Reply to @Ginko: Countries should not have to resort to nearly thousand-dollar thank yous, especially countries with Japan's financial situation. It does not mean that Japan has "run out of buyers", but the idea is that it may be the start of a trend (maybe Greece can give an acre of land with every bond purchase?).
I think Japanese citizens and other internal entities have been the primary (well, majority) investors (around 95%) in Japanese bonds and you're likely going to find a point where the internal demand will weaken (aging population, a number of other factors). Then what? I don't think you're going to find the same demand externally and especially at these rates. Hence, an IMF warning the other day regarding Japanese debt (http://online.wsj.com/article/SB10001424052970204630904577057331784667886.html) and an excellent article detailing the situation (http://www.reuters.com/article/2011/11/29/us-column-markets-saft-idUSTRE7AS1ES20111129)
I really do not think that demand for any country's bonds is "virtually unlimited" and while demand can go on longer than fundamentals would indicate, proceeding with a mindset that the demand for the asset (or any financial asset for that matter) is "virtually unlimited" is concerning on a number of levels. Again, there are no "safe harbors" and I think that's an investing mindset that will be valuable in the next decade.

Morn'in Ted,
Thank you....interesting read, and this quote attracted my attention:
"’Dangerous’ Treasuries
William Eigen, who runs the JP Morgan fund, said that while he is disappointed with his “flat” performance this year, he isn’t unhappy with the choices he made.
“I don’t regret not owning Treasuries because they were dangerous,” Eigen, who has managed the JP Morgan Strategic Income Opportunities Fund (JSOAX) since its inception in 2008, said in a telephone interview from Boston. “In fixed income you need to be looking at alternatives.”
Dangerous compared to what ??? Europe melting down, 99% of U.S. government leaders/congress having cranial/rectal inversion?
Dan Fuss, Loomis-Salyes; stated yesterday that a "coin toss" is as good as it gets right now; UNTIL the Euro kids and their Friday meeting. I fully agree.
There is either going to be a further investment grade area bond rally; or a large equity rally (at least through year end) dependent upon the value of the EU meeting on Friday. Joe/Jane investor will not be able to take much advantage of this; unless they are a trader, and will find one direction or the other come Monday morning with the opening of the Asia markets. Joe/Jane investor may find their investments to be on the right side of the tracks by virtue of sheer luck; as I find no method to assure where to be; as of today, Wednesday.
http://www.bloomberg.com/video/82279410/
This house has been sitting upon a variety of bonds for this year; awaiting the big change to come from Europe; only to find the continued flow of the problems that have plagued the markets for two years.
Generally speaking, if one has been invested in bond funds with holdings in Treasury issues, including TIPs; you have continued to sail into strong head winds, but have arrived at the positive side, YTD.
There remains a strong dividing line between some bond types and the equity area. One or the other will be the most happy with a holiday gift of profit a year's end; and it all lays in the lap of European decisions.
Even if there is some magic plan to arise from this Friday's meeting; the likely benefit may be a short term bump in equity sectors; but the possible full fix will likely have to also be a function of each EU government actually approving a plan.
This could take many months into 2012.
My observations and understanding of the EU financial problem continues to be that the whole legal contract and compact among all nations and how to rewrite the original treaty to "authorize" actual legal functions, is a major hurdle.
The Euro compact, it appears; was written without the consideration of how to legally deal with the financial circumstances that are now present.
Some type of temporary "fudge factor" is going to have to be put in place; and it must be now............they (EU) are running out of time.
My coffee induced, and inflation adjusted 2 cents worth.
Regards,
Catch

From article: "Balance sheet solvency [the raw stuff of financial confidence] must be addressed in tandem with monetary policy in order to achieve financial and economic stability."
Some interesting comparisons of eurozone troubles with China's and Japan's.
Andrew Foster is former CIO of Matthews Asia funds.
http://news.morningstar.com/articlenet/SubmissionsArticle.aspx?submissionid=132436.xml&part=1

http://www.sec.gov/Archives/edgar/data/912036/000119312511328616/d265000d497.htm
Class N Shares and Class I Shares
Supplement dated December 2, 2011
to the Prospectus dated March 1, 2011 and Summary Prospectus dated March 1, 2011
IMPORTANT NOTICE
This supplement provides new and additional information beyond that contained in the Prospectus and
Summary Prospectus and should be retained and read in conjunction with the Prospectus and Summary
Prospectus. Keep it for future reference.
Effective immediately after net asset valuation on Friday, December 16, 2011 (the “Soft Close Date”), the ASTON/River Road Dividend All Cap Value Fund (the “Fund”) will not accept additional investments until further notice, with the following exceptions:
— Existing shareholders of the Fund may add to their accounts, including through reinvestment of dividends and distributions.
— Financial advisors and/or financial consultants who currently have clients invested in the Fund may open new accounts for current or new clients and add to such accounts where the Fund determines that such investments will not harm its investment process and where operationally feasible.
— Financial advisors who have approved the inclusion of the Fund as an investment option in a model and such inclusion was approved by the Fund prior to the Soft Close Date may designate the Fund as an investment option.
— Participants in retirement plans which utilize the Fund as an investment option on the Soft Close Date may designate the Fund where operationally feasible.
— Trustees of Aston Funds, employees of Aston Asset Management, LP and River Road Asset Management, LLC and their family members may open new accounts and add to such accounts.
The Fund reserves the right to make additional exceptions or otherwise modify the foregoing closure policy at any time and to reject any investment for any reason.
For more information, please call Aston Funds: 800-992-8151 or visit our website at www.astonfunds.com.

Sold some stuff yesterday, raing even more cash. In my 40+ years investing, this is the most unstable mkt I've ever seen. I'm not a mkt timer, but do believe in buy low/sell high with my non core investments. That being said, when the market drops again, I'll add a dividend paying equity fund that has limited exposure to the financial sector.

Right on target, Catch........ Kevin, I hate the way a lot of my tax dollars get used. More precisely, WASTED. But only government has by definition the authority and power to protect people from the greed-factor. Even when corporate profits are obscenely, insultingly huge when stood side by side with the poor all around this once-great country, at least such sweaty, putrid, hugely obscene profits do not wreck companies and entire financial systems --- as did the dismantling of regulations since the Reagan years. And after hearing an NPR report last night, the beat goes on even under the current Dem. Prez. Government must do the regulating, because no one else will. Ever read Upton Sinclair's "The Jungle"?

VGK is Vanguard's European ETF. It holds 17% in Financial services companies. It has lost 6% this year. It pays a 12 month dividend of 5.05%. Its capitulated share price back in 2009 was $27. It has bounced around $40 / share more often. Up over 5% today (from $39/share) so far (as of 11:30 est). It has recently sold off 7.5% of its shares which, I assume, is due to investor redemption. This ETF index fund's ER is a razor thin .14%.
Much like US companies, haven't European Global companies been unfairly hurt? Any thoughts?
http://portfolios.morningstar.com/fund/holdings?t=VGK&region=USA

Unfortunately, even the AP article (via Zions Direct) is a bit overly simple - so is it boomers that don't know the basics, or financial reporters?
Nothing wrong per se, but a fair amount of incomplete statements. A few amendments:
- Financial institutions beefing up their bond literature could reasonably be taken as a sign that bonds are more complex than they previously made them out to be; it is not a sign that bonds are more complex than stocks (especially if one has not bothered to compare the volume/sophistication of bond literature vs. stock literature). IMHO bond performance is much more precise and mathematical (which in part is why with bond funds more so than stock funds, expenses are paramount - everything else with bond pricing is clear).
- While it is true that muni bonds are loans to governments, in the case of private activity bonds, that's just a thin veneer (much as saying that a variable annuity is an insurance product and not a fund investment). The government has no liability - the money is funneled to the private activity (like a stadium). And it is the private company that has the obligation to service the debt.
- Yield - while coupon rates are usually fixed (e.g. 4% of par value), this is often not the case. The rate may still be technically fixed in the sense that it is determined by some well-defined metric (e.g. market participation, such as 90% of the change in the S&P 500, or linked to the inflation rate as with TIPS), but it can also be even more vague. Some bonds have resets where the rate is periodically adjusted to current market rates. Fixed, yes, in the sense of pre-defining how the rates work. But not fixed in the sense that a new investor would understand the term.
- Investing in multiple bonds (as with a bond fund) increases, not decreases, the risk of a default. Think about it - are you more likely to see a bond default if you own one bond (with say, a 10% chance of default), or two bonds each with a 10% chance of default? With more bonds, it is more likely that one of them will blow up. What diversification does is shift the probability distribution - instead of having a 10% chance of losing everything (assuming for the moment that we define a default as all or nothing), with two bonds you've got a 1% chance of losing everything, an 18% chance of losing half (one of the two bonds failing), and an 81% chance of staying whole. (Everyone remember binomial distributions?) That feels (and is) a whole lot better; with enough bonds, even though the risk of default gets pretty high, the amount you lose gets swamped by the profits from the other bonds.
- In addition to the types of default mentioned in the article (failure to make timely payments, whether interest or principal), there are also technical defaults (failure to comply with any other conditions of the loan). These may not affect your cash flow, but can have an effect on the market price of the bond, and in any case, will keep Meredith Whitney very happy :-)
- Omitted is reinvestment risk. With interest rates so low, it may seem impossible not to be able to get the same (or better) interest on new bonds (paid for out of the interest received), but I'll bet people were saying the same thing six months ago. Less of a risk now (rates have even less room to fall), but still a possibility, and in any case, something to include in a background article on bond basics. That would lead naturally to zero coupon bonds, and American Century Zero Coupon funds. (The more recent muni target funds are not zeros.)
- Omitted also is call risk - which relates to interest rate risk (you need to look at yield to worst, since you may be forced to sell the bond early) and to reinvestment risk (what you do with the principal if you get it back early).

http://www.forbes.com/sites/steveforbes/2011/10/24/steve-forbes-interview-david-riedel-international-investing-expert/
This is a bump up in case anyone missed it and still interested in reading. I thought this Q&A with David Riedel was pretty good and quite interesting in terms of looking beyond the BRICs for EM opportunities.
***
"We like, once again, those countries with large enough domestic populations, a dynamic and diverse domestic economy. Turkey, one of our favorite markets right now. Turkey finds itself between Iraq and a hard place with Europe on one side and Iraq on the other, but they’re doing very well in their mercantalist tradition of being a trader and working with corporate groups throughout Europe as an alternative to building in Europe."
"Let’s talk about Indonesia for a minute, because this is a market that used to be very exotic. It was a very difficult place for people to imagine investing in. And over the last 10 years you’ve seen Indonesia come from the brink of disaster during the ASEAN financial crisis at the end of the 1990s to having a very good, well-run stable of corporate families and groups that have done a very good job overseeing the largest Muslim democracy in the world, transitioning to a fully functional economy.
Now that’s what’s exciting about emerging markets. Finding those opportunities where you have a very troubled situation that, through a series of good decisions and some good luck, ends up being a fully functional economy. Today Indonesia ,with its 200 million population, has about 30% of its economy supported by exports of palm oil and thermal coal, both of which go to China and India. They have a seemingly insatiable appetite for both.
And a very dynamic domestic economy where you can buy companies that are in the agri-business space or in infrastructure building, in automobiles, in all kinds of spaces in Indonesia. There aren’t very many ADR ways to play Indonesia. For people looking for ways to play that, they’re kind of limited to the telecom incumbent PT Telcom. But that’s a great company and a good proxy for good growth in Indonesia."

http://www.sec.gov/Archives/edgar/data/842436/000139834411002737/fp0003783_497.htm
Alpine Equity Trust
On behalf of the Institutional Class of each Series of the Trust
Supplement dated November 23, 2011
to the Prospectus dated March 1, 2011
Change of Name of Class
Prior to January 3, 2012, each series of the Trust issued only one class of shares. Effective January 3, 2011, that class will be referred to as Institutional Class.
Effective January 3, 2012, certain series of the Trust will also offer Class A shares.
Increase in Minimum Initial Investment
For new shareholders after January 3, 2012, the minimum initial investment of the Institutional Class has increased from $1,000 to $1,000,000.
Effective January 3, 2012 the sections titled “Purchase and Sale of Fund Shares” and “How to Buy Shares” are replaced in their entirety as follows:
Purchase and Sale of Fund Shares
You may purchase, redeem or exchange Fund shares on any business day by written request via mail (Alpine Funds, c/o Boston Financial Data Services, Inc., PO Box 8061, Boston, MA 02266), by wire transfer, by telephone at 1-888-785-5578, or through a financial intermediary. The minimum initial amount of investment in the Fund is $1,000,000. There is no minimum for subsequent investments if payment is mailed by check, otherwise the minimum is $100.
How to Buy Shares
You may purchase shares of the Funds on any day the NYSE is open. The minimum initial investment for the Institutional Class in each Fund is $1,000,000. The minimum may be waived in certain situations as described below. There is no minimum investment requirement for subsequent investments if mailed by check. Telephone and Internet subsequent purchases are subject to a minimum of $100. Shares will be issued at the net asset value per share next computed after the receipt of your purchase request in good order by the Funds’ transfer agent (the “Transfer Agent”) or your financial intermediary, together with payment in the amount of the purchase. No sales charge is imposed on purchases or on the reinvestment of dividends. Stock certificates will not be issued. Instead, your ownership of shares will be reflected in your account records with the Funds. All requests received in good order before 4:00 p.m. Eastern time, or the closing of the NYSE, whichever is earlier, will be processed on that same day. Requests received after 4:00 p.m. will receive the next business day’s NAV.
Minimum initial purchase amounts for the Institutional Class are waived for the following:
o Any shareholder as of the close of business January 3, 2012
o Employees of the Adviser or its affiliates and their immediate family
o Current and former Trustees of funds advised by the Adviser
o The Adviser or its affiliates
o Investors in employee retirement, stock, bonus, pension or profit sharing plans
o Investment advisory clients of the Adviser or its affiliates
--------------------------------------------------------------------------------
o Registered Investment Advisers
o Broker/Dealers and Registered Investment Advisers with clients participating in comprehensive fee programs
o Any corporation, partnership, association, joint-stock company, trust, fund or any organized group of persons whether incorporated or not that has a formal or informal consulting or advisory relationship with the Adviser or a third party through which the investment is made
These waivers may be discontinued at any time without notice.
Please retain this Supplement for future reference.
http://www.sec.gov/Archives/edgar/data/1142010/000139834411002735/fp0003782_497.htm
Name change of some funds and "I" class shares also in link above.

http://www.sec.gov/Archives/edgar/data/912036/000119312511317229/d258316d497.htm
Aston Funds
ASTON/River Road Independent Value Fund
Class N Shares and Class I Shares
Supplement dated November 18, 2011
to the Class N Prospectus dated December 28, 2010 and Summary Prospectus dated April 6, 2011,
and the Class I Prospectus dated May 27, 2011 and Summary Prospectus dated June 1, 2011
IMPORTANT NOTICE
This supplement provides new and additional information beyond that contained in each Prospectus and Summary Prospectus and should be retained and read in conjunction with each Prospectus and Summary Prospectus. Keep it for future reference.
The ASTON/River Road Independent Value Fund (the “Fund”) expects that it will implement a “Soft Close” if the net assets of the Fund reach a certain level (the “Soft Close Level”) in combination with other assets managed in the same investment strategy by the Fund’s subadviser, River Road Asset Management, LLC (“River Road”). Currently, the Fund expects its Soft Close Level to be between $500 million and $600 million in net assets. As of November 16, 2011, the net assets of the Fund were $469 million. If implemented, a Soft Close will mean that the Fund will not accept additional investments until further notice beginning on an effective date to be determined by the officers of Aston Funds (the “Soft Close Effective Date”), with the following exceptions:
• Existing shareholders of the Fund may add to their accounts, including through reinvestment of dividends and distributions.
• Financial advisors and/or financial consultants who currently have clients invested in the Fund may open new accounts for current or new clients and add to such accounts where the Fund determines that such investments will not harm its investment process and where operationally feasible.
• Participants in retirement plans which utilize the Fund as an investment option on the Soft Close Effective Date may designate the Fund where operationally feasible.
• Trustees of Aston Funds, employees of Aston Asset Management LP and River Road and their family members may open new accounts and add to such accounts.
The Fund reserves the right to make additional exceptions or otherwise modify the foregoing closure policy at any time and to reject any investment for any reason.
For more information, please call Aston Funds: 800-992-8151 or visit our website at www.astonfunds.com.

Hi Guys,
Although I am saddened by the paucity of replies which negate any meaningful statistical analysis, I do extend my hardy thanks to those MFO members (one at this point) who did offer their Final Four. I appreciate your effort.
As promised in my original post, here is my 32-unit MTA (Most Trusted Advisors) listing, the Final Four from the virtual tournament, and the criteria that permitted these four to successfully navigate each round. The listing of candidates also depicts the first round duels which were picked randomly within each division.
In the Money Managers Division: (1) Peter Lynch faced (2) Warren Buffett, (3) Jesse Livermore faced (4) David Swensen, (5) Mohamed El-Erian faced (6) Nassim Taleb, and (7) Benjamin Graham faced (8) Nathan Rothschild.
In the Financial Wizards Division: (9) George Soros faced (10) Napoleon Bonaparte, (11) Bernard Baruch faced (12) Barr Rosenberg, (13) Jack Welch faced (13) Charles Ellis, and (15) Andrew Lo faced (16) Robert Merton.
In the Economic Thinkers Division: (17) Adam Smith faced (18) Ludwig von Mises, (19) Alexis de Tocqueville faced (20) William Sharpe, (21) Paul Samuelson faced (22) John Maynard Keynes, and (23) Milton Friedman faced (24) Karl Marx.
Finally, in the Financial Writers and Historians Division: (25) Peter Bernstein faced (26) Tom Bulkowski, (27) Daniel Kahneman faced (28) Ayn Rand, (29) Jude Wanniski faced (30) Benoit Mandelbrot, and (31) Mark Skausen faced (32) Robert Shiller.
Just the list itself tells a story about the investor who compiled the MTA roll-call.
After three grueling rounds of hopefully consistent officiating, the Final Four emerged. By the way, the decision making took far less time than staffing the matrix slots. I suppose I was using my intuitive, reflexive brain in the decision process.
The Final Four are: Warren Buffett, Andrew Lo, John Maynard Keynes, and Daniel Kahneman. This is surely an elite group. These four would make engaging and combative dinner guests.
Warren Buffett survived because of his long term record of delivering excess returns; he generated positive Alpha for decades. He definitely has established himself as a super-investor with uncommon wisdom and commonsense. Nothing succeeds like success.
Andrew Lo is an educator who has successfully transitioned from the Halls of Ivy to Wall Street. He has skillfully adopted and adapted behavioral findings into an aggressive investment philosophy. He is an innovator. He has formulated an Adaptive Market Hypothesis that uses social, biological, and physical modeling parts.
John Maynard Keynes was a giant in the economic community whose insights and programs dominated Nation building economic policies for decades. He was a successful private investor. He never feared changing his position when the data so directed. As Winston Churchill said: If you put two economists in a room, you get two opinions, unless one of them is Lord Keynes, in which case you get three opinions.”.
Daniel Kahneman is a founding father of financial behavioral research. It is rare to have immediate access to a true originator in an evolving scientific discipline who reports its progress so beautifully. He totally destroyed the hypothesis of a rational investor. His research and superior reporting in this fast developing arena should make us all better investors. I have likely been influenced in this selection by what Kahneman would term a “recency bias”. I am currently reading his fascinating new book “Thinking, Fast and Slow”.
This outstanding group of thinkers would make for lively table talk at dinner or over cocktails.
Warren Buffett is my winner overall. My toughest decision occurred in the final battle when, because of my placement of Divisions, Buffett was pitted against Keynes. Keynes was a classical renaissance man. His economic concepts and formulations ruled worldwide policy for decades, and he made compelling arguments to achieve that high status. In the end, Buffett received my vote because of his unchallenged investment record, coupled with his wit and folksy writing style. My final decision was strongly influenced by my overarching investment criteria.
The final outcome could easily have been different if the Division structure had been altered; in many instances, the sequential order of the individual contests determine the final victor. That is a definite shortcoming of the Bracketology system. It is both pathway and criteria dependent.
This completes my initial commitment. Please consider volunteering your own Final Four. There is still time, and I need more submittals to generate a meaningful summary.
Best Wishes.

MTA top 4:
1. Jim Rickards: I think the way that Rickards blends geopolitics and finance is increasingly valuable and effective in today's financial markets. Clear, concise and unique in perspective (Rickards' specialty is "threat finance" and he deals with the DOD and other government agencies; he also worked with the military on a recent financial wargame.) His book, "Currency Wars" just came out last week (and is an excellent read.)
2. Meredith Whitney: Smart, unafraid to make bold calls and well, easy on the eyes.
3. David Einhorn: A manager who has presented a strong sense of ethics and continues to present himself in a straightforward manner, Einhorn continues to quietly (well, aside from the effect of his speeches on stocks like Green Mountain Coffee) go about an excellent career (iffy first half of 2011 aside.)
4. Jacob Rothschild: Has lead RIT Capital Partners (which I own) from a 3M pound in net asset value fund in 1961 to 1,984M pounds as of 3/31. Not to mention the stories he could likely tell, the connections and more. This would be my pick for someone similar to Soros.

Hi Guys,
It is not what you think. No, in this instance MTA is not Metropolitan Transit Authority; it is not the nonstop subway system made famous in the Kingston Trio’s song of the same name. In this case, MTA means Most Trusted Advisor.
In the end, I propose that you identify your MTA by trying a tournament structure as used in the National college basketball playoffs. Your Final Four MTA group should be populated by the financial wizards who you would most like to share a dinner, question them on financial matters, and likely accept their composite recommendations.
In this tournament, you get to pick your contestant field, your Final Four, and finally, for closure, your ultimate champion. Time constraints should be abandoned to not limit the scope of your contestant field. Assume you have access to all historical figures.
Note that I have modeled the tournament like the March Madness basketball tournament conducted by the NCAA annually. In that tournament, 64 candidate teams are selected for the competition. Since you are organizing the event, you choose the size of your field, and you specify the winning criteria.
If a complex tournament structure is not to your liking, compile a short list of only the Final Four and vote for your champion. Using gut instincts often produces reliable results. Daniel Kahneman, Jonah Lehrer, and Jason Zweig make the case for reflexive (speedy, intuitive, survival) approaches in “Thinking, Fast and Slow” , “How We Decide”, and “Your Money and Your Brain”, respectively.
But when confronted with unfamiliar and/or complex circumstances that generate tension and strain caused by data overload, your reflective (slow, thinking, logical) brain automatically jumps into the pool to rescue the decision process.
Perhaps another approach to prepare and resolve your personal MTA decision tree would be to assemble an inclusive candidate list, and serially order it from the “most trusted” to the “least trusted”. Remember, this is primarily a mental drill to develop decision criteria. Napoleon Bonaparte was a grand scale planner and reputedly an innovative investor. I included him in my listing.
My recommended method is to construct a tournament matrix that copies the March Madness pattern; a head-to-head, single elimination series of contests. This scheme is called “Bracketology”. It has been applied in arenas far removed from the sporting world with some success. At the very least, it stimulates discussion and controversy. As each individual decision for advancement is made, it forces the decision maker to identify the reasons that support his like-or-don’t-like arguments. It will help to crystallize and focus attention on what the participant feels is important. It provides some order under chaotic decision conditions. This matrix format adds yet another device to the decision maker’s tool kit.
How to contribute to this survey? The submittal requires two mandatory inputs; an additional third input is optional. The mandatory inputs are your choices for the Final Four and the single MTA, the champion. The optional input is a short paragraph that explains the rationale for your selections.
Please respond. If enough replies are posted, I will summarize the MTA winners later.
The Bracketology concept applied to financial matters is not my idea. I discovered its flexibility and benefits after securing a copy of Mark Reiter’s and Richard Sandomir’s book “The Final Four of Everything”. They apply this one-on-one technique to 150 diverse subject categories that range from history and politics, to food and drink, and to Yogi Berra sayings. This can be a fun exercise.
After a few days, I will add my opinions to whatever replies have accumulated. I don’t want to contaminate your independent opinions at this juncture. I have completed the exercise.
I plan to deploy a 32-unit Bracketology approach in my response. But I did not position my 32 candidates in a random fashion. I elected to organize my contenders into four distinct groupings. Importantly, the four major advisor groupings were: (1) money managers, (2) financial wizards, (3) economic thinkers, and (4) financial writers and historians. For example, Peter Lynch, George Soros, Adam Smith, and Peter Bernstein were included as candidates in separate categories, respectively. Within each group, the first round match-ups were randomly chosen.
Once mind is put to this task, there is no trouble filling all entry slots. The matrix could easily have been expanded to 64 without compromising quality. Dependent upon your commitment to this task, you get to choose whatever number of entries satisfies your imaginative set of MTA heroes.
I arranged my bracket match-ups so that the groups only compete against members of the same group until the Final Four shootout. In that way, I’m assured that my Final Four will have a representative from each primary financial discipline. That will guarantee a diverse perspective and stimulating debate. I always favor a balanced approach. That allows the old adage that “the sum is greater than the parts” to fully engage.
The champion that emerges from the Final Four centerpiece encounters is not as critical as exposure to all four distinctive endgame viewpoints. Most likely, I would cobble together a portfolio that reflects the diverse perspectives from all four finalists.
Here’s an odd tidbit of the single elimination one-on-one tournament that you might find useful. The individual number of contests (games, decisions) that are required to achieve a champion in the single elimination tournament format is (N – 1). N is the total number of entries. So if the tournament has 32 entry units, 31 contests are needed to crown a champion.
That’s the basics of the Bracketology concept. All that remains is application of it by a statistically significant number of MFO members. The ball is now in your court. Please play. I recommend that you probe outside the box and permit your thinking to diverge before it converges. That technique encourages innovative solutions.
The purpose of this exercise is intended to provide both a fun and a learning experience. Try it.
Best Regards.

Hey, Investor and Scott.
I am grateful for your obviously sincere concern. I admit my portfolio is truly NOT what I would like it to look like at the moment... I am not dismissing your offer to assist with allocation advice. It's just that right now, I am anticipating---along with my brothers, sisters and cousins--- some inheritance money. (Bless my beloved aunt, who never married or had kids of her own!) Instead of revamping soon and then AGAIN later on, I figured I'd wait to get that cash and then deploy it in a way that will truly diversify me further.
Nothing is ever ideal for any of us, I know. I have to "admit" to you that in my portfolio at the moment, I'm holding ZERO cash. My circumstances have ALWAYS been so---- able to invest through 403b at work, but therefore, I've always been "cash-poor." If I had a big lump of greenbacks, I could buy into "this" fund or "that" fund without any delay, whenever the time seemed right. (By that, I DO NOT mean that I'm trying to TIME the Market.)............ In fact, one piece of my portfolio I might choose to cover is just to hold MONEY in a bank account, just so ALL my money is not already tied-up.
For the record: You know of my conviction about Asia, and how all good things are moving toward the Orient and South Asia. The West is dead, over the long haul, and the recent ('08) Financial Crash is not the reason, it is just another brick in the wall.
Here's what I'm holding right now:
1) Cash: 0%
2) MAPIX: 34.24% (Trad. IRA)
3) PREMX: 41.83% (rollover IRA from old 403b)
4) MACSX: 3.12% (regular, taxable investment account)
5) PFE (Pfizer) ---already a piece of the inheritance: 14.83%
6) Israel government zero-coupon bond: pays 5.68%, almost doubling my money at maturity, bought in 2003 and maturing in 2013.
I've not sold the Pfizer and done something else with it because of its good reputation and .20 cent quarterly dividend, though I HATE the very idea of making money off a human necessity: drugs and healthcare.
I invested in the Israel bond before some events which transpired soon afterward which would have steered me away from that particular investment. I turned down the offer a couple of years ago to cash it in early with no penalty.
I have such a big stake in (TRP) PREMX EM Bond at the moment because I rolled-over my (TRP) PRLAX Latin America shares into PREMX when I decided it was time to get rid of PRLAX. I made about 11% or so on my PRLAX stake, but for a period of a few months in '10, it was doing nothing, and I was already late for the huge rise in share price during '09.
Back in '10, I was also holding PRSVX TRP small-cap value fund. I'd held it through thick and thin for about 5 years or so, and it is really an index-hugger. I was sick of its do-nothing performance; I was not going to lose anything (except diversification) by rolling it into PREMX; and after rolling-over the PRSVX into PREMX this past July, I avoided the outrageous 100% jump in the annual extortion ("admin.") fee, which gets charged in August, rather than December, most everywhere else. Now, I've got so many PREMX shares, I'm not charged at all for the annual extortion fee.
But I'm not trying to be "penny wise but pound foolish." I'm certainly NOT satisfied with the very limited way my portfolio is spread-out. I fully intend to find some other sorts of things in which to invest, once the cash comes through.
My short-list includes MWHYX, QRSVX, DODIX, PRSNX. I don't feel embarrassed to say that everything I'm discussing comes to just over $100,000.00 currently, so a LOT more diversification would only accomplish DILUTING my earnings. I mean, it would be very easy to over-do the whole diversification thing.
I prefer to (eventually) get to a 60% bonds and 30% stock and 10% cash portfolio. At this moment in time, I'm sitting on 52.25% equities and 47.74% bonds. I have the EM bonds piece covered (PREMX). I have Asia equities covered (MAPIX and MACSX). I am into the Dow 30 with Pfizer. That single foreign-gov't bond is a specialty item, but is as safe as safe can be. I'd like to find a monthly income-producer in a domestic bond fund which offers better than a lousy 2 cents per share.
All my retirement funds are still not being tapped yet. I have a (new) job and income on which I can live. I'm out of church work now. I am not yet OFFICIALLY retired, but that is already in the works. I am 57. The monthly retirement checks will be invested, not spent. (Less than $500/month, anyhow---in a traditional defined-benefit plan which ostensibly will last until I die. After that, wifey will receive an even BIGGER monthly benefit.)
This is TOO thorough. Thanks for your kind attention and sage advice.

Hi Guys,
Some of the most prescient aphorisms come from anonymous sources. One of my favorites from an investing perspective is “If you can’t take the sting, don’t reach for the honey”. This saying was extracted from Mark Skausen’s 2011 book titled “The Maxims of Wall Street”.
Warren Buffett has forever been a super-investor who has no fear when reaching for the honey. Buffett has suffered the bee’s sting, but relatively infrequently. He and his investors have profited substantially by adhering to the conservative investment policies originally outlined by Benjamin Graham.
As Graham wisely observed: “Investments should be based not on optimism but arithmetic”. Buffett does not sport a perfect investment record, but the only person who does has never invested whatsoever; he never reached for the honey.
I seriously believe that each of us, at one point or another, had money managed by Mr. Buffett. Countless mutual funds have holdings in his operations. Although we may take issue with some of his decisions (I surely do), we indirectly benefit from his market acumen.
Will Buffett generate future returns at the rates produced in the past? Given the current environment I suspect that to be a highly unlikely scenario. Some performance erosion is a better guesstimate. But I would not challenge Buffett. He is a champion super-investor until he is dethroned.
Will that happen soon? Nobody knows. As Warren Buffett himself famously said “If past history was all there was to the investment game, the richest people would be librarians.” Or perhaps chartist would populate the richest cohort. That hasn’t happened.
And economists are no better at projecting the future then are financial wizards. The forecasting records of both groups are dismal.
Newton announced three laws of motion. They are: (1) Every object in a state of uniform motion tends to remain in that state of motion unless an external force is applied to it, (2) The relationship between an object's mass m, its acceleration a, and the applied force F is F = ma, and (3) For every action there is an equal and opposite reaction. Laws (1) and (3) are most frequently quoted.
Economists have jokingly proposed two equivalents (1) For every economist, there exists an equal and opposite economist, and (2) They’re both wrong.
Winston Churchill added to the humor by observing that “If you put two economists in a room, you get two opinions, unless one of them is Lord Keynes, in which case you get three opinions.”
Maybe, just maybe, John Bogle had it right all along; simply stay the course. Be brave guys.
My posting purpose was to contribute just a little fun to this discussion line while introducing some useful investment guidelines. I hope I succeeded.
Best Regards.

Reply to @Flack:
Hi Flack,
Thanks for your reply. However, I’m not sure I want to thank you for your numerous questions, all pertinent, but some of which require considerable effort for a full response.
I have not convinced myself that it is worthwhile or wise to commit to that effort, so I’ve compromised and prepared an abridged, and likely incomplete, reply. At my age, I’m forever deviled by the specter of “muda”. A few months ago I posted comments on something called the “muda trap”. The “muda trap” is a popular Japanese idiom that translates into English as a waste of time and energy. Everyone should take cautionary steps to avoid this resource depleting trap, especially me. I’m sure you understand.
First, congratulations on introducing your investment students to the Sell in May seasonality indicator. I assume that you also incorporate many of the other seasonality indicators that CXO Advisory Group documents in your classroom lectures. Good for you; good for your students.
You are exactly correct in your interpretation of the CXO Sell in May study. CXO clearly identifies that the returns are based upon a single decision criterion: that criterion is the calendar month. CXO does not claim that this simple criterion generates optimum rewards nor does it minimize downside losses (these are separate and distinctive goals and require careful specification in any mathematical optimization program).
You apparently impose a second criterion in your personal portfolio returns optimization efforts; you insert a market momentum component into the decision matrix to enhance returns. For the purposes of easily reporting their study findings, CXO did not consider a more complex multiple decision tree rule set.
Will multiple criteria enhance performance results? In many instances the answer is in the affirmative since financial markets are complex and governed by many moving parts. However, because of that complexity, sometimes adding additional constraints can do damage. So care must be vigilantly exercised, and the added constraints must be fundamentally sound from a market modeling perspective.
As constraints are added, the prospect of data mining becomes a more relevant issue. At the two-criteria level I would not consider this concern too pressing an issue.
CXO does good work. They carefully define and identify their study purposes, their assumptions, and their shortcomings. The CXO studies do have an academic quality. Perhaps that is why I often reference them. They also document their work carefully and end each article with cautionary warnings about the limitations of their mostly statistical studies.
The limitations of statistically-based studies must always be fully documented and recognized. CXO can only do the first part; the reader must be cognizant of the second part of that pact and interpret findings accordingly. User beware.
Best Wishes.

Hi Catch & All. Am near the end of a stay in the Marathon Fla part of the Keys. Taking noon time break here from sun and 80 degree heat. Just checked northern Mi forecast for our return Friday and looks like snow and rain mix. #%*!#*.
Lot a interesting discussion on this one. Unfortunately, Ol Joe seems to think answers should be
"reasoned and well-structured" so had to really think hard here. Guess I'd start off asking Catch why he'd even consider putting 19.999% in equities if he believes they won't deliver a substantially better return than cash and bonds over his chosen time frame? After all, the latter 2 are certainly less volatile and more predictable. Less likely to get ya cussing or smashing things against the wall too.
Catch, you've hinted at what you consider your time frame or investment horizon - but am not sure what you consider it to be - maybe just missed it. At 65 I'm thinking in terms of 15-20 years - being in reasonably good health and disciplined about diet exercise, etc. Keep in mind too that most people don't need the $$ all at once, but take it out in small increments. That means shouldn't get hurt too bad if have to endure a 1-2 year bear market. Ain't any guarantees about any of this - either your own longevity or the future returns of equities. Having said that, gotta think most observers would expect stocks to out perform cash and bonds over the time span I mentioned, 15-20 years.
Everybody's different and I'd never second guess somebody else's decision. Myself, at last check couple months back, had around 40-50% equities counting what's in balanced funds. And, like you, got some additional holdings in junk bonds, so we got the old *** hanging out there a bit. Big chunk in TRRIX and my returns run close to theirs. Am lagging a little this year probably due to having avoided investment grade bonds which the fund holds. Am also overweight in natural resources, commodities, and foreign currencies compared to that fund - so get jerked around a little more by these.
So like others said, depends a lot on your risk tolerance and investment time horizon. I've never agreed with Bogle re bond allocation, - though I respect his views on a great many things. Truth is you can find at least one respected member of the financial community to support just about any point of view. Am loath to nominate any one "expert" here as not able to defend their each and every action over the years or prove that one is smarter than the other. Take care.

Hi Guys,
I am not sure why the intense interest in John Bogle’s portfolio. He has never been considered an especially astute investor although he is an acknowledged financial expert. Fully understanding financial matters and translating that understanding into prescient investment choices are not necessarily closely correlated attributes.
But there is one attribute that is money in the bank: John Bogle does practice what he preaches. He has long championed a portfolio bond/equity mix that reflects your current age. Since he is currently in his 80s, Bogle’s bond holding percentage is in the 80 % bracket.
MarketWatch writer Robert Powell reported on his portfolio in 2010. Here is the Link to that article:
http://www.marketwatch.com/story/bogles-in-bonds-but-should-you-be-2010-05-20
John Bogle has always been a man whose word can be completely trusted even if you do not subscribe to his market views or his investment philosophy.
Best Regards.

Howdy Investor,
Below is the M* of our portfolio from July 23, 2011. We use the free M* available at TR Price's web site. We have not yet used Financial Engine.
We don't mind criticial review of our holdings or methods, so don't worry about any of that. Our Funds Boat is for all to view and comment upon; and hopefully be of some value to us and all here at MFO.
OK, gett'in near pillow time at this house.
Take care of you and yours,
Catch
.......MORNINGSTAR PORTFOLIO VIEW below.......
NOTE: as of Nov, 2011, cash and equity holdings are both reduced from what is shown here
Asset Class %
Cash 12.28
U.S. Stock 13.12
Foreign Stock 4.05
Bond 62.97
Other 7.58
Not Classified 0.00
Stock Style %
Large Value 11.01
Large Core 14.47
Large Growth 29.64
Mid-Cap Value 12.57
Mid-Cap Core 7.75
Mid-Cap Growth 7.60
Small Value 6.78
Small Core 4.67
Small Growth 5.40
Not Classified 0.10
Stock Sector Portfolio %
Cyclical 68.79
Basic Materials 5.51
Consumer Cyclical 58.36
Financial Services 2.89
Real Estate 2.03
Defensive 9.54
Consumer Defensive 5.51
Healthcare 3.75
Utilities 0.27
Sensitive 21.67
Communication Services 2.57
Energy 7.45
Industrials 3.59
Technology 8.06
Not Classified 0.00
Stock Type Portfolio % VS S&P 500
High Yield 0.11 0.23
Distressed 3.57 0.67
Hard Assets 6.91 13.29
Cyclical 69.64 43.93
Slow Growth 5.14 14.80
Classic Growth 0.75 6.73
Aggressive Growth 5.52 16.15
Speculative Growth 0.87 1.98
Not Classified 7.50 2.22
Fees & Expenses Average Mutual Fund Expense Ratio (%) 0.75
World Regions %
North America 61.02
UK/Western Europe 4.20
Japan 0.87
Latin America 2.33
Asia ex-Japan 1.83
Other 0.30
Not Classified 29.45 (AAARRRGGGHHH !!!!!)
Stock Stats Average for This Portfolio Relative to S&P 500 (1.00=S&P)
Price/Earnings Forward 14.46 1.03
Price/Book Ratio 2.14 1.02
Return on Asset (ROA) 7.74 0.91
Return on Equity (ROE) 18.47 0.88
Project Earnings Growth-5 Yr (%) 12.77 1.29
Yield (%) 4.38 2.58
Avg Market Capitalization ($ mil) 10,260.29 0.20
Bond Style %
High-Quality Short-Term 0.00
High-Quality Intermed-Term 0.00
High-Quality Long-Term 0.00
Medium-Quality Short-Term 3.53
Medium-Quality Intermed-Term 14.77
Medium-Quality Long-Term 0.00
Low-Quality Short-Term 16.10
Low-Quality Intermed-Term 33.45
Low-Quality Long-Term 5.28
Not Classified 26.88 (AAARRRGGGHHH !!!!!)