Ran into this .Good chart of nearly every domestic index's performance in time frames dating to the past five years.
So, is there magic in the post-election sprinkling of Trump Fairy Dust? I am encouraged by many of the ideas put forth, especially on tax reform as a way to unleash America's potential (less excited about other ideas). Consumer sentiment and small business confidence rose sharply following the election, suggesting the positive feelings or animal spirits are on the rise. That said, experience tells us that the political sausage grinder has a way of neutering the most well-intentioned plans, and that the economy continues to struggle to achieve "escape velocity,” constrained by low productivity and labor force growth. Still, pull up a chair and grab some popcorn: I expect an exciting show!
https://www.ridgeworth.com/articles/market-perspective-december-31-2016
Here's a longer perspective on the Trump Effect
SEIX BOUTIQUE PERSPECTIVE (CAN TRUMP MAKE BONDS GREAT AGAIN?)
December 5, 2016 However, the structural issues will continue to serve as headwinds to growth as they have for the duration of this recovery and lower for longer remains our base case as these deflationary forces remain firmly entrenched and secular in nature. More time and very difficult decisions are required to remedy these issues and politicians have been unwilling to tackle them thus far. As history has instructed, the political class typically fails to act absent a real crisis. Perhaps this is another political tendency the President-elect can approach from the non-traditional perspective of an outsider elected by Main Street. Hope springs eternal…
https://www.ridgeworth.com/articles/can-trump-make-bonds-great-again

Thanks Ted. A good sign that you're doing better. Good post.
I think what is often overlooked in discussions about international markets (like a recent thread) is the dollar. Its strength is one reason those markets have lagged for several years. Of course, currency trends can persist for years or decades. No one really knows. Eventually, they do reverse. Today the trend reversed (probably temporarily) and the dollar fell hard. Will be interesting to see what impact, if any, that has on international funds today. Many international stock and bond funds hedge against dollar flux and many international stock funds also use something called "Fair Value Pricing" (FVP) - some more than others. Both practices would tend to mitigate any big gains in international funds on any given day. (FVP): https://advisors.vanguard.com/iwe/pdf/FAFVP.pdf
As regulars know, I'm pretty conservative at 70+. I'm also 80+% buy and hold (sometimes called "buy and die"). But it's fun to play around a little around the edges. In December I sold my remaining shares in PRNEX (heavy on refiners). It jumped 25% in 2016 as oil began the year around $30 and reached over $55 in late December - a near doubling in less than 12 months. I suspect it has further to go, but didn't want to risk the year's gains. Used the $$ (about 2.5% of holdings) to boost cash a bit and also to buy my first ever index fund, PIEQX, which invests in developed overseas markets (Europe, Japan, Australia, South Korea, etc.). A month is way too short a period to draw conclusions, but the new fund has been my best performer this year. One reason I chose an index international fund (over a managed) is my assumption (could be wrong here) that T Rowe isn't using dollar hedging or FVP on this one. So the currency play should be near 100% - for better or worse.
Good luck folks. Always enjoy hearing how others invest and see things.

@rforno- Yes, it's a shame that MJG frequently incites our worst... try to ignore us. Sometimes his patronizing and condescending remarks are just too hard to ignore. The interesting thing is that after all of these years of this crap he still professes to be "somewhat surprised by the vindictiveness" of our reactions. A real slow learner, that fellow is.

I have always contended that the reason so many active managers underperform is not because markets are efficient, but because of structural problems within the money management industry and behavioral problems within managers themselves. To put it bluntly, greed, conflicted interests and the herding instinct to closet index are all built into the system for most managers. Managers serve two masters--fund shareholders and fund company owners--and the latter too often cares too little about the former.
There are ways to appropriately incentivize managers to put fund shareholders first, compensating them solely on long-term risk adjusted returns as opposed to asset gathering, but few fund shops follow this practice and thus deserve to go extinct from the index onslaught. Another way is to insist that managers invest a significant portion of their net worth in their own funds. Again, few managers do this.
But imagine a fund where the manager was an employee of the fund, not of a fund management company with an external set of shareholders seeking to profit off of asset gathering. Imagine a fund where the management fee was a fixed or flat number, not based on assets, and a bonus was allotted based solely on the manager outperforming a benchmark on a risk-adjusted basis over five years--a full market cycle. Meanwhile, the manager was required to invest a significant percentage of his/her liquid net worth in the fund. Such a structure I would argue would have a better chance of beating the market than the way funds are designed today.
Closet indexing is another problem as managers face career risk from underperforming a surging benchmark to a significant degree, so most herd together and try not to deviate too much from the benchmark. After fees obviously they will underperform but not so much they will get fired.
I would contend that there are only a handful of money managers who behave as true fiduciaries and always put shareholders needs first. That is why so many underperform in my view, not because markets are efficient.

"You may be thinking that, if passive is the way to go, you might as well make things even simpler. Why not just put your retirement money in the bank and forget it? While you can certainly do that, the results may be disastrous. If you want more than just Social Security for your retirement, you need your money to grow.
Consider this. In 1913, nine cents bought a quart of milk. In 1963, the same nine cents bought a small glass of milk. In 2015, nine cents bought seven tablespoons of milk. Clearly, putting money under the mattress doesn't work for the long term. The culprit of the declining purchasing power of that nine cents is inflation. The moral of this story is to make sure your money grows at least as fast as inflation.
That requires investing it. For example, it would require $13 today to equal the purchasing power that $1 provided in 1926. Had you put one dollar in the bank in 1926, you would have $21 today. Having invested the dollar in long-term bonds would give you $132. However, invested in the S&P 500 index (stocks), you would have $5,386."

I love this assertion that the past stock market's performance is prelude to the future market's performance. Let's assume that indexers are right and that stock performance truly is a "random walk," which active managers can't predict and therefore can't beat. Why accept the other notion indexers believe in then that in the "long run stocks always go up" if it is truly random? The 104 years of market history this author cites is less than a heartbeat in the history of the planet. Just because markets have gone up in the past is no guarantee they will go up in the future. Rising markets are not a law of nature like gravity in physics. There is no guarantee even that stock markets will continue to exist. There is a historical precedence for markets disappearing altogether as happened to Russia in the 1910s during the Russian revolution: https://the-international-investor.com/2011/st-petersburg-stock-exchange-1865-1917-diversification-pays-emerging-markets
Can an active manager predict when the next bubble will burst or some major geopolitical event is about to occur with any certainty? No, but they can at least react defensively to it when a blind mechanical index can't. What indexing's triumph proves is not that markets are efficient, always rising and therefore unbeatable. It proves that costs matter. Costs are the one thing in funds you can predict will have an impact with a fairly accurate degree of mathematical certainty. Not just expense ratios, but trading costs and market impact costs. But a low cost, low turnover actively managed fund with a manageable level of assets can be a better investment than a mechanical index fund.

I forgot that thread, but I must admit being fairly pleased going on 10 years with TD Ameritrade, starting back in my active futures / day trading days with ThinkorSwim.

Puddnhead , I worked for a once great company, once the darling of the DOW, that downsized every year for almost 20 years. Went from 100k+ employees world wide to now just a few thousand. At different times they offered both buy-outs that were taxed as regular pay and buy-outs that could be rolled over into the company 401k or an IRA tax free. The difference was where the company was taking the money from to make the buy-out payment. Money coming out of the pension plan was considered tax free if rolled directly into IRA or 401k. Your employer should be giving you that very important information. I'm surprised Duke didn't tell you this :)

Hi guys!
You're the best, Skeeter! It's your thread and everybody knows it but you. Keep up the good work, big guy!
Not much to say.....doing a lot of watching, but will say this: seems everybody is looking for a pullback. But....what if we don't get one? ..... really?......then, what will you do? Add more money or wait? I watched wealth track this morning......it's part 2. They seem to think things are getting better in the world. What is a good Japan fund? I haven't been over there in years. Might put a little in there. I see Josh Peters has a fund he's managing now: OARDX. Will keep an eye on it for a while. Also, at work they came out with a buyout package. Yep! They're going to pay us to leave. I feel like a politician being bribed......I like it!!! Also, where's Ted? The board seems slow without him around. Also, give me your best fund.....one you will die before selling. I want to make a list before going into an IRA and paying $2500.00 to open a fund. Now, with 401k, it's only $500.00, so I might add some before I retire. Why? Because I'm a lot like Bee. Also, is a bank loan fund or short term bond fund as good as a money market account for short term money? If so, what funds? Also, if I get lump sum (via buyout) and put into IRA, will I have to pay taxes? I assume "yes," but I had to ask. Anybody else been here before? Funny......at the meeting, about 100 people there....I might've known half of them. So many friends are gone. Didn't realize that. They leave over time and you forget. Got to stop before I cry in my beer.
God bless
the Pudd

DSEUX is an interesting fund ONLY because of the success of DSENX. In my opinion, there is absolutely no reason to jump into this fund now. Way way way to early. If it is doing better than FMIJX after 3 years I may consider it.

.....What leaps to mind here is Adam Parker of Morgan Stanley a few weeks ago, on Bloomberg, where he declared: "Europe is for vacation, not for owning stocks." I did not do very well holding PRESX, looking back a couple of years.

EFEIX shows a concentrated portfolio of just 47 stocks, and 7 "other." I compared it to TRAMX: 71 stocks, 2 bonds and 1 "other." EFEIX shows a better 1 and 3-year record, but TRAMX has a longer record, showing 5 yr. perf. at 7.23%. It seems to me that it's not worth the headache of all of the deep research you'd have to do, in order to justify owning a Frontier fund. Expense Ratios are high. If you want to buy it as a short-term trade rather than a long-term investment, it might make you happy. I made money with TRAMX years ago, but it was dumb luck.

Yes. I was hoping they'd do this. Especially since it is by any standards a tiny fund, $160 mln in AUM. This one's a keeper. Thanks, David_Snowball, for writing this up a few years back.

It's an awfully admirable decision. They've been struggling for years to get attention. They returned 54% last year, despite a contracting pool of opportunities, and got serious attention. Having concluded that there simply aren't many opportunities and reluctant to hold cash, they're closing the door to their most popular channel. It seems very principled to me.
David

DSEUX is an interesting fund ONLY because of the success of DSENX. In my opinion, there is absolutely no reason to jump into this fund now. Way way way to early. If it is doing better than FMIJX after 3 years I may consider it.

Closed out JOHAX after another disappointing year. Adding to FMIJX in foreign large cap allocation. BTW, M* still has OAKIX as gold, 5 star but FMIJX has truly clocked it for three years.

Of course, it helps to know which end of the horse is selecting the investments.
Seems I have a horse in most of these races. Should I divest if they win?

First part: (easiest to address): Let's hope that the horse is being fed and stable cleaned by some good research and analytical people underneath. (no pun intended)
Second part: Dunno. I wouldn't sell - but wouldn't be pleased either. I've worried about the "popularity effect" for several years with PRWCX. Haven't sold, but keep only a small % of assets in that fund. Lagged noticeably last year. The ingredient that's hardest to figure out when thinking about the effect of money flows on a fund is how much of the AUM is relatively stable (committed for the long term) and how much will flee when things turn south. It's the rapid flow out during hard times that can really ding a fund and damage those who remain behind.
As an aside: If you like timing, one might try to ride a fund higher as the popularity grows and than bail about the time the popularity begins to wane. I'm pretty sure I've seen evidence in the past that some big investors do follow fund flow data with precisely this intention.

I would vote for TRMCX manager Wallack for MoTY. I was able to purchase this fund in May 2009, just after it reopened to new investors. My last buys were in late January and February 2016. Later it didn't go unnoticed by me that the fund was doing quite well.. Mid year I saw the updated portfolio and saw why - Energy.
I believe that his management skills have added value in excess of the fees paid. I'm also in Primecap and have been for almost 20 years. I think they received this award in the past.

@kevindow Your point was that the fund will not close anytime soon because the manager's intention is "looking for assets like First Eagle," which the manager has stated is false.
The manager has between 50-100K in the domestic fund; he has none in the international fund. I like to see managers have some meaningful stake in their products, but at the same time I don't conclude that they "don't have confidence" in their own ability.
You are very correct in stating that it may take "5 or more years" for the fund to reach 10B at its present pace!
OTOH, I'm unconvinced that if the fund reaches that amount that "greed will overcome principle like it usually does," especially when the manager has stated that he will limit assets. What I have seen in my past investment experience is that managers who have said that they will close the cash windows do follow through, and so I'm making a judgment in the case of Mr. Deshpande that he will do the same. Based on what he has said and written publicly indicates that his goal is to produce superior returns, not accumulate assets, and so I will take him as a man of principle rather than as someone following his own selfish interests.
I have a very favorable opinion of FMIJX but do not own it.
Best.

@openice,
OK, let me be clear. The current AUM is a measly $53M for a fund which began collecting assets 8 months ago in May 2016. Like I said, this fund will not close to new investors anytime soon.
Also, Mr. Deshpande only has a paltry $100K or less invested of his own money in this fund, according to the latest SAI. Why should I have confidence in this fund if the manager doesn't ??
And if the AUM get near $10B, which may take 5 or more years at this pace, I predict that greed will overcome principle -- like it usually does -- and the fund will stay open to ALL investors.
Again, in this space, FMIJX would be my choice and not Mr. Deshpande's fund.
Kevin

Centerstone Investor Class A (CETAX) and Centerstone International Class A (CSIAX) are available no-load and NTF at Schwab for $100 and $1 additional in basic and IRA accounts. David ran a launch alert in June 2016. The fund http://centerstoneinv.com has a lengthy, detailed conference call transcript dated December 6 under News and Events that is worth your attention plus past articles / interviews that communicate very clearly the strategy of the funds and views of the manager. I own CSIAX and recommend it for consideration provided it has an appropriate place in one's portfolio.
@kevindow

Centerstone is likely looking for AUM like First Eagle, so this fund will not close to new investors anytime soon.

On the contrary, the manager has been quite clear about his intentions regarding AUM. He's stated that 10B would be an ideal size for his funds and mentions the importance of fund flows as well in keeping returns competitive. He points out that Ben Graham warned years ago about the danger of combining huge fund size with added fees making it difficult to produce superior returns. While it's probably true that the fund(s) will not close anytime soon, AUM will definitely be controlled.

Dear Old_Joe,
Thanks for you reply. This is the epoch when everyone becomes cynical, some call it "post-truth era". As for these funds, I recall now that there was a discussion of these new funds in June Commentary, in "Launch Alert: Centerstone Investors Fund (CETAX/CENTX)". Here is a part of these comments, much better said than in Morningstar:
"The argument for being excited about Centerstone Investors is pretty straightforward: it’s managed by Abhay Deshpande who worked on the singularly-splendid First Eagle Global (SGENX) fund for 14 years, the last six of them as co-manager.... Deshpande was seen as the driver of SGENX’s success in the years after Mr. Eveillard’s departure, which is reflected in the Morningstar downgrade when he left. So there’s talent on Centerstone’s side."
Then in July Commentary I read:
"The great virtue of the Morningstar conference, and one of the greatest gifts that working with the Observer affords, is the ability to talk with (heck, mostly listen to) remarkable people. That roster most recently included Rupal Bhansali, Abhay Deshpande, Andrew Foster, Teresa Kong and David Marcus. These folks aren’t just bright, they’re scary bright. More importantly, they’re the right kind of bright."
I guess this really helps me to decide:)