDAQ (Korean NASDAQ) since 1989. The stock was
up 19% in the fourth quarter and contributed 30 basis points to the overall return of Global and 30 basis points to the overall return of International.
Bertrandt AG
The Bertrandt Group is a $500 million market cap company based in Ehningen, Germany. Bertrandt generates about $750 million of annual revenue providing outsourced R&D and other services to the automotive and aerospace industries. The company was founded over 35 years ago. The stock was up 25.8% in the fourth quarter and contributed 24 basis points to the overall return of Global and 25 basis points to the overall return of International.
Banco ABC Brasil
Banco ABC is a $1.7 billion market cap commercial bank based in São Paulo, Brasil. The bank has about $6 billion in assets and provides a range of financial products and services to medium and large companies in Brazil. It focuses on corporate credit, capital markets, and treasury operations. The stock was up 17.1% in the fourth quarter and contributed 19 basis points to the overall return of Global and
23 basis points to the overall return of International.
Tegma Gestao Logistica
Tegma is a $1.7 billion market cap company based in São Paulo, Brasil. They are one of Brazil's largest logistics management companies, and a leader in the automotive industry. They are experts in providing customized and innovative logistics solutions focusing on three core market segments: the automotive industry, road transport, and warehousing and handling. The stock was up 15.8% in the fourth quarter and contributed 14 basis points to the overall return of Global and 28 basis points to the overall return of International.
Vitasoy International Holdings
Vitasoy is a $5.9 billion market cap company based in Hong Kong that was founded in 1940. They are a global leader in soy-based beverages and foods with annual revenues of $500 million. The stock was up 13% in the fourth quarter and contributed 12 basis points to the overall return of Global and 19 basis points to the overall return of International.

This Bio from M*
Andrew Foster
10/31/2006 — 03/21/2011 Andrew Foster is a Portfolio Manager at Matthews International Capital Management, LLC. Andrew joined Matthews in 1998 as a Research Analyst, and has held a number of positions at the firm during his tenure, including Director of Research, and acting Chief Investment Officer. Andrew began his career in Singapore, where he worked as a management consultant in A.T. Kearney’s Financial Institutions Group. He holds an A.B. in Public Policy and a secondary degree in Economics from Stanford and an M.B.A. from INSEAD in France.
Mr. Foster had an excellent performance at MAPIX,basically in the top 10% for his 4 1/2 years there.
http://performance.morningstar.com/fund/performance-return.action?t=MAPIX&region=USA&culture=en-us

http://www.sec.gov/Archives/edgar/data/916006/000145079112000024/supplement.htm
497 1 supplement.htm SUPPLEMENT TO THE PROSPECTUS AND SAI - UPCOMING REORGANIZATIONS
Bridgeway Funds, Inc.
Aggressive Investors 1 Fund (BRAGX)
Aggressive Investors 2 Fund (BRAIX)
Ultra-Small Company Fund (BRUSX)
Micro-Cap Limited Fund (BRMCX)
Supplement dated February 13, 2012 to the Prospectus
and Statement of Additional Information (“SAI”) dated October 31, 2011
At a meeting of the Board of Directors (the “Board”) of Bridgeway Funds, Inc. ( “Bridgeway Funds”) held on February 10, 2012 (the “Meeting”), the Board unanimously approved a Plan of Reorganization (the “AI2 Plan”), providing for: (i) the conversion of the shares of the Aggressive Investors 2 Fund (the “AI2 Fund”) into shares of the Aggressive Investors 1 Fund (the “AI1 Fund”) and (ii) the resulting transfer to the AI1 Fund of all of the property, assets and goodwill of the AI2 Fund (when completed, the “AI2 Conversion”). The Board determined that the AI2 Plan and AI2 Conversion would be in the best interests of the AI1 Fund, the AI2 Fund, and their respective shareholders. The effect of the AI2 Plan and AI2 Conversion will be that the AI2 Fund shareholders would become shareholders of the AI1 Fund.
At the same Meeting, the Board also unanimously approved a Plan of Reorganization (the “MCL Plan”), providing for: (i) the conversion of the shares of the Micro-Cap Limited Fund (the “MCL Fund”) into shares of the Ultra-Small Company Fund (the “USC Fund") and (ii) the resulting transfer to the USC Fund of all of the property, assets and goodwill of the MCL Fund (when completed, the “MCL Conversion”). The Board determined that the MCL Plan and MCL Conversion would be in the best interests of the MCL Fund, the USC Fund, and their respective shareholders. The effect of the MCL Plan and MCL Conversion will be that the MCL Fund shareholders would become shareholders of the USC Fund.
The AI2 Plan and MCL Plan will require the approval of the shareholders of each of the AI2 Fund and MCL Fund, respectively. Separate special meetings of the shareholders are being called for that purpose. Shareholders of the AI2 Fund will receive proxy solicitation materials providing them with information about the AI1 Fund and AI2 Plan and shareholders of the MCL Fund will receive proxy solicitation materials providing them with information about the USC Fund and MCL Plan. If approved by such Fund’s respective shareholders, the AI2 Conversion and MCL Conversion are expected to take effect in the second quarter of 2012. Investors should check the Bridgeway Funds’ website (www.bridgeway.com) for further information.
Lastly, the Board approved certain modifications to the Management Agreement between Bridgeway Capital Management, Inc. (“Bridgeway”) and Bridgeway Funds, related to the AI1 Fund and USC Fund, effective as of February 13, 2012. Accordingly, the Bridgeway Funds’ Prospectus and SAI are hereby amended as follows:
1. The expense cap for the AI1 Fund in the table on page 70 of the Prospectus is reduced to 1.75%.
2. The expense cap for the AI1 Fund in the table on page 24 of the SAI is reduced to 1.75%.
3. The Base Advisory Fee schedule, which will now include an additional breakpoint providing for lower advisory fees, for the AI1 Fund on page 25 of the SAI is deleted and replaced with the following:
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(1) 0.90% of the value of the Fund’s average daily net assets up to $250,000,000;
(2) 0.875% of the next $250,000,000 of such assets;
(3) 0.85% of the next $500,000,000 of such assets and
(4) 0.80% of such assets over $1,000,000,000.
4. The expense cap for the USC Fund in the table on page 70 of the Prospectus is reduced to 1.85%.
5. The expense cap for the USC Fund in the table on page 24 of the SAI is reduced to 1.85%.
This information supplements the Prospectus and SAI of Bridgeway Funds, Inc. dated October 31, 2011.
Please retain this supplement for future reference.
Ironically, I have Aggressive Investors 1 and Microcap Limited funds.

They follow different commodities indexes (I believe Plus follows the Credit Suisse Commodity Index, while RR follows the Dow Jones-UBS commodities index) and the collateral/fixed income management is different (RR has a large portion of its fixed income collateral in TIPS, among other differences.)
Commodity RR: "A Double Real™ inflation-hedging strategy
Instead of investing in physical commodities, the Fund purchases derivatives linked to a broad index, helping it diversify without committing substantial capital. The Fund then “collateralizes” these derivatives with an actively managed TIPS portfolio. This dual approach seeks to capitalize on real (after-inflation) returns from commodities and real returns from TIPS. TIPS may decline in value if interest rates rise, and may be particularly sensitive if real interest rates rise rapidly."
CommoditiesPlus: "The Fund combines a non-leveraged position in the Credit Suisse Commodity Benchmark with a portfolio of high-quality, short-term bonds. The commodities futures capture the price return of the commodities index, while PIMCO’s active management of the bond portfolio seeks to add incremental return above the index. The Fund maintains a high overall portfolio quality, and enhances diversification by investing in a variety of high-quality securities, such as mortgages and hedged non-dollar bonds, as well as relatively risk-free assets such as T-bills and money market instruments. The Fund may also invest in securities with ratings below AAA to capture additional yield. "
I own RR, and have never felt the need to add or switch to Plus.
The only issue with RR is that it does tend to throw off very large distributions at times.

got this from Financial advisor
SPECIAL MARKET REPORT
February 2012
SHORT TERM VIBRATION:
It will be difficult for the markets to replicate their January performances in February. After sporting nearly a 7% gain in the first month of 2012, markets are due to take a breather. Because of this, investors should exercise caution in the near term.
During this recent market rally, the market has seen volatility diminish as well. Currently, the volatility index, which is used by many short term traders, suggests that there is a great deal of complacency in the stock market. The present level is measuring around 16, which is only four points off the all-time low measured a few years ago when the market peaked in 2007 before the big crash.
This does not suggest a big downturn is in store for the immediate future, but the likelihood of a measurable 5% or greater correction is extremely great. In other words, avoid chasing many of the stocks that have experienced parabolic jumps in this recent market spurt. Remain patient and allow the markets and stocks to settle in at more reasonable levels before taking positions.
Medium term:
The present strong market conditions have most money managers wanting to chase stocks in order to hit growth benchmarks. This has initially caused the quick burst seen in January. There is a distinct possibility that stocks will consolidate and potentially pullback in the near term. However, after stocks put in a healthy breather, they may be poised to push a little higher into the end of spring.
To take advantage of any more upside in this market may require that investors remain selective in what stocks they buy. Most of the big movers in the early part of 2012 were those stocks and sectors that underperformed woefully in 2011. Sectors such as alternative energy, financials and commodities have exhibited extreme strength so far.
Will that trend continue? It is a question that remains to be answered.
All markets are sitting near multi-year highs. Meanwhile, we have treasuries also yielding all-time lows. Bonds are in a bubble and gold is within striking distance of taking out all-time highs. This scenario poses an intriguing conundrum for all investors because it is extremely rare to see all asset classes sitting at such lofty levels.
In other words, something has got to give.
It would be premature to determine what asset classes will break down and which ones will soar even higher. Investors need to maintain a shorter time frame in holding any of these assets and be willing to trade out of them at the first signs of serious price depreciation. The current mood is suggesting long equities and short treasuries. However, this trade could reverse quickly by the end of the second quarter if Europe continues to stumble and the U.S. economy shows any serious hiccup in its recovery effort. This year the old adage "sell in May and go away" may turn out to be a worthwhile piece of advice worth following.
EXECUTIVE SUMMARY:
Short term indicators suggest equities will remain the place to be, but chasing most of these stocks at present levels may leave some investors being disappointed. If investors have a willingness to remain nimble and can exercise selectivity, the present market rally may continue to offer more gains in equities over the coming three months.
We believe having a defensive asset allocation in a majority of cash; with some selective fixed income, bonds and principle protected investment instruments may be prove to be a wise pose. This is what we would like to term capital preservation growth --- it is getting the most out of assets with the least amount of risk. This is a key strategy for us as we maintain the markets are at an inflection point as all asset classes are near unsustainable tops. Until it is clear which asset class or classes will emerge with more sustainable upside, we believe exercising caution, remaining nimble and diversifying risk is the way to navigate the present, turbulent investment waters.
If you would like to receive Monthly Market Newsletters from the Trader's Desk of Jason Shade, please feel free to sign up for free at www.wallstreetstraighttalk.com. You can also access my daily blogs and other complimentary special reports on my site as well. Thank you for your time and feel free to email me if you would like to discuss anything. [email protected]
Best Regards,
Jason Shade, Financial Advisor
Director of Portfolio Management
Barrington Financial Advisors, Inc,