@ducrow & MFO Members:: Here's the problem with OAKBX and it's performance: Very long-term 10-15 years excellent, medium term 3-5 years below par, recent term YTD- 1 year horrible.
Regards,
Ted
Years: Percentile Rank:
15 2
10 12
5 58
3 35
1 89
YTD 91

@ducrow,
GM is the fund's largest holding (at just over 4%). GM's down nearly 15% over the past year. They've only recently (past 3 years) acquired GM - sensing deep value. Either the bet pays off or it's a classic value-trap. Oakmark is known to dump companies when they feel they've made a mistake - so I suppose that's a third possibility. Lipper places the fund in its "mixed equity" category and gives it a 5 (highest) for category performance, but only a 3 (average) for consistent performance . So much of this ratings game depends on the category one places a fund in. Looks like the fund averaged about 6% over past 3, 5 and 10-year periods.
Haven't paid much attention to their fixed income holdings lately. The fund has never played much in the junk bond area (where there may still be value). It's just not their game. And (IMHO) the investment grade universe today more closely resembles Disneyland than a serious investment option. (Returns on a 10 year Treasury held to maturity should net the owner about 1.5% per year after expenses. Sound attractive?) So, most likely, the fund has gone very short on its fixed income component (around 35%) which helps explain the low returns for fixed. To them, in the current environment, fixed income is more of a defensive holding than a way to generate return.
I've owned OAKBX for close to 15 years* (currently 9-10% of holdings). No plans to do anything - just not my nature. But can understand others' concerns. Am sure you'll find better performers on the chart Ted linked. As for this fund "getting crushed" anytime soon ... don't hold your breath waiting. :)
*Temporarily moved all of it to their more aggressive OAKGX for 1-2 years starting in early '09.

Totally disgusted with Sequoia, a core holding in my kids' Roth IRAs for 9 years. I pulled them out several weeks ago. Alas, the kids do not qualify for O'Reilly or VRX, or whatever else SEQUX wants to get rid of for their affluent customers. I shall look for a box of used auto parts on my doorstep.

Jerry's correct above. And I won't argue that Sequoia management screwed up royally in managing their fund.
But here's the crux of the WSJ article:
"Sequoia’s repayment approach, called a “redemption in kind,” is part of a longstanding fund policy that allows it to give shareholders mostly stock if they are pulling out $250,000 or more. A person close to the firm said it has done thousands of in-kind transactions over many years and that the majority are done for redemptions in excess of $1 million."
If Sequoia failed to disclose RIK in its Prospectus that's a serious legal matter. In all likelihood it was mentioned. I've seen similar language in many prospectuses for my funds. It's not uncommon. Bottom line: Read and understand your Prospectus before you invest.
Additionally ... How many on this board will ever have occasion to pull a quarter-million dollars from one fund all at once (which is what triggered the RIK in this case)?
WSJ fails to address Mr. Bently's age and circumstance. Sequoia's annual/semi-annual reports should have revealed to him that Sequoia was concentrated in only a dozen or so securities. Ed S. addresses this issue in David's April 1 Commentary. In a nutshell: Potential rewards are high with a concentrated portfolio. So are the risks. If I'm reading Ed correctly, he has serious reservations concerning the suitability of highly concentrated portfolios for retirees.
msf has a good thread running on the topic of disclosure. Personally, I'm often guilty of clicking on "Accept these terms" without due diligence whenever Apple, Amazon or PayPal update their terms of use (not smart I know). But I love reading financial literature and so very much enjoy reading over prospectuses and reports for the funds I own. (And don't like the dumbed-down "summary" prospectuses either.)

I am a somewhat unhappy Sequoia investor though it has worked out over the many years I have owned it.But these I am shocked remarks remind me of Casablanca. Not only does the prospectus make it very clear that you might get stock bui that fact is very prominent (You don't have to read fine print))A bigger problem for me is that until I read the annual investor day minutes(held in may) I was not really aware of the controversy around Valeant and I did not get a copy of the report till sometime in August

FYI: (Click On Article At Top Of Google Search)
Home, they say, is where you make it. For Bill Gross, 71, manager of the Janus Global Unconstrained Bond fund, home these days is a small suite in an office tower in Newport Beach, Calif., down the road from Pacific Investment Management, or Pimco, the asset-management firm he co-founded in 1971 and ran until leaving abruptly in 2014, following a few years of poor investment results and an ugly management spat.
Regards,
Ted
https://www.google.com/#q=Bill+Gross:+Why+Interest+Rates+Must+Rise+Barron's

Thanks fundalarm nice post above. So let's get off topic. Any insights on bank loan/senior loans/leveraged loan/floating rate funds???? Talk about a stealth bull market or at least one under the radar. Some of the open end ala EVFAX have had but one down day since 2/17 and a multi percentage rise. Plus juicy yields around 5%. I hold EVFAX and SAMBX overbought as they are. Not as exciting recently as NHMRX or the junk corps and emerging markets debt when they are moving, but real steady eddies. Below is an excerpt of some comments in early March in Barrons on this often misunderstood asset class.
>>>>>Most loan funds have attractive yields of 5% to 6%—up to 9% for closed-end funds. Loan funds have credit risk, but are much less volatile than junk-bond funds when credit conditions weaken; and loan investors get paid back before bondholders in the event of a default. The loan market has about 4% exposure to the troubled energy sector now, compared to 15% for junk bonds.
As an added bonus, most loans have interest rates that float with prevailing rates. So if the Fed hikes several more times, many loans will yield more. Without interest-rate risk, loans tend not to correlate with other fixed-income assets.
Now is a good time to buy, because these loans are selling at about a 10% discount to par. They sold off, along with high yield, as investors worried that the U.S. was going into recession, but they haven’t recovered. “The asset class has always offered a nice risk-adjusted return over a three-to-five- year time period,” says Craig Russ, co-director of floating-rate loans at Eaton Vance. “But the last two years they’ve underperformed, creating this attractive entry point.”
There’s another good sign, says Jean Joseph, a portfolio manager at Goldman Sachs Asset Management: The default rate priced into the loan market is 7.5%, when the average default rate historically is 3%; and the current rate is still below that. “The market is pricing in defaults close to 2.5 times what we expect this year,” Joseph says.<<<<<<<<

David Snowball a fascinating subject where there is no right or wrong answer. My definition of low risk (and I have *extremely* to the max low risk tolerances) is not holding losers or underperformers under any circumstances. But then I am not an investor. Wouldn't it be nice if all these various styles we read here could be backed up by long term (20+ years) real money documented results to see what works the best and what doesn't? Stay tuned.

@Catch22- Hello there. Actually, the revokable living trust has been set up for years, and in CA is a very common alternative to other variations for holding property in common with a married partner. It has to do with establishing a the step-up in property value for tax purposes at the death of the first partner, and avoiding probate after the death of the second partner. Because it is revokable, it does not have the complexities of more traditional types of trust.
So the trust itself has nothing to do with selecting Vanguard for an account. I'm just looking at the possibility of some VWINX, and don't want to pay Schwab every time I add a little or move something.
I did download Vanguard's standard trust form, and it is twelve pages long, very legalistic, and very intimidating. An exercise in absurdity compared to setting up similar accounts at American Funds or Schwab, for instance.
Thanks- hope all is well at your end.
OJ

Junk Sovereigns ?? A Real Reach?
Markets | Thu Apr 7, 2016 4:46pm EDT
After 15 years, Argentina set for bond market return
By Joy Wiltermuth
Now it will hold a five-day roadshow in the UK and the US as it preps a new bond expected to raise $12 billion - or more - to help pay off holdouts who had rejected a debt restructuring.
Finance Secretary Luis Caputo and Undersecretary Santiago Bausili will each lead teams meeting with investors in London, Boston, New York, Washington and Los Angeles.
Deutsche Bank, HSBC, JP Morgan and Santander are arranging the meetings, but few other details were immediately available.
"The dealers on it are keeping it hush-hush until they are ready to come to market," said Sean Newman, a senior portfolio manager at Invesco Fixed Income.
One of the lead banks told IFR that investors had not yet been given any information about the ultimate size of the deal or the potential currencies of issuance.
At US$12bn, the transaction would be the largest ever from an emerging markets borrower, according to Thomson Reuters data.
"It does mean something really huge for Argentina," said Bianca Taylor, a senior sovereign emerging markets analyst at investment management firm Loomis, Sayles & Company.
"They are back in the game with the curing of this longstanding issue with the holdouts, and they once again have access to the foreign capital markets."
One trader in New York said he had heard yields whispered in the 7.5 percent range, but said 8.5 percent on a 10-year bond was a more feasible target given the current climate.
But Taylor said a useful comparable would be a Brazil 10-year currently trading at 6.13 percent.
"The talk of 7.5 percent seems rich for a country still in a balance-of-payments crisis and just coming out of default."
In addition, after being unable to raise debt abroad for so long, Argentina might well come to market with a debt sale larger than US$12 billion in order to replenish its coffers and plug at least some of its fiscal deficit.
http://www.reuters.com/article/us-argentina-bonds-idUSKCN0X42O6
@DanHardy You're not the only one expecting low rates to remain for some time.
Yield Curve Madness
Posted on April 6, 2016 by David Ott Acropolis Investment Management
,,yield on the 10-year US Treasury hit 1.73 percent. After starting the year at 2.24 percent, the benchmark yield dropped to 1.63 percent when the stock market bottomed out on February 11th and then climbed to 1.98 percent before falling again.
As low as your yields are today, they are among the highest in the developed world, as the chart below shows. The chart includes the G7 countries (with the benchmark eurozone rate representing Germany, France and Italy), Switzerland and Australia (each representing the highest and lowest rates in the developed world).

This chart is striking for at least three reasons. First, the overall level of rates is just appallingly low across the world. The idea that the highest rates are still a paltry 2.5 percent is troubling.
Second, and even more bothersome, is that three of the curves are negative all the way out to 10 years. There are other countries with negative yields like Denmark, but the idea that the euro benchmark curve is negative is striking.
Finally, there are only three ‘normal’ yield curves, where rates rise as the maturity goes out further into the future. The US has the steepest curve, although it’s far flatter now than it was six months ago.
http://acrinv.com/yield-curve-madness/

A curious juxtaposition - a completely liquid MMF (even more liquid than a savings account) and a CD with a redemption fee (except at maturity).
Personally, I prefer I-bonds to 1 year CDs. What I give up in short term liquidity (no redemptions in the first year) I gain in a better rate, inflation protection, state tax exemption, potential to defer taxes for years (until redeemed), and greater safety (theoretical only) than an FDIC-insured CD.
- I bonds have no redemption fee once held for 5 years, so if one is expecting to roll over CDs, holding the I bond is slightly easier and more liquid over the long term.
- The FDIC is not officially backed by the full faith and credit of the US government; savings bonds are treasury securities that have this backing.
One can purchase $15K of I bonds/year per SSN. Current yield is 1.64%.

@Junkster thanks for the reply. I was watching munis (and have a position in them) since you and another poster Dox? mentioned them. I think most types of interest paying bonds will do well over the coming years. I just don't see where inflation will come from. Yes there will be areas of inflation - housing - but workers will not have power to demand higher wages. There was an article on Marketwatch.com about silicone valley tech workers fear of losing their jobs, low pay and increases. Also, as baby boomers retire, they will be looking for interest and dividends. That is something I don't see mentioned in the news media.
High yield corps highly correlate with stocks - I'll watch them.
High Yield foreign bonds correlate with the US dollar - I'll watch them.

I've read several threads here about high yield corps being hot right now. But high yield munis have been chugging along and looking like they are gaining some momentum. Are they a buying opportunity now? I am in the camp that inflation will not be an issue for years.

FYI: It's been a hard few years, but we think John Roth will be able to right the ship at New Millennium.
Regards,
Ted
http://www.kiplinger.com/article/investing/T033-C009-S002-fidelity-contrafund-or-new-millennium.html
Returns: FCNTX vs. FMILX:
http://www.marketwatch.com/tools/mutual-fund/compare?Tickers=FCNTX+FMILX&Compare=Returns

Thanks for the info. Now I guess the key question is: does anyone know anything about the new manager? It appears he has been at TRP for 6 years. Nothing was said in the annual report about any experience in health care stocks.

I've owned this fund for several years - you have to have a strong stomach for it since it's a concentrated fund and has huge up and down swings - it'll go a year or two as the top ranked fund in its category, then it'll have a year or two where it's the worst. It was ranked 96th in 2014 and 98th in 2015; year to date 2016 it is 1st - go figure!

Some mutual funds have done well in the 90's, but it's been just plain hard outperforming the Russell 2000 index ( IWM = ETF equiv. ). Maybe it's because they get too big, their management style stops working, or the market "complexion" has changed over the last 15 years ? Try plugging symbols mentioned in commentary here ( https://portfoliovisualizer.com/backtest-portfolio#analysisResults ) and select the Russell 2000 as "benchmark". I like to use 2002 and 2008 as dumb luck / Murphy;s law starting points ...
even BRK-A loses out.

That is why I have owned SCHD for past 3 years and most comfortable with it.
Schwab U.S. Dividend Equity is a suitable core holding for investors who want a high dividend yield without tilting toward distressed and deep-value stocks. The fund market cap weights 100 high-yielding U.S. stocks with solid fundamentals and a consistent track record of paying dividends. While the resulting fund holds high-quality stocks with strong profitability, it should be paired with other funds for complete market coverage. The 0.07% expense ratio makes this the lowest-cost strategic-beta fund available and allows investors to keep a greater share of the fund's returns.

I'll have some comments in the main thread on this month's commentary. Since you asked about MMFs, I'll provide a few notes here.
No MMF, not even one containing only Treasuries, is guaranteed not to break a buck. That's true now and will always be true (unless the Treasury does something extraordinary as it did in 2008 and step in to guarantee MMFs).
One of the rules going into effect later this year says that prime and muni MMFs must have floating NAVs if they are offered to institutional investors. So there are (at least) two types of non-Treasury MMFs that are not required to have a floating NAV:

1. Federal-government security MMFs (these are allowed to hold federally backed paper aside from Treasuries), e.g. SPAXX, whose holdings you can find here.
   
2. Retail MMFs, regardless of what they hold.

Many brokerages have for years offered sweep accounts into FDIC-insured bank accounts. So there are, and will be, options for sweeps that will not break a buck.
Fidelity (since the commentary spoke directly about this brokerage) has converted some of its prime MMFs (e.g. FDRXX) into government securities MMFs. Fidelity requires new accounts to use a government MMF or FDIC-insured sweep account as your core (transaction) account (old accounts are grandfathered), it continues to offer a full suite of "position" MMFs that you can own and trade explictly.
Here's Fidelity's page on the rules along with links to all its MMFs.
Further, as a courtesy, Fidelity will allow you to purchase securities in your brokerage account automatically using cash directly from your "position" MMFs. So to a certain extent any MMF can function as your core account. While there's this sweep out of the position account, there's no automatic sweep in. You have to explicitly move cash into the position MMFs.

Read this before Ted posted it (pretty rare!). I thought the article a bit shoddy. 5 & 10 years (to my thinking) are too short of time frames to draw big assumptions. If I recall, they compared gold's performance to the S&P 500, REITS, and international and EM markets over the past 5 & 10 years. All of these are subject to substantial deviations over short periods. But I do think the overall point being made is valid: Investing regularly over time in a broad basket equities can be very profitable. Hard to disagree on that. But the time frames used are very short.
Re gold, I sold all of my small speculative position in OPGSX last week. It was up 37% YTD and 44% since I bought it around Labor Day last fall. Still exposed a bit through other funds; but pure plays on this stuff (or miners) are bit like snacking on nails. Not for everyone.