FYI: (This is a follow-up article) (Click On Article Title At Top Of Google Search)
Jeffrey Gundlach's new aggressive Tweeting style has sparked a discussion as to whether it makes sense in the financial services industry.
Regards,
Ted
https://www.google.com/search?source=hp&q=Will+Jeffrey+Gundlach's+Trump-like+approach+on+Twitter+work+in+financial+services?&oq=Will+Jeffrey+Gundlach's+Trump-like+approach+on+Twitter+work+in+financial+services?&gs_l=psy-ab.3...3490.3490.0.63960.3.2.0.0.0.0.79.142.2.2.0....0...1.2.64.psy-ab..1.1.79.6..35i39k1.lSaHTE5d3Aw

FYI: Sometime back in the 1990s my financial adviser and I were discussing an investment in the Fidelity Contrafund, a high-performing mutual fund helmed then — and still — by the legendary Will Danoff.
I can’t recall exactly, but I expressed some misgivings about the fund’s fees.
“You’re buying Will Danoff,” my financial adviser said.
Regards,
Ted
https://www.washingtonpost.com/business/economy/your-mutual-fund-manager-just-doesnt-matter-much-anymore/2017/08/07/f3cda63a-7b9e-11e7-83c7-5bd5460f0d7e_story.html?utm_term=.b837b61e5d38

FYI: (Click On Article Title At Top Of Google Search)
What’s not to love about preferred shares? These securities, which have characteristics of both bonds and stocks, pay yields of around 6%—more than the average junk bond—and are typically issued by large, well-capitalized, investment-grade-rated financial institutions. Payouts are usually taxed as qualified dividend income, allowing investors to keep more of what they earn.
There’s one problem, however: They are getting expensive....
Regards,
Ted
https://www.google.com/search?source=hp&q=Preferred+Shares:+High-Yielding+but+Pricey&oq=Preferred+Shares:+High-Yielding+but+Pricey&gs_l=psy-ab.3...4505.4505.0.6550.3.2.0.0.0.0.82.160.2.2.0....0...1..64.psy-ab..1.1.82.6..35i39k1.R5jU2DtHUO8

This certainly wasn't a great PR move, but aside from that, could be viewed as a positive.
It's pretty common to see one fund in a family buying the same securities as another one is selling. Aside from the immediate benefit of reducing trading costs (by trading internally), it can also be taken as a sign that the managers are not all moving in lock step, suffering from group think and a single pool of analysts.
That seems preferable to watching implosions from massive overlap, such as one of BobC's bugaboos, Janus.

@BobC. Not so sure. I lost half my portfolio in dot com bust. I lost 22-23% in Financial Crisis. Only because I sold.
It is true I also didn't enjoy the gains after 2008 that one would have done simply buying and holding. However, I'm not sure I am worse for it. I'm more objective now because I was more "active". Sometimes that's better than deer caught in headlights.
I need to read the whole GMO paper. I'm not going to say anything about people's ability to predict. However I do manage my allocations systematically. I was a 100% invested until last week in my retirement accounts, now I'm not. One doesn't have to make 100% on/off moves, but for me taking some money off the table and trying to deploy it somewhere else or gradually putting it back in does make sense.
Also, sometimes I keep a list of things I "want" (not "need") and if I take gains, I will go buy something. After all, that's why we invest.
Best.

A little bit more about that 2015-2016 dip. From M*'s article "Your Bond Fund Could Be Riskier Than It Looks" (linked to by Ted)
"the trailing five-year period through July 31, 2017, includes only one stressful period for high-yield corporates: June 2015 through February 2016. That was mainly confined to energy and metals and mining firms. ... What if, instead of rebounding in February 2016, oil prices had continued to plunge, or just settled at a much lower floor, pushing more high-yield bond issuers into financial distress? Was this scenario more or less likely than what actually occurred? Risk isn't just what happened (volatility); it's what could have happened but didn't."
From the video, it sounds like this fund had been investing in low rated bonds and got burned in the only time during its lifetime that this section of the market hiccuped. At least as of Jan 31, the fund was still over 50% in BBB or lower-rated bonds. (Jan 31, 2017 annual report). This was after moving the fund into higher quality bonds (per annual report).
Are they managing credit risk well? Are the high returns so far (despite the volatility) due to skill or simply holding mostly junk and near junk?

This just sounds like payment for order flow, hardly a secret, not illegal (though it must be disclosed) and, forgive me, (almost) everyone does it.
Here's a sample disclosure from Schwab (generally payments "average less than $.0009 per share"):
http://www.schwab.com/public/schwab/nn/legal_compliance/important_notices/material_aspects.html
Also from Schwab is their advisory disclosure, that purports to explain how they reconcile best execution with payment for order flow:

Schwab may receive remuneration such as liquidity or order flow rebates from a market or firm to which orders are routed, but at all times is committed to best execution.
Schwab considers a number of factors ...
[and]
Schwab may receive remuneration such as liquidity or order flow rebates from a market or firm to which orders are routed, but its trading practices are designed to achieve best execution.

I'm not condoning the practice, just wondering whether there's anything new here or whether this is grandstanding. (What, a politician burnishing his credentials?) The Boston Herald article says that "Galvin said he suspects the practice is standard in the financial industry." If he only "suspects" a practice that's out in the open, where has he been?

Thought that "Synchrony Financial" rang a bell. Wickipedia: "prior to its 2014 initial public offering, which raised $2.88 billion, Synchrony operated as a subsidiary of GE Capital".

Synchrony Financial looks interesting and I would like to know more about. First impression is that it's interest rates are going to be high on specialty loans.
Any one have any information.
Looked at a Zero turn lawnmower the other day and it was company financed at 26% int.
per year for four years. I tried to buy with cash and not negotiable on price. Also a car lot offered the similar terms on a used car at 22% over the life of the loan.
It's a new dynamic make some money on the product and a killing on the finance charges.
Is cash good anymore???

"Dominance of an index by a single fund is prevented by equally weighting component funds each quarter."

THOMSON REUTERS LIPPER Index POLICIES

Please find the following links to our first-ever Zoom Webinars ... both sessions generated positive feedback and follow-up ... several questions in first session especially. As touted by chip, thought the process was easy, which bodes well for future sessions.
Please fast-forward past the funny looking host with spectacles at beginning! Will be sure to better align camera angle next time. The sound, intro charts, and live demos though came out well.
I've included link to our intro charts as well, which includes summary of concurrent chat session questions/comments.

• MFO Premium Search Tools Webinar Recording - Wednesday, 16 August 2017, 3 pm Eastern
  
• MFO Premium Search Tools Webinar Recording - Wednesday, 16 August 2017, 8 pm Eastern
  
• Intro Charts

Thank you all for attending and your continued support!
As David discussed in this month's commentary, gentle reminder that we will be providing a live, interactive walk through of the MFO Premium screeners and analytics.
Throughout our intention will be to highlight unique insights those tools provide individual investors and financial advisers … and the attendant benefits to themselves and their clients.
Plan on about 1 hour. There are two sessions scheduled for this coming Wednesday, one at 3 pm eastern, and one at 8 pm eastern.
If you have not already received a registration confirmation, you can register directly via the links below:

• MFO Premium Search Tools Webinar - Wednesday, 16 August 2017, 3 pm Eastern
  
• MFO Premium Search Tools Webinar - Wednesday, 16 August 2017, 8 pm Eastern

Hi Guys,
If the market wizards are depending on the investing public to make wise decisions they will be sadly disappointed. Our crystal ball is not just cloudy, it is cracked. Test data demonstrates time and time again that it is not that we suffer from a lack of knowledge, but that we misinterpret what we know, or, even more troubling, what we think we know is just not so.
Here is a Link that presents some data and discusses our knowledge/interpretation shortfalls:
http://www.newsweek.com/how-ignorant-are-americans-66053
In a closing paragraph, the author concludes that " We suffer from a lack of information rather than a lack of ability.” I disagree. I believe we have plenty of information but fall short in our ability to properly interpret that huge information base.
A very long time ago I served in the US Army. At one stage in my military career I administered, scored, and discussed results with the troops taking these tests. In all aspects, the outcomes were disappointing. We think we know more than we actually do.
The good news is that I believe we often recognize our shortcomings and adjust accordingly. I suspect that is why, in the investment world, we overwhelmingly default to Index products. Unlike those on MFO, many folks don't check the financial marketplace on a regular basis. They are satisfied with near market returns minus some modest fees.
In several,ways, these folks are smarter and more efficient than those who choose to invest time and effort in this challenging task. The outputs of that daunting task have not proven to substantially reward its practionaires with outsized profits. It is not that we lack information, and not that we lack ability. It is that we are trying to predict the unpredictable.
Best Regards

FYI: The financial whizzes cocooned in the serene offices of the Sequoia Fund atop one of New York’s iconic office buildings seem far removed from the noise of the city far below.
But the 47-year-old mutual fund known as much for its ties to billionaire Warren Buffett as for its uncanny stock picks that created massive wealth for clients — retirement funds, pension funds, university endowments and regular-Joe investors — has had to descend from its lofty perch in the past two years and rescue its good name.
Regards,
Ted
https://www.washingtonpost.com/business/capitalbusiness/an-epic-winning-streak-on-wall-street--then-one-ugly-loss/2017/08/11/137fc2dc-7637-11e7-8839-ec48ec4cae25_story.html
M* Snapshot SEQUX:
http://www.morningstar.com/funds/xnas/sequx/quote.html
Lipper Snapshot SEQUX:
http://www.marketwatch.com/investing/fund/sequx
SEQUX Is Ranked #245 In The (LCG) Fund Category By U.S. News & World Report:
https://money.usnews.com/funds/mutual-funds/large-growth/sequoia-fund/sequx

Thank you. There was some text that had to be left out for space reasons. One thing was how there is a fee model I think that is more objective than either commission-based or fee-based advice. That is a retainer fee in which the client pays the financial planner a flat rate--a flat fee of x dollars for a specific service such as a financial plan or an annual/quarterly review. This separates the adviser's fees from the portfolio entirely so there are no commissions and no asset based fees. It is similar to a fee you might pay for instance to see an accountant and have them do your taxes. The issue with this is one of popularity as clients sometimes have sticker shock having to write a check to their adviser rather than letting the fees be automatically deducted from their account's assets. They may actually pay more with the asset based fee, but not looking at the fee somehow makes it easier for them to swallow. It's more transparent however to pay the flat fee and can lead to more comprehensive/holistic financial advice as opposed to just portfolio-centric investment advice.

@VF
>> This must be a good one.
It is a good outfit, but, as msf pointed out, excessively expensive.
Some more checking resources:
https://www.thebalance.com/financial-advistors-credentials-2388438
http://www.campaignforinvestors.org/have-other-investors-filed-complaints-against-my-financial-advisor/
From quick googling, so perhaps you are aware.
I do not use Edelman myself, never have, and have no other connection; just a radio listener.
@Maurice
You would have to listen to the show several times to get the nuance of what RE is saying, the soft sell, the offering of impartial advice, the disinterestedness. You 'hard time' is understandable.

Hi Fundalarm,
I completely agree with everything that you said in your excellent post. I not only concur with the general thrust of your comments, but with every single claim. Your profession does provide a useful and meaningful service to many investors.
When I started to invest in circa 1960, I knew very little of market mechanisms, realized my many shortcomings, and employed a financial advisor. He not only provided a needed service, he was also a superior teacher.
After a few years I gained sufficient knowledge and confidence to do my own investment sorting and decision making. I still apply many of the lessons and bits of wisdom that he taught me. In no way do I regret that learning experience. That advisor definitely earned his pay.
I fully understand your cautionary comment that closed your post. There are a few MFO members who harbor deep personal grudges for unspecified and unreasonable reasons. Pity these poor souls! Their comments are easily discounted and discarded.
Best Wishes for your continued success in helping hapless investors. They do exist, even on this fine website.

I am an FA with mostly fiduciary practice. one needs to understand that not everyone is as sophisticated as some contributors to this forum. I see PhD's and MD's who sit in concentrated positions of their company's stock or have other broker relationships that fill them with annuities and mutual fund C-shares. so you might want to demolish the industry all you want, but many find real value in financial planning and guidance and are willing to pay the extra 50 bps (over robo-advisors) for a 1% fee that includes not just money management, but also tax evaluation, withdrawal recommendations, and an impartial advice on all other financial issues -- trusts, adequacy of insurance, home borrowing, etc.
please do not be vile in your responses, even if you don't believe in the industry.
respectfully, fa

Hi msf,
Thanks for your detailed review of my earlier postings. I surely do not remember them. I do like the DALBAR summaries. They do useful work.

You have completely missed the point and are on autopilot in generic self-defense mode:
See, e.g. Prof. Snowball's comments in the 2015 link, or this 2017 analysis by Wade Pfau: "Investors may behave badly. But the DALBAR study does not demonstrate this empirically. Its calculations are wrong and the financial services profession should stop using it as a way to market the value of financial advice."