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DavidV big difference between a timer and a trader. Timers predict and forecast while traders react. Never met a successful timer or at least a successful Mom and Pop timer. Hear about a lot of their claims but whenever I ask if they care to back them up by multi years of real time trading statements or 1040s (and I would reciprocate) they always back down. Everyone seems to trade stocks, options or futures. If they only knew about the trading opportunities in open end mutual funds. But to them it is akin to watching paint dry. Yes, I ignore the fees associated with selling funds within 90 days (Scottrade) It's part of doing business albeit getting harder to ignore. In the old days at INVESCO and Strong you could buy and sell their in house funds at will with no fees whatsoever. Then came the $17 fees and now as of a month or so it's has risen steeply to $49.99 at Scottrade. Even more if it is a transaction fee fund. That may force me to change my style or at the very least be more of a diversifier and not be so quick to cut and run.@Junkster I see you trade MF rather frequently, trying to time the market. Do you ignore all fees for selling mutual funds prematurely or keep some discipline in doing that?
Not an investor but the "experts" are all over the ball park when it comes to the prospects of the junk bond market. In Ted's linked and bullish article we see this comment Payson Swaffield, chief income investment officer at Eaton Vance, thinks we are at the beginning of a new cycle of positive junk returns that could last a few years. Yet, in this week's Barrons we see an interview with Michael Weilheimer, head of Eaton Vance's Income Fund who is cautious and thinks we will be rangebound and are anywhere from the 6th to 9th inning of the credit cycle. Same firm yet two entirely different opinions on junk bonds. Marty Fridson the junk bond guru says ex oil we are an extreme valuations in the junk bond market. And of course we all know the Bond King's (Gundlach) constant and continual bearishness on the junk bond market.
http://www.wsj.com/articles/sequoias-redemption-with-securities-is-tax-efficient-1460583731For many years Sequoia Fund has clearly disclosed that we can and do pay large redemptions with securities rather than cash, and we have done so thousands of times before this year without incident. So we were puzzled by “Sequoia Clients Get Stock Shock” (Business & Finance, April 9) questioning the practice as a “shock” to investors and trying to tie recent in-kind redemptions to our Valeant stake. This policy isn’t new, is unrelated to the ups and downs of our fund and, specifically, is unrelated to our holding in Valeant.
We redeem with shares to benefit our continuing shareholders, who might otherwise pay capital-gains taxes on the sale of appreciated stock that might be required for redemptions. By redeeming in kind, our 20,000 continuing Sequoia shareholders will pay lower capital-gains taxes in the future. Our goal is always to be tax-efficient and to do what is right for continuing shareholders. For a departing shareholder, there is no tax or other consequence to receiving stock instead of cash, aside from the minor inconvenience of having to sell a security upon receipt. We take care to always deliver stocks that trade in sufficient volume so that the exiting shareholder can sell them immediately without depressing the market for a particular security.
David M. Poppe
President
Sequoia Fund
New York
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