FYI The below linked article, (Click Article At Top Of Google Search) was featured in this Week's Barron.s. As often
happens BX is up over 4% today. The Linkster has a position in BX and KKR
Blackstone Group ’s complex operating structure seems almost designed to turn ordinary investors away from its shares—technically, its units. They recently fetched $28.94, down from an initial offering price of $31 nearly 10 years ago. Yet the alternative-asset manager’s cash distributions could soon grow too large to ignore. Wall Street predicts a yield of more than 8% this year, based on a combination of steady, predictable management fees and lumpier performance fees that Blackstone earns when it exits profitable investments. Earnings used to fund those distributions could double in five years, judging by the pace at which Blackstone has been raising new cash and putting it to work.
Regards,
Ted
https://www.google.com/#q=Blackstone+Units+Have+40%+Upside+and+Yield+More+Than+8%+Barron's&*
BX Real Time Quote:
http://www.marketwatch.com/investing/stock/bx

Good article & ties-in with the WSJ ("Euphoria") article that @Tony cites in the Market Top thread. Martin Conrad mentions Benjamin Graham frequently here, but I found it a bit hard separating out Conrad's own recommendations (or biases) from what Graham taught. That's not to say he distorts Graham. But I have a sense Conrad makes a lot of observations/inferences that go well beyond Graham's teachings.
To learn more, I located an older Martin Conrad article (Barron's December 31, 2011) in which Conrad appears to take a very cautious approach to investing, and also puts an awful lot of weight on investor psychology. I already knew the "average" investor underperforms badly. But I didn't think it was this bad :
"In the 20 years ended 2008, a period that included the best decade of performance ever for stocks, the average stock-fund investor averaged only a 1.9% annual return (due to consistently poor buy and sell decisions) even though the average stock mutual fund returned 8.4% annually over the same period."
http://www.barrons.com/articles/SB50001424052748703522304577086891063798090
Market numbers for December 31, 2011 (date of above article):
- Dow Jones Industrial Average ( DJIA ) Close 12217.56 Down 69.48
- Nasdaq Stock Market Close 2605.15 Down 8.59
- S&P 500 Close 1257.60 Down 5.42
http://daytradingstockblog.blogspot.com/2011/12/dow-jones-close-123111-stock-market.html
Wondering about Conrad's (Graham inspired) recommendation that investors use low cost balanced or allocation funds for their core holding, I dug up an article which attempts to define specific fund recommendations Graham made (or would make today). Not very definitive - but may be of interest. http://www.gurufocus.com/news/164674/are-there-any-good-ben-grahamstyle-mutual-funds
Note - Was able to access the article @Ted linked the first time. When I went back later to read it again, the article wouldn't come up. Clearing your cache might work if you are having a similar issue.)

@MikeM. It's not about Long/Short or Value. And eff Morningstar. I have invested in FVALX for several years now after having a chat with Forester when I used to have hair.
To clarify, I own a lot of FVALX/INTLX at Scottrade. My largest holdings in that portfolio. They are my conservative investments I have owned for years. If I didn't own them, I would just keep money in cash not invest in another Long/short or Value fund. Switched out of Schwab into Scottrade few years back. I do that when I do tax management.
Now that Scottrade is going to become TD and TD doesn't have them NTF, looking for a new home for them, hence TIAA.

You might look into the performance history of Lexington Corporate Trust and see where that takes you. All I've been able to find is it's history over the past 10 years.

A good mention @Tony The WSJ audio clip I received (subscription service) sounds like the same article you're referencing - but I can't read it online either. It's a 6-8 minute clip laying out the bear case which we're all by now familiar with from various sources.
Summary
- Stocks have increased about 250% from the end of '08 when (according to the article) "nobody" wanted them.
- As always, the mom & pop / momentum crowd come late to the party and drive the "euphoric" stage for an indeterminable number of additional years.
- Serious investors face a tough decision whether to hang on to equities longer hoping to reap the big gains that come in the final "blowoff' stages of a market top or to sell now locking in gains before stocks plummet.
I know. "Same Old" - "Same Old" that we've all been hearing for the past few years. I'm not saying the analysis is correct. And I haven't a clue what anyone should do. Just wanted to help clarify the focus of the WSJ piece you appear to be referencing. Thanks again for sharing.
Edit/Additional
Source: WSJ March 9 2017, Author: James Mackintosh, Title: "This Crazy, Expensive Stock Market Is for Speculators, Not Investors" https://www.wsj.com/articles/this-crazy-expensive-stock-market-is-for-speculators-not-investors-1489078334?tesla=y
Excerpt: Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria—Sir John Templeton. Eight years ago today, investors were more pessimistic than they had been in many decades. Stocks had crashed back to where they stood almost 13 years earlier, banks were failing and comparisons to the Great Depression of the 1930s were routine. It was a great time to buy."
Re: James Makintosh http://topics.wsj.com/person/M/james-mackintosh/8338
(I made a couple minor corrections to original summary based on a second listening.)

Those are nice Kiplinger tables (data from M*). Be careful with the top figures though, because funds often have multiple share classes.
For example, it says the top 3 year performer was DSENX, but DSEEX performed about 1/4% better. That's as one would expect since the I class shares have no 12b-1 fee. (I checked to make sure that DSEEX was also around for at least three years as of 2/28/17.)
Online, M* only goes back 15 years, but with that in mind, the top 15 year performers are (as of 3/10/17):
OSMAX 14.71% (foreign small/mid)
PHSZX 14.60% (health)
SHSSX 14.55% (health)
PRMTX 14.53% (communications) - converted from CEF New Age Media 7/28/97 (> 15 years ago)
ESMAX 14.44% (Europe)
CGMRX 14.27% (real estate)
BRUFX 14.21 (allocation 50%-70%)
INPIX 14.14% (trading - leveraged equity)
To address the question about the next 20 years, the most obvious answer is: your guess is as good as mine. FWIW, my guess is a bit south of 8%. Look at Ted's 20 year top LC performers. Domestically, around 11-12%, internationally 7%-8%.
Rate of population growth is declining quickly (might result in slower demand/profit growth). Unlike the first industrial revolution that increased both production capability and demand (hiring workers), the new revolution in machines (both service and manufacturing) seem to improve primarily just the production side of the equation.
Just a couple of random thoughts. Not sure how it will really affect long term profits (which is supposed to be what drives capital gains).

Thanks, Ted. 10 years is too short for what I'm asking about. Looks like the best they have for a 20 year period is Vanguard Capital Opportunity at 12.9%.
@Junkster, what I was intending by using the word diversified was to exclude those funds.

@dryflower: Here are some Large Company Stock Fund returns over 1,3,5,10,20 years. Returns as of 2/28/17.
Regards,
Ted
http://www.kiplinger.com/tool/investing/T041-S001-top-performing-mutual-funds/index.php

What is the highest annualized rate of return of which you are aware for a mutual fund over an extended time period, say 15, 20, or 30 years? I know that before the weaker performance this century, Templeton Growth Fund (TEPLX) had compounded at something north of 13% annualized for about 50 years. As of late 2016, the fund company says its inception to date return was 11.86%.
What do y'all think is the highest annualized return one could hope for from a diversified equity mutual fund over the coming couple of decades?

VintageFreak,
I like your mutual series funds very much.....smart choices. But, Forester funds.....what do you see there? FVALX has negative average annual returns for the last 5 years with a 1.26 ER. INTLX is not much better with a 1.36 ER. I would put more money in the mutual series funds and skip these.....just saying. The info I cited is from Fidelity.
God bless
the Pudd

You'll find my comments on the Investment News page. In short, M* has been selling advisers "managed portfolios" for years. They had been picking funds and allocations on paper, leaving it to the advisers to buy.
All this seems to be doing is taking that process in-house, where a M* fund hires the same managers, allocates the same sleeves, and then presents the prepackaged "managed portfolio" in a single fund to advisers.
https://corporate.morningstar.com/us/documents/Brochures/Bifold-MIS-MF-TAMP200-0516.pdf

@VintageFreak- Reopened a small position in The Income Fund of America (been some years since we had that) but you should be OK because I went with the AMECX version. FYI, about the only difference that I can see is a slightly lower ER, IFAFX 0.65% vs AMECX 0.56% . I'm guessing the difference covers the NTF arrangement with brokers, as compared to buying directly from AF.

@VintageFreak- What did you buy over at American? (We've been with them for close to forty years.)

GBLEX and IFAFX. I just dipped my toe in though.

@VintageFreak- What did you buy over at American? (We've been with them for close to forty years.)

I will also note that fees always have a negative impact on investor returns. ... Mutual fund managers never have a losing year when their funds have negative years, the investor does. ER is paid regardless as to whether the investor subtract the fee from gains or adds the fee to losses.

Morningstar: "Zero or negative expense ratios are rare but not unprecedented." The article contains examples and links. The ones I had in mind were the Bridgeway funds the article leads with. They are especially relevant as they have performance adjustments that can make fund expenses go negative. The fund managers most definitely had a losing year.
Since the article is old, and some of those links are dead, I'll help out a little. The Elon Musk backed funds referenced are also described in this Bloomberg article.

Vangaurd has a nice interactive chart that illustrates the impact Expense Ratio (ER) fees have on "lost return".
By sliding the expected return control closer to the left (simulating a low return environment where CAPE is historically high) fees grab proportionally more of the return that the investor keeps.
I will also note that fees always have a negative impact on investor returns. What the chart fails to shown is a negative returns scenario and the additive effect ERs have on negative returns. Investors deal with negative risk while also absorbing the negative impact of fees during down markets. Mutual fund managers never have a losing year when their funds have negative years, the investor does. ER is paid regardless as to whether the investor subtract the fee from gains or adds the fee to losses.
https://personal.vanguard.com/us/insights/investingtruths/investing-truth-about-cost

FYI: Online brokerage firm Scottrade said Wednesday starting in 2005 it will begin charging a flat $7 commission on all online market and limit orders. Scottrade customers currently pay a $12 commission for all limit orders. Conversely, Scottrade said it will institute a $17 transaction fee for trades of certain no-load mutual funds after not charging such fees on any no-load funds for the past four years.
Regards,
Ted
http://www.marketwatch.com/story/scottrade-cuts-limit-order-commissions-ups-fund-fees/print

- I don't see DSENX as an alternative fund at all. It invests in value sectors of the S&P 500
- nothing akin to MFLDX in it's method. No manager guessing at allocation.
- don't see it as black box either. It is pretty well spelled out what it does.
- not going to do the analysis, but I don't believe any mix of CAPE and DBLTX has achieve the same returns as DSENX.
- as far as what can go wrong, value investing can and does lag growth investing from time to time
I definitely enjoyed this thread though. This fund is one of my favorites and now a high percentage of self managed portfolio. I could sit back and say nothing lasts forever or to good to be true and not invest, but the bottom line is something with this formula is working very well. CAPE is a known commodity. Just hope it doesn't end up a group-think fund 3 years from now. I'll take the chance.

Great stuff everybody. Thanks for the clarification LLJB. Yeah - most often what a manager can do, according to prospectus, isn't what he actually does. And sounds like Gundlach is more conservatively positioned in fixed income than what the prospectus would allow.
"Black box" probably too harsh. My bad. They do have a clear methodology they follow.
Started tracking DSENX today based on this discussion. Will follow for awhile. Amazingly, it held up very well today. My own highly conservative portfolio came with an identical showing - off .27% for the day (and has nowhere near the growth potential this fund has). I don't know how much high yield debt he has in the fund. But that stuff can look bullet-proof for years on end and than have the bottom drop out almost overnight. And it's had a nice long run. Equities are no different in that respect I suppose, but not as apt to lull one into complacency.
Gundlach is flying high. It's hard to criticize anything he has a hand in. For some reason I keep thinking of MFLDX several years ago. Drew in big sums and was highly regarded on the board. Considered a safe conservative holding. Than went into a terrible tailspin as everybody and his brother bailed.

>>forgive thickness, but not seeing how ...
Regardless of whether you see how, Shiller does. The index removes one of the five lowest CAPE sectors due to fear of a value trap (low momentum remaining low). If one of the ten sectors that ought to outperform is eliminated because it might not, then surely it's possible that a second would also fall into this trap, and a third, and a fourth.
The index is a variant of a Dogs of the Dow strategy, where you pick by sectors rather than by stocks, and look at the past ten years rather than the past year, and then throw out the worst dog. It's not guaranteed any more than the Dogs is (are?).