Howdy @PBKCM
I've asked here and have looked about on the wonderful net over the years; as to where does the very large amounts of monies from equity sells travel during the very large sell downs. Hedge funds and some related futures funds, etc. likely park the money internally.
During the large sell at the end of January and the current sell down, one does not find much evidence of hot money buying investment grade bonds with equity sell monies.
Might you be aware of some of the current paths for the very large money flows for those organizations who have bailed on the equity sectors?
Thank you.
Catch

Hi @catch22
There is a baseline range of trading activity regardless of market direction, as people sell stocks they think will go down and buy stocks they think will go up. At panic sell offs, volume can spike above normal range. I assume that's what you are asking about.
During these times, some institutions and funds are raising money to meet investor redemptions. The money from these sales leaves the market and goes back to the investor, who may re-invest or sit on his cash awhile. You may have heard the phrase "cash on the sidelines."
Some institutions and funds shift the money from equities to other asset classes. This will usually be evidenced by rising prices in those asset classes during the stock sell off.
Some institutions and funds simply hold the cash raised from equity sales until the panic subsides.
And some institutions and funds need to meet margin calls in their leveraged investments, so they sell their good investments to raise money for the margin calls. We saw this in late January as many VIX products blew up.

@Mark,
Here is the earlier post about Harbor's large CG forthcoming.
https://mutualfundobserver.com/discuss/discussion/43072/m-taking-a-bath-lessons-from-a-big-fund-s-9-billion-capital-gains-distribution-hainx
Also check Principal and Transamerica Funds links above for extremely large CGs. Even BRAGX paid a $5 per share CG this year after all of the years it had carry forward losses.

Howdy @PBKCM
I've asked here and have looked about on the wonderful net over the years; as to where does the very large amounts of monies from equity sells travel during the very large sell downs. Hedge funds and some related futures funds, etc. likely park the money internally.
During the large sell at the end of January and the current sell down, one does not find much evidence of hot money buying investment grade bonds with equity sell monies.
Might you be aware of some of the current paths for the very large money flows for those organizations who have bailed on the equity sectors?
Thank you.
Catch

Thanks to David for doing all the leg-work on researching these EM value funds. I find the performance comparisons among the several funds surprising in that Seafarer seems to be a laggard. This is surprising to me, a former shareholder, and maybe to MFO participants who have voiced quite steadfast support for Mr. Foster. Over the last 25 years, when I have been a market participant, I haven't made much money in EM and I certainly have not been compensated for the risks. Grandeur Peaks's latest letter to shareholders, a "mea culpa," says they had too much exposure to EMs. Granted, there's no place to hide these days; EMs seem to offer the least protection, but never fail to attract the soothsayers who prod the unwary to catch the next wave up. The TRP EM value fund does have a good, though short, record.

GMO forecasts have had little relationship to reality — that is, actual returns— for many years. But sooner or later they might be right.

GMO monthly issues their "7‐Year Asset Class Real Return Forecasts" for 10 - and, beginning this month, 11 - asset classes. Their method is fairly simple: assume that things - P/E ratio, profit margin, sales growth and dividend yield - will revert to "normal" over the next 5-7 years and sketch the line from here to there. The "real" part is that you deduct the effect of inflation from the resulting "nominal" returns.
Several scholars have examined their predictive validity and found it to be pretty robust. One, examining projections from 2000-2010 then comparing them with Vanguard index funds concluded:

The correlation between the GMO predicted returns and the Vanguard realized returns for equities, bonds, and all assets taken together are 0.954, 0.959 and 0.677 respectively. (Tower, 2010)

Others found that even when the absolute values are off (i.e., GMO was too pessimistic during the frothier parts of bull markets), the relative values are right: GMO's top-ranked asset class tends to outperform its second-ranked class, and so on. Ben Inker, their chief strategist, claimed a 94.5% accuracy (2012).
As recently as September, the real return projections were negative for every asset class except cash. They were least negative about the emerging markets. The newest projection released today begins to factor-in the effect of the recent market turbulence. Bad news: cash remains the most promising US asset class, with US equities in the red over the next 5-7 years and US fixed income breaking even. Good news: there is one asset class now poised for historically exceptional returns, emerging market value equity. GMO projects a 7.7% annualized real return for EM value, well above the historic 6.5% real return in the US stock market. Emerging equity, as a whole, is the second-highest asset class (4.4% real) and emerging debt (2.8%) is third. The one caveat: these asset class return projections are not risk-adjusted; that is, there's no suggestion about how much volatility you'll need to accept in return for your hoped-for 7.7% real.
Traditionally value investing in the emerging markets has been painful and, mostly, unprofitable. Managers at Seafarer and elsewhere argue that structural changes in the emerging markets - largely marked by local investor activism - has fundamentally changed that equation and that long-ignored value plays offer ... well, exceptional value. As a result, there are relatively few EM value funds though their ranks are growing.
Based on YTD performance (as of 11/21/18), here are the top 10 EM value funds available to domestic investors:

• BlackRock EM Equity Strategy
  
• American Beacon Acadian EM Managed Volatility
  
• ICON EM
  
• T. Rowe Price EM Value
  
• Schwab Fundamental EM Large Company Index Fund
  
• Pzena EM Value
  
• Dreyfus Strategic Beta EM Equity
  
• State Street Disciplined EM
  
• SA EM Value
  
• Seafarer Overseas Value

Pzena, T Rowe and Dreyfus sport five-star ratings from Morningstar. Dreyfus and T Rowe have also earned Great Owl designations from MFO for their consistently top-tier risk-adjusted returns. State Street and SA (for Strategic Advisers, a set of funds offered to certain Fidelity clients) trail with two-star ratings. BlackRock and Seafarer are relatively new funds.
On the your choices in the upcoming December issue of Mutual Fund Observer.
Take care,
David

This forecast may be of interest. Its my recollection it is the first time in a few years any of the asset classes in one of their 7-year forecasts has exceeded the 6.5% Long‐term Historical U.S. Equity Return base line used for comparative purposes. And, the October 2018 timing means the forecast precedes the November market declines.
Stocks
US Large -3.9%
US Small -0.4%
Intl Large 0.8%
Intl Small 1.2%
Emerging 4.7%
Emerging Value 7.7%
Bonds
US Bonds 0.1%
Intl Bonds Hedged -1.9%
Emerging Debt 2.8%
US Inflation Linked Bonds 0.1%
US Cash 1.0%
Here is a link to their pretty chart. It may be necessary to register to see it.
https://gmo.com/docs/default-source/research-and-commentary/strategies/asset-class-forecasts/gmo-7-year-asset-class-forecast-(oct2018).pdf?sfvrsn=2

Investing over time tends to humble all of us. Sometimes I think we need a thread about our dumbest investments or decisions over the years.
@Ted - Your 1-2 minute clip seemed so tantalizing I located the full 10-minute Utube video of Mr. Cordier speaking to the camera. Hope that's OK. Here's the full 10-minutes worth.

---
And, in keeping with the spirit of contriteness, here's a video of Louis Rukeyser back in 1987 trying to make sense of a disastrous week in the markets. Interestingly, both videos run about 10 minutes.
https://m.youtube.com/watch?v=XFn1G2goDQw

FYI: With the S&P 500 falling 9.08% QTD, it has been the sixth-worst start to the fourth quarter in the history of the S&P 500. The only worse Q4s (through 37 trading days) came during some of the worst years for the stock market (1929, the 1930s, 1973, 1987, and 2008).
Below is a table showing the worst starts to Q4 for the S&P 500 through 37 trading days. Any drop of more than 2% at this point in the quarter made the list. As shown in the table, the average change for the S&P for the remainder of these years has been a gain of 2.77% with positive returns 78.26% of the time. For all other Q4s in the S&P’s history, the average change for the remainder of the year has been +1.61%.
Of course, it’s not all good news. If you look at the window of Q4s that were down between 8% and 12% like we are this year, the S&P actually declined for the remainder of those four years.
And in case you don’t remember, at this point in Q4 2008, the S&P was down 35.5%! In that year, the S&P ended up rallying 20% for the remainder of the year before plummeting to new lows again in the first quarter of 2009.
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/a-historically-bad-q4-so-far/

October = worst month for market in 7 years.

FYI: The booming loan market for highly indebted companies has faced a lot of scrutiny in recent months. The IMF has repeatedly aired its grievances. Multiple central banks, as well as the banker of central banks, the Bank for International Settlements, have chimed in with their concerns as well. And last week, Massachusetts Senator Elizabeth Warren called for tighter regulation on what she believes is “a significant risk to the financial system and the American economy.”
Beyond deteriorating protections for lenders, critics have grown wary of just who is buying these loans. In recent years, it has increasingly been retail investors.
Regards,
Ted
https://ftalphaville.ft.com/2018/11/20/1542706123000/Who-s-buying-leveraged-loans-anyways-/

Once logged into Vanguard, this message appeared:
Converting to Admiral Shares
-------------------------
You can now own lower-cost Admiral™ Shares for almost 40 of our index mutual funds for a minimum of just $3,000 each.
If higher minimums were keeping you from converting, select Yes below to find out if you can start saving money today.
-------------------------
When you convert from Investor Shares to Admiral Shares, you're still invested in the same mutual fund but you keep more of your investment returns thanks to lower expense ratios.
For example, would you rather invest $50,000 in:
•Investor Shares, which would cost an average of $90 a year? Or...
•Admiral Shares, which would cost an average of $55 a year?*
A $35 difference may not seem like much, but imagine how that might add up over time. Consider this hypothetical example:
Assume you invest $50,000 and hold onto it for 10 years (no additions, no withdrawals). The investment earns an average annual return of 6%, and the $35 annual expense ratio difference holds true the entire time. After 10 years, your Admiral Shares investment could be worth about $600 more than if it were in Investor Shares. (This doesn’t represent any particular investment; your actual savings could be higher or lower. The rate of return is not guaranteed.)
Admiral Shares minimum investment requirements
Minimums are assessed per fund, per account:
•Most index funds start at $3,000.
•Most actively managed funds start at $50,000.
•Some sector-specific index funds start at $100,000.
Fund-specific minimums can be found in each fund's profile.
After the conversion
You'll pay no taxes or fees on the conversion because you're simply moving money within the same fund.
But if you're invested in an actively managed fund or any other fund that offers both Admiral and Investor Shares, we may reclassify you back to Investor Shares if your investment drops below the Admiral Shares minimum.
Learn how converted shares are priced
Do you want to convert to Admiral Shares now?
*Vanguard Investor Shares average expense ratio: 0.18%. Vanguard Admiral Shares average expense ratio: 0.11%. All averages are asset-weighted. Source: Vanguard, as of December 31, 2017.

FYI: This past week was saw another positive move up by bulls – especially in the Dow and S&P 500; the NASDAQ was not quite as enthusiastic. Wednesday’s rally was on the legs of an election that was seen as market friendly or at least not as bad as it could have been. Essentially – paying people a lot of money to get nothing done the next 2 years – woo hoo!
Regards,
Ted
https://www.stocktrader.com/2018/11/11/weekly-market-recap-nov-11-2018/

@hank- I have to tell you, it really has shaken my complacency with respect to our place on the Russian River. It's only 20 minutes from last years inferno in Santa Rosa, and then we have Paradise this year. As I was driving to and from the river place this weekend I was looking over the country that we were driving through, and thinking that virtually all of it is just as susceptible to wildfire as Santa Rosa and Paradise.
I used to kind of think that because the river runs through the back yard there would be plenty of water if anything ever got started. Now I realize that just being close to water means absolutely nothing once one of these fires gets going.

California can certainly let PGE go bankrupt without letting it shut down. I am sure the state doesn't want to have to run a utility, but PGE could be forced to bankruptcy and sell off it's assets. this would leave the bondholders fighting over pennies.
It is extremely unlikely any of this will happen in the next few years, but it doesn't have to happen for the bonds to trade lower. Unless you are able to figure out GE's complex finances, these are probably a better bet in the short run.
But there are probably better high yields out there with less uncertainty. Face it, if you put a meaningful amount of money into these things, can you really watch while the political meat grinder in California goes after all PGE assets to pay off all those poor homeless people? It is going to get a lot uglier than it is now.
And there will be new fires next year

Thanks, @Old_Joe. Wow, poor ratepayers, poor California. (A friend lost her home and essentially everything in the Thomas fire last year. I can't imagine the collective pain being felt in all those wildfire areas.)
And I (along with many fellow citizens) was p-o'd about the comparatively really minor insurance-related scam our utility tried to pull when their oldest, dirtiest coal plant went down a couple of years ago .... They tried to double charge the ratepayers for both the replacement power and the extreme, uninsured costs of the plant fix, for a plant far beyond its design life.
Then an insider just recently spilled the beans; they figured they'd save $ by not buying insurance on their unreliable coal plants, 'cause, hey, they could just get the ratepaying schmucks to pay the whole tab when something went wrong. Not even the captive public ute commission could vote to dun the ratepayers for the whole tab after that revelation.

:)
Actually, we’re in a similar situation. No NG in our area. Have a 500 gallon propane tank (known as a “pig”) in the yard and a local supplier delivers by truck. Years ago the neighborhood association attempted to move everyone to a “small local (propane) distribution system” as you referenced. Didn’t get off the ground.

I agree with @Ted with respect to the State not letting PG&E go broke. However, things are very unsettled in Sacramento right now with respect to State oversight of PG&E, with talk of possibly breaking PG&E up into several smaller units. My best guess is that nothing will come of this, but it's another unknown factor right now.
With respect to PG&E's liability for last year's fires, the State has allowed PG&E to fund their liabilities with bonds which will be funded by ongoing and future charges to PG&E customers, so these bonds are revenue bonds for all practical purposes.
While it has yet to be determined if PG&E is in fact responsible for the current fire situation, Sacramento is preparing to initiate legislation similar to last year's, again allowing PG&E to fund their liabilities by revenue bonds if that becomes necessary.
I have no idea if the bonds being discussed by @DavidV are part of this special liability setup, but as long as PG&E is in business they will have revenue, and as long as they have revenue from captive customers who have no choice in the matter, that income revenue seems safe enough.
On another perspective regarding the current fire damage, I've not seen any specific news articles regarding rebuilding, but from very good background knowledge I can note that the current construction labor market in Northern California is already so over-stressed that there is virtually no chance of significant rebuilding in the Paradise area any time within the foreseeable future. All available labor is already fully employed in the Santa Rosa fire ares from last years fires, and even there it's estimated that additional labor resources won't be available for several years.

This says that Vanguard will be integrating its 401(k) processing with Health Equity's HSA. It doesn't sound like any new HSA product is being offered. Interestingly, it seems to characterize HSAs as retirement savings:

For Vanguard participants who elect to save in a HealthEquity HSA, Vanguard’s Retirement Readiness Tool technology will integrate their HSA information with their 401(k) balance and other assets to give them a comprehensive view of their current and future retirement savings.

Vanguard already offers some of its funds through Health Equity and through a couple of other HSAs. Here's Vanguard's retail page for those HSAs:
https://personal.vanguard.com/us/whatweoffer/overview/healthsavings
Health Equity overhauled its HSA about three years ago. It used to offer inexpensive access to a pretty good set of funds if I recall correctly, but switched to all Vanguard. Its HSA account costs 40 basis points/year. If you've got $10K in your HSA that costs more than several other HSAs, though if you want a fairly wide selection of Vanguard funds, this HSA can still work well for you.
It offers index funds through cheaper institutional clones rather than through Admiral shares of retail funds, but how much of a cost difference does that amount to?
HealthEquity retail HSA:
https://www.healthequity.com/doclib/hsa/hsa-invest.pdf

@johnN It is very difficult to imagine PG&E bankruptcy. First, its liability for California fires should established, then the size of liabilities ordered by court should be really huge to bankrupt the company. The notes will mature in 2 years and it is very unlikely any decision will be made before that.