FYI: Last week, Financial Advisor magazine published a story announcing that one of the mutual fund industry’s oldest funds, run by one of its most enduring fund managers, Kenneth Heebner, went out of business when Natixis Global Asset Management liquidated its CGM Advisor Targeted Equity Fund.
Regards,
Ted
http://www.etf.com/sections/index-investor-corner/swedroe-star-manager-loses-luster?nopaging=1
M* Snapshot CGMFX:
http://www.morningstar.com/funds/xnas/cgmfx/quote.html
Lipper Snapshot CGMFX:
http://www.marketwatch.com/investing/Fund/CGMFX?countrycode=US
CGMFX Is Ranked #240 In The (LCB) Fund Category By U.S. News & World Report:
http://money.usnews.com/funds/mutual-funds/large-blend/cgm-focus-fund/cgmfx

FYI: (Copy & Paste from Amazon.Com)
How does one spot the bottom of a bear market? What brings a bear to its end?
There are few more important questions to be answered in modern finance. Financial market history is a guide to understanding the future. Looking at the four occasions when US equities were particularly cheap - 1921, 1932, 1949 and 1982 - Russell Napier sets out to answer these questions by analysing every article in the "Wall Street Journal" from either side of the market bottom.
In the 70,000 articles he examines, one begins to understand the features which indicate that a great buying opportunity is emerging.
By looking at how markets really did work in these bear-market bottoms, rather than theorising how they should work, Napier offers investors a financial field guide to making the best financial provisions for the future.
This new edition includes a brand new preface from the author.
(Scroll And Click On Download)
http://www.moneylifeshow.com/highlights.asp

'Let the jury consider their verdict,' the King said, for about the twentieth time that day.
'No, no!' said the Queen. 'Sentence first - verdict afterwards.'
'Stuff and nonsense!' said Alice loudly. 'The idea of having the sentence first!'
'Hold your tongue!' said the Queen, turning purple.
Mr. Swedroe is a marketer. His title, Director of Research, strikes me as modestly misleading since we often associate that title with someone leading the stock-by-stock, market-by-market analytics effort. BAM's official description of his role is this: "Larry regularly reviews the findings published in dozens of peer-reviewed financial journals, evaluates the outcomes and uses the result to inform the firm’s formal investment strategy recommendations." What does that mean? The most recent research I read concluded that frequent portfolio disclosure depresses performance by facilitating front-running of the fund. Okay, and therefore ... ? Several recent studies found that most active funds don't outperform their benchmark's raw returns. Uh-huh. "Finding successful funds ex-ante is extremely difficult." Someone got published for that nugget. At base, Larry's conclusion was reached a long time ago, BAM is deeply invested in it, and I'm not sure what he's actually contributing. The nature of peer-reviewed articles is that they aren't timely, so it's unlikely that the answer to the question "what on earth are the Chinese doing?" will be found there.
On the risk-adjustment stuff, I looked at GMO's five largest funds.
Benchmark-Free Allocation (GMBFX) is largest and it's beaten its peers since inception with dramatically higher returns (about 300 bps/year) and lower risk (a downside deviation of 4.4 versus 7.2 for its peers). It's Sharpe ratio is 0.99 versus 0.43 for the peers.
International Equity (GMOIX) is second largest and it's beaten its peers since inception with modestly higher returns (about 120 bps) and lower risk (DSDEV 11.2 vs 12.5), resulting in a higher Sharpe (0.24 versus 0.16).
Quality (GQEFX) is third, a Great Owl (i.e., a consistent winner), with higher returns (40 bps), lower DSDEv (7.8 versus 10.3) and higher Sharpe (0.44 versus 0.32).
Emerging Markets (GMOEX) is fourth. It has better performance (180 bps), very slightly higher volatility (16.9 versus 16.8) and a higher Sharpe (0.14 versus 0.06).
US Equity Allocation (GMUEX) is fifth. Better performance (90 bps), lower vol (9.8 versus 10.6) and higher Sharpe (0.51 versus 0.42).
If you play with the comparison groups or the time frames, you can substantially change the results. That said, most of these funds lead most of their peers, mostly with lower volatility, over most full market cycles.
David

@MJG: your points on n-factor models are well taken. It would be interesting to compare fit statistics and information criteria for each of the models for each of the funds to better determine if funds' all have the same underlying factor structure. Which model is correct? Is the correct model the "correct" all the time? Leave that as it is for another time. There's also a methodological issue in terms of getting the random variable distributions of the observed indicators correct. Without that, the factor analysis results are apt to be biased, and statistical inferences on parameters from the factor solution are apt to be incorrect. Same, of course, goes for a t-test, etc. Would the biases be consistent across funds/comparisons? Hard to say. But, leave that as it is. There is also the question of how appropriate linear or fully parametric models (such as factor analysis) are for something as opaque as financial markets and asset performances. Perhaps a parametric model should explicitly account for trending (is "momentum" sufficient) in a different manner. Again, leave that as it is.
Because, what I really want to know is -- in terms of actual, realized, dollar value returns -- what is GMO's performance when we factor in their contribution to risk reduction. I would think that is what GMO with their "2-sigma" logic, etc., is trying to do: not just pick attractive and/or undervalued assets per se, but avoid market bubbles. This is how I often hear Grantham speaking of GMO's mission. Here I think a different accounting for volatility is important before dismissing what GMO does or doesn't do. And it doesn't have to be all that complicated, but simply comparing means to means doesn't account for this aspect of what GMO attempts to do (perhaps adding "momentum" to a factor analysis does capture this in some tangential way; I don't think so, but its possible). I would think an analyst such as Larry savvy enough to wax poetic about factor analysis would know this. For example, it is quite possible for Fund A to have a lower mean annualized return than Fund B, but outperform Fund B, if it has lower volatility. As Buffett says: "Rule #1 is to not lose money; Rule #2 is to not forget Rule #1". Who cares if the market index has a higher average return but takes costly bites out of your principle along the way? That's really the point of my critique. If GMO lagged the market average by 0.5% but reduced investors' exposure to the 2001 or 2008 downturns, they would have added significant value that would likely not be captured in simple mean comparisons or (as I understand it) an n-factor model.

This is all well and good...I suppose. But he needs to taken into account the volatility (standard deviation) in performance, not just the mean. It's not hard to outperform on a total value basis if your mean comes in lower than the benchmark if your volatility is lower than the benchmark's. I find it disappointing that a financial advisor does not appear to explicitly account for volatility in his/her analysis.
Also, not sure what he's doing with his factor analysis stuff. Maybe someone can explain that to me. I've used factor analysis plenty in my day job, but am not sure how he's using it here.
I write all of this, BTW, as someone who does not have a horse in the GMO race (although I enjoy their quarterly letters).

http://www.sec.gov/Archives/edgar/data/1418191/000141304216000337/walthscvsupp.htm
497 1 walthscvsupp.htm
WALTHAUSEN SMALL CAP VALUE FUND
TICKER WSCVX
February 24, 2016
SUPPLEMENT TO PROSPECTUSES DATED JUNE 1, 2015
The Board of Trustees of Walthausen Funds (the “Trust”) has approved the re-opening of the Walthausen Small Cap Value Fund (the “Fund”), a series of the Trust, to new investors and new accounts effective on or about March 1, 2016. In connection with this action, the following changes are hereby made to the Fund’s Prospectus:
The sentence “The Fund is closed to new investors. See “Investing in the Fund” on page 8 for additional details.” is deleted on page 4 and page 8 of the prospectus.
The section under the heading “Investing in the Fund” is deleted on page 8 of the prospectus and replaced with the following:
You may purchase shares directly through the Fund’s transfer agent or through a brokerage firm or other financial institution that has agreed to sell the Fund’s shares. If you are investing directly in the Fund for the first time, you will need to establish an account by completing a Shareholder Account Application (To establish an IRA, complete an IRA Application). To request an application, call toll-free 1-888-925-8428.
************
Please retain this supplement with your Prospectus for future reference. You may obtain more information about the Fund at www.walthausenfunds.com or by calling toll-free 1-888-925-8428.

By way of a backhanded compliment, they have simplified their website a bit. (I'd not seen one more complex than theirs.)
Before, if you had the usual type of accounts (e.g. 403(b), or anything else using the TIAA-CREF annuity structure), and you also had "external" accounts (e.g. a taxable brokerage account), these showed up in different places on their website, and you had to navigate through them differently. Now, all the statements are in one place. An improvement, albeit a small one.
But the company structure is just as complicated as always. Still with the three share classes that charge IRAs the most. Still with a bank that's somewhat off to the side. Still without statements online for aftertax annuities. It took me 4-5 clicks and scrolling down each of the pages to get to the aftertax annuity performance (worse than before, at least because of all the scrolling required).
Still can't find any info about what funds they offer NTF (via their brokerage). There's just one link to Nuveen funds (which they own). It's not under the drop down menu (What We Offer), but at the very bottom of the page (as you scroll down for miles), where you see it under "For Financial Advisors". So you can get these NTF at other brokers but not at TIAA (formerly TIAA-CREF)?
Lipstick on a pig is too kind (and I do think TIAA-CREF is excellent for some purposes)

Hi Dex, Hi BobC
Thanks for your commentary. Perhaps from this dialectic exchange a useful synergy will emerge. That often happens.
I take no issue with the general rules that you both advocate. I too use them. But they are motherhood and apple pie. If your mother and father did not lecture them as a practical gospel before teenage, your parents were delinquent. That advice is accepted wisdom; it just does not go far enough for retirement planning purposes.
Those guidelines simply do not yield a yardstick to measure retirement planning progress against, and do not help in a final retirement decision. Some metrics are needed. A Monte Carlo approach is a perfect tool given the uncertain nature of future portfolio performance. Monte Carlo methods were specifically developed during World War II to address uncertainty, especially when a boatload of data are accessible.
Napoleon said: “Nothing is more difficult, and therefore more precious, than to be able to decide”. Information gathering, data interpretation, hypotheses testing, and flexibility to adjust are essential elements in any ongoing retirement planning process.
Without numbers and expectation estimates, a potential retiree is lost at sea. Without credible estimates any retirement consultant is similarly lost at sea, and is not providing a full service. Convenient, easy to use, and fast Monte Carlo simulations fill many of the gaps, at least in a probabilistic sense. That’s as good as it gets.
For example, use the PortfolioVisualizer Monte Carlo tool. In a few minutes it runs 1000 random cases for the input parameters. Those input parameters are easily changed to explore what-if scenarios. Those what-if scenarios test the robustness of any assumptions. Time span is changed with a single input.
Output includes a likely median end wealth portfolio value, a portfolio survivable probability, and the 25 and 75 percentile portfolio value likelihoods. All this is good stuff and informs both the sagacity of the ongoing savings process and any final retirement date decision. These outputs can be updated over time, and yield retirement guidance. And it’s all free for the doing.
Note that the Monte Carlo simulators that I recommend do not operate in a vacuum. They are just one tool in a retirement planning toolkit. Adopting that tool does NOT preemptively require discarding all the other elements discussed in these exchanges. These are not mutually exclusive planning devices. They should be used in tandem.
Monte Carlo simulators have become a more or less standard tool in financial planning circles. An early version was developed by Nobel Laureate Bill Sharpe. He still runs that service as part of his Financial Engines website. Like all tools, the everyday American wisdom is to “use it or lose it”. I’m at a loss to construct an alternate way to generate any meaningful projections for the survivability of any retirement war-kiddy.
Your suggestions are welcomed and encouraged.
Best Wishes.

"a financial services brand that's simple, maybe even a little fun"
Yep. 30 years of giggles, and counting! Now if only they'd go back to the low minimum / waived minimum model that might be marketable to the timid and confused audience they're intending to address, I'd be happier.
David

FYI: Financial planning and everything associated with it can be stressful and complicated, even off-putting. For a financial services brand like TIAA—which just dropped the "CREF" from TIAA-CREF—that can present a marketing challenge.
Regards,
Ted
http://www.adweek.com/news/advertising-branding/why-financial-services-company-shortened-its-name-and-changed-its-logo-169807
Mutual Fund Wire.Com Slant:
CREF-Less:
http://www.mfwire.com/common/artprint2007.asp?storyID=53520&wireid=2
TIAA Website:
https://www.tiaa.org/public/index.html
M*: TIAA Fund Family:
http://quicktake.morningstar.com/fundfamily/tiaa-cref-asset-management/0C00001YVW/fund-list.aspx

Simple heuristics (rules-of-thumb) are fine when making common everyday decisions like buying a hamburger or not, but are totally inadequate when making complex, significant decisions like those about retirement.

If there is one thing that rules of thumb work best - it is retirement planning especially when you are young:
- know how to budget
- track your spending
- pay yourself first
- spend less then you earn
- invest 100 (or 110) - age to stocks, rest to bonds
- understand cash flow thrown off by your investments and your retirement needs
Those simple rules of thumb and maybe a few others are the foundation for financial retirement planning.
While those calculators are interesting ( I've experimented) with them, they are useless without the basics.
Financial planners and stock salesmen like those calculators because they make retirement planning complicated and retirement a nearly impossible goal.

Hi Guys,
Simple heuristics (rules-of-thumb) are fine when making common everyday decisions like buying a hamburger or not, but are totally inadequate when making complex, significant decisions like those about retirement.
The retirement when, where, how much do I need, drawdown rate, portfolio size and placements seem hopelessly intertwined to permit a comfortable and confident decision. But a financial tool is readily accessible that significantly attenuates doubt, and it’s not rule-of-thumb based.
I’ve proposed this approach many times on MFO, but I don’t hesitate to do so once again. That tool is Monte Carlo simulation analyses. I do not apologize for being a broken record in this instance.
Many such tools are easily accessible for free on the Internet. Two such codes that I have previously recommended are the PortfolioVisualizer and the MoneyChimp codes. Here are direct Links to these Monte Carlo simulators:
https://www.portfoliovisualizer.com/monte-carlo-simulation
http://www.moneychimp.com/articles/volatility/montecarlo.htm
Please give them a few tries. The inputs are self-explanatory, and the codes are fast. Many scenarios can be explored over a short commitment of time. Endless what-if scenarios can be examined with end portfolio average value and portfolio survival likelihoods as their primary outputs. Thousands of cases are randomly constructed for the projected market returns.
The PortfolioVisualizer tool has more user options, but the MoneyChimp version also does yeomen work. Since these are Monte Carlo-based codes, each time a simulation is made, expect slightly changed predictions. That somewhat captures the fragile nature of the uncertain future.
Retirement decisions will be dramatically improved by application of these simulators. Imperfect analyses (even estimating the range of possible market returns is risky business) almost always beats poorly informed guesstimates. Before making a retirement decision, give the Monte Carlo codes a test ride. They are powerful stuff for everyone.
And for normal circumstances and drawdown rates, a 2 million dollar portfolio is not necessary for a portfolio with some equity holdings. Do the analyses to challenge the robustness of that statement.
Best Wishes.

Objective & Overview
The Hennessy Cornerstone Mid Cap 30 Fund seeks long-term growth of capital by investing in 30 Mid Cap companies, screening for undervalued stocks with above-average growth potential.
Investment Strategy
The Hennessy Cornerstone Mid Cap 30 Fund formula marries value with momentum, seeking growth at a reasonable price. Stocks for the portfolio are selected by strict adherence to the following time-tested, quantitative formula:
Market capitalization between $1 and $10 billion, excluding foreign stocks/ADR's
This market cap spread allows for inclusion of a broad range of mid-cap companies. Foreign stocks/American Depositary Receipts, or “ADR's” are excluded as they do not generate additional returns for the additional associated risk.
Price to sales ratio below 1.5
This value metric helps to uncover relative bargains. The formula chooses sales as its guide because sales figures are more difficult for companies to manipulate than earnings and frequently provide a clearer picture of a company's potential value.
Annual earnings higher than the previous year
While sales may be the best indicator of a company's value, the formula considers improvement in earnings as an indicator of a company's financial strength.
Positive stock price appreciation, or relative strength, over 3 and 6-month period
Historically, relative strength has been one of the most influential variables in predicting which stocks will outperform the market.
Select the 30 stocks with the highest 12-month price appreciation
Limiting the portfolio to 30 stocks allows just the top performers to be included, while providing ample diversification
The portfolio is rebalanced once annually, generally in the Fall
https://hennessyfunds.com/funds/equity/individual/f_3/sc_investor/cornerstone_mid_cap_30_fund/p_Quarterly/overview.fs

Fund now has $6B in assets, all classes. the A shares OSMAX is available load waived as NTF. I own OSMYX, institutional version. I called them and if fund is held with financial advisor, can still add. Nice fund.
January 29, 2016
OPPENHEIMER INTERNATIONAL SMALL-MID COMPANY FUND TO SOFT CLOSE ON APRIL 1, 2016
Dear Oppenheimer International Small-Mid Company Fund Shareholder:
In an effort to continue to provide our shareholders with a long-term strategy for success, we are placing limitations
on certain investor purchases into Oppenheimer International Small-Mid Company Fund. We believe
these new limitations will help position the Fund for continued sustainable long-term growth.
Effective as of the close of the New York Stock Exchange on April 1, 2016, the Fund will no longer accept
purchase orders from new investors and existing Fund shareholders will no longer be able to purchase new
shares or exchange shares of other funds into the Fund, subject to certain exceptions including:
• If you own shares in certain types of employer-sponsored retirement plans you can continue to purchase
shares and exchange into the Fund.
• If you own shares through an OppenheimerFunds Portfolio BuilderSM account you can continue to purchase
shares and exchange into the Fund.
• If you own shares in any 529 Plan that currently includes the Fund within one or more of their investment
options, those existing 529 portfolios are not affected.
Distribution and capital gains set to reinvest in Oppenheimer International Small-Mid Company Fund will continue
to reinvest after the close date. If you have automatic purchases established for this Fund and one of
the above exceptions does not apply, your auto purchase feature will be turned off before the effective
date. This will include purchases you make through Asset Builder, exchanges from another Oppenheimer fund
into this Fund (including dividend exchanges) and other automatic purchase methods. If you wish to continue
your automatic investments after the effective date, you will need to choose a different investment to receive
the purchases. Your financial advisor can help you make changes to your account.
We will continue to monitor the Fund to determine if we need to further modify these restrictions on investment
purchases. Please see the prospectus supplement, which is available on our website at oppenheimerfunds.com
for additional details on these and other changes to the purchase restrictions for the Fund.
If you have any questions, please speak with your financial advisor or contact us at 1 800 CALL OPP (225 5677)

FYI: Not only the film industry has glamorous events such as the Academy Awards (better known as the “Oscars”) and the “Golden Globe Awards,” where juries select and reward the best movies from their point of view. The mutual fund industry also celebrates its best performing funds with fund awards ceremonies at the beginning of the year. As with movies, these fund awards are determined by a jury (a qualitative screening) or with a quantitative screening on a global basis by the likes of Morningstar and Thomson Reuters Lipper, who use a similar quantitative methodology for their awards all around the world. Or the funds are selected by local players, who award funds only in a single country or region according to their definition of the best funds.
Regards,
Ted
http://lipperalpha.financial.thomsonreuters.com/2016/02/monday-morning-memo-are-fund-awards-only-showtime-for-mutual-funds/

FYI: Financial advisors and other professional investors often have a lot of questions about liquid alternatives, and for good reason. The investment strategies used in alternative mutual funds and ETFs are not straight forward by any means. Many use some form of leverage. Most utilize the ability to short securities, while others use a variety of derivative instruments to efficiently gain exposure to certain assets classes or securities.
Regards,
Ted
http://dailyalts.com/understanding-liquid-alternatives-ask-the-right-questions/

http://finance.yahoo.com/q?s=NCATX paying 3.20%
http://finance.yahoo.com/q?s=HYD 4.79%
The gold rush might be over as the interest rates (especially for non Californians) are low for the Cali munis.
Was it 5 years ago that Cali was having financial problems? So, could their performance be coming from that low point and they have caught up with the market?

Actually, if I can remember correctly, excluding the 2008 financial crisis, the worst 12 months ever since the beginning of the new Milken era of junk bonds in the 1980s. They never ring bells at bottoms so will just keep probing and exiting with tight mental stops when proven wrong. So based on Wednesday's intraday action in all markets went to 5% junk corporate bonds and pared back to 45% junk munis by Friday's close. Don't feel comfortable with so much cash but can change that in a day or two if necessary. Junk munis are but a penny off all time highs (total return) set Thursday.

FYI: Many investors are searching for a refuge in the latest stock-market storm.
Ever since the financial crisis of 2008-2009, fund companies have been pushing “smart-beta” funds. These are bundles of companies that have tended to be less risky and more lucrative than the market as a whole, because of cheaper stock prices, higher dividends or other factors.
Regards,
Ted
http://blogs.wsj.com/moneybeat/2016/02/12/chasing-hot-returns-in-smart-beta-funds-is-a-dumb-idea/tab/print/