Thanks guys for info and link on insider trading.
Pared back FAIRX, FOCIX, and ARLSX as I continue to move portfolio back to just 3-4 principal holdings: BOND, AQRIX, and FAAFX.
If COP and GE continue downward next week, will likely move into other stocks/ETFs I've mentioned previously. Both I believe have fallen recently to 200d levels.
Nothing new right now.

Reply to @Investor:
Looking at some other profiled funds:
COBYX -0.73%
SFGIX -1.63%
MAPIX -1.46%
MACSX -1.08%
MAINX -0.18%
APPLX -2.87%
Long/Short or Hedged equity style investing funds:
ARLSX -1.54%
RLSFX -1.61%
WBLSX +0.10%
MFLDX -1.91%
FMLSX -2.52%
BPLSX -0.28%
BPRRX -1.17%

I'll be watching mainly for opp'ties to bulk up on EMs, both bonds & stocks, via Matthews, Seafarer, & maybe TGEIX & even PCY if/when it bottoms out. That'd be partly a continuation/possible ramping up of a longer-term plan to build a much heftier stake in Asia.
I'll probably sell the last remaining smidgen of an EAFE index in an index-only 401k. I'd been moving the $ a chunk at a time to an Asia-Pacific index fund; I'll probably stick with that approach.
If this begins to look like a correction that might go on for a while, I'd add to PIGIX as a ~ safe haven.
Also, same idea as Charles on ARLSX ....

COP
More BAC.
If AQRIX and ARLSX hold-up well in correction, I will look to add more to both, likely pulling from ARIVX.
If DODGX moves under 10 mo SMA (gasp), will shift 75% to DODIX.

I sunk an initial position into the Aston fund ARLSX a couple of weeks ago. I'd been very skeptical of L-S funds in general, but decided that I like the Aston guys' (detailed!) process and the risk containment. So far it's had a 70-55 up-down capture ratio (compared to the S&P 500). It's still a test at this point, but looking okay so far.
I looked at FMLSX, but the capture ratios aren't very good; for 1 and 3 years, the down-capture is greater than the up. In fact, generally speaking it's had about equal down-capture compared to the two large-blend, long-only funds I own, so it doesn't really fit what I'd want in an L-S fund.
The Lipper awards are out for this year; those awards emphasize risk-adjusted return, and their 3y and 5y pick is the Robeco fund. 10y is the Schwab Hedged Equity Fund, which I haven't looked into. Typically if a fund is a 10y winner but not a winner lately, it's got a good history overall due to great work in the past, but not as good recently.

There's a nice essay from Wasatch on using long/short funds as a core portfolio holding.
I did interviews with or profiles of a series of long/short managers last summer and fall. My general impression:
1. this is a very old strategy, actually. This is pretty much where the hedge fund industry started, back in the days when these were "hedged" funds. Done well, it makes sense.
2. in general, most long/short funds are sorrowful. Most are expensive, undisciplined and surrender too much upside , though they do provide some downside protection.
3. the long/short category actually covers a very different strategies, so side-by-side comparisons are not as straightforward as you might imagine.
Folks to look at would include Aston/RiverRoad Long Short (ARLSX), Bridgeway Managed Volatility (BRBPX) and RiverPark Long Short Opportunity (RLSFX). The gold standard in the field is the closed Robeco Boston Partners Long/Short Equity fund (BPLEX). They have a second long/short fund (Research) which is interesting but it's no BPLEX. Marketfield, in adopting a sales load and a marketing machine, probably has taken itself out of the running.
Just random thoughts on a Friday afternoon,
David

Just as a hypothetical, since we know such behavior is fraught with risk and potential margin-calls, credit limits, leverage strategies, etcetera, Flack asked me to take a look at selling short SPY instead of buying bonds (IEF) in the above scenario. If I did actually implement this strategy (ha!), I would likely use the bear market exchange traded fund ProShares Short S&P500 (sym: SH), but to enable direct comparison with results posted above, I simply reversed the SPY monthly values for the short holding.
The timing curve is the same as above, but the result is quite different, as seen in the portfolio growth plot below and corresponding performance table:


Flack's dynamic timing method still trumps either the SPY or stock/bond 60/40 buy-and-hold portfolios, but this time with much higher volatility, greater max drawdown, and with somewhat lower overall growth. This result highlights the potential vulnerability of the method, the so-called "head-fakes" and getting out of sync with the market. In the long-only portfolio, having a string of back-to-back reversals (see crossover symbols on timing charts above, particularly Jul-Oct '10) means you may not capture a near-term gain, but if you are short...you can get whiplash.
Here are links to couple informative presentations by Mebane Faber: Dynamic Risk Parity Part 1 and Dynamic Risk Parity Part II.
It's basically about how to survive down-turns (bubbles) to invest another day, or like Matthew Moran of ASTON/River Road Long-Short ARLSX explained during the recent MFO teleconference: "Stay out of the way of freight trains!"
In any case, Flack, thanks again. MJG, thanks for link to Bulkowski's Blog. Scott, I will look further at the shorter SMA period. I think the ARLSX folks swear by the 50 day SMA of the Russell 3000. Hank, what can I say, I guess I'm a quant at heart.

Reply to @scott: Thanks man. I will be interested in the oil company you pick. Don't forget to add RSH to your list of change-or-liquidate retailers. Panasonic too should be on your dinosaur-watch list.
Break, break. I see that both DAL and LUV are up pretty heavy these past few months. In fact airline exchange traded fund FAA has 13-week return of 23% and 26-wk return of 40%. So, Mr. Redleaf was correct on this one. I recall the ARLSX folks were looking to short DAL, but it has not yet showed up in their holdings...they are shorting Gamestop, however.

Hi Bob.
I agree with your categorization of Whitebox Long Short Equity WBLFX. I'll also give that Mr. Aronstein's MFLDX has (slightly) outperformed Mr. Redleaf's WBLFX since 2007. But with an enviable 13.8% APR and 2.0 Sortino Ratio since its inception in 2004, WBLFX still gets top dog honors in my book.
I did not completely follow the comparison with Eaton Vance Global Macro Absolute Return EIGMX, since it seems to be a non-traditional bond (and cash) fund. (I could not find EIGRX...did you mean EGRIX? Also, Schwab shows EIGMX open.) In any case, EIGMX looks solid...as does MFLDX. Congratulations on both those holdings.
I do not own any of these, but kind of regret not getting in when Scott was alerting us that MFLDX was closing. I think the MainStay acquisition spooked me.
I do own Mr. Redleaf's Tactical Opportunities WBMIX and continue to consider WBLFX. I also own the young ASTON/River Road Long Short ARLSX.
I know M* gives TFS Market Neutral TFSMX a gold star, but I don't see it, especially at 2.5 ER. Schwab shows it restricted anyway.
Here are lifetime stats for the funds you mentioned, plus my ARLSX:

And, M* performance chart since MFLDX's inception:

Whitebox Long Short WBLFX was masterful through the financial crisis...

Here's ASTON/River Road Long-Short ARLSX more recently:

Got it?

I wouldn't invest in Blackstone, funds or otherwise. Nothing against private equity, I just don't think the company is shareholder friendly (but that's just me.)
I also recommend MFLDX, ARLSX, PAUIX, BPLSX, AQRIX, FMLSX. Lastly, the new ARDNX (which is a fund of hedge funds, and actually includes some famed funds) looks promising.

I would advise watching these investment vehicles, but not being an early buyer. As I see it, you have a master cook who is managing other "expert" cooks. The main problem is that every cook in the kitchen is taking their own cut out of the contents of your wallet, and this represents a significant headwind for future performance. Also, what evidence exists that this collaboration of cooks will produce a satisfying meal (risk-adjusted performance) ? I suspect that the meal will be bland and the many cooks will be wealthier.
Reasonable "hedgy" funds that I would consider would be PAUIX, FMLSX, ARLSX, MFLDX, and VIMNX (under current management). At this time, I don't feel the need for such funds in my portfolio, and I only have footholds in PAUIX, BPLSX and TFSMX. Although not truly "hedgy," I continue to like certain Risk Parity funds (we own AQRIX plus a foothold in ABRIX), as they have had decent performance and relatively poor correlation to all asset classes that I have tested.
Kevin

I wonder whether this fund is going to be as tax efficient as Wasatch Long/Short Investor FMLSX or MFLDX. Also, during the same time FMLSX did even better, rising by almost 7%, i.e. 2% more than ARLSX. Time will tell...

M* YTD performance against some contemporaries (ARLSX versus RLSFX, WBLFX, MFLDX, and AQRIX):

I'm officially in ARIVX.
Purchased ARLSX too and upped holding in AQRIX.
Here's current fund portfolio, heavy to light:
RNSIX, AQRIX, SFGIX, WBMIX, DODIX, ARIVX, ARLSX, FAAFX, DODBX.
So much for my dream of a four fund portfolio...thanks MFO =).

After Shadow's post recently...

Effective after net asset valuation on Friday, January 18, 2013 (the “Soft Close Date”), the ASTON/River Road Independent Value Fund (the “Fund”) is closed to new investors until further notice...

...thinking of getting into ARIVX finally next week. Had tried to place order back in September after David's update, but the re-open had not yet caught-up with Schwab. Then, its higher fee gave me second thoughts.
Ditto for another ASTON/River Road fund reviewed on MFO, Long-Short Fund ARLSX. I may wait here for the institutional class alluded to during the recent conference call.
Both options would be alternatives to some bond holdings in my portfolio.
Scott, you're going to laugh, but I recently bought Pandora P after its plunge. Quickly made about +10% and protected myself with a -6% limit stop...only to get stopped-out and subsequently watch it go up 30%!
I doubled-down on Bank of America BAC at end of last year. I believe it will double again over next couple years.
Thinking about shorting Staples SPLS as I simply don't see a future in its stores, which represent about third of its business. They have a decent dividend though, which props up stock price. If that wavers, however, watch out.
Finally, again I can hear you laughing now, I'm actually thinking of a speculative buy of Radio Shack RSH.

Here's the link to a recording of the ARLSX call. We'll host it (and several neat new features) on-site in January.
Quick highlights:
1. they believe they can outperform the stock market by 200 bps/year over a full market cycle. Measuring peak to peak or trough to trough, both profit and stock market cycles average 5.3 years, so they think that's a reasonable time-frame for judging them.
2. they believe they can keep beta at 0.3 to 0.5. They have a discipline for reducing market exposure when their long portfolio exceeds 80% of fair value. The alarms rang in September, they reduce expose and so their beta is now at 0.34, near their low.
3. risk management is more important than return management, so all three of their disciplines are risk-tuned. The long portfolio, 15-30 industry leaders selling at a discount of at least 20% to fair value, tend to be low-beta stocks. Even so their longs have outperformed the market by 9%.
4. River Road is committed to keeping the fund open for at least 8 years. It's got $8 million in asset, the e.r. is capped at 1.7% but it costs around 8% to run. The president of River Road said that they anticipated slow asset growth and budgeted for it in their planning with Aston.
5. The fund might be considered an equity substitute. Their research suggests that a 30/30/40 allocation (long, long/short, bonds) has much higher alpha than a 60/40 portfolio.
An interesting contrast with RiverPark, where Mitch Rubin wants to "play offense" with both parts of the portfolio. Here the strategy seems to hinge on capital preservation: money that you don't lose in a downturn is available to compound for you during the up-cycle.
Negotiating now with Matthews about talking with Teresa Kong (MAINX) in January. They've agreed and we need to arrange date and time. The good folks at Seafarer are on-board to celebrate their first birthday with us in February. Still thinking about ultra-focused folks (RiverPark Wedgewood, Bretton, maybe Cook & Bynum) thereafter.
For what interest it holds,
David

Hi, guys.
I've posted, separately, quick highights of the Aston River Road Long Short call. Here, for those interested, is the ARLSX audio-file link and a bit of background on the team.
As ever,
David
---------------------------------
Why ought you be interested in chatting with Matt, Dan and me? Two reasons:
1. investors need to become more sophisticated in their risk-management strategies. We know that high volatility strategies are disasters for 99% of the folks who invest in them; we're simply not wired to endure sharp, sudden losses. The traditional risk-management strategy, buy a wad of Treasury bonds, is becoming increasingly problematic. Serious and thoughtful folks have made the argument that directional long-short or covered-call strategies should be considered conservative core equity strategies, not just "5% in diversifying alternatives." Wasatch made a clear, readable statement of the case in "Using a Directional Long/Short Fund as a Core Holding" (2009).
2. the River Road guys strike me as eloquently thoughtful and ARLSX shows substantial promise. Two things caused me to notice the fund. First, it started showing up in my performance screens for top-tier new funds. Second, the words "River Road" were immediately intriguing because of their association with Eric Cinnamond and the Aston / River Road Independent Value (ARIVX) fund, which strikes me as one of the best small cap options available. Those two factors didn't justify enthusiasm for ARLSX, but they did justify further investigation.
In our conversations, Matt makes four observations about the fund that do warrant both interest and enthusiasm:

They view themselves more as “risk managers, not returns managers”. They have a robust set of individual stock risk controls and a disciplined drawdown plan to manage net market exposure risk.
By controlling risk, they're better positioned to generate substantial long-term compounding. They've generated double-digit annualized returns, while keeping volatility at less than half the benchmark and controlling draw-downs.
Their short positions have "a unique focus on challenged businesses with low momentum that has led to significant outperformance on the short side."
Matt and Dan describe themselves as "100% committed to the Strategy." It's the only strategy they work on at River Road and both have 100% of their liquid net worth in it.

There's a profile of the fund (under the "funds" tab) at the Observer.
On January 1, I'll post highlights and an .mp3 file with the whole call.
Take great care,
David

I'll just register a vote for the conference call approach to digging into newer, interesting, and innovative funds-- that is, if it's worth David's time considering the number of participants. The board's had a number of mentions of funds like that recently, so there'd be a pretty good menu to draw from. I'm recalling Whitebox, ARLSX, BRTNX, and RWGFX, just off the top of the cabeza here.
If it turns out not to be worth the time to do the calls as a regular feature, the interview approach David used for SFGIX would be great too.

I continue to believe that most investors do not need a dedicated L/S fund. There are very, very few long-term winners in this space (only BPLSX and MFLDX), and the space has inherently very high actual expense ratios which serve as stiff headwinds to future performance. Here are the M* front page ERs vs. the actual ERs paid by investors for select funds: BPLSX (2.47% vs. 3.71%), MFLDX (1.56% vs. 2.47%), ARLSX (1.70% vs. 2.75%), PMHIX/PMHDX (1.40%/1.75% vs. 1.80%/2.15%), and MARNX (1.50% vs. 2.63%).
And when one buys MFLDX, you are not receiving this fund's past performance, but you are paying very high fees which will definitely affect uncertain future performance. And now that the fund has $2.3B in AUM, will it perform as well as it did when it was a much smaller fund ?
For portfolio diversification, investors may use other asset classes that are far less costly to own and have better track records than L/S funds.
I do own PAUIX (1.18% vs. 1.65%) which may short and use leverage, but it has limits on such exposures and is not obligated to use such tactics. But this fund is very expensive for a $21B AUM fund, and the more accessible PAUDX is even more expensive (1.58% vs. 2.05%). This fund is as close as I will come to owning a significant position in a L/S fund.
Kevin