Smead has been saying this at least for several years since I became aware of him. At this point it's not new news so the bet is only whether the impact millennials have is better or worse than expectations rather than an undiscovered opportunity (as usual).

FYI: The Fed’s Survey of Professional Forecasters for 2017 Q2 shows that 10-year rates are expected to rise to 2.9% over the coming 12 months. The problem is that Wall Street economists have been consistently too optimistic for the past 15 years, see chart below. To correct for the excessive optimism among forecasters, one can subtract the average forecast error, i.e. the average mistake made for the past 15 years by the forecasting community, which is 0.6%-points. Doing that gives a 12-month forecast for 10-year rates of 2.3%.
Regards,
Ted
http://ritholtz.com/2017/06/excess-optimism/

Like clockwork, HACK is back in the news. *yawn*
There's no correlation on cybersecurity events + cyber company stock prices. If that was the case, given the state of cyberINsecurity in the world, HACK would be four digits by now and everyone would own it. But they don't ... this is just another faddy sub-sector thing.
(ETA: I've got 20 years in the cybersecurity industry before moving into academia, specialising on cybersecurity stuff.)

FYI: Ivestors have been more open to a clown inviting them into the woods than they have been to buying actively managed mutual funds.
And that’s understandable, given how poorly many managers have fared against passively managed index funds. But even well-managed funds that have beaten the S&P 500’s 10.1% average annual gain in the past three years have watched investors run away.
The outflows are staggering: The 10 funds with the largest outflows have lost an estimated $160 billion in the past three years. InvestmentNews, using data provided by Morningstar, looked at the funds with the biggest outflows, in order from the least amount to the largest. The carnage begins on the next slide.
Regards,
Ted
http://www.investmentnews.com/gallery/20170626/FREE/626009999/PH
1. Fidelity Contrafund:
http://www.investmentnews.com/gallery/20170626/FREE/626009999/PH/10-funds-with-largest-3-year-outflows&Params=Itemnr=11
2. American Funds Growth Fund Of America:
http://www.investmentnews.com/gallery/20170626/FREE/626009999/PH/10-funds-with-largest-3-year-outflows&Params=Itemnr=10
3. Coumbia Acorn:
http://www.investmentnews.com/gallery/20170626/FREE/626009999/PH/10-funds-with-largest-3-year-outflows&Params=Itemnr=9
4. T. Rowe Price Equity Income:
http://www.investmentnews.com/gallery/20170626/FREE/626009999/PH/10-funds-with-largest-3-year-outflows&Params=Itemnr=8
5. Davis New York Venture:
http://www.investmentnews.com/gallery/20170626/FREE/626009999/PH/10-funds-with-largest-3-year-outflows&Params=Itemnr=7
6. Vanguard Windsor II:
http://www.investmentnews.com/gallery/20170626/FREE/626009999/PH/10-funds-with-largest-3-year-outflows&Params=Itemnr=6
7. Artisan Mid-Cap Growth:
http://www.investmentnews.com/gallery/20170626/FREE/626009999/PH/10-funds-with-largest-3-year-outflows&Params=Itemnr=5
8. T. Rowe Price Growth Stock:
http://www.investmentnews.com/gallery/20170626/FREE/626009999/PH/10-funds-with-largest-3-year-outflows&Params=Itemnr=4
9. Dodge & Cox Stock:
http://www.investmentnews.com/gallery/20170626/FREE/626009999/PH/10-funds-with-largest-3-year-outflows&Params=Itemnr=3
10. Fairholme Fund:
http://www.investmentnews.com/gallery/20170626/FREE/626009999/PH/10-funds-with-largest-3-year-outflows&Params=Itemnr=2

Hi @Maurice, I'm thinking that Ms. Gaffney left Lommis Sayles because there was a good possibility that Elane Stokes and Matthew Eagan were higher in the pecking order to replace Mr. Fuss when he leaves. Recently, they brought on Brian Kennedy as a fouth member of the team that manages the fund that I own, NEFZX. In a couple of years I may venture back into NEFRX also a Lommis fund run by a different team consisting of Peter Palfrey and Richard Raczkowski. I sold the fund a few years back when I added LBNDX to my fixed income sleeve.
I'm thinking Ms. Stokes and crew can carry own just fine when Mr. Fuss leaves.

Hi @Puddnhead,
I have used the trifecta system in my portfolio for years since the mid 80's. Years back I bet the dogs and found my winnings were much greater at the track betting on three dogs to win, place or show over just betting one or two dogs to win per race. Over time the track gave me special seating in the track's club area. And, even today I still use it within my investment sleeve management system with no less than three funds per sleeve. However, sleeves can hold up to nine funds if they are champion of champions type funds ... in this way, I'm betting on the whole pack as there are really no loosers found here.
Seems, you also have found and are a believer in the win, place, show strategy too. For me, the strategy has worked well through the years. However, know that there are others that will argue it different. But, it has put me net positive at the track and with my investment system as well.
I'll be in the Daytona area vsiting a high school buddy (who is a retireed engineer by profession and that is also an investment indexer of sorts) for part of July ... not for the NASCAR race ... but, for the dog track. My buddy moves between a 60/40 to 40/60 stock vs. bond allocation using index funds as to how he is reading the markets. At times, his portfolio leads over mine and at times I lead. So, there you have it both systems work as we both wear smiles on our face. If you would like to study a fund that uses much the same investment strategy as he does the ticker symbol is SFAAX.
Best regards,
Skeet

I bought into PTIAX almost 2 years ago when muni's were hot. I don't believe that will be the case moving forward. I did see where management still believes muni's are a good place to be going forward (apparently still at a high percentage), fwiw. I decided about 4 months ago I only needed 1 good multi sector bond fund so I sold PTIAX and put it into PONDX. You can't ignore the nose on your face. PONDX has been a better fund, and until it proves otherwise, that is my choice.

@willmatt72,
I also moved away from EVBAX but still own the Dan Fuss run NEFZX and have owned it for better than ten years now.
Skeet

I can't figure out why the 10 month SMA system doesn't get more press for retirees. You will get whipsawed occasionally but you're never going to suffer an enormous setback. When there is a big crisis you're going to come out ahead. If you compare it to a standard 60/40 buy and hold it's been a lot better on real returns and basically the same on a risk adjusted basis over the last 30 years. If you compare it to famed funds like Wellington and Wellesley it still wins the absolute return game, although just a little over Wellington (a lot over Wellesley) and it loses the risk adjusted game, but it depends on what you care about. The max drawdown is better than Wellington if that matters but you give up a lot in return if you choose Wellesley for the lower max drawdown.
I guess there's are tax implications if someone isn't using a tax protected account and maybe that's a drawback compared to some other strategies but this seems like a great game to me and one that should work pretty well for a lot of people.

“There are no easy solutions when investing in an overvalued market. Every strategy has its flaws. The trick for investors in this situation is to find a strategy they can stick with no matter what happens in the markets. No one can predict the future, but you can plan how you will react under different scenarios.”
My emphasis.
Roughly 10,000 people retire each day – or roughly 3,650,000 each year.
My guess is that >90% of them are unaware of the market’s Sequence of Returns.

Situation Assumption -
Assume that it’s June and that your friend (age 65) is about to retire at the end of the year with a portfolio of $600,000. (The actual amount is anything he believes is sufficient to be adequate for his retirement.) His mortgage is paid and he has $3,000 in credit card debt.
He has a 60/40 or 50/50 allocation of vanilla mutual funds in a 401k and $10,000 in cash. He has booked a cruise in January for his family and plans to buy a new car that he will keep for the next ten years.
The market starts to fall dramatically. By November it’s down 25% and sliding.
He asks your advice.
Based upon “find a strategy they can stick with no matter what happens in the market”, what do you tell him?

FYI: Bitcoin is kicking sand in the face of traditional investments. Between July 1, 2013 and June 13, 2017, it gained 3,130 percent. To put that in perspective, it took Vanguard’s S&P 500 thirty years (from its 1976 inception) to make investors that much money.
Regards,
Ted
https://assetbuilder.com/knowledge-center/articles/bitcoin-gains-174-percent-in-just-six-months-should-it-be-part-of-your-portfolio

With average maturity at 13+ years and duration at more than 6, Gaffney's fund is not for the faint of heart should a credit crisis develop. By comparison, LSBDX looks tame, and it is not.

Morn'in @LLJB @davidrmoran
Yes, of course, some of this is about the "machines/algos". But, the humans in charge set the parameters and I am sure have an "override button" in place to alter the algos.
Relative to the simple side for we retail investors and "timing" methods.
I am reminded (based upon my time in the markets) when Fidelity introduced their "Select Funds". One (for a period of time) could trade the select funds at the top of every hour. This became too disruptive to the funds, and this option was removed.
A carryover for we retail investors was the evolution of momentum trading of these select funds. Numerous folks via mail and electronic web sites produced their views for choosing the rotation in and out of the best 4 select funds via Fidelity. These methodologies still exist today. These methods remind me of the choices being made by the managers at DSENX or PONDX, although at a very sublime level.
One can imagine the chatter in the offices of the quant, long-short, market neutral and the hedgies or related similar operations trying to figure out how to come close to returns from the likes of DSENX or even PONDX.
I have not checked, but I suspect most of the " quant, long-short, market neutral and the hedgies or related similar operations" have not matched returns with PONDX. One can almost hear the screams of despair at the meetings of "why can't we outperform a multi-sector bond fund?". :)
ADD: 5 year annualized average returns, except DSEEX (only 3 years available). A very few long/short, managed futures, market neutral and multi-alternative did surpass PIMIX , but the majority performed poorly. One would have needed the luck of the draw to have a winner in this group to even perform above the current low inflation rate.
---DSEEX / DSENX = 14.5%
---PIMIX / PONDX = 8.3%
---long/short = 6.6%
---multi-alternative = 3.3%
---managed futures = 1.1%
---market neutral = .8%
ADD 2: Hedge funds (various types) data 2015-2017, scroll down page for data
http://www.valuewalk.com/2017/05/hedge-funds-return-an-average-of-0-66-in-april-2017/
Well, anyway; per my original write is that currently, the funds noted are on a "Magical Mystery Tour" providing profits to the investors at a most reasonable cost.
Take care,
Catch

FYI: While much of the financial services industry has been fretting for the past few years over how to compete in the age of digital-advice platforms, The Vanguard Group Inc. appears to have cracked the code in a steady climb to more than $65 billion under management on its two-year-old robo.
Regards,
Ted
http://www.investmentnews.com/article/20170620/FREE/170629993/vanguard-rides-robo-advice-wave-to-65b-in-assets

HI Guys,
If anyone does listen and then trade based on a Jim Roger's prediction, they do so with great risk to their wealth. I agree with MFO members who are skeptical of any forecaster's projections.
Simply put, forecasters can't forecast. Much empirical evidence supports that observation; the record is clear on this matter.
For years, CXO Advisory did yeomen work at scorekeeping the cumulative record of a host of famous market gurus. I hated to see the end of that worthy project. Here is a Link that discusses their methodology and their scoring outcomes:
https://www.cxoadvisory.com/gurus/
The summary demonstrate the futility of making market predictions. With about 7000 forecasts from 70 or so gurus, these experts managed an overall accuracy of just under 50%. A fair coin toss would have done slightly better.
This outcome must be humbling to those who claim superior insights. Those special insights simply do not exist. So buyers of these failed analyses must be doubly suspicious of any such forecast. It just might be profitable to do the opposite of what was recommended!
Best Wishes

Rode it for about 2 years from around $65 (summer 2014) down to $26 (early 2016) and than back up again to $50-55 where I got out. Bought the dips and sold a few rallies along the way. Used PRNEX as a proxy. Did OK in the end, but I'll tell you it was no fun. No appetite to play it again - Sam
This time the slide might be a warning of a coming recession. Bond yields also seem to suggest that. Hope I'm wrong. But recessions happen. @Maurice - Love your new picture. Looks more like a normal person than the last one did.

@catch, it's a great observation that I have a few additional thoughts about having been a Patriots fan since the '70s and more recently a fan of Doubleline's Enhanced CAPE fund thanks to all the discussions here.
Both sports, especially football with so many guys playing during a game, and investments, with tens or hundreds of investments, are very complicated systems. The goal, I think, is to put pieces together that work extremely well TOGETHER rather than assembling a collection of 'star' performers that don't work as well together. Belichick has a system and he seems to be extremely good at taking lots of different players over the years and getting them to work together. Quite a few of these players aren't individual stars but he gets so much out of how he gets them to work together that they've been perennial contenders for many years. And, which I think is very important, he's very quick to part with anybody who causes or might cause disruption to the system because the value he gets out of cohesion is far greater than what he could ever get out of an individual star.
I think the same is probably true for fund managers but they have even more pieces to manage and they don't have the ability to 'teach' anything to their investments to get them to perform 'better' in their system. They do get it right sometimes, occasionally for long periods of time and I would suggest it's not easy to guess when they're going to lose it as Bill Miller did. In the case of the Doubleline funds, most of the performance is rules based and there's no reason to think a set of rules can't work extremely well for some period of time too. The bonds play an important role too and it seems both the math and the bonds have been working very well together since inception. Figuring out if and/or when the math won't work as well isn't easy but it's probably the key to knowing when it's time to move on.
In another more active example, the Primecap guys have had a team approach to their funds forever and the performance speaks for itself. Since the members of the team manage their pieces with a high degree of autonomy, at least according to what I've been able to read, it has to mean they've put team members together and taught them a system that has worked extremely well together for a very long time. As the team turns over, as it has some through the years, finding new team members who can employ the system and who mesh well with the other team members is probably the biggest source of their success. Since POAGX is my biggest single investment I'm hoping that continues for a long time.

The Beatles have already established the phrase of "Magical Mystery Tour", but the words appropriately describe some personal investing styles and active managed funds, IMHO.
Be it musical groups, sports teams, corporations, small private companies or your other choices; the stars do align from cosmic forces, a function of cyclical mathematics or some other energy that one may choose to attempt to define; or perhaps, just by chance; circumstances find certain people and events to discover one another and bind into a positive and overwhelming presence of intellect that is difficult for 99.99% of the world population to comprehend.
I suspect most folks here have and can define, to a point; a recollection of a sports team or musical group that "just had that superior edge", at least for a given time frame. Although I'm not a big time sports fan and don't fly U of Michigan or Michigan State flags at the house, I do pay attention. Superior head coaches and the selected staffs help build a successful program which results in attracting superior athletes to the sports team. These periods may run for many years and then get "clunked" for any number of reasons. The duration of success for many collegiate teams today is highly impacted by the money draw into professional sports, that finds superior college team players exiting after two years. These magic combinations of managers, staff and players may also be found in professional team sports. One must also consider the other side of the coin into the world of "can't get it right" for long time frames. The Detroit Lions football team comes to my mind for such a circumstance, and especially relative to the New England Patriots, eh?.
Well, anyway; you get the gist of my thinking, yes?; as related to active managed mutual funds.
Are these the circumstances behind the superior performance of DSEEX DSENX PIMIX PONDX (both classes noted for the purpose of one's purchase limits)?
Will this superior performance continue for 1, 2, 3, 5 or 10 more years? Your guess is as good as mine, I imagine.
Is the risk involved with the magic sauce formula of these funds over and above some threshold of personal investment risk tolerance? Only the individual investor can answer this question, yes? But, one can not argue against the skill of the use of the "magic sauce" by management, at this time, correct?, based upon performance.
We're investors and have exposure to many forms of investment risk beyond our control and vision. Tis the old adage of "get out of the kitchen, if you can't stand the heat".
Six month, after inception, slide report DSEEX / DSENX . You may find this document of interest, although the subject matter has been discussed here previously.
http://www.valuewalk.com/wp-content/uploads/2014/05/5-20-2014-CAPE-webcast-slides-Valuation-Its-All-Relative-mailing.pdf
Alright, the end of the early morning jabber from this house; and moving on to another cup of coffee before starting chores for this day.
Take care,
Catch

Buffett's rules .1Don't lose MOney 2 Don't forget rule 1 have been followed by all managers of this fund when they started managing and wrote that more or less in their first quarterly reportga

Don't lose money? Yes, agree. But than continue to generate these kinds of average annualized returns?
PRWCX:

Average annualized returns: 1-year 11.73%, 5-years 11.59%, Since Inception (21-years) 11.34% https://www3.troweprice.com/usis/personal-investing/mutual-funds/historical-performance.html
Talk about consistency!
BTW: The fund wasn't always so universally loved here. Here's a former poster named "Max" in November 2013 testing the waters. He was new to PRWCX and appeared in need of assurances from some of those familiar with the fund. I'm glad we were able to help at the time. http://www.mutualfundobserver.com/discuss/discussion/9085/changes/p1

Aw, shucks..... ;)

Buffett's rules .1Don't lose MOney 2 Don't forget rule 1 have been followed by all managers of this fund when they started managing and wrote that more or less in their first quarterly reportga

Don't lose money? Yes, agree. But than continue to generate these kinds of average annualized returns?
PRWCX: Average annualized returns: 1-year 11.73%, 5-years 11.59%, Since Inception (21-years) 11.34% https://www3.troweprice.com/usis/personal-investing/mutual-funds/historical-performance.html
Talk about consistency!
BTW: The fund wasn't always so universally loved here. Here's a former poster named "Max" in November 2013 testing the waters. He was new to PRWCX and appeared in need of assurances from some of those familiar with the fund. I'm glad we were able to help at the time. http://www.mutualfundobserver.com/discuss/discussion/9085/changes/p1