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.

Reply to @CathyG: I think it's really tough - Managed Futures funds really do have the potential to gain during tough periods, but on the other hand, don't expect them to go to the moon during good times either. It's the risk trade-off. Arbitrage is similar -AQR has a good diversified arb fund. Sometimes these strategies also have off years. AQR has a new fund that places funds across several alternative strategies (including arbitrage, long-short, macro, managed futures and more; they can increase/decrease allocations to the strategies they feel will outperform and there are 9 strategies in the fund) I have confidence in AQR, although this fund has started off a little shaky for a fund of absolute return strategies. I do own it though, and will continue to keep it and may add a bit more.
I have lessened risk in the past few weeks, and really think I've wrapped things up for the year (and getting a little tired of thinking about investing. I'll still chat here all the time, but I just don't want to be thinking about it as much otherwise.) However, while I think things could deteriorate further, I will not be shorting; I'd rather lessen risk than outright short because I just think that you'll continue to see reactionary and possibly increasingly desperate measures from policy makers to try and keep the status quo. People can be short fundamentally, then a rumor takes the market up 400 points in 45 minutes. I'd rather just dial down risk and volatility.
I own Bluecrest Allblue on the London market, which had low double digit NAV gains in 2007 and 2008 (traded at a discount and lost slightly from a share price perspective in 2008, but the underlying NAV gained), then gained quite nicely in 2009, but as with anything else, past performance isn't necessarily indicative of future performance. It definitely might not do well in another downturn, but it has the *potential* (flexibility, tools, etc) to do so.
I own (as of last week or so) Greenlight RE (GLRE), which is a reinsurance company whose float is invested, Berkshire Hathaway-like, with David Einhorn's Greenlight Capital hedge fund. Greenlight RE has not done well this year and the stock did not do well in 2008, but Einhorn has the long/short tools to perform in a tough market, and hopefully the next downturn will be different, but with anything else, no guarantees. Overall though, I like placing money with Einhorn - whose low-key, seemingly low-ego manner I respect and whose views I really agree with - over the long term, and I thought the price was right (trading closer to book value, as well, whereas the stock usually has traded at a more substantial premium - the stock does not track the underlying hedge fund's performance very closely - it can trade over/under) after the turn South the stock had taken earlier this Summer. It's certainly volatile, but again, trying to find funds and other investments with a wider variety of options and flexibility. Not a big investment, but felt comfortable with this as a long-term play after it was quite a bit higher not too long ago. Apparently other hedge fund managers are looking at this structure - popular hedge fund Third Point has started a reinsurance company whose float is invested in Third Point; that will apparently go public soon, although Third Point Offshore (TPNTF.PK) can be found on the pink sheets (but it's terribly illiquid and volatile; it traded at a huge discount to NAV in 2008.)
AQR Risk Parity is an interesting, unique strategy - it's a different take on the allocation fund. It isn't going to gain in a 2008 scenario, but Risk Parity strategies did hold up pretty well during that downturn. There is a paper going over the strategy on AQR's website. The AQR fund's allocation is listed on their website - the way that the fund is structured (it is entirely derivatives-based, futures, etc; it does not invest in individual stocks, it invests in index futures around the globe) doesn't seem to be able to be listed on M*'s website. Asset allocation and top holdings are at the link below.
http://aqrfunds.com/Our_Funds/Individual/FundID_13/Key_Facts/Risk_Parity_Fund.fs
The EM debt situation has rattled a lot of good funds this year (TGINX, as well); I think the asset class has a good future and is something I'd recommend a portion of assets be devoted to for those with fixed income, but if one doesn't own any, I'd DCA in slowly over time.
I think that it was really discussed as a safe haven and attracted a huge amount of inflows (I started selling TGINX when they announced that their assets under management had increased several times over in the span of about 10 months) to what is a relatively small asset class; when investors started leaving towards the "safer harbor" (heavy emphasis on the "'s) of US and developed market debt, it really seemed to cause ripples in the EM debt market and that could continue. Too many people ran in, now that they're going the other way, they're finding it difficult (as discussed in the article below.) I think that managers like Hasenstab are going to navigate this well over the mid-term, and if EM debt keeps heading South, I'd actually look at making some room for a little bit.
It is definitely a volatile asset class; it has performed exceptionally well in 2009/2010, but be prepared for the kind of price action that TGINX (for example) took pretty quickly in 2008.
This article spells out the worst case scenario for EM debt. Systemic crisis seems like a bit much, but it outlines what has been happening. If things start getting on solid footing around the world, you'll probably see the tension in this market start to cool a bit.
http://www.globalpensions.com/global-pensions/news/2112073/em-debt-systemic-crisis
"“There are a handful of enormous global bond investors with heavy exposure to local currency emerging market debt, with some owning over 50% of individual EM sovereign bond issues. If the end investor wants to sell, the fund has to sell, and what if there is no-one that wants to buy,” he said.
“EMD has never had to deal with huge outflows before – in 2009 the foreign ownership was not as large – and liquidity is completely drying up.”"

Reply to @scott: Thanks for your follow-up, Scott... always informative. The Portfolio's I'm managing have weathered all this very well, under the circumstances. I squeezed out +.28 last 3 months and +4.94 YTD, so I consider myself lucky. As much as I liked the managers of my Asian Fund (MAPIX), I sold all almost a year ago (kept very minimal amount in MSMLX). My major stake in DBLTX has done very well, as has IAU (even with the recent drops). I'm a little worried about TEGBX's and Emerging market losses and their short-mid term future - my PGBDX has done a lot better during these awful markets. Small stake in long govt (VUSTX) has done very well, and short terms and multi-sectors hanging in there. One of the nice aspects of having such a small percentage (-14%) in equities (YACKX, ARIVX, those in BERIX, etc.) is I am ok keeping them as they help me with some gains (or less losses) in the few "good day" markets. So, overall, my Portfolio is close to as "peaceful" as I can get.... I'm just not familiar enough with awful market trends to know if these downturns could be normal for bear market.... or how bad the extremely high volatility, awful news everywhere, etc. could mean for even my very Conservative Portfolios. (And, on the "plus" side, the Portfolio I invested for Mom is still ahead 5+% over last 14 months.... whereas the same amount my sister invested with USB is now in negative territory, so that gives me some bizarre pleasure (even though it means loss to Mom).

http://www.sec.gov/Archives/edgar/data/1000351/000089710111001691/leuthold114603_497.htm
Effective as of the date of this Supplement, Steven C. Leuthold is stepping down as a portfolio manager of the Leuthold Funds and as the Chief Investment Officer of the Leuthold Funds’ investment adviser, Leuthold Weeden Capital Management. Douglas R. Ramsey has assumed the role of Chief Investment Officer for Leuthold Weeden Capital Management. All references in the Prospectus to Mr. Leuthold as a portfolio manager of the Leuthold Funds and as Chief Investment Officer of Leuthold Weeden Capital Management are hereby deleted from the Prospectus. Specifically, the Sections of the Prospectus identified below are deleted and replaced as follows:
1. The first paragraph under the Section titled “Portfolio Managers” for the Leuthold Core Investment Fund, on page 5, shall read in its entirety as follows:
“Portfolio Managers
Andrew J. Engel, CFA, Douglas R. Ramsey, CFA, and Matthew B. Paschke, CFA, are the portfolio managers of the Fund. Mr. Engel is a portfolio manager and a member of the Adviser and has been a senior analyst of the Leuthold Group since 1986. Mr. Ramsey is the chief investment officer and a portfolio manager of the Adviser and has been a senior analyst of the Leuthold Group since 2005. Mr. Paschke is a portfolio manager of the Adviser and has been a senior analyst of the Leuthold Group since 2000.”
2. The first paragraph under the Section titled “Portfolio Managers” for the Leuthold Asset Allocation Fund, on page 10, shall read in its entirety as follows:
“Portfolio Managers
Matthew B. Paschke, CFA, Andrew J. Engel, CFA, and Douglas R. Ramsey, CFA, are the portfolio managers of the Fund. Mr. Paschke is a portfolio manager of the Adviser and has been a senior analyst of the Leuthold Group since 2000. Mr. Engel is a portfolio manager and a member of the Adviser and has been a senior analyst of the Leuthold Group since 1986. Mr. Ramsey is the chief investment officer and a portfolio manager of the Adviser and has been a senior analyst of the Leuthold Group since 2005.”
1
3. The first paragraph under the Section titled “Portfolio Managers” for the Leuthold Global Fund, on page 15, shall read in its entirety as follows:
“Portfolio Managers
Matthew B. Paschke, CFA, Douglas R. Ramsey, CFA, and Chun Wang, CFA, are the portfolio managers of the Fund. Mr. Paschke is a portfolio manager of the Adviser and has been a senior analyst of the Leuthold Group since 2000. Mr. Ramsey is the chief investment officer and a portfolio manager of the Adviser and has been a senior analyst of the Leuthold Group since 2005. Mr. Wang is a portfolio manager of the Adviser and has been a senior analyst of the Leuthold Group since 2009.”
4. The first paragraph under the Section titled “Portfolio Managers” for the Leuthold Select Industries Fund, on page 18, shall read in its entirety as follows:
“Portfolio Managers
James E. Floyd, CFA, Chun Wang, CFA, and Matthew B. Paschke, CFA are the portfolio managers of the Fund. Mr. Floyd is a portfolio manager of the Adviser and has been a senior analyst of the Leuthold Group since November 1981. Mr. Wang is a portfolio manager of the Adviser and has been a senior analyst of the Leuthold Group since 2009. Mr. Paschke is a portfolio manager of the Adviser and has been a senior analyst of the Leuthold Group since 2000.”
5. The first paragraph under the Section titled “Portfolio Managers” for the Leuthold Global Clean Technology Fund, on page 26, shall read in its entirety as follows:
“Portfolio Manager
David H. Kurzman is the portfolio manager of the Fund. Mr. Kurzman is a portfolio manager of the Adviser and has been a senior analyst of the Leuthold Group since 2009.”
6. Under the Section “Management of the Funds – Leuthold Weeden Capital Management manages each Fund’s investments,” on pages 44 and 45, (a) Mr. Leuthold’s biographical information is deleted; (b) Mr. Ramsey’s biographical information is revised to read in its entirety as set forth below; and (c) the table identifying the portfolio managers is revised to read in its entirety as set forth below:
“Mr. Ramsey is the chief investment officer and a portfolio manager of the Adviser and has been a senior analyst of the Leuthold Group since 2005. Prior to joining the Leuthold Group, Mr. Ramsey served as the Chief Investment Officer for Treis Capital Management from 2004 to 2005. Mr. Ramsey served as a portfolio manager for Principal Global Investors from 1997 through 2003.”
2
“The following table identifies the portfolio managers for each of the Funds. The portfolio managers are equally responsible for the day-to-day management of the Funds that they manage.
Fund PMs
Leuthold Core Investment Fund Andrew J. Engel, CFA
Douglas R. Ramsey, CFA
Matthew B. Paschke, CFA
Leuthold Asset Allocation Fund Matthew B. Paschke, CFA
Andrew J. Engel, CFA
Douglas R. Ramsey, CFA
Leuthold Global Fund Matthew B. Paschke, CFA
Douglas R. Ramsey, CFA
Chun Wang, CFA
Leuthold Select Industries Fund James E. Floyd, CFA
Chun Wang, CFA
Matthew B. Paschke, CFA
Leuthold Global Industries Fund Matthew B. Paschke, CFA
Greg M. Swenson, CFA
Leuthold Global Clean Technology Fund David H. Kurzman
Leuthold Hedged Equity Fund Matthew B. Paschke, CFA
James E. Floyd, CFA
Greg M. Swenson, CFA
Grizzly Short Fund Matthew B. Paschke, CFA
Greg M. Swenson, CFA
* * *
The date of this Supplement is October 3, 2011.
Please retain this Supplement for future reference.

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..... Apparently, this house in reality, is running a market neutral fund. :) I jabbered enough about my market perspective and the challenges in the PRE funds boat note on the 30th; this section, this week will be about the "what to do now" aspect of our portfolio; if indeed any actions are required. A first note that M* indicates that the portfolio has an overall yield of 4.27%. This write generally reflects thoughts with our bond holdings, being the biggest chuck of our money; but must be countered with the actions of the equity holdings and forward directions, and in particular, our high yield/income bond funds with their more related linkage to actions of the equity cousins. A non-scientific look at HY bonds vs equity actions since August 1, shows that for every 1% decline in a broad U.S. equity index, one would find about a 1/3% price decline in the HY area. This changed this past Friday, Sept 30; when HY price declines just about matched the decline of pricing in the broad equity area; and finally pushed our HY funds to mostly negatives for YTD. 'Course this action has caused yields to increase to higher and tempting levels; but at the cost of lost NAV. A few considerations of cause and effect in the next 6-12 months; as I still feel that the complex nature of "fixes" for the U.S. and Europe will remain entangled by and with political and legal (in the case of Europe) problems with the likely overhang of whether any "fixes" or decisions are credible and/or proper to the point of being real fixes:
1. The last quarter of the year for the fund managers is here and now. Some equity fund mgrs are in the "rock and hard place" zone, somewhat locked in place by the prospectus. Some bond funds are also similarly stuck. So, as usual; one must decide the who, what and where of matching a fund type to what one feels may be the market actions of the next 6-12 months. This is where the "flex" (in and out of a sector, without having to wait until the end of the trading day) of using an etf fund is of value; and no less, the ability via prospectus and finely tuned manager(s) decisions for a traditional mutual fund.
2. Pension funds: These folks will always maintain a core bond postion of some flavor or another. Based upon their internal forecasts for forward equity actions; and their need to generate cash flow, I anticipate accelerated bond yield chasing, i.e.; reworking and re-allocation of their bond sectors. This may bode well for support in the HY and other bond sectors.
3. Mutual funds: The same thinking applies to some bond funds. The "late to the party" crowd are moving more monies to U.S. bond issues.....Pimco, TCW and others. I suppose they have become believers to the serious problems. I sure don't know how Mr. Gross and co. missed this move, being Pimco gave birth to the "new normal".
4. The continued strength of the U.S. dollar; albeit, perhaps only for the next 6-12 months does indeed affect values of funds. If and when this does flip downward again, one's dollar will buy more of whatever that is not denominated in $US; if you catch the near top, before the down move.
So, what to do? Monday will tell this house more; but we may sell down some percentage (25%) of HY) and move the monies to a more flexible bond fund to allow for the decisions of management among what type of bonds to hold. We have no reason to "whine" about our HY/HI holdings, as these have been held since May/June of 2009 and have paid us well. 'Course this has not worked very well with having Pimco manage our holdings in PTTRX; and sadly, this is the only bond fund available in one retirement plan. So, we are stuck with this for now. Perhaps strange to some, is why we would hold FSAGX in such an economic environment. Our house will place this holding in line with the need to have insurance on the house and cars. The money is there for some protection that may never be needed; but may be foolish to "not" have. As to our current equity holdings, well; a real head scratcher with these, as our percentage is not very large, but continued down moves of these will still "nickel and dime" our losses. Fido Select Auto, Fido commodity holdings and CAMAX are the only real big dogs, YTD. Auto is in play as to some of the companies held that support select areas (Auto Zone/related) as many folks are going to fix and not buy good used or new vehicles. We are also "betting" on earnings of auto companies with sales in the asian markets. Fido commodities fund is a tough one, too. We still feel that the equity holdings here are being beat up with the rest of the equity markets, but not for any real and proper reason. Yes, some of the holdings are related to real demands in some sectors....copper, etc.; which have real uses in growing economies; but there is a "real" base of use and need for the energy and agriculture sectors of this fund.
I thought this would be a more clear cut and easier write, that this house was just going to sell this or that; and move the monies to such and such fund(s). A weekend of pondering this has not brought forth a more clear vision. :):):) I sure as heck hope I/we have not just added to the "confusion" of the markets. I suppose that this house can not whine too much for our YTD performance; but, with what we are invested in, the ride down has been much slower for the past 2 months; but this portfolio also takes much more time to recover to higher YTD levels.
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 -.89 % 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 - 4.7 % 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)
The immediate below % of holdings are only determined by a "fund" name, NO M* profile this week
CASH = 8.3%
Mixed bond funds = 81.8%
Equity funds = 9.9%
-Investment grade bond funds 18.6%
-Diversified bond funds 18.5%
-HY/HI bond funds 25.8%
-Total bond funds 14.6%
-Foreign EM/debt bond funds 4.3%
-U.S./Int'l equity/speciality funds 9.9%
This is our current list: (NOTE: I have added a speciality grouping below for a few of fund types)
ALSO, this week indicates yield/YTD data after the fund name
---High Yield/High Income Bond funds
FAGIX Fid Capital & Income (6.4%/-6.5%)
SPHIX Fid High Income (6.9%/-2.8%)
FHIIX Fed High Income (8%/-1.2%)
DIHYX TransAmerica HY (8.6%/-1%)
DHOAX Delaware HY (front load waived) (6.7%/-4.9%)
---Total Bond funds
FTBFX Fid Total (3.3%/+5.5%)
PTTRX Pimco Total (3.3%/+1.9%)
---Investment Grade Bonds
APOIX Amer. Cent. TIPS Bond (2.4%/+7.7%)
DGCIX Delaware Corp. Bd (5.2%/+4.8%)
FBNDX Fid Invest Grade (2.8%/+6.6%)
FINPX Fidelity TIPS Bond (.8%/+10.2%)
OPBYX Oppenheimer Core Bond (4.9%/6.2%)
---Global/Diversified Bonds
FSICX Fid Strategic Income (4.5%/+1.7%)
FNMIX Fid New Markets (5.2%/+2.4%)
DPFFX Delaware Diversified (4.4%/+4.2%)
TEGBX Templeton Global (load waived) (5.3%/-3.9%)
LSBDX Loomis Sayles (5.7%/+1.2%)
---Speciality Funds (sectors or mixed allocation)
FCVSX Fidelity Convertible Securities (bond/equity mix) (3.7%/-12.4%)
FRIFX Fidelity Real Estate Income (bond/equity mix) (5.3%/-1.2%)
FSAVX Fidelity Select Auto (0%/-32%)
FFGCX Fidelity Global Commodity (1.2%/-24%)
FDLSX Fidelity Select Leisure (.6%/-8.5%)
FSAGX Fidelity Select Precious Metals (0%/-11%)
RNCOX RiverNorth Core Opportunity (bond/equity) (2.9%/-8.2%)
---Equity-Domestic/Foreign
CAMAX Cambiar Aggressive Value (.3%/-26%)
FDVLX Fidelity Value (1.5%/-16.9%)
FSLVX Fidelity Lg. Cap Value (1.4%/-12.6%)
FLPSX Fidelity Low Price Stock (.7%/-8.6%)

Thanks Kenster,
Cory G is also co-manager of MFCFX = Marsico Flexible Capital Fund. Keeping a close eye on this holding I own.

Gundlach Has No Europe Bets, Likes Corporates
Jeffrey Gundlach's DoubleLine Capital LP is invested only in U.S. dollar-denominated assets in a bid to avoid losses stemming from Europe's debt crisis.
"All of our international exposure is in dollars," Gundlach, the founder and head of Los Angeles-based DoubleLine, said at a panel sponsored by the firm in New York today. "There's a big loss in Europe and all we want to do as investors is make sure as best we can that we're not the ones taking the loss. How do you do it? No investments in Europe."
{...}
"I like junk bonds a lot better than I did six months ago, but I am not ready to buy them yet," he said. "The high yield bond market is going to have a default problem in late 2012 or 2013."
{...}
"We're not going to be ready to jump back in to high yield basically until Greece is solved," said Bonnie Baha, head of DoubleLine's global developed credit group.
Even with the yield on the 10-year Treasury notes below 2 percent, long-term government bonds make sense as a hedge, Gundlach said.
http://www.bloomberg.com/news/2011-09-28/gundlach-s-doubleline-has-zero-euro-exposure-as-losses-loom.html

Only Flexibility Can Restore Growth
Rigidities in Global Markets are Impeding Recovery
By Andrew Foster | Posted: 09-28-11
http://news.morningstar.com/articlenet/SubmissionsArticle.aspx?submissionid=128096.xml&part=1
[Andrew Foster is the CIO and founder of Seafarer Capital Partners, a newly-formed firm focused on overseas markets. Prior to Seafarer, he worked at Matthews International, advisor to the Matthews Asian Funds, where he was a portfolio manager, director of research and acting CIO.]

Hi John and others,
Quote From your link:
interestng article for fix income minded investors
http://advisorperspectives.com/commentaries/pimco_92111.php
"...we place a lot of emphasis on downside hedging. Investors certainly want to participate in market upside, but, in our view, avoiding losses may have greater impact over the long term. Our belief is that no matter how strategies may perform in strong markets, if they do a terrible job during down markets, investors lose."
My Question:
What are some of these downside hedging strategies we all want to be aware of? I have to agree that losses have greater impact over the long term so how do you participate in the upside while hedging the downside?
Here is what I try to use as strategies:
I try to take profits (10-20% gains) from my temporary "alpha" investments and place these profits into a Total Return, Income or core Investments (PTTDX, TGMNX, USAIX, PFPFX). Most recently I took profits (20% gain) from a Precious Metal & Mining fund (USAGX) and established a position with these profits in USAIX (an Income fund)
I try to take profits (10-20% gains) from my "alpha" investments and place these profits into other out of favor Alpha Investments. Here, I reference other sector investments and its position in the business cycle. There are always out of favor sectors. Some can stay out of favor for a very long time so this reinvestment can feel like drag on a portfolio but if you bought it at an out of favor price with profits you have minimized the downside risk as well as diversified your portfolio. Patience is required to reward you with this investment over the longer term.
Here, I try to educate myself and then make some educated guesses as to what is a good value...out of favor. This could be a fund strategy or EFT strategy that is out of favor. FAIRX comes to mind as a fund (2 segments Banking & Real Estate) and PKN (nuclear power) comes to mind as a EFT. Right now FAIRX can be purchased at a 32% discount to its recent price. It may have some more downside but may be rewarded handsomely over the long term. Nuclear power can be invested in through PKN which is down 33% since the Japanese disaster. It also will be out of favor for the short term but may also be a big energy source for China and other countries.
What are you downside strategies?
bee

A Saturday Morn'in Hello,
On the go a bit today, and will do some Funds Boat writing later. The below numbers/list is from MSN finance and they do match return numbers from M*. Hopefully, following and matching the YTD and other time frames as you read across the page is not too nasty; as the format is the best I can provide.
Obviously, the "large AUM funds" below do not have much relationship to our holdings for a comparison; but may be of value purely for looking at the numbers in these areas. The other two areas of conservative/moderate/balanced funds have more of a relationship to our holdings.
This is the MSN link, and there is a "back" feature near the end of any funds group list to get one back to the fund type choices list...the easiest method to use:
http://moneycentral.msn.com/investor/partsub/funds/topfunds.asp
Anyway, a quick and dirty look at some numbers.....
Regards,
Catch
LARGE FUNDS*, by $'s invested/AUM
Symbol Company Net Assets Morningstar Stars YTD 1-year 3-year 5-year
VTSMX Vanguard Total Stock Mkt Idx Inv 58.72 Bil 4 -9.27 3.19 1.06 -0.25
AGTHX American Funds Growth Fund of Amer A 57.08 Bil 3 -10.91 -0.26 -0.24 -0.35
FCNTX Fidelity Contrafund 57.05 Bil 4 -5.76 4.71 3.19 3.05
CAIBX American Funds Capital Inc Bldr A 55.90 Bil 3 -4.09 0.35 1.79 1.13
AMECX American Funds Inc Fund of Amer A 51.18 Bil 3 -3.03 2.99 3.86 1.39
VFIAX Vanguard 500 Index Admiral 49.87 Bil 4 -8.33 3.04 0.79 -0.76
CWGIX American Funds Capital World G/I A 48.36 Bil 4 -14.32 -8.40 -1.55 -0.48
VTSAX Vanguard Total Stock Mkt Idx Adm 47.45 Bil 4 -9.22 3.28 1.16 -0.16
AIVSX American Funds Invmt Co of Amer A 43.10 Bil 3 -11.09 -1.53 -0.21 -1.59
DODFX Dodge & Cox International Stock 40.30 Bil 4 -21.23 -12.77 -2.39 -2.33
CONSERVATIVE ALLOCATION/BALANCED
SHORT TERM*
Symbol Company 3-month YTD 1-year 3-year 5-year
HSTRX Hussman Strategic Total Return 2.45 3.55 3.50 5.25 7.78
WICAX Waddell & Reed InvestEd Cnsrv A -0.19 2.18 2.13 4.16 4.46
SNSAX SAAT Defensive Strategy A -0.07 1.86 2.54 1.74 0.84
MATRX GAMCO Mathers AAA NA -1.00 -2.08 -1.97 -0.30
TPDAX Timothy Plan Defensive Strategies A -0.08 4.72 11.39 NA NA
TPDCX Timothy Plan Defensive Strategies C -0.26 4.33 10.69 NA NA
ASENX Aston Dynamic Allocation N -0.63 -0.21 9.18 5.18 NA
FMUAX Federated Muni and Stock Advantage A -0.70 4.45 4.43 3.96 1.87
FMUFX Federated Muni and Stock Advantage F -0.70 4.44 4.43 4.01 NA
FMNBX Federated Muni and Stock Advantage B -0.89 3.92 3.65 3.18 1.10
LONG TERM**
Symbol Company 3-month YTD 1-year 3-year 5-year
APIUX API Efficient Frontier Income A -9.79 -6.69 -3.63 15.87 6.80
AFFIX API Efficient Frontier Income C -9.81 -6.74 -3.74 15.36 6.08
FFSAX Fifth Third Strategic Inc A -1.49 3.05 4.20 15.30 4.49
FRACX Fifth Third Strategic Inc Inv C -1.59 2.53 3.48 14.49 3.82
PRPFX Permanent Portfolio -3.96 0.61 9.69 9.41 9.26
BERIX Berwyn Income -3.36 -0.88 3.10 8.67 7.16
VWIAX Vanguard Wellesley Income Adm -1.47 3.41 5.61 8.52 5.67
VWINX Vanguard Wellesley Income Inv -1.44 3.35 5.59 8.44 5.58
DFIAX Delaware Foundation Cnsrv Allc A -5.04 -1.75 1.95 8.04 4.66
DFIRX Delaware Foundation Cnsrv Allc R -5.11 -1.94 1.68 7.79 4.41
MODERATE ALLOCATION/BALANCED
SHORT TERM*
Symbol Company 3-month YTD 1-year 3-year 5-year
JADHX JHT Core Diversified Gr & Inc Ser III 0.71 5.36 18.57 3.92 NA
JADNX JHT Core Diversified Gr & Inc Ser NAV 0.71 5.45 18.74 4.11 NA
SIRRX Sierra Core Retirement R -0.61 2.71 3.26 13.11 NA
SIRAX Sierra Core Retirement A -0.49 2.66 3.05 12.89 NA
CPMPX Changing Parameters -0.53 0.53 3.45 0.68 NA
SIRCX Sierra Core Retirement C -0.65 2.17 2.32 NA NA
AAXAX Adaptive Allocation A -1.69 -1.16 12.20 NA NA
AAXCX Adaptive Allocation C -2.07 -1.71 11.12 7.98 2.31
MOBAX Aston/Montag & Caldwell Balanced N -2.92 -1.41 4.28 3.58 4.42
HBFBX Hennessy Balanced -3.17 0.27 4.19 3.53 0.91
LONG TERM**
Symbol Company 3-month YTD 1-year 3-year 5-year
SIRRX Sierra Core Retirement R -0.40 2.71 3.35 13.16 NA
SIRAX Sierra Core Retirement A -0.70 2.49 2.91 12.85 NA
BRUFX Bruce -6.67 1.78 11.68 12.79 3.93
RNCOX RiverNorth Core Opportunity -10.19 -7.39 0.86 10.03 NA
AAXCX Adaptive Allocation C -2.07 -1.71 11.12 7.98 2.31
IBALX Transamerica Balanced A -6.17 -3.22 8.22 6.97 4.12
ICMBX Intrepid Capital -6.69 -4.89 2.31 7.20 6.49
FBLAX Franklin Balanced A -7.76 -5.34 2.36 6.69 2.12
AZNAX Allianz AGIC Income & Growth A -9.16 -7.39 2.09 7.09 NA
AZNDX Allianz AGIC Income & Growth D -9.13 -7.44 2.10 7.09 NA

Hi folks,
I disagree with Scott in the case that Permanent Portfolio is not a core fund. I feel it's the very best core fund available and that it's by design. If you read about Harry Browne, who developed the original concept you will see why.
http://www.getrichslowly.org/blog/2009/04/20/fail-safe-investing-harry-brownes-permanent-portfolio/
Compare this to PFPFX by clicking on the tab on their website:
http://www.permanentportfoliofunds.com/
Now, as to tax efficiency - they're great because of such low turnover. They're not playing the market like so many funds because their asset allocation is fixed. Sure, it requires some rebalancing, but that's minimal. As for holding 20% gold and 5% silver, that's not a problem with taxes because being a mutual fund, you're taxed as with any mutual fund. This is completely different from holding one of the bullion ETFs as a stand alone investment. The gains on these are taxed at 28% as 'collectibles'.
Lastly, for those wishing to hold gold in a taxable account, please investigate the Central Fund of Canada. They're still taxed at 15% on LTCGs although being Canadian, and a PFIC so you need to keep this in mind.
http://commoditybullmarket.blogspot.com/2010/06/gold-tax-rates-and-collectible-tax.html
Good luck,
rono

http://www.marketwatch.com/Story/story/print?guid=3E535790-DFDD-11E0-A65A-00212803FAD6
By Jonathan Burton, MarketWatch
SAN FRANCISCO (MarketWatch) — Hey, Young Turks on trading desks, up-and-coming money managers and Wall Street stock jockeys: You want the truth about the global markets today?
Listen to Jeremy Grantham, chairman of Boston-based investment manager GMO LLC: You can’t handle the truth.
“This is no market for young men,” Grantham said. “At least us old men remember what a real bear market is like, and the young men haven’t got a clue.”
Women, too, for that matter. And at 72, after 40-plus years in the investment business, Grantham can make this claim unchallenged, but his point is more about the lessons of experience than the limitations of age, and an investor’s ability to build on the former and overcome the latter.
{...}
The potential for gains is “modestly higher” outside of the U.S., he added, other than “high-quality blue-chips.” Mostly, he said he prefers discounted plays that are surfacing in Europe and emerging markets.
{...}
At the same time, he’s not jumping on the long-term-bond bandwagon. “One day we will have more inflation and our bonds will bleed like a pig,” Grantham said. “The only reason for buying long bonds is short-term or as a desperate haven for terrorized investors. But the potential to make longer-term real money is naught.”
{...}
For others, Grantham advised taking a page from GMO and buying shares in companies with strong finances and which produce goods that people need, as opposed to luxury items. Look for dividend-paying opportunities in emerging markets especially. “I would own emerging and EAFE (the MSCI Europe, Australasia, and Far East Index), including Japan,” Grantham said.

The issue with Greek "value" stocks is that what happens to the economy? You're talking about a (insolvent, I agree with mns) country undergoing a massive change and what it looks like on the other side of that, in terms of currency, austerity, etc remains to be seen. Given the level of change and the level of turmoil that could revolve around that, I would be very careful about trying to invest in terms of price level. Additionally, aside from the National Bank of Greece, I don't even know what other companies are out there.
The weirdest, most tiny alternative play on Greece that I can think of would be Dolphin Capital Investments (DOLHF.PK), which is a high-end (they've partnered with Waldorf Astoria and other such brands) property fund with a lot of property in Greece (as well as other locations, but there's a number of Greek properties.) It has been decimated, but their holdings are really quite beautiful and if there is at least some certainty as to how the Greek situation ends, maybe this would find a bottom. Beyond that, if this company had the cash, they could possibly pick up land on the cheap. I haven't done any research as to their position on that, but this would be a 48 cent a share alternative play on Greece. I don't own it because I can't seem to purchase it and definitely do your own research, but I think this is an interesting alternative play on Greece. This isn't a Greek stock, but it has quite a bit of exposure to Greece and the area.
You can see their Greek properties below.
http://www.dolphinci.com/#greece
If you believe fair value/book value, Dolphin is trading at a nearly 80% discount to the NAV reported on 3/31 and has been trading around that discount for a couple of years.
http://tools.morningstar.co.uk/uk/cefreport/default.aspx?Site=uk&id=F0000026OS&LanguageId=en-GB&SecurityToken=F0000026OS]2]0]FCGBR$$ALL
As for the $HKD trade, brokerages with global accounts can hold $HKD. You can also use any number of forex services, although I find 4x trading insane. There's not enough caffeine in the day for that. I don't know about currency options/derivatives.

Reply to @BobC: See this Bloomberg article:
http://www.bloomberg.com/news/2011-08-31/tcw-rests-case-in-trade-secrets-fees-lawsuit-trial-with-jeffreyy-gundlach.html
Gundlach et al. hired Oaktree Capital Management to do the setup work for DBL, in exchange for an equity stake. The article quotes Paul Deitch of Oaktree:
"DoubleLine’s people were far from ready to start an investment company when he first met with them the week after Gundlach was fired, Deitch said.
'We had a lot of work to do,” Deitch said, adding that Oaktree had 57 people, including eight project managers, working on DoubleLine. “It was the Number 1 project.' "
The story doesn't say that DBL didn't use TCW data and certainly doesn't absolve them of that liability, but the Oaktree hired hands were responsible for getting the company up and running so quickly.
Last point, & very interesting to me: If DBL is using TCW data/models, they're certainly doing a better job with them than the new TCW/MetWest team; the comparable DBL funds (core fixed income, total return) are crushing the TCW equivalents. Imho, it's worth remembering in the context of fund returns that Gundlach's team developed the models & are probably better able to work with them.

http://online.wsj.com/article/BT-CO-20110916-711869.html
http://www.google.com/#sclient=psy-ab&hl=en&source=hp&q=Concerns+Linger,+But+Some+Good+News+Too+&pbx=1&oq=Concerns+Linger,+But+Some+Good+News+Too+&aq=f&aqi=&aql=1&gs_sm=e&gs_upl=968l968l0l2977l1l1l0l0l0l0l226l226l2-1l1l0&bav=on.2,or.r_gc.r_pw.&fp=a6739e3f98e052ae&biw=1366&bih=541
http://www.kiplinger.com/columns/fundwatch/archive/our-7-favorite-actively-managed-vanguard-funds.html
http://seekingalpha.com/article/294079-how-many-stocks-or-funds-should-your-portfolio-contain
Mortgage REITs Keep Gaining; Is SEC Review A Threat?
http://blogs.barrons.com/focusonfunds/2011/09/15/mortgage-reits-keep-gaining-is-sec-review-a-threat-to-industry/?mod=BOLBlog
oil news
http://www.marketwatch.com/story/oil-futures-extend-gains-in-asian-trading-2011-09-16?dist=countdown
investment advisors showing ‘realistic optimism’
http://www.marketwatch.com/story/investment-advisers-showing-realistic-optimism-2011-09-15?reflink=MW_news_stmp
investors pulled out of MF & ETFs in august
http://www.financial-planning.com/news/ETFs-Mutual-Funds-Outflows-August-2011-Morningstar-2675141-1.html
4 signs to dump your mf
http://www.dailyfinance.com/2011/09/16/4-signs-its-time-to-dump-your-mutual-fund/
little known fund manager scores 100%
http://www.thestreet.com/story/11249946/1/little-known-fund-manager-scores-100-gains.html
Fund-amentals: Is Fidelity overstretching Feingold?
http://www.reuters.com/article/2011/09/16/us-feingold-fidelity-idUSTRE78F52520110916
Fund managers: Bleak outlook in European crisis
http://www.cnbc.com/id/44554822

In 2010, I converted a portion of my self directed IRA into seven individual Roth Accounts. I purposely created seven individual Roth accounts so that I could track the gain or loss over the re-characterization grace period providing me with a simple way to convert only the accounts that produced a positive gain. Each account had an investment theme. They were as follows:
Emerging Market
Energy
Healthcare
Technology
Real Estate
Sml/Mid Cap Equity
Precious Metals
I took a slightly conservative approach to these investments in that any 10-20% gains were converted into cash. I did these conversions in the very last week of 2010 so I did not take full advantage of the re-characterization grace period. What I mean by this is that if I had done the conversion in January of 2010 I would have added an additional 11 months to the grace period. As you may recall there was a lot of uncertainty as to the Bush Tax cuts and Roth provisions for 2010. I waited for clarification.
I now have until October 17th, 2011 (TY2010 extension period) to re-characterize any accounts I converted in 2010 that I do not want to convert at this time. Many (6) accounts have lost value since the date of conversion...one has not. That one account is holding onto a mere 2% gain. This account was invested in PRMTX = T Rowe Price Media and Technology. The other accounts show losses of:
Emerging Market = (-2.4%)...I hold shares of VWO & EDV (EDV shares bought after 15% gain in VWO)
Energy = (-1.2%)...I hold shares of VDE & EDV (EDV shares bought after a 16% gains in VDE)
Healthcare = (-3.9%)...I hold VHT
Technology = (+2%)...I hold PRMTX
Real Estate = (-3.92%)...I hold VNQ
Sml/Mid Cap Equity = (-5.2%)...I hold PRNHX and PRDMX
Precious Metals & Mining = (-3.52%)...I hold VGPMX
Wondering if anyone else made a Roth conversion for 2010 and whether you will be re-characterizing some or all of your conversions?
bee

Good thread.
I didn't invest in NARFX b/c I already had funds in that space. One of them is AARFX, which I thought would be a good singles hitter. But this fund has underperformed for some time. I have had a very lengthy phone conversation with the manager Brady Lipp and was quite impressed. Every other time that I've called a mutual fund, I've only been able to speak to a low level answering service that can barely quote the prospectus. But these guys offered to setup a meeting with the portfolio manager. Brady was very open with me about the funds current positions and their basis. I was pushing him hard to explain why they became a loaded fund and Quaker -- obviously to generate more AUM, which hasn't been working and I'm not even sure why it would work. Maybe more advisors would encourage the now loaded fund. Brady explained that he has a hedge fund for friends and family (I found this very interesting. Usually its a hedge fund manager that has a mutual fund for friends/family and these guys were doing the opposite). Brady explained that they thought they had a unique offering and displayed some seemingly genuine altruism. I also questioned the viability of the fund with such low AUM. They have 6 employees and Akros capital is owned 25% by angel investors. They did not act as if they were on the ropes, but what do you really expect them to say. They are trying to increase AUM and advertise their product. I'm not sure how much longer, I am willing to stick with them. Since I've owned the fund it has gone from 5 stars to 3 stars. I believe it is one of the most conservative long/short MF's and tries to adjust based on macro views. After mark to market accounting was ended, they repositioned so that they were zero short and 90% invested. They have dialed this back down. Now, they are somewhere closer to 25% short, 75% long, but they have a net cash position around 20%. It is hard to gauge holdings based on websites, because of the options they hold and high turnover.
Anyway, I can see how it would be difficult to refrain from irrational exuberance when speaking with this guys.

Yes, part of the problem is their past stellar performance against which we tend to measure them. DODBX according to the USA Today site ranks 95/100 of balanced funds for 5 years. The 13/100 rank for 10 years is still good, but not up to snuff for these guys. To be fair, this fund has always been more aggressive than your typical balanced fund.
I should not have alluded to 5 year performance of DODWX as it has not been around that long yet. Sorry. At $7.53 today, it's NAV is about 25% below inception. However, doesn't take into account reinvested dividends/cap gains. I've tried to find out how much it's really off since inception, but no success. DC web site shows it roughly "even" as of June 30 if I'm reading it right.
David's point about not reading too much into number of stars a fund has or rigid/short time frames is well taken. I believe a good fund house cultivates a successful culture, one reason TRP is so highly regarded. Guess that was really the gist of my question, whether such a culture existed and is still intact at DC. If it is intact they might well overcome short term failings. Thanks for all the thoughts.

FWIW,
Concerning NARFX:
On August 17, 2011, the Board of Trustees of Nakoma Mutual Funds (the “Trust”) approved the reorganization of the Nakoma Absolute Return Fund (the “Nakoma Fund”), a series of the Trust, into the Schooner Global Absolute Return Fund (the “Schooner Global Absolute Return Fund”), a series of Trust for Professional Managers (“TPM”). The Board of Trustees of TPM approved the reorganization on August 30, 2011.
Nakoma Capital Management, LLC (“Nakoma”) serves as the investment adviser to the Nakoma Fund and Schooner Investment Group, LLC (“Schooner”) serves as the investment adviser to the Schooner Global Absolute Return Fund. Both the Nakoma Fund and the Schooner Global Absolute Return Fund have an absolute return investment objective.
Under the terms of the Agreement and Plan of Reorganization approved by each Board of Trustees, shares held by Nakoma Fund shareholders will be exchanged for shares of the Schooner Global Absolute Return Fund at the closing of the reorganization. At the same time assets held by, and liabilities of, the Nakoma Fund will be transferred to the Schooner Global Absolute Return Fund. Shareholders may, however, purchase and redeem shares of the Nakoma Fund in the ordinary course until the last business day before the closing. Purchase and redemption requests received after that time will be treated as purchase and redemption requests for shares of the Schooner Global Absolute Return Fund received in connection with the reorganization.
As a result of the reorganization, each shareholder of the Nakoma Fund will become a shareholder of the Schooner Global Absolute Return Fund and will receive shares of the Schooner Global Absolute Return Fund of equal value to their shares in the Nakoma Fund. It is expected that the reorganization will be treated as a tax-free reorganization for federal tax purposes.
Prior to the reorganization, which is expected to occur on or about November 4, 2011, Nakoma will continue to manage the Nakoma Fund in the ordinary course.
Shareholder approval is not required to effect the reorganization, but Nakoma Fund shareholders will receive an information statement/prospectus that provides information on the Schooner Global Absolute Return Fund and the terms of the reorganization.
Please retain this Supplement for future reference.
The date of this Supplement is August 31, 2011.
http://www.sec.gov/Archives/edgar/data/1355975/000089271211000724/nakoma497.htm