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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • Morningstar's Evaluation of FAIRX is an embarrassment
    It's interesting that this fund is becoming a topic again after so many years. It was on my list, and I noticed it moving well a couple weeks back; so I took a flyer on it. Needless to say, I've been happy with the results. Pure luck, but good timing. Did ANYONE else actually BUY any; other than me, that is?
    racqueteer in Fund Discussions
  • Healthcare
    Oh to answer the mutual fund question, I did a quick run through MFO for health care funds with best risk related returns, Martin numbers etc in last five years
    Several to consider. I think active management is probably a better bet than an index
    BHCFX is retail version of BHCHX
    SHSAX SWHFX And PHSTX all come in close to top.
    Interesting the only "Great Owl" is Schwab's SWHFX
    sma3 in Fund Discussions
  • Will Bruce Berkowitz get the Last Laugh?
    I used to own FAIRX in the glory years.
    FD1000 in Fund Discussions
  • Will Bruce Berkowitz get the Last Laugh?
    Notable, sure ---- but how long did he have to hold the position to see that gain? IIRC that's been a dog stock for well over a decade and I suspect he's been underwater for most of it as their largest shareholder.
    As a result of these promising developments [in 2021], Berkowitz commented that Charlie Munger (Trades, Portfolio) was correct when he said, “The big money is not in the buying or the selling, but in the waiting.”
    https://www.forbes.com/sites/gurufocus/2021/08/02/berkowitzs-fairholme-fund-takes-a-spade-to-largest-holding-st-joe/
    The fund has landed in the top 5% or the bottom 5% every year in the past nine. It seems not so much a matter of having to wait a decade for a big pop as it is a matter of having more losing years than winning ones.
    msf in Fund Discussions
  • Morningstar's Evaluation of FAIRX is an embarrassment
    But not the whole truth. The first quote continues: "This can be seen in its five-year alpha calculated relative to the category." The second quote continues: "lagging both the category benchmark and average peer over the past 10-year period."
    Over the past YTD, 1,3, and 5 years, M* reports that FAIRX finished in the top 4% or better. Over the past 10 years, FAIRX finished in the bottom 5%.
    This shows that time frames matter. That, and the fact that recent performance can skew figures for several years. FAIRX returned over 34% YTD vs. about 7% for the category. That supercharged performance is enough to make all the trailing results through five years look great, but not enough to make the 10 year performance look good.
    msf in Fund Discussions
  • Will Bruce Berkowitz get the Last Laugh?
    Notable, sure ---- but how long did he have to hold the position to see that gain? IIRC that's been a dog stock for well over a decade and I suspect he's been underwater for most of it as their largest shareholder.
    Given the fact that it's now almost 80% of the FAIRX portfolio, what does Bruce do now? If he pats himself on the back and moves on, can you imagine the year-end Capital Gain distribution to look forward to? He'll probably sell it and buy FNMA, and then sit back and wait a few years.
    PRESSmUP PRESSmUP in Fund Discussions
  • Will Bruce Berkowitz get the Last Laugh?
    Steller earnings at St. Joe yesterday propelled the Fairholme Fund to a gain of 15.01%. That may be the largest single day advance for a mutual fund I have ever seen. This on top of a YTD gain of either 33.3% (Morningstar) OR 34.34% (Yahoo).
    There are always a lot of "Yeah, but"s when talking about Fairholme's performance, but from inception it has done just fine, especially after this year, and especially after yesterday. One has to go cherry picking to choose time periods which cast it in a bad light.
    "Sure it's done great this year, for the past year, for the past 3 years, the past 5 years and the past 20 years, and it's done okay for the past 15 years --- but what about that 10 year number???"
    I think what Bruce Berkowitz has always talked about delivering was good but quite lumpy returns. Is that what we're now seeing?
    And by the way, what about this discrepancy between Morningstar and Yahoo? Does this happen often? Which is correct?
    dryflower in Fund Discussions
  • But what if stocks had not just a rough year or two, but a dismal stretch for over a decade
    If what makes you comfortable is the only (or main) criterion why are we spending so much time here?
    Investing is all about performance...or...other investors are looking for better risk-adjusted performance.
    I have a neighbor who is a multi-millionaire since the early 90s. He invested over 90% in Munies and the rest in stocks. So, he is very comfortable. Was that a great choice?
    Actually, he could be all in MM and still would do great.
    BTW, I have been discussing high-income investing since 2010. They look good for a while and then they don't.
    First, it was VZ,ATT,IBM against SPY,QQQ or MSFT, AAPL
    Second came MLP which got crushed.
    Third came CEFs and they made so much less than SPY,QQQ in the last 5 years.
    If you can prove that very high-income investing has better performance or even better risk-adjusted performance, I'm listening.
    FD1000 in Other Investing
  • But what if stocks had not just a rough year or two, but a dismal stretch for over a decade
    Using Backtest, if one started with $1m in 2000 using 50/50 SPY/VBMFX (BND was not in existence) and took all income, rebalanced yearly, one ended up with slightly over $1m in 2010 and a decent income stream (positive TR). It's all we have to foretell the future. A couple of mistakes trading in 10 years to make a good TR could have been serious.
    I had an edit; The decade was 2000 to the end of 2009, not end of 2010. The results were a little different. The average income was the same but the $1m was short $37k. Still not disastrous.
    Gary1952 in Other Investing
  • But what if stocks had not just a rough year or two, but a dismal stretch for over a decade
    @Gary, what was the total of CG's & dividends over that time period ? I'm thinking no reinvestment took place ?
    Thanks , Derf
    PS Now I'm wondering how this works
    out over ten years if one started in
    2021
    No reinvestment and the income was about $30k per year average. I am not sure how to show the results here. Starting on 2021 is not possible for 10 years into the future.
    I hear how bad returns were 2000-2010. I was an accumulator then so I did OK buying shares. But as a retiree you still did OK.
    Gary1952 in Other Investing
  • But what if stocks had not just a rough year or two, but a dismal stretch for over a decade
    @Gary, what was the total of CG's & dividends over that time period ? I'm thinking no reinvestment took place ?
    Thanks , Derf
    PS Now I'm wondering how this works
    out over ten years if one started in
    2021
    Derf in Other Investing
  • But what if stocks had not just a rough year or two, but a dismal stretch for over a decade
    Using Backtest, if one started with $1m in 2000 using 50/50 SPY/VBMFX (BND was not in existence) and took all income, rebalanced yearly, one ended up with slightly over $1m in 2010 and a decent income stream (positive TR). It's all we have to foretell the future. A couple of mistakes trading in 10 years to make a good TR could have been serious.
    Gary1952 in Other Investing
  • But what if stocks had not just a rough year or two, but a dismal stretch for over a decade
    Surviving only on income isn't a good option if your portfolio loses money or doesn't make enough, hence total return is everything. If your portfolio is big enough, you will survive anyway.
    In the last 5 years, PDI paid about 50% of income in the last 5 years but was up less than 4%. So, 50% income sounds great but less than 4% is a bad performance, especially when the no-brainer SPY made 74%.
    FD1000 in Other Investing
  • Trad/Rollover RMDs
    @msf Ah! Someone else has come up with it for me: 33.4 divisor. (19 years.)
    And now I think I can see how the damnable Table works, now that I've uncovered that number!
    It does not help the likes of me at all that the Table is chopped up into different pieces, as presented there. :)
    Crash Crash in Other Investing
  • Trad/Rollover RMDs
    You're looking for Table II. That is in Pub 590B here:
    https://www.irs.gov/publications/p590b#en_US_2022_publink100090290
    Table I (which you can find by scrolling up from Table ii) is used for inherited IRAs. Table III (scroll down from Table II) is the "usual" RMD table.
    Table III simplifies calculations for most IRAs by assuming that the beneficiary has the same age (life expectancy) as the owner. The IRS figures that if the two ages are within 10 years of each other, that's, well, close enough for government work.
    But if the age difference is more than 10 years, it makes a significant difference in the joint life expectancy. Since your spouse is more than 10 years younger than you, your joint life expectancy is longer than it would be if your two ages were the same. So the number you divide your IRA balance by to get your RMD is higher. That's better (lower RMD).
    If you were 73 now and your spouse were 62, then the IRS would figure your joint life expectancy as 27,2 (Table II). The "usual" table (Table III) would give a life expectancy of 26.5.
    I appreciate your work for ALL of our sakes. What you say is clear, but I am unable to transfer and "translate" it to the particular details of my own situation. The numbers on the tables relate to other numbers on the tables, but none of it means anything since a starting point is impossible for me to find. I've sent you a Direct Message. I hope you don't mind. :)
    Crash Crash in Other Investing
  • Trad/Rollover RMDs
    You're looking for Table II. That is in Pub 590B here:
    https://www.irs.gov/publications/p590b#en_US_2022_publink100090290
    Table I (which you can find by scrolling up from Table ii) is used for inherited IRAs. Table III (scroll down from Table II) is the "usual" RMD table.
    Table III simplifies calculations for most IRAs by assuming that the beneficiary has the same age (life expectancy) as the owner. The IRS figures that if the two ages are within 10 years of each other, that's, well, close enough for government work.
    But if the age difference is more than 10 years, it makes a significant difference in the joint life expectancy. Since your spouse is more than 10 years younger than you, your joint life expectancy is longer than it would be if your two ages were the same. So the number you divide your IRA balance by to get your RMD is higher. That's better (lower RMD).
    If you were 73 now and your spouse were 62, then the IRS would figure your joint life expectancy as 27,2 (Table II). The "usual" table (Table III) would give a life expectancy of 26.5.
    msf in Other Investing
  • Perils of Chasing Star Managers + Other Fund Stories from Barron's
    Back to the original topic…
    Amy Zhang was supposed to be a star SCG and MCG manager at Brown Capital. She got hired away by Alger. However, her record there leaves a great deal to be desired. Not that her former fund BCSIX has shot the lights out since she left; its total return for the past 5 years is only 7.5%. OTOH, AGOZX has racked up a 5-year loss of 3.07% under Zhang’s tutelage. Her Alger MCs haven’t done any better.
    BenWP BenWP in Fund Discussions
  • Utilities
    If one likes energy company prospects but does not like the high volatility of energy equities, one can look into finding funds with a portfolio that combines utility and energy stocks. GASFX is one such fund, which I never owned and have not research into but it has an M* analyst rating of Negative. I used to own GLFOX many many years ago. I treat GLFOX as a downstream vertical; whereas, GASFX as a upstream vertical.
    I currently own SWX in my trading account.
    BaluBalu in Fund Discussions
  • Trad/Rollover RMDs
    "Take note that calculating your RMD works a bit differently if your spouse is the only primary beneficiary to your account and is more than 10 years younger than you. In this case, you must use the IRS Joint Life and Last Survivor Expectancy Table. You can also find this on IRS Publication 590. However, your life expectancy factor would be based on the ages of you and your spouse. But the formula doesn’t change. You’d still follow the same IRA withdraw rules listed above."
    Just discovered this. My spouse is indeed the only primary beneficiary, and is more than 10 years younger than me. Does that work to my advantage?
    "...The IRS has other tables for account holders and beneficiaries of retirement funds whose spouses are much younger."
    I still have 4 years until reaching age 73.
    ....And just try to locate those withdrawal tables (and alternative withdrawal tables) re: "combined life expectancy." I dare you. Your tax dollars at work. Geniuses, everywhere:
    https://www.irs.gov/forms-pubs/about-publication-590-b
    Crash Crash in Other Investing
  • Perils of Chasing Star Managers + Other Fund Stories from Barron's
    @FD1000 In other threads haven't you also advocated for owning IOFIX at times, a bond fund with an extraordinarily high for bonds 1.50% expense ratio? You've also suggested PRWCX, which, while an excellent fund, isn't cheap but average expense ratio wise and more expensive than American Funds' competitors. So it might help if you explain why these previous statements don't quite add up when combined with this one.
    Yes, years ago I used to own a lot of IOFIX. I have a system that works for me and is not recommended to anybody. I don't care too much about ER, I'm a trader.
    On the other hand, there are funds that can be great for other investors with a decent ER, such as PRWCX, PIMIX at its best and others.
    FD1000 in Fund Discussions