Reply to @Mark:
What he said.
>> he ran the fund in such a way that it was bound to happen.
Oh, come on. Have faith, or don't. But decide. I mean, people say the same about Heebner (CGMFX and CGMRX), even Soviero (FLVCX). I'm no longer in, but you gotta know what you're doing and investing in. Anyone who bails gets what he deserves. If your first rule is not to lose money etc., then stay the heck away.

Thanks MJG. Great simulator.Everyone should use the Sensitivity Analysis feature to plug in standard deviation factors as well as annualized returns that are readily available @ M*. The 15 year numbers, when available ,should factor in the dot.com bubble of 2001 and the "financial meltdown" of 2008-09. Try plugging in VFINX(16.19 standard deviation/5.46% 15 YR annualized return,WHOSX 14.67/7.13,BRUFX 14.18/13.62,CGMFX 29.20/13.73,TGLDX 33.53/13.83 or FPACX 11.46/9.13.To factor in a new car purchase, just add an average purchase/lease amount to the annual spending parameter.The standard deviation is as important to any long term investor as any up/down capture or a 1-3 Yr return that catches one's eyes.

Reply to @mrc70: Hey, I still own CGMFX :-P

Reply to @Maurice: Again, don't want sound disrespectful anyone including Investor, I agree that we should commend people for their honesty in admitting their mistake but what purpose it serves if we are not learning from those mistakes.
The forum is filled with posters, including quite knowledgible ones, dumping funds at the first instance of underperformance. Didn't we learn anything from M* statistic introdced a few years back, the investor return.
For most of the funds, investor returns lag the total returns because investors flock a fund after its success and then dumping after started underforming, thus loosing out, and not capturing its sucess. This is espcially true for volatile funds, CGMFX being the poster child for such funds.

I love the Midcap indexes - have been touting them for a long time as well. Years ago, people would shun indexes at all costs by having look at some of the poor Total Stock Market and S&P 500 index performances from say 2000-2005.
But I have always liked the Midcap indexes because they can't get super top heavy --- if a company grows too large and growth-y then they have outgrown the midcap index and gets kicked-out. Some have cited this as an issue with the general market indexes but it's not a problem with the midcap indexes - but it was fallen on deaf ears and people just don't like indexes - it's been ingrained into people's head.
IJH and MDY have 10-year annualized returns just over 10% as well as Vanguard's Midcap Index fund. This has been a practically worry-free investment for me that I don't need to closely monitor - just rebalancing. Been great as a pretty tax-efficient investment for me as well.
There are also some midcap variants as well - for example:
RFG - annualized returns:
3-yrs: +21.30% | 5-yrs: +14.93%
How many investors jumped on CGMFX 5 years ago? 5-yrs = -5.03% annualized return. The 10 year returns of the Midcap indexes have handily beaten highly recommended funds including DODGX, TAVFX, Ariel Fund plus way too many other All-Star funds to mention which has turned investors into a game of fund musical chairs. Hell even on the old FundAlarm site - a multi-cap fund such as Muhlenkamp was touted and mentioned many times for years by some investors. The past 10 year performance has been a dud and the Midcap indexes have absolutely killed or knocked the snot out of MUHLX - a multicap fund that could invest in any stock it wanted.
It's not the be-all end-all investment but too bad so many investors had a dislike for the S&P500 index and concluded that all index investments were not good and could've used the Midcap indexes strategically. I use a combination of indexes and active funds where it makes sense.

CGMFX wasn't down much yesterday and was up today.

M* keeps calling Bill Miller "contrarian" like its a badge of honor. First of all he was not freak*** contrarian. Saying he was because his fund name had word "Value" on it, while he was simply loading up on the riskiest stocks is BS. What he was doing was not investing in value stocks and simply investing in what was going up, until it stopped going up.
Anyone investing with Bill Miller deserves him. Most overrated fund manager of all time, who should simply retire on his $70 million yacht. But why do that when you can fool people into thinking because he has $1 million in his stinking fund, he somehow deserves credibility?
Full disclosure: Of that list, I own CGMFX and BRAGX.

Superior over the long run? Only sort of. BB is an exciting manager, to put it mildly, but at every interval except 1y you got as good or better performance from YAFFX and FLPSX, with many fewer jolts. And if you're simply dying to rock 'n' roll, give your dough to Soviero (FLVCX) or Heebner (CGMFX). Never really got the appeal of FAIRX even when I held it (long time), except for returns-chasing.

If you see the chart below, you see SMVLX started bettering VFINX only in later half of last year. These IMO skews all performance numbers. Also I'm not sure it is less volatile or safer. For a buy and hold approach IMO, it is a crap shoot as to which is better. One did not start making money in this fund from inception compared to the S&P until late 2012. So when you buy funds like these, you have to catch them at their CUSP. MXXVX, CGMFX are more radical examples, than SMVLX, but I find it difficult to jump on the bandwagon just yet
http://quote.morningstar.com/fund/chart.aspx?&t=SMVLX&region=usa&culture=en-US

Hmmm, indeed.
In what I took to be the same whimsical spirit in which David posted, I peeked at Morningstar's investor returns for LMOPX.
I blinked several times when I saw that the 5 year annualized investor returns are -10.22%, as compared to the slight depletion one might think was implied by the 5 year annualized total returns of - 0.66%. One could not ask for a better illustration of the way volatile returns can shake investors off the roller-coaster at inopportune moments.
I, too, am astonished at the still faithful $1.2 billion AUM. Yet I just looked and saw that CGMFX has an even more faithful $1.5 billion AUM. Maybe those assets belong to investors who have been in these funds for a very very long time...?
gfb

Did you notice that one of the bigger laggards is Alpine Dynamic Dividend Fund (ADVDX). This used to be a Retail class fund and it was actually heavily discussed in the old FundAlarm board. A large number of people were invested in it.
Oh, yes another popular fund of the time CGM Focus (CGMFX) is in the list as well.
The FundX ETF upgrader strategy (REMIX) did not fare well either.
Another interesting thing is that while S&P 500 has recovered the losses, the 2x leveraged version RYTNX is lagging severely.

Hey Mark,
Yep ... It looks like brother Ken has hit paydirt in CGMFX ytd @ 7.03% and CAMAX is hot on his heals at 6.37%.
Skeeter

CGMFX and CAMAX, check out their YTD and 1-mo returns. If anyone still holds these from way back I'd get a good grip on the exit door. Assuming they keep up this pace what's the bet that soon they will become the must have, most talked about buzz funds on fund discussion boards.

Hands down -- CGMFX. I'm down 20% net lifetime investment on it. Ken Heebner has a short position on US Treasuries right now; 15% of portfolio.

ARIVX did not dissapoint me. CGMFX did.

A few points:
I like the fact that the Fairholme website now has some case studies on a few of the larger positions. They don't really move my views (especially Sears, which I think is unfortunate, given the history of the company, but I detailed that above), but in a way I appreciate that Berkowitz is making some sort of effort to make his case for some of these things in a way that's more informative than a few CNBC soundbites.
I definitely get the idea of a long-term time horizon. I have a particular stock that I think is a really exciting and relevant company that is a way to take part in a number of trends that I think have years to play out. I could be wrong, but really believe that this particular story hasn't really played out. It's a particular investment journey that I've evaluated and am choosing to go on.
Berkowitz is in financials. Possibly for years, and the positions are such that they are not likely easily unwound. My view is this: I don't mind if a manager is venturing into something that I don't agree with for a part of the portfolio, but when it's the majority of the portfolio, I'm making the choice not to go on that investment journey and give it the time that the manager thinks it needs.
Greg put it superbly (and thank you Greg, for your post): "I also wonder how valid the deep value concept can be with large, opaque, deliberately obfuscatory, highly regulated companies like Bank of America. " I still am negative on the financials for a number of reasons, but that's a pretty good summary.
People talk about putting their trust in management and I think that's fine, but I think people can't just put their entire faith in management and need to bring their own views to the table to some degree, especially when a fund has half its holdings in three names, like FAAFX. When a fund is concentrated and more reliant upon the manager, it's really an evaluation of whether one wants to go on that journey.
Nothing is a sure thing when it comes to investing, whether it comes to a manager comeback (see Heebner, see CGMFX holders still waiting) or a stock. I think it's fine to give a manager a reasonable amount of time if they want to join them on an all-in thesis, but people need to bring their opinion to some degree and evaluate progress (if any.) Additionally, given the nature of a fund like Fairholme, whether or not someone wants to have it as a core holding or supporting player comes into question, given the nature of the fund. I can see a case where Fairholme is a better supporting player than a core holding (especially to a huge degree) if someone is going to have a long-term view on it.
St Joe has rebounded somewhat, but I think it's another instance where Berkowitz got into it too early. Additionally, I believe there was some discussion at some point of turning it into a holding company, a la Berkshire - I wouldn't get my hopes up. I've said before they should have gotten Asian company Genting to put one of what I call their "resort cities" on the land.
Additionally, I think the $10K (FAIRX) or $25K (FAAFX) minimums are ridiculous. It's supposedly meant to attract more serious investors who will not flee quickly. It totally doesn't matter what the minimum is - investors are going to flee from a bad year if it's a $1,000 minimum or a $1M minimum hedge fund. It played out like that with Fairholme.
If they didn't want money to flee from mutual funds, they should create "enhanced" mutual funds that have lock-ups, but are also less restricted than mutual funds. Maybe when you invest, you have to read and agree to a terms statement. Who knows what the details would be, but raising the minimum isn't going to result in getting people who won't flee when a fund performs like Fairholme did.
Additionally, with all the discussion of FAAFX and FAIRX, I totally forgot about the existence of Fairholme Focused Income (FOICX.)

Reply to @ron: Ouch, on the speculation part, and a bit unfair I think, based on the case studies Berkowitz presents when taking his positions. Even the implied Heebner comparison is a stretch...who trades at frenetic speeds, if I remember correctly.
WaltJ paints the right picture.
But I certainly understand that selecting a more volatile fund, like FAIRX or FAAFX or even FOCIX, which has extraordinary yield, depends on desired investment horizon. About 6-7 years ago, I had more than 50% of my portfolio in FAIRX. Today, that honor is held by the much more steady-eddy (I trust) RNSIX, since retirement is imminent.
But I still hold Fairholme.
BTW, over the last 10 years, a solid, if not perfect, equity fund like DODGX managed to perform comparable to market. Both FAIRX and CGMFX beat, but the former did so with much less volatility and a tenth the turnover. The data:

And, if we dare go back a little further, say to 1999 (just prior to tech bubble pop), Heebner beats Berkowitz who beats Gunn...but these three active traders beat the market, as shown below. If past trends at all predict the future, I pick the blue line.

Dear me, I'm normally on top of such things. I stopped putting more money in CGMFX because of manager's age. Chuck Akre is 69? Of course he is.
Doh! No more investing in AKREX. I'll hold my shares of course, but look to find another concentrated go anywhere manager.
Anyone know of way to screen for manager age? Hard I know, but thought I would ask anyways.

Morningstar I view as a very good source of information. Information, not opinion. Past performance may not be a predictor of future performance. However it is necessary to look at past performance. I mean after all, none of us invested in "Apex Mid Cap Growth" because it had bad performance, right?
I really start with a different metric. How much has the manager invested in his own fund? That's easy to find out. What's harder is how much of that investment constitutes his net worth? That's harder. However sometimes it is easy, because of which I never invested in Bill Miller's funds. When one discloses he has 1M+ in his fund and NOT 10M+, but buys a 70M+ yacht, that tells me all I need to know.
Next I look at things like previous performance at older charges. Also look at how his fund(s) performed in good vs bad years. Also look at previous reports to see if he completely glorifies himself in good years but blames bad stock market for bad years. Needless to say it always help if manager communicates about why he buys a certain investment. No one can be right all the time, but for active management one at least has to have confidence manager is not a closet indexer.
Over period of time I have been gravitating only toward active management that view their funds as a "complete" or "only" investment or regardless of capitalization or asset. Such active management I can muster the courage to hold through thick and thin. It is said - dunno who - one has to give fund manager at least 10 if not 20 years for it to make a difference. Well, unless I really respect a fund family I have stopped buying "This Small Cap Fund" and "That Large Cap Fund" when it is obvious company is simply marketing to asset allocators rather than necessarily have special aptitude.
In my 401K I only use index funds since most active funds in 401ks in my opinion suck most intensely. You may occasionally find Fidelity Contra and Dodge & Cox in 401k, but to me it is imply not worth the effort in 401ks. "MY" funds I buy on weakness and hold on for dear life. FWIW its worth here are some funds I buy when my $0.99 crystal balls tells me to.
WGRNX
AKREX
APPLX
BULLX
AUXFX
PVFIX
JORDX
FVALX
I have some MXXVX and CGMFX which I'm not actively buying. I had expressed opinion elsewhere about manager risk vs market risk. IMO it is worthwhile accepting manager risk in active funds only in above situations at large. No point otherwise and better to only accept market risk with index funds and not compound the problem. This after all is why most active fund managers cannot outperform index managers for the most part. With bonds, as you indicate it is even more difficult. I'm hopelessly bond challenged and have given up trying to figure how to invest in them.
It is public knowledge I'm invested in most Artisan and Bridgeway funds that I could and I have held them for a long time. I'm not adding and have no plans to add.
Good luck. Luck is what you need most, more than anything else. Just ask holders of FAIRX who bought in 2008 and sold in 2011.

Reply to @claimui: Unless I'm mistaken, this fund is not supposed to be an "alternative" or supposed to fit in a portfolio. This fund is supposed to be a complete portfolio.
Of course, in reality there is no such thing. I mean no one is going to invest simply in "Target 2035" their entire portfolio. It's manager risk. Which is what this is about.
FAIRX, WGRNX, CGMFX, PVFIX, DEFIX, BULLX, MUHLX, MXXVX, SEQUX, etc., etc., IMHO never "fit" in a portfolio. We are relying - okay gambling - on someone being as good as they, or others claim. Not every fund one owns is about asset allocation.