Dear friends,
As Investor notes, below, the November site update went live on Halloween night. A handful of highlights:
a profile of Pinnacle Value (PVFIX) - this is a microcap value fund that does act like it. The manager, John Deysher, is very conscious of valuations and volatility and tends to hold lots of cash. He also experimented, with about 5% of the portfolio, with what he saw as a few attractively-priced alternative investments. Some of those have worked out quite well, some didn't. What you end up with is a microcap fund with strong returns and the volatility of a mid-cap one.
a profile of Manning & Napier Dividend Focus (MNDFX) - this is a megacap value fund that was designed by M&N to test the hypothesis that it's possible to have an attractive, actively-managed alternative to indexing. In addition to a first-rate management team, the fund is attractive because it offers M&N's lowest expense ratio (0.6%) which means that you're buying the management team at a 50% discount.
the Observer's Honor Roll of funds - the behavioral finance research suggests that it's more important to look at the downside of an investment, rather than the upside because investors are a lot more sensitive to the pain of losses than to the pleasure of gains. We might think that we're Ken Heebner and Tom ("Tom Terrific") Thurlow type investors. (Do you even remember Thurlow Growth? Nine stocks, 900% turnover, 200%+ returns until ...) Mostly we're kidding ourselves, so we've screened for funds that have never bombed. Not a perfect strategy, but an interesting start since the simple criterion "never in the bottom third" leads to a lot of funds whose long-term returns are in the top third.
a warning on fund data on the web - the portfolio reports for MNDFX were so freakishly, irrationally inconsistent from one site to the next that I had to use them as a cautionary tale. Jason Zweig, of the Wall Street Journal, found the story interesting enough that he did a follow-up of it online: http://blogs.wsj.com/totalreturn/2011/11/03/fund-data-gone-wild/
a couple intriguing funds in registration - Miller Tabak, a behind-the-scenes powerhouse whose services enable hedge funds and institutional investors to execute their strategies, is launched a low-minimum arbitrage fund. It's wildly overpriced (2.7%) but intriguing on principle.
And a couple other neat little pieces and fund updates as well.
Hope you enjoy them.
David

Reply to @Maurice: The Morningstar data is just information, it doesn't actually say what will happen. But given that there have been significant redemptions, Fairholme had to sell something. So I would fully expect that they'd be picking the highest cost lots to sell from to offset the gains; it's really basic tax management. Berkowitz moved to Florida in part to avoid state income taxes so it's a good bet that he'd keep a close eye on the cap gains.

With the poor performance this year, they should be able to harvest losses to cancel out the gains. Morningstar has their potential cap gains exposure as -13% so it's unlikely we'll see capital gains distributions this year.

Howdy Kaspa,
Thank you for the update. I will presume you may have looked at these two, too; as they have a relationship to sectors you are invested.
EDV
LTPZ
You have not noted; so I will presume you are satisfied with your returns, YTD.
I will note that I have a smile on my face as I write this portion; as you note that you are not convinced about bonds; and our house is also on the fence with just about every sector we hold. WAIT, I will adjust that thought.........investment grade bonds and some areas of Treasury issues, including TIPs should hold their own over the next year.....my best guess, eh?
I am only convinced that the best of the traders; be it equity or bonds, should have very large gains at year's end, when they add up the profits.
Take care,
Catch

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: October 31, 2011
The Markets
Double-barreled relief over the economy and the plan for attacking the European debt crisis powered a rally in equities. In the wake of Thursday's 340-point jump in the Dow, the industrials were closing in on their best month since January 1987 with a 12% gain, and the Russell 2000's 18% gain since September 30 will likely make October its best month ever. By Friday, the S&P 500 and the Nasdaq had regained roughly three-fourths of their losses since mid-July. The renewed global optimism sent bond yields up.
Market/Index 2010 Close Prior Week As of 10/28 Week Change YTD Change
DJIA 11577.51 11808.79 12231.11 3.58% 5.65%
Nasdaq 2652.87 2637.46 2737.15 3.78% 3.18%
S&P 500 1257.64 1238.25 1285.08 3.78% 2.18%
Russell 2000 783.65 712.42 761.00 6.82% -2.89%
Global Dow 2087.44 1846.63 1964.49 6.38% -5.89%
Fed. Funds .25% .25% .25% 0 bps 0 bps
10-year Treasuries 3.30% 2.23% 2.34% 11 bps -96 bps
Last Week's Headlines
Eurozone leaders finally announced an agreement they hope will build a firewall around Europe's sovereign debt problems and enable banks to keep credit flowing in the region. Under the agreement, banks holding Greek debt will receive 50% of what they're owed, in hopes that the reduction will enable Greece to cut its debt to 120% of its gross domestic product (GDP) by 2020. To help cushion future losses, banks will have to raise €147 billion to cover higher capital reserves. The agreement also would raise the resources of the European Financial Stability Facility to roughly €1.4 trillion, though there were no details on how the increase would be paid for. Finally, the agreement allows the EFSF to maximize its resources by guaranteeing sovereign bonds or setting up special-purpose vehicles to provide financial support.
The odds of a double-dip recession seemed to dim after the Commerce Department said the economy grew almost twice as fast in the third quarter as it did during the second. The 2.5% initial estimate of growth surpassed Q2's 1.3% and Q1's anemic 0.4%. The report also said that consumer spending rose 2.4%, including a 4.1% increase in durable goods and 3% growth in spending on services. Exports were up 4%, and business capital spending jumped 16.3%. Government spending was unchanged as a 1.3% drop in state and local government spending helped offset a 2% increase in federal government spending.
Home prices rose in August in the 20 cities tracked by the S&P/Case-Shiller index. Though prices were still 3.8% lower than a year earlier, the increase was the fifth in a row, suggesting that prices could be starting to stabilize. Meanwhile, the Commerce Department said sales of new single-family homes were up 5.7% in September.
Americans spent more and saved less in September; according to the Bureau of Economic Analysis, consumer spending was up 0.6%, while the savings rate dipped to 3.6% from 4.1% the month before. Meanwhile, incomes rose 0.1%.
A drop in orders for transportation equipment led to a 0.8% decrease in new durable goods orders in September. The Commerce Department said it was the third straight month of declines.
The more income you had over the last two decades, the more income you got, according to a study by the nonpartisan Congressional Budget Office. For the 1% of the population with the highest income, average real after-tax income rose 275% between 1979 and 2007. Households in the top 20% saw a 65% increase in income, while for the 60% of the population in the middle, incomes grew just under 40%. Those in the bottom 20% saw an 18% increase from 1969 to 2007. The CBO said the shift in overall pre-tax income (not counting taxes and payments such as Medicare/Social Security benefits) was caused by two factors. Income sources, such as jobs, became increasingly concentrated in fewer individuals (the most important factor); also, capital gains and business income represented a larger percentage of overall U.S. income, while the share of income from salaries and wages fell.
Eye on the Week Ahead
Earnings reports should receive more attention now that a European rescue operation has been announced (though details of the debt game plan also will be under scrutiny). Unemployment data will be of interest in light of the new GDP number, as will the Fed's Wednesday announcement.
Key dates and data releases: U.S. manufacturing, auto sales, construction spending (11/1); Federal Reserve Open Markets Committee (FOMC) meeting (11/2); weekly new jobless claims (11/3); business productivity, factory orders, U.S. services sector (11/3); unemployment/payrolls (11/4).

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..... Liberal it is; as in a Liberal Arts degree, whether an actual diploma from a course of study, or the ongoing study of everything. One may have formal training or a degree in a specialized field that allows your employment and/or maintaining that your employer views "you" as the last person they could afford to lose; as your work ethic and knowledge are an asset. I have specialized training in the electo-mechanical/computer based world of knowledge, that has served me well for income over the years. ;
I am a naturally curious person; which may also mean that I am a jack of all trades/knowledge, and perhaps a master of none. However, such broadbased knowledge for a curious mind; does, in my opinion have value as it translates into the investment world. These broadbased knowledge areas for anyone may favor particular areas for one's own comfort zone. Such an example for myself; among the many areas of music to which I listen, is that I am not a fan of opera and some forms of classical music. This does not mean that I do not revisit these areas of music; as we all constantly evolve and re-form who we as we experience more life, whether being aware of these sometimes, slow changes, or not. My naturally curious mind does not let me become locked into confined areas of potential knowledge; the exception being the broadbased areas of knowledge for investments. I have no problem discovering and obtaining knowledge, as related to investing; from any number of folks on the tv business channels, that vary from the hard "right or left" style of thinking about where or what to invest, as well as the 1,000's of opinions since the market melt of 2008 and "how" to help correct the current economic situation. No one is twisting my arm to watch and listen to any of this; but I/we personally must draw in these opinions to help this house digest and attempt to realize the meanings and/or ramifications of potential actions and what the end result may be upon current and future investment sectors.
Focus upon what you must for your employment; or if retired, what you enjoy. But, do not become entrenched in a narrowly focused journey of knowledge that would preclude you from any new adventure in learning.
I am singing to the MFO choir; but there are always some new visitors here.
As one's time allows, continue the Liberal Arts studies; as one never knows what little piece of text or spoken words will trigger a new thought, a clarification of previously unconnected dots of thought or perhaps the simplification of what one thought was a more complex proposition. The source may be from a book, a movie, a television program or a spoken conversation from any subject area one chooses to discover. The source need not be new; and could come from perhaps a book or movie from the 1940's.
At a point in my very early 20's, while writing a letter to a friend; I noted that, "If I could make a statement or ask a question, that caused someone to think of something they had never before considered; or to observe a topic they were familiar with, but from a different perspective, I would find that particular day, as fulfilled." We, at this house; must also apply this same function when presented with a statement or question.
MFO, and formerly FundAlarm are prime, positve examples of "eyes wide open" statements and questions for helping navigate the investment highway. Combine what you learn here, with all of the other pieces from your Liberal Arts of the World of Everything knowledge and you may find a type of intuition for your investment choices.
Never stop learning.....
A short blip about Europe. One may choose any number of connective stories about the "conditions" that exist. For more than 2 years, one may consider that the collective EU has been aware that their "house" is a "fixer upper". So, buy another house or fix the existing house would be the common question for an indivivdual. The EU has known about the problems with the old house; and has started to make a list of fixes, and the projected cost of repairs. This is all well and good; but the problem remains, in terms of the housing market; that they have not yet qualified for the loan to make the repairs. Until this is settled, the overhang of doubt and ability to "get the loan" remains and will continue to affect the value of all homes in the neighborhood (read that as global markets and investment sectors). So, a kinda fix; from the plan last week, but all the neighbors are still a watch'in with their shoulders hunched upward.
A money move last week as indicated further down the page.
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:
SOME CASH MOVED TO FNMIX, which already had some monies invested from this house; and the percentages of holdings has been adjusted accordingly. The $U.S. has maintained and gained value since this past spring. This has kept dollar denominated emerging markets bond funds in a somewhat sideways mode relative to NAV's. Recent downward moves in the $US may or may not be in place at this time to hold going forward. So, the EM bond additional monies is a bit of a coin toss; but we will gather the yield while hopefully awaiting a continued upward move in NAV.
Portfolio Thoughts:
Our holdings had a +1.76 % 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 !)
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)
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 = 3.2%
Mixed bond funds = 88.7%
Equity funds = 8.1%
-Investment grade bond funds 26.8%
-Diversified bond funds 19.8%
-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
MACSX Matthews Asia Growth-Income

Reply to @MikeM:
Thanks MikeM,
I like the simplicity of your plan. Part of the problem at our mom's ages...hopefully our ages one day... is the spend down dynamic. My feeling is that a portion this money needs to be in a "spend down investment". CDs are not spend down vehicles...the money needs to be locked away even if for short periods of time. There isn't much difference between a short term CD and a high interest checking account in today's markets. Maybe this will change, but possibly not in our parent's life time.
So I am looking for an investment that I could fund with two years of money ($600*24 = $14400) while letting the remaining money (in my mom's case, another $21K) to "grow". Also, at the end of each year a reallocation of any gains could be moved into the :spend down" fund. In some years there would not be a gain but a nice thing about a fund like VWINX or RPSIX (also suggested) is their track record of consistent positive yearly gains. Not home runs and strike outs...but instead a lot of singles and doubles.
I seem to be leaning toward a total return fund like TGMNX or similar for a spend down fund along with a conservative allocation fund like VWINX or RPSIX. I might further diversify with a foreign bond fund like TGBAX. Maybe a tad of PRPFX...and a smidge of MAPIX...wait a minute! Its really hard to just pick one or two flavors.
Thanks for your comments.

http://individual.troweprice.com/staticFiles/Retail/Shared/PDFs/PriceReports/Fall2011PriceReport.pdf#page=1&placementGUID=em_prcreport&creativeGUID=EMBDHT&v_sd=201110
kipinger best 25 mf
http://www.kiplinger.com/printstory.php?pid=2151863
stinker of the yr
http://www.investmentnews.com/article/20111023/REG/310239985
M* ranks best/worst MF for 401K
http://abcnews.go.com/Business/morningstar-ranks-best-worst-mutual-funds-401k/story?id=14789497
loomin ETF shakeout
http://www.fa-mag.com/fa-news/8945-the-looming-etf-shake-out.html
putman offering new retirement income funds & tools
http://www.financial-planning.com/news/Putnam-retirement-tools-mutual-funds-2675713-1.html
are you bogleing
http://www.forbes.com/sites/rickferri/2011/10/24/are-you-bogleing/
also - ot
http://www.forbes.com/sites/dividendchannel/2011/10/25/why-hatteras-financial-corp-is-a-top-10-reit-stock-with-15-34-yield/
vanguard dividend etf
http://www.etftrends.com/2011/10/a-closer-look-at-vanguards-high-dividend-etf/?utm_source=iContact&utm_medium=email&utm_campaign=ETF Trends&utm_content=
junks bonds are hot but there are still plenty of fire
http://money.cnn.com/2011/10/21/markets/bondcenter/high_yield_bonds/
which investors are in long term
http://blogs.wsj.com/venturecapital/2011/10/24/groupon-which-investors-are-in-for-the-long-term/
Market Week: October 24, 2011
The Markets - rbc investments
A tug-of-war between earnings and Europe dominated equities last week. The Dow industrials overcame a discouraging start to the week and managed a third straight week of gains. However, the Nasdaq slipped back into the loss column, while the S&P 500's encouraging week still left it in negative territory for the year and the small-cap Russell 2000 continued to struggle.
Market/Index 2010 Close Prior Week As of 10/21 Week Change YTD Change
DJIA 11577.51 11644.49 11808.79 1.41% 2.00%
NASDAQ 2652.87 2667.85 2637.46 -1.14% -.58%
S&P 500 1257.64 1224.58 1238.25 1.12% -1.54%
Russell 2000 783.65 712.46 712.42 -.01% -9.09%
Global Dow 2087.44 1845.80 1846.63 .04% -11.54%
Fed. Funds .25% .25% .25% 0 bps 0 bps
10-year Treasuries 3.30% 2.26% 2.23% -3 bps -107 bps
Last Week's Headlines
Despite strong words from G-20 finance ministers about the need for a formal plan for containing the damage from European debt problems, the eurozone continued to debate ways to enhance the European Financial Stability Facility's resources. However, any formal agreement failed to appear last week, though French and German leaders said they anticipated having one this week. In the meantime, Moody's warned that France's AAA debt could be hit with a negative outlook if its budget is strained by bailout demands; it also downgraded Spain's debt from Aa2 to A1.
September's 0.3% consumer inflation rate was the third increase in as many months. According to the Bureau of Labor Statistics, that put the inflation rate for the last 12 months at 2%. At the wholesale level, inflation was worse; driven mostly by a 2.3% jump in energy costs and a 10% increase in the prices of vegetables, it spiked up 0.8% in September, for a 6.9% rate for the last year.
Federal Reserve manufacturing numbers were mixed. The New York region was negative for a fifth straight month, while new orders were flat. However, the Philadelphia Fed survey showed improvement, jumping from -17.5 in September to 8.7, the first positive number in three months. Nationwide, industrial production rose 0.2% in September and was 3.2% higher than a year ago.
China's efforts to try to control inflation there contributed to a slower pace of economic growth--9.1%--during the third quarter. According to China's National Bureau of Statistics, that's down from Q2's 9.5%.
Housing starts shot up 15% in September, putting them 10.2% above last year. According to the Commerce Department, that's the highest level since before the homeowner's tax credit expired last year. Building permits, an indicator of future construction activity, fell 5% from August, though they also were up from a year ago.
Sales of existing homes dropped 3% in September, according to the National Association of Realtors®, though compared to the previous September, they were up 11.3%.
Eye on the Week Ahead
Action or lack thereof at the midweek European debt summit is likely to affect the mood of the markets. A first look at Q3 economic growth also will be of interest.
Key dates and data releases: home prices, consumer confidence (10/25); new home sales, durable goods orders (10/26); initial estimate of Q3 gross domestic product, pending home sales, weekly new jobless claims (10/27); personal income/spending, labor costs, consumer sentiment (10/28).

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..... Too busy of a weekend with other than money watching. Briefly; peeked at any news for EU and appears a coin toss; although the early Asian markets are somewhat happy. Started our own project of OOOF, Occupy Our Own Funds. Minimal outside managerial, political or other influences to affect our policy making decisions to OOOF; aside from the normal tiny variables in the global monetary market places...:):):) A money move last week as indicated further down the page.
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:
SOME CASH MOVED TO FINPX, which already had some monies invested from this house; and the percentages of holdings has been adjusted accordingly.
Portfolio Thoughts:
Our holdings had a +.67 % 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)
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 = 4.5%
Mixed bond funds = 87.4%
Equity funds = 8.1%
-Investment grade bond funds 26.8%
-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

Makes perfect sense, bee. Truly, my own portfolio is always a work in progress, though the way the process has worked-out amounts to making BIG changes, but rather SELDOM. Talk about concentrated bets! My holdings are very much a barbell affair these days. Some folks here in MFO and the old FundAlarm will know of my conviction that the future is Asia's. I'm holding 34.66% of my total in MAPIX and 3.14% in MACSX....MACSX has turned out to be the fund I "raid" for big-ish expenses like vacations. It is our ONLY regular, taxable investment which is not in an IRA, so cost-basis info. is provided. I waited just a few days recently before redeeming a chunk, and so we made a 2% profit on that lump of shares we just cashed-in. TWO percent. Not wonderful, but better than a loss. Since 2003 when I began with Matthews, I have quite RANDOMLY dollar-cost-averaged my share purchases into MACSX at $300 each time. It became a "random habit."
So my Asia total comes to 37.8% of total portfolio holdings. As I recall, I opened my MAPIX account about three years ago, and M* shows that particular fund to be UP almost 20% over that time-frame. I reinvest cap gains and dividends. (The original amount I put into MAPIX was a switch-over: lock, stock, and barrel, from TAVIX, after 2 years or so of disappointing under-performance there. I'd been in TAVIX for a long time.)
The other side of the barbell is my PREMX stake. Since I got into it a little more than a year ago, it is just above the break-even point. (per M*.) My PREMX= 41.57% of my total.
In addition, I have PFE Pfizer stock which is an inheritance I just came into this summer: 14.61% of my total holdings. The share price is down right now. It was above $20/share in the early summer. There was a .20 cents/share div. in Sept....And finally: my only other holding right now is a foreign gov't bond---in US dollars--- which comes to just over 6% of my total.
I expect to be able to diversify further , which is my intention--- before too long, with some "new" money. If my positions look risky in terms of their proportion to one another, I'm certainly aware. I just don't want to go in and rearrange right now, when I know I'll be doing that before too long, again. "Seldom" is really and truly the way I prefer to "play" with my portfolio.
Interesting question. I'll be watching for other responses, too.

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.