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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.
  • Help buying individual BOND
    Hello, never bought an individual Bond earlier and all my bond investments via mutual funds - are under water this year.
    So trying to buy an individual bond in my fidelity account to supplement 4% SWR later (retired this year and in perfect storm - sequence of returns risk - luckily holding cash for expenses for two years).
    CUSIP - 3133ENT26 FEDERAL FARM CR BKS BOND 5.30000% 10/19/2026
    Looks like 4 year BOND but may be called after 1 year.
    I will get 5.3% - paid semi-annually and on 10/19/2026 - I will get my principal back unless called earlier.
    Am I right in my understanding?
    Any risk, I do plan to hold it till maturity.
    Thanks,
  • Fidelity files for Credit Interval Fund
    Interval-funds are relatively new. Many major firms have them (BlackRock, Blackstone, BNY Mellon, Calamos, GS, Invesco, KKR, Lord Abbett, Pimco, Principal). And this is Fido's first - can you imagine Fido being left behind in something (it almost got left behind in ETFs where it had an early ONEQ and then nothing for years, and finally catching up fast).
    https://stockmarketmba.com/listofintervalfunds.php
  • 2022 year-end capital gains distribution estimates (Vanguard's Final estimated year-end posted)
    Primecap funds at https://www.primecap.com/ have 2022 estimates now
    Rather large, again. Looks like around 9%, for example, in the case of POAGX. Even in the midst of several years' worth of redemptions, plus this year's losses, they may not feel like they're finding great values since they're keeping that fund and all three Vanguard ones closed.
  • from Canada: consumers will now be dunned

    The customers can pay cash by several ways:
    1. A bank check (merchants often need driver license plate number and another piece of ID). Last time I did that was over 20 years ago.
    2. a debit card. Often the gas station charges $0.35 per purchase.
    I think the usual way to pay in cash is to go up to the person at the cash register and hand them green paper. You know : 5, 10, 20 dollar bills. That's how I've paid for gas for decades. I have yet to see a filling station attendant refuse actual cash money.
  • How Coal Companies Sidestep Mine Clean Up Obligations
    Worth reading: https://bloomberg.com/features/2022-west-virginia-coal-mining-alpha/?leadSource=uverify%20wall
    All these old coal mines present a looming and potentially expensive disaster for coal country—and for taxpayers who could be on the hook. Meanwhile, Alpha’s share price has gone up more than 700% since it exited bankruptcy in 2016. The executives who guided the company through bankruptcy, a corporate split, a re-merger and a name change have been handsomely rewarded. Kevin Crutchfield, CEO from 2009 to 2019, earned at least $72 million in those years. President Andy Eidson, set to take over as CEO, has made at least $16 million since he joined Alpha a decade ago.
    Environmental advocates say big coal companies transfer their mines and reclamation obligations to save money, despite the cheery confidence they express in the ability of new owners to clean up their messes. Indeed, Alpha and Lexington both trumpeted their commitment to reclamation when the deal was announced.
    “It’s a fig leaf,” says Erin Savage, a scientist at Appalachian Voices in Boone, North Carolina. “It comes down to the math.” Alpha and other large coal companies must know that reclamation would cost them more than they pay to the company that takes the mines off their hands, Savage says. “Otherwise, why would they do it? They’d just do the reclamation themselves.”
  • Classic stock and bond mix no longer makes sense. Do this instead says BlackRock’s Rick Rieder
    I was very leery of VWINX and other "allocation" funds. Everyone knew the stock market was close to peak PE, but when interest rates were so low last year, the protection bonds offered in the past disappeared, especially as VWINX duration is still 5 to 7 years.
    I don't understand why they didn't move rapidly into short term bonds and cash. The bonds they held were almost guaranteed to lose 5 to 10%
    I can only assume this is a case of being stuck as their mandate did not allow 70% cash
  • from Canada: consumers will now be dunned
    Credit card business is a very profitable business with little downside risk. That is why Visa and Mastercard stocks are commonly held in growth mutual funds.
    Think the transaction fees have gone up from 3% (Visa and Mastercard). Now the credit card companies offer $ reward annually based the amount the customers spent.
    The customers can pay cash by several ways:
    1. A bank check (merchants often need driver license plate number and another piece of ID). Last time I did that was over 20 years ago.
    2. a debit card. Often the gas station charges $0.35 per purchase.
    The downside of debit card is that there is no credit protection for the customers in case of fraudulent charges, and it is tied directly to your checking account. With a credit card you can dispute the charges with credit card companies and they will investigate. If proven in favor of the customers, no payment is required.
    With high gas prices everywhere, one can minimize the debit card risk by paying inside the gas station, say $100, any amount unused will not taken out from the checking account. This would avoid “skimmer” that thieves often install outside by the gas pumps.
  • Wealthtrack - Weekly Investment Show
    @Observant1, thank you for the great summary on Giroux’s interview.
    His timing coming into 2022 is impeccable with his positioning of the portfolio.
    He repeated “recession” several times even though he does not believe it. However, moving 10% of fixed income to 5-yr treasury indicated he is seeking something more than merely the higher yield (4.2% as of 12/14/22). Still he has a healthy % in bank loan and a few investment bonds.
    He reduced the overweighting of utility to fund the cyclical stocks including the semiconductors and other quality growth stocks (3-5 years horizon).
    Discussion on GE stock helped to clarify why he still holding 3% of it.
    Clearly he knows his holdings (40 stocks) well and move in and out based on their valuation.
    Still he don’t like energy stocks.
    For full disclosure, PRWCX is one of our largest holdings. I will get his book for Christmas.
  • Classic stock and bond mix no longer makes sense. Do this instead says BlackRock’s Rick Rieder
    No doubt short term bonds are paying well. But further out on the curve “plain vanilla” bond funds don’t appear to have fared much better than a diversified mix of equities or many mixed allocation funds. PRGMX, which I’d characterize as holding very high quality bonds of intermediate duration (5-7 years), is down 14.6% YTD. Global bond fund DODLX, which I own, keeps around 50% or more in the U.S. and leans towards higher quality bonds (with some sub-investment grade). It is down 14.45% YTD.
    As for allocation funds, a couple 60/40 (bonds/stocks) from TRP sport the following YTD numbers:
    PRSIX -17.6% / TRRIX -17%. Even highly esteemed VWINX is off 15% YTD. If you check equity heavier conservative funds like PRWCX and DODBX you’ll find both have held up somewhat better than those bond and allocation funds I cited.
    Of course managers can use derivatives to make their bond funds perform a lot better or even buck the trend, as I’ve sure some have done. But for the “plain vanilla” category further out on the curve there’s not a lot to recommend them over equities up to this point. None of this will cut your losses or make you feel better. Just a humble attempt to look at a few categories that longer term oriented investors tend to rely on.
    Re Rieder’s suggestion - Note there is an air of market timing in what he says. He’s talking about a temporary shift to fixed income to take advantage of the spike in short term rates. I’d expect Rick to “ring a bell” to announce when the day arrives when we should move out of that defensive position into “growthier” holdings. :)
    Most recent YTD numbers from Bloomberg I’ve glanced: Dow -18% / S&P - 25% / NASDAQ - 35%.
    While it’s dangerous to try to equate this with another period (No two are the same.) - if you were to overlay this bear decline on top of the ‘07-‘09 bear market, I suspect in both magnitude of losses and duration we’re somewhere around the mid-way point.
  • Matthews Emerging Markets ex China Active ETF in registration
    It looks like the Matthews group has been hemorrhaging assets and now manages less (a lot less) money than they did 10 years ago. The company is flailing and throwing all kinds of sh*t at the wall in the hope something will stick. Look at the mass exodus of managers. My opinion, of course, and worth what you just paid for it.
    Matthews Asia funds were once appealing options for investors seeking Asian equity exposure.
    The firm had deep experience with Asian markets and had several talented mutual fund managers.
    Unfortunately, quite a few of these managers exited the company over the past few years.
    There has also been some turnover in the executive ranks.
    Matthews Asia is floundering.
  • Matthews Emerging Markets ex China Active ETF in registration
    It looks like the Matthews group has been hemorrhaging assets and now manages less (a lot less) money than they did 10 years ago. The company is flailing and throwing all kinds of sh*t at the wall in the hope something will stick. Look at the mass exodus of managers. My opinion, of course, and worth what you just paid for it.
  • Classic stock and bond mix no longer makes sense. Do this instead says BlackRock’s Rick Rieder
    Ominous other years in the quadrant in that chart where we are now; the other two began long downturns. 1931 we all pretty much know about; 1969 was the first down year ushering in a decline that didn't break until 1982.
  • foreign dividends: a stinky, poopy discovery
    No, never had issue on foreign tax credit. My foreign tax credit is quite small.
    What will you do differently in your 2022 tax filing in order to avoid this foreign tax credit issue? I have been filing electronically for many years and have no issue.
  • foreign dividends: a stinky, poopy discovery
    The IRS just denied my deduction for foreign taxes that were shown in my brokerage 1099s; I didn't file From 1116. IRS said that those foreign tax credits were just offset by my AMT obligations. I am really far from AMT but did have high tax-exempt interest from private-activity bonds (a change from previous years).
    Does anyone know more about this issue? There are AMT-free muni funds too and I can switch to those. Is that the issue, or something else? The amount denied isn't large enough to hire a lawyer.
    BTW, as I had paid my taxes due via IRS Direct Pay, so this IRS letter was the only indication for me that my 2021 tax return (paper filing!) was finally processed.
    BTW2, I was able to login to my IRS Direct Pay with my old credentials and the new IDme is just optional. I knew its implementation was delayed/suspended but I now got verification.
  • Parnassus Growth Equity Fund in registration
    I wondered how soon after AMG bought them that they'd start rolling out new stuff or tweaking existing products.
    PRILX (which I used to love, but got out of last year) has been more growthy in recent years, so is this really necessary? Unless it's to allow PRILX to be more value-and-income oriented again?
  • foreign dividends: a stinky, poopy discovery
    @Crash : Do the Canadian banks have a foreign tax applied to their dividends ?
    I was up there on one of my many trips, many years ago. I remember the conversation with the banker-person that day. it was at a BMO branch. She explained that if I were to open a brokerage account there, but I live in the States, they would withhold tax. But of course, depending upon what's on your own 1040, it may be refunded to you. You DO have a line-item on the 1040 where you can claim credit for "Foreign Tax Paid." ..... Living in the States and holding a brokerage account here, and buying canadian bank stocks via a stateside brokerage is a bit different thing. But I'd bet dollars to donuts you'd have some foreign tax withheld. Wish I could tell you for certain.
  • What “Bubble”? ARKK closing in on 70% for one year
    Fellas, fellas...the original point was how wacked out the market is due to many reasons, some of which are crazy monetary and fiscal policy...which helped to enable cray cray funds like ARKK and many of those who do not have pensions have to "invest" in this stock market dreck/risky casino to fund their retirement while those with gov't pensions do not.
    Not to disparage those who have earned the pensions. A deal is a deal. No questions, I'm sure many have worked hard and served the public to earn them. But why is it they are guaranteed, many inflation indexed, no mattter what the markets do of which they are invested in and if the underlying investments underperform the taxpayer has to pony up, funding is cut for other public projects just to fund the pensions...is that the right thing to do?
    My belief is that the pension returns should be indexed to say the past 3 years rolling returns. I do not think is right that the taxpayer has to be on the hook no matter what happens in the market. Or let ALL workers participate in a national pension, why just if you were say a politician for 25 years?
    What really sticks in my craw is when those with the gov't pensions from a high tax state move right after they retire because "they don't want to pay the high taxes".
    Baseball Fan
  • Unrelenting Inflation: Bad News for the Fed, White House, and the rest of us too...
    Following are excerpts from a current New York Times report, brutally edited for brevity:
    Here's the NYT graphic, unfortunately without the text. The chart begins in 1985, peaks at ~14% in 1980, and the dot at the end of the axis shows +8.2% in September (which was +6.6% excluding food and energy).
    image
    Prices continued to climb at a brutally rapid pace in September, with a key inflation index increasing at the fastest pace in 40 years, bad news for the Federal Reserve as it struggles to wrestle the cost of living back under control.
    Overall inflation climbed 8.2 percent in the year through September, according to the latest Consumer Price Index report. Even more worrisome, underlying inflation trends are headed in the wrong direction. After stripping out fuel and food — which are volatile and removed to get a better sense of the trajectory — prices climbed 6.6 percent in the year through September. That was the quickest rate since 1982.
    Markets swung wildly after the report, with stocks falling sharply initially but then surging higher as investors struggled to digest what the data meant for the future. The S&P 500 index closed up 2.6 percent.
    Economists have predicted that the economy will slow and inflation will moderate in the months ahead. But they have been expecting an imminent cool-down for the past 18 months, and the data have repeatedly proved them wrong. Worried that rapid inflation might last, Fed officials have been clear that they plan to raise interest rates to a point where they are constraining the economy and hold them at a high level until price increases are clearly moderating. Officials have estimated that they will lift borrowing costs to about 4.6 percent by the end of 2023.
    After making three unusually large rate increases, officials had suggested they would debate slowing down in November. The fresh inflation data makes another big move more likely, and economists said it could make it difficult for the Fed to slow down by the end of the year, as policymakers had previously forecast.
    It is too early to know how the Fed’s thinking will evolve by its final meeting of the year on Dec. 13 and 14. Even if inflation shows little sign of cracking by then, policymakers may want to give themselves time to see the cumulative effect of their rate increases, as well as fallout from monetary policy adjustments taking place around the world. But for now, just about every sign they are receiving from the inflation data is discouraging. Economists said there were signs in the inflation data itself that price increases might be growing more entrenched.
    Fed policy takes time to work, and most economists would not expect this year’s adjustments to be pulling inflation drastically lower yet. But because rate moves work by slowing consumer demand, one might expect their effects to show up in everyday consumer goods and services categories first. That has yet to happen. From restaurant meals to cigarettes to stationery products, prices continue to climb briskly, suggesting consumers are still willing to pay up.
  • What “Bubble”? ARKK closing in on 70% for one year
    From my OP - “This isn’t to rag on the fund and manager. But just to lend support to the idea that there certainly appears to have been a genuine “bubble” in this sector of the market.”
    No disputing it was a bubble. That’s what my modest post meant to address. Is 70% off the price of a year ago still a bubble? Remains to be seen. We all try hard here to steer clear of partisan politics. There’s enough blame to go around when it comes to falling equity and bond prices. I don’t think either party owns those issues 100%.
    Personal belief: I think we’ve all become too short term focused. Instant prices / up to date gains & losses / fund flows / interest rates / everything’s at our finger tips today, and trade on it we do. So what happens is that many markets “run to extremes” as the “smart money” latches on to the trend. ARKK’s meteoric rise is but one example. And it works in reverse too with short sellers owning the day now. Eventually over time prices sort themselves out to where there’s some rationality. I’m confident that in 5-7 years folks who bought ARKK at these prices will be glad they did. But it’s damn hard just to sit and not look. I think most equities will do better over 5-7 years. That’s the optimist in me. John Templeton was my very first fund manager.
  • Thoughts on Oakmark?
    ARTKX is run by former Oakmark alums and seems to have beaten OAKIX at its own game.
    Glad you brought up ARTKX, LB. Haven't thought about it in years; it was once a kingpin in the portfolio. Samra is still there after 20 years, it's open after being closed for quite a while, and the shape of the portfolio (at least the geography of it) looks pretty similar to what it was when I owned it. Putting it on the watchlist ...