I wanted to start a thread that asked readers to comment on portfolio performance with respect to concentrated bets they have made. FAIRX has been talked about of late and is a concentrated bet (banking/RE). There are plenty of other sectors under performing right now. Interestingly enough, FAIRX is not my biggest dog. As part of my investing strategy I try to select and hold concentrated bets. I also monitor the percentage of these "potential high fliers", keeping their allocation small in comparison to my overall portfolio. At my age (low 50's) I try to keep these "Alpha Dogs" low...10-15% of my portfolio. A younger investor might be more aggressive. Finally, I position these investments in my Roth account or in a Roth conversion account. My hope here is that the extra risk will eventually equate to extra return that (hopefully) will not be impacted by the drag of additional taxes.
I consider an asset class or mutual fund strategy high risk when it has a historical performance of losing 25% or more of its value in periodic hard times. Some of my emerging market, precious metals, and energy funds have easily achieved this...I call it:"the ability to provide me with a great sleepless night". They have also returned very high positive returns in good times. If I believe in these investments over the long haul I try to be opportunistic. I add to them when they are temporarily out of favor and I try to take profits when they are over performing. Over performance in my portfolio is a personal return of 10% or more. Taking these profits requires that I have a cash position that can be deployed at a moments notice or over periodic time frames. I try to determine what to buy based on what sectors look like they are on sale. Remember, I am doing this opportunistic buying and selling with a very small portion of my portfolio. I still have to look at the overall portfolio on a less frequent basis to be sure my overall allocations make sense for the market conditions (risk on / risk off) and my age (young/middle age/ retired), and long term goals.
It is always nice to buy (risk on) these types of investments during one of there under performing phases. All of us wish we bought gold at $200/oz. or Apple at $7 ten years ago. I say "ten years ago" because ten years is about the time frame most investors need to base the success of their portfolio performance on, not this week or this year. I personally bought RIMM after it dropped 12% to $57/share in March. Not such a great buy. The Yatckman fund (YACKX) bought a lot more shares of RIMM at $22/share. I still own both but recently I decided to let fund managers make my buy/sell decisions of individual securities. I will decide if the manager is adding value or if I have to find other managers who will.
I believe buying, selling, or holding FAIRX, for example, is as much about the sector (banking and real estate) as it is about the manager. In 10 years the banking and real estate sector (and FAIRX) will improve, but are these the sectors that hold the greatest potential for return? I do believe Bruce is the man to find the hidden gems in the market. I believe he will lick his wounds and survive...maybe even over perform again. Do I have enough time to hang around? These are the decisions I will try to make. Once I have made my sector decisions I will try to constantly try to find managers in those sectors who manage well run mutual funds.
As investors we need to remember to give ourselves and our managers the breathing room to let the dust settle. In the short term I'm not happy with the performance of a lot of my holdings. Right now FAIRX is competing with CAMAX (down 26%), VWO (down 22%) and USAGX (up 15% and now down 18%).
At some point I will re-deploy cash (gains) I have made from other profitable bets such as PRPFX, GASFX, EDV, VGENX, USAGX, PRMTX, PRJPX, TGBAX, PONDX, and others. Where I place this new money is the work. The biggest role I play in achieving a successful portfolio is to try and buy things on sale, realize the gains of periodic winners, keep an eye on manager risk, and give long term bets/trends the opportunity to play out.

More about it:
Fairholme Hires and Reshuffles After Fernandez Departure
It seems the departure of Charlie Fernandez this week from Fairholme Capital Management was part of a larger management reconfiguration at the firm. The management changes were likely sparked by the firm's renewed focus on the public markets, as opposed to private transactions, which were Fernandez's specialty. The firm's flagship Fairholme (FAIRX) fund's struggles with massive shareholder redemptions and blowups in its financials sector bets may have been an additional stress.
To help better coordinate research efforts at the firm, Fairholme hired investment veteran Fred Fraenkel. Fraenkel's 30 years of experience is wide-ranging and includes being global research head at Lehman in the early 1990s and, most recently, being vice chairman of Beacon Trust Co. where he helped oversee asset management for high-net-worth individuals. However, Fairholme contracts out a lot of its research to sector experts and has only five in-house analysts. To that end, Dan Schmerin, who was hired last March, will now focus his research on the firm's financials sector bets. Before joining Fairholme, Schmerin had helped run the government's legacy securities Public-Private Investment Program since 2008. While these changes seem promising, the fund has a lot of ground to make up.

I do not know whether it is OK to copy, but here it goes:
Departure is a loss, but this fund's bench has been bolstered, too
A departure reflects Fairholme's curtailed plans more than a change in direction.
Comanager Charlie Fernandez resigned from this fund's advisor, Fairholme Capital Management, effective Oct. 17, 2011. The firm has not given a reason for his resignation, but the decision appears to have been made for personal reasons. Fernandez joined the fund in January 2008 and focused on private investments such as those in AmeriCredit and General Growth Properties.
It is likely that the departure is partly related to the fund's scaled-back ambitions. Manager Bruce Berkowitz said that he does not plan to do any private transactions for the foreseeable future. With the market down about 10% from its April 2011 high, Berkowitz believes that there are plentiful opportunities in the public markets. The fund's significantly smaller asset base probably played a role in that decision, too. Because of the fund's 27% year-to-date loss and massive redemptions, its asset base has fallen 55% to $8.9 billion. Berkowitz had believed that the fund's prior scale gave it access to attractive deals.
The fund's recent hires may be better aligned with its current composition. The fund made two additions in the past seven months with former Treasury official Dan Schmerin joining as director of special situations and Wall Street veteran Fred Fraenkel coming on board Oct. 1 as chief research officer. Fraenkel and Schmerin bolster an in-house staff that has been bare bones in recent years. Both also bring relevant expertise given the portfolio's huge position in financials. Schmerin has worked with distressed assets while Fraenkel began his career as a banking analyst.
These changes come amid the fund's worst results since its inception. Berkowitz maintains strong conviction in his holdings, and one should keep in mind that such stretches are par for the course with a deep-value, contrarian approach. In the meantime, the fund's new personnel appear to be a good fit with where it's heading.

Daniel Schmerin
Current
Director of Special Situations at FAIRHOLME CAPITAL MANAGEMENT, LLC
Past
- Chief Operating Officer, Public-Private Investment Program, Office of Financial Stability at U.S. DEPARTMENT OF THE TREASURY
- Director for Preparedness Policy, Homeland Security Council, Executive Office of the President at THE WHITE HOUSE
- Presidential Management Fellow, Bureau of Economic and Business Affairs at U.S. DEPARTMENT OF STATE
- Research Assistant, Office of the Vice President at THE WHITE HOUSE
- Research Assistant, Office of the Rt. Hon. Bruce George MP, House of Commons at UNITED KINGDOM PARLIAMENT
Education
Georgetown University
London School of Economics and Political Science
University of Pennsylvania
**********************
Fred Fraenkel
(Fairholme Chief Research Officer)
Current
Vice Chairman at Beacon Trust Company
Global Research Director at Beacon Trust Company
Past
Board member at Gerson Lehrman Group
Chairman at Clear Asset Management
vice chairman at ING Barings Furman Selz
managing director at Lehman Brothers
senior management positions at Prudential Securities and E.F. Hutton
security analyst at Goldman Sachs
Education
University of Pennsylvania - The Wharton School
Lehigh University

http://www.onwallstreet.com/news/mutual-fund-outflows-investors-2675591-1.html?ET=onwallstreet:e4207:2131761a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=OWS_Weekend__101411
buy the banks
http://www.google.com/#sclient=psy-ab&hl=en&site=&source=hp&q=Buy+the+Banks+&pbx=1&oq=Buy+the+Banks+&aq=f&aqi=&aql=1&gs_sm=e&gs_upl=986l986l0l1901l1l1l0l0l0l0l203l203l2-1l1l0&bav=on.2,or.r_gc.r_pw.,cf.osb&fp=8e7fa2636e8b849&biw=1366&bih=547
http://online.barrons.com/article/SB50001424052748704468304576627261773829164.html?mod=djembwr_h
interesting, BOA and JP morgan are offering bonds at 6s-7s% YTM, looks very tempting
how to be a better mf investor
http://www.kiplinger.com/columns/fundwatch/archive/be-a-better-mutual-fund-investor.html
buy out crystalizes values in market
http://www.usfunds.com/investor-resources/investor-alert/index.cfm?&INJECTION-DETECTED
index fund wars
http://www.kiplinger.com/columns/fundwatch/archive/index-fund-war-fidelity-vs-vanguard.html
why stock investors should buy americans
http://www.marketwatch.com/story/why-stock-investors-should-buy-american-2011-10-07?siteid=nwhfunds
brief market news - etf trends
S&P 500 ETFs Post 6% Rally as Europe Worries Fade
Markets held onto gains and rose for a second week. U.S. stocks jumped Friday on speculation European leaders will soon unveil detailed plans for addressing the sovereign debt crisis. For the week, the Dow Jones Industrial Average gained 4.9%, the S&P 500 added 6% and the Nasdaq rose 7.6%. The Dow on Friday joined the Nasdaq-100 in positive territory for 2011.
Markets ended the week strong on lingering talk Germany and France are prepping a solution to the debt turmoil before a key European Union summit. There were also reports that Group of 20 finance ministers meeting in France were discussing ways to give the International Monetary Fund more power to assist the bailout effort.
U.S. stocks have bounced sharply in October and have rallied to the top of the recent trading range following the August swoon.
“The stock market price gains have been very impressive since the bottom on Oct. 3, suggesting to us that more upside will be seen. Yet we think this current rally will run into some trouble as some decent chart resistance sits up in the 1,220 to 1,230 region” on the S&P 500, Standard & Poor’s U.S. Investment Policy Committee said in a note.
Bulls argue that stock valuations have been pushed so low that ETFs are cheap, while bears counter that Wall Street earnings forecasts may end up being way too rosy.
ETF Overview
Energy ETFs were the big sector gainers on the week, while funds that invest in Russia also benefitted from strength in the commodities complex.
Oil ETFs were on track for weekly gains of 5% while gold funds climbed about 3%. Gold futures were hovering below $1,700 an ounce on Friday.
In stocks the tech sector led the way with Nasdaq-100 ETFs rising about 7% on the week.
In currency markets, the euro strengthened against the dollar in the “risk-on” trade.
Conversely, volatility-linked ETFs saw big declines this week as Wall Street’s “fear gauge,” the CBOE Volatility Index (VIX), eased back to the bottom end of its trading range.
The top three unleveraged ETFs this week were: SPDR S&P Oil & Gas Exploration & Production (XOP), PowerShares S&P SmallCap Energy Portfolios (PSCE) and Global X Uranium ETF (URA). They rallied more than 14%.
The bottom three unleveraged ETFs this week were: C-Tracks Citi Volatility ETN (CVOL), ProShares VIX Short-Term ETF (VIXY) and iPath S&P 500 VIX Short Term Futures ETN (VXX). They were down more than 18%.
Next week’s economic reports will feature data on inflation and the residential real estate market, including housing starts and existing home sales.

Reply to @AndyJ: Thanks for your input, AndyJ. I'm with you that now is not the time to try and time the market... unless one has a lot more steely nerves than I do. So far, my small percentage in stock funds have been just enough to keep me in the black during up days when bonds are down... and enough of my bond funds have done well enough that I'm still managing mostly gains or close to break-even during down times. Though small ones, the balance is enough to have kept me sane during these crazy last few months. I just have no idea how far down each segment will go once the reality gets down and dirty. The "knowns" are so much easier for me to handle than the "unknowns" - but I guess that would be true of everyone.

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; if and when it returns. 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.....That sound is the pontoon boat's aluminum floats rubbing upon the sand bottom; as we are parked in a relative safe harbor, just 20 feet from the shoreline, protected on three sides from the strong winds blowing from one of the Great Lakes bordering Michigan. A 30' pontoon boat needs about 2' of water depth to not touch the below sand or rocks. The boat is in 3' of water depth, but the recent rocking motion of the boat comes from the larger waves that have formed farther out into the big lake surface; but still have impact into the shoreline of the safe harbor.
We find any number of boats in the area; some of whom have also taken safe harbor. A few have pulled their boats completely out of the water. There are other boats, confirmed with a look through the binoculars; that are navigating along into the bigger waves at various distances from the shoreline, and one knows there are other boats much farther out into the open waters of the big lake, but beyond the view of the horizon. We do hope that the weather radar systems upon all of these boats are in proper working order and that the pilots are able to recognize meaningful images to avoid the sudden; sometimes localized, and sometimes far reaching storms that come to be upon the Great Lakes.
Using the weather radar systems allows one to avoid most of the in place and obvious storms; but it is the weather fronts moving into positon that are most difficult to predict. Some of these will never develop into anything meaningful; other than some rain and wind. Some will become storms that pose the potential to do damage to one's boat.
Obviously, as our boat is in a relatively safe harbor, based upon our reading of the weather radar; we do not have the same comittment as those who choose to ply the open, equity waters. From our recent observations of the number of boats in safer harbors, versus those in the open equity waters; there remains a division of how the images upon the weather radar are being interpreted, relative to the weather fronts one may view.
For the below video link, click onto the name title first for a full screen play; so that you may then click onto the "show more" just below the video image which will let you view the text of the radio transmissions and the song lyric.

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
Portfolio Thoughts:
Our holdings had a +1.35 % move this past week. And yes, we are satisfied with our risk adjusted returns YTD. If the portfolio can pull a +10 to 12% for the year; you will not hear any whining from this house. (This sentence was from an April write; and I/we suppose a +5% for the year may now look good, too !) Our portfolio is at - 3.65 % from the high point in mid-July.
The old Funds Boat may make 5% or 25% this year. I expect some rough waters, changing winds and opposing currents; causing the most serious attention being given to a firm hand upon the rudder control. (April report text)
Relative to our PTTRX holding, which is the only broad based bond portfolio available in one account; we continue to remain surprised that Mr. Gross' view of Pimco's "new normal" did not match the placement of the portfolio holdings, and the lack of performance YTD. For those checking any of the portfolio holdings, FTBFX had a short term distribution of .042/share and long term distribution of .094/share that is reflected in the NAV change of -1.36% on Friday.
We can hardly wait until Oct. 31 to find whether it will be the trick or the treat.
The immediate below % of holdings are only determined by a "fund" name, NO M* profile this week
CASH = 8.3%
Mixed bond funds = 83.6%
Equity funds = 8.1%
-Investment grade bond funds 23%
-Diversified bond funds 18.5%
-HY/HI bond funds 23.2%
-Total bond funds 14.6%
-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

Reply to @scott: What I am completely perplexed about is why this market has gained so much in the last several weeks. As you said, there have been NO real fixes to anything. The machines must be tired of playing only with themselves and want to spike the market so the rest of us will think all is ok and get back in in fear of missing the great bull market coming. Of course, once/if that happens, the machines will grab all their gains before the bears shoot it all down.
Re Fairholme and "Managers of the Decade". Same thing happened with Gross and PTTRX. I wonder if there is a survey on how many Managers who got that award then proceeded within the next 1-2 years to drop to the bottom of their category returns.

http://www.marketwatch.com/story/litman-gregory-launches-alternative-strategies-fund-2011-10-05
Not much press so not sure anyone caught this last week or saw this coming prior to this. Just opened this month. Quite a lineup.
-- DoubleLine Capital: Jeffrey Gundlach - Opportunistic Income
-- FPA: Steven Romick, Brian Selmo, Mark Landecker - Contrarian Opportunity
-- Loomis Sayles: Matt Eagan, Kevin Kearns, Todd Vandam - Absolute-Return Fixed-Income
-- Water Island Capital: John Orrico, Todd Munn, Roger Foltynowicz, Gregg Loprete - Arbitrage

Reply to @catch22:
Hey Catch, I would consider YAFFX as a replacement for FSLVX. I would say YACKX but that is no longer NTF at Fidelity. Nevertheless, both Yacktman funds are very similar.
Alternatively, you can invest in a couple of good balanced funds and have the manager manage the bond/equity allocation for you. That way, you are less likely to be jumping in and out at wrong times. A few to consider: GLRBX, OAKBX, PRPFX, FPACX
Regarding allergies: I am sorry for you. Before I moved to Austin, I did not know much about allergies. I think within 5 years most people develop some allergies here. Some people claim Austin is the allergy capital of the world. I don't know if it is true. (Austinites also believe and advertise as Austin the Live Music Capital of the World)
Being Generation X, there are no pensions for me either. No cushy health benefits attached to a pension either. With the Republicans out there to destroy Medicare and Social Security as we know it, I think retirement will be much more difficult for me. I am not sure, if I will be able to build a big enough fund by then. I am not expecting a big inheritance to bail me out either. I still have 2 kids to send to college and college costs like health care is increasing much higher rate than inflation.
Bonds or equities? I wish, I knew. If I knew, I would buy long treasuries this summer. I am pretty heavy into equities but have a long time horizon.. Despite that I'm down ~5% YTD after recent rally. I try to get myself to buy a small amount on equities large down days. I think in the next 12 months market will be higher than now.

Wonder if new fund will have a load like FPA Capital, Perennial or Paramount or will it be like Crescent and have no load?

Reply to @catch22:
Hi Catch. Just my opinion, but your question on bonds or equities (?), I wouldn't make it an either or. You need to be conservative as you say, but I believe some equity funds are worth holding in what ever percentage you feel comfortible with.
What would I replace your Fidelity Value fund with? I think that's an easy one... my favorite funds have managers with capital preservation at the forefront and have a good history in bad markets would be either of the Yacktman funds, YAFFX is what I hold or the Parnassus Equity Income fund PRBLX. For small caps, the new ARIVX has been a standout. YAFFX and ARIVX are the only pure equity funds I'm holding on to right now. And they are "comfortable".
Just my 2cents. Good luck.

HI Investor,
I'll do the old FA method for replies:
"SELLs/BUYs THIS PAST WEEK:
Sold entire postion in CAMAX, FSAVX and DHOAX, with all procedes going to FBNDX. We took it in the teeth with the first two......oh, well; tis how the cookie crumbles sometimes.
It looks like you bought CAMAX close to the top and and after you sold, stock funds has actually rallied significantly this week. Buy high sell low huh?
>>>>>As to CAMAX, bought high, relative to our sale price; but it remains to be seen if the sale price is the low. As to significant gains in the past week; it appears the fund was outperforming in up markets; but is having a hell of a time getting it right in a sideways market. The fund is acting like a long/short fund and having problems with the proper direction. So, gone it is. FSAVX.....really thought there would be more going forward, although not at the 2009 pace; so, gone, too. DHOAX...we had held this since May, 2009; but the fund was not holding up as well as the other HY funds....so, gone, too. All of this was and is still part of a "dump" waiting to be made.
Anyway, I know at the 1st qtr, you were starting an imaginary portfolio of funds. Did you check how it performed recently?
>>>>>The Grand Illusion fund. The portfolio mix is in place and the list is parked somewhere on this pc. I have not had time this summer to even look at the results so far. I will attempt to find this and place the list at MFO. Where we live in Michigan finds only about 2 more weeks of possible decent outside weather; to attempt to finish any outside projects. As we own and maintain our home (ah, the joys of home ownership :)...) some of the spring or fall months, and the summer days when there is no rain many times provide only "x" number of days to get anything accomplished. This summer, for me; had two downside kickers. I discovered I now have allergies to something outside and lost most of the month of June to do physical work outside; and my mother decided to buy a new home and move.........60 years worth of upwind at her previous home..........another month of unscheduled other work. Not the warmer weather project period I had envisioned last winter.
Addition: I am also curious why you continue to hold the Fidelity Large Cap Value fund which you purchased by mistake. I don't think it is a great fund either. Why not reallocate that fund into another fund?"
>>>>>This fund has had some very nice up days when the equity markets think they are happy. It isn't doing as poorly as many equity funds. What would you buy with the sale of this fund; knowing the overall moderately conservative mix we now have ?
Summary: The last two years has found us being Euro-ized two times. In May of 2010 and 2011. I was much too optimistic with the willingness and ability of the EuroZone leaders to come to grips with their problems. Our equity holdings have suffered from this and downsized the returns we have been slowly gathering in the bond sector. We were also expecting continued value in the Treasury bond area; but that sector has far surpassed our wildest thoughts about this.
Doing the silly rearview look at our portfolio: We would not have purchased many eqiuity funds in May, 2010 or 2011. We missed the equity move from the Sept. 2010 period. And we sure would have purchased a boat load of Treasury related funds in July of this year; had we known this area would exceed our optimistic view.
Either the bond market or equity market area is wrong at this time; looking forward to the next 6-12 months. This is an easy statement to make; but not easy to "call" looking forward.
As there are very few here (MFO) who have noted their holdings; I sure don't know how we measure against a similar portfolio, with the exception of Skeeter who notes his moves, but I don't know the holdings.
Our main goal; as is indicated, is to preserve capital, as we are not far away from no cash flow from "work". We will not have any grand pension or health care plan into retirement; as is common for many in this state related to the large boomer population retired from the unionized auto industry and the related large group of retired from what was a very large group of folks in the gov't/teaching/public sector; all of whom have very nice retirement packages. Without a post retirement health care plan provided and pre-Medicare retirement; a family plan here for health/dental currently has quotes of about $20,000/year with fairly high deductibles. We have always been aware of all of this with our chosen careers and have planned accordingly with building our own pension fund via IRA's, 401k's and related. We skipped all of the toys one used to find among the families in our area....the boats, snowmobiles, jet skis, the second home or cottage at the lake, etc. When we wanted or needed these adventures............we rented. We are debt free, with the exception of the normal recurring expenses.....property taxes, utilities, home/auto insurance, food and gas, etc.
So, there it is in a nutshell. We don't knowningly have a rich aunt, uncle or similar flowing inheritance money our way in the future, the self provided health care plan is going to cost an additional 9%/year at the current rate changes and we have our fingers crossed that we don't outlive our money.
While still seeking perfection in the invesment world, we will continue to make mistakes from not having time for the best research and will also be whipsawed by the perverted markets. Other than all of this, life is good.
I stepped through this reply fairly fast; and hopefully there are not many typos or mismatched thoughts; as I did not proofread the text.
Bonds sector or equity sector going forward for the next 6-12 months ??? What say you ?
Be well in Austin,
Catch

Reply to @Old_Joe: When you search the article title via Google and access the article via Google you can often read the full article w/o membership.
Search for "Big Banks Find No Comfort in Capital Cushion‎" on Google.

Reply to @johnN: Yes, John, that's exactly what I did, and I obtained the complete article. However when I test-transferred the link to MFO it produced only the truncated "preview" version. Since the results were inconsistent and unpredictable, I elected to not post the link. However, here is that link- it may or may not work properly: Wessel WSJ Article

Here's an excerpt from a good article in today's WSJ- I can't link it, as they require a subscription.
"The two dozen or so big banks woven into the fabric of the global economy are a special case: If they go, it's not only their shareholders and creditors who get hurt; everyone does. Because of that, everyone expects governments to rescue them.That can be costly, and gives those institutions an edge in raising money, taking risks and attracting customers over banks that are "too small to save."
Big banks can be vital to the global economy, though how big is big enough is a question yet to be answered. Big trucks are good for the economy, too. They can carry lots of stuff and do things cars can't. But you don't want to be on the road when a truck crashes and explodes. So we require tougher safety standards for trucks than cars, more training for their drivers, and so on.
"The right response," Federal Reserve Chairman Ben Bernanke told Congress this week, "is to put extra cost, extra supervision on these [financial] firms that will give them an incentive to eliminate unnecessary size, to eliminate unnecessary activities and to reduce their risk-taking."
One approach to dealing with this small group of big banks: Make them hold even more capital, as a percentage of assets, than other banks. Leaders of big banks—mostly loudly J.P. Morgan Chase's Jamie Dimon here in the U.S.—aren't happy. No surprise: The rule is likely to reduce their profits and limit their dividends."
One more thing: There's an alternative to requiring the biggest banks to hold extra capital, which bankers would like even less: Break them up.

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; if and when it returns. 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..... The equity dump truck has its motor running and we just about pulled the lever to dump the whole related batch last week. As the market blipped up a few days, we did sell CAMAX, FSAVX; as well as DHOAX, in the bond sector. DHOAX in particular, for a technical aspect; indicated a Relative Strength that would indicate a buy for some folks. The encounter with this is what is fair value or undervalued. While I don't have any writes to direct to this area from 2008; one must suspect that there were enough "professionals" in the investment world who continued to find stuff "undervalued" per their guage. Some of these folks likely continued to be surprised for the next 6 months from Oct. 2008, as to what undervalued might really become. We all have our own guage to measure what we feel may be undervalued today; versus the unknown forward paths, and how the investments fit into our risk/reward scenario.
Most of Europe and the U.S. still find problematic conditions that remain paralyzed by both legal (Europe) and political circumstances. I can not begin to fully understand the most complex nature of the required interactions needed among the European nations that would offer a more positive prospect of corrective actions. The U.S.; well I sure don't find much comfort with the actions in D.C.; and sadly, there are some very decent folks there who work very hard and become road kill to the movers and shakers.
I can only offer this video link; in regard to the machinations of those in Europe and the U.S. who fiddle while the fires burn. I believe I had previously posted at FundAlarm.

VAN HALEN lyric:
Don't wanna wait 'til tomorrow
Why put it off another day?
One by one, little problems
Build up, and stand in our way. Oh
One step ahead, one step behind it
Now ya gotta run to get even
Make future plans I'll dream about yesterday, hey!
Come on turn, turn this thing around
(Right now) Hey! It's your tomorrow
(Right now) Come on, it's everything
(Right now) Catch your magic moment
Do it right here and now
It means everything
Miss a beat, you lose a rhythm
An nothin' falls into place. No!
Only missed by a fraction
Slipped a little off your pace. Oh!
The more things you get, the more you want
Just trade in one for another
Workin' so hard to make it easy
Whoa, got to turn. Come on, turn this thing around
(Right now) Hey, it's your tomorrow
(Right now) Come on, it's everything
(Right now) catch that magic moment
Do it right here and now
It means everything
Said a lie to me
Right now
What are ya waitin' for? Oh! Yeah!
Right now
(Right now) Hey! It's your tomorrow
(Right now) Come on, it's everything
(Right now) Catch that magic moment
And do it right, right now (Right now)
Oh, right now!
It's what's happening
Right here and now
Right now, it's right now
Oh!
Tell me, what are ya waitin' for?
Turn this thing around
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:
Sold entire postion in CAMAX, FSAVX and DHOAX, with all procedes going to FBNDX. We took it in the teeth with the first two......oh, well; tis how the cookie crumbles sometimes.
Portfolio Thoughts:
Our holdings had a -.34 % move this past week. And yes, we are satisfied with our risk adjusted returns YTD. If the portfolio can pull a +10 to 12% for the year; you will not hear any whining from this house. (This sentence was from an April write; and I/we suppose a +5% for the year may now look good, too !) Our portfolio is at - 5 % from the high point in mid-July.
OMG. was the first word cluster from the mouth at this house when discovering the portfolio was still positive for YTD.
DON'T like the recent action in the HY bond sector, not moving up much with the few equity blips. I take this as a traders market in equities with some "run and gun".....take some profits and run. Our sells this past week of the above indicated and moving to an IG bond fund tells you just about all you need to know about our feelings as to forward directions. More head scratching next week; without a doubt. We'll still maintain that if the kids in Europe get a real plan of value that is is accepted and not just show and tell; our portfolio will get a big kick down and those of you holding equity positions will smile. I/we here just don't feel the "love" of a plan of purpose headed down the path, anytime soon. So, we too; are in the darn if you, darn if you don't camp. And for the time being, we are stuck with PTTRX as the only bond fund in one particular account. At least its value is not yet negative. LSBDX may get a rework/trim job; as it is not happy in this current environment either.
The old Funds Boat may make 5% or 25% this year. I expect some rough waters, changing winds and opposing currents; causing the most serious attention being given to a firm hand upon the rudder control. (April report text)
The immediate below % of holdings are only determined by a "fund" name, NO M* profile this week
CASH = 8.3%
Mixed bond funds = 83.6%
Equity funds = 8.1%
-Investment grade bond funds 23%
-Diversified bond funds 18.5%
-HY/HI bond funds 23.2%
-Total bond funds 14.6%
-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

Thanks for reminding me Scott,
I bought and sold WWNPX as well but my biggest disappoint came out of the momentum of the 1990s. Most funds got piled into after the money had been made...I fell victim to the classic "chasing a falling star" syndrome. There are a lot of these situations and funds we should try to avoid. Bill Miller's Legg Mason fund(s), Hebner's CGM Focus Fund, and most recently Bruce Berkowitz and FAIRX.
This was also the case with my choosing Vanguard US Growth fund, VWUSX, back in 1998. I rode this fund up its last ascent and like most investors felt comfortable with the mantra of "buy and hold". As this fund bottomed so did the market and I tried to better educate myself as an individual investor. I stumbled across Roy's website FundAlarm and his "alarm system". I took my losses with VWUSX and moved the proceeds into "new" ideas. I also learned that selling is actually part of the "buy and hold" process. Selling is the realization of a gain or a loss. When I sold these shares I made other investment choices...I continued to hold investments...just not this "three alarm" fund. I came out of the 2000-2002 bottom holding better assets than if I had just held VWUSX. I owe FundAlarm, its contributors, and some luck for this.
I linked Yahoo finance's chart which is merely a price chart, not a price and dividend chart. It paints a picture that we all wish to avoid. I included my "switch to" fund at the time, VHCOX, so that a "rear view mirror" comparison between the two funds could be illustrated. Again, Yahoofinance does not include dividends so these are not perfect performance charts but they do illustrate my point. By switching from VWUSX to VHCOX it provided me with better performance...larger gains...than if I had just "bought and held". I guess I am a "buy and and try to upgrade" type of investor now.
Select "max" to see the funds 20 year performance comparison:
http://finance.yahoo.com/echarts?s=VWUSX+Interactive#chart2:symbol=vwusx;range=my;compare=vhcox;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
Remember that wealth is something we try to realize at the top of a markets (...only if we sell...take profits). Opportunity is what an investor looks for at the bottom of markets.
bee

VF, I've done the same thing all year with Vbltx, Vanguard's long term index. I own a tiny bit, but never ramped it up, while it's racked up huge gains maybe not to be repeated for the next century or so.