First, I would be turned off by the lead manager. He seems to have a habit of badmouthing. Foolish this and that. But the showstopper would have been the way he tore into Bill Miller in this presentation.

Maybe I missed the point during the call so I'm sorry if that's the case, but I didn't hear him tear into Bill Miller at all. My take on what he was saying was that Miller was an incredible guy, outperforming for 15 straight years and as soon as he didn't all the critics came out of the woodwork. But he showed Miller's performance after the criticism and he was back at the top, hence I took his comments to suggest those who criticized were "Foolish Critics", the title of the presentation. He was making the same argument about Buffett- that people are criticizing him for recent performance but Smead thinks they have it wrong.
Just for the sake of transparency I don't own Smead's fund but I do pay attention to him and his fund because I think he has some reasonably good ideas about the future, mostly related to the impact millennials will have.

FYI: It wasn’t that long ago that many were calling an end to the out-performance that has persisted for years in the Vanguard Wellesley Income Fund (VWIAX[1]) in light of rising interest rate concerns. After all, how could a fund shackled by a prospectus rule to hold an abundance of fixed-income ever outperform high yield strategies near the low end of an interest rate cycle?
It just goes to show that there is no replacement for common sense asset management during a difficult year in the market. As a result of their expertise, the $40 billion juggernaut VWIAX was recently named Morningstar’s Top Allocation fund for 2015[2].
Regards,
Ted
http://investorplace.com/2016/01/vanguard-wellesley-income-fund-shines-on/print
M* Snapshot VWINX: (Investor Shares)
http://www.morningstar.com/funds/XNAS/VWINX/quote.html
Lipper Snapshot VWINX:
http://www.marketwatch.com/investing/Fund/VWINX?countrycode=US
VWINX Is Rank #5 In The (CA) Fund Category By U.S. News & World Report:
http://money.usnews.com/funds/mutual-funds/conservative-allocation/vanguard-wellesley®-income-fund/vwinx

@rjb112, the quick-glance metric you have pointed out is a good example of why the performance metrics as published can be misleading (and why managers try to game the numbers each calendar year). Investors don't always invest by calendar years. And barely beating the index one year isn't much of a comfort to an investor if you have lost much more the previous period.
For example,
The 11 month performance in 2008 is missing in that table and was a bad one for the fund losing about 42%+ of its value compared to the approx 36%+ loss for S&P 500 in the same period. It is the bounce back from this deep loss that it managed to recover some in 2009 so 2009 by itself looks as if it beat the market but investors who invested with the fund in 2008 were still under water relative to S&P 500. Trailed index again in 2010 and didn't even make back all of that trailing deficit in 2011 although it looks like it beat the index that calendar year in your table. In fact, the people who started with the fund or soon after didn't see anything over the S&P 500 up until that one good run in 2012-2013 more than 4 years later.
The one continuous period I mentioned from mid 2012 to mid 2013 is what makes the 2012 and 2013 calendar years look good. 2014 and 2015 are index hugging years for all practical purposes. If you look closer at 2014 unless you were invested in the first three months of 2014, your portfolio would have trailed the index even in that year.
If you had invested in 2013 after its one good run ended (still in a rising bull market) you would be trailing the S&P 500 again todate.
All this shows is that except for that one good run, the fund is just more volatile than the index and when you have such a fund, real investor returns suffer unless you were lucky to time the few entry and exit points correctly. It seems to give back all the advantage in down markets. I do not want to confuse this with the IRR values computed by M* and blaming it on bad trading by investors. The point I am trying to make applies to all investors that just invest and hold but aren't lucky in when they enter/exit this fund to make the fund worth it. Even holding for a long period may not help in such a fund if you weren't in it for its one good relatively short run.
My point is that this is why many investors think they have chosen a good fund because all published metrics look good and yet may see that their returns are nothing to justify the high fees such funds charge. This has certainly been my experience in selecting funds based only on such easy to digest tables and metrics ratings even when it has a boatload of numbers as available on this site.
Better metrics can perhaps be designed that try to make the performance metrics as insensitive as possible to when the investment began or ended perhaps by aggregating over a large number of random periods or some model of typical disciplined investor behavior such as monthly deposits/withdrawals each month. Also perhaps metrics that try to detect such continuous good runs and compare relative to other periods to see whether the fund is a one hit wonder or is regularly outperforming even if it has down years. I would chose a fund to buy and hold that did well in the latter even if it didn't beat the index in every calendar year which is a very artificial construct that fund managers try to game to look good to gather assets.

"Then I took a look at the fund performance. It is a classic index hugger.....and a poor one at that and would have done poorly if it wasn't for one period between June 2012 and August 2013. That time frame with a reasonably well defined start and end suggests the fund had one or two positions that over performed. Typical stock momentum for high flying stocks last about that much time. If the fund didn't have that, it would look bad relative to S&P 500. In fact, almost all of the good metrics for the fund can be traced to that period.

If you had bought into that fund after that period, for most such buys you might have experienced index hugging or worse performance. For the 4.5 years before that period, the fund had lagged the S&P. Now you can see why such blind metrics can be really misleading
"fund that didn't have such a one-hit wonder quality to it"
take a look at the calendar year performance since inception.
It beat the market and its category in 6 out of the 7 years.
A pretty consistent outperformance rather than just a single period of 14 months

Cheers

I find no compelling reason to invest in this fund even if it was open.
I hope this post is not a faux pas as it might be construed as a criticism of the fund profiling and metrics done on this site. But that is not the intent. I have been frustrated quite often by selecting funds based on the usual Lipper, MorningStar, etc as they looked great on paper and came highly recommended but never delivered for my investment.. So this applies to all of such fund evaluation techniques.
I am thinking that by looking at the metrics above and the fund profiling linked above, that this is a fund that would be seen favorably here. I realize that "past performance is no predictor of future performance" is the explanation when that does not work as expected but I think that is just CYA. One could say the same thing about any metric including those that had zero correlation with anything that happened in the future. So one has to look at the performance/validity of the metric itself.
I have never considered this fund before but would never have chosen this fund looking at the performance a little more carefully than what is blindly captured by metrics and the accompanying presentation.
It looks great on paper with a positive 5yr alpha over S&P 500. But I am sure everyone has had experience with funds that looked great and yet their returns when invested were very disappointing. People chalk it up to that "past performance ..." thing but I would believe that a fund like this one could be positively predicted to disappoint more investors than not in the future compared to say just a S&P 500 fund/etf by underperforming relative to that benchmark.
First, I would be turned off by the lead manager. He seems to have a habit of badmouthing. Foolish this and that. But the showstopper would have been the way he tore into Bill Miller in this presentation. I don't know Bill Miller personally nor have I invested in his fund. In my career where I have to evaluate the future performance of people very often and with not a lot of information, people who use a lot of time to badmouth others very seldom deliver. It shows a lack of class here which some people might not care about but to me it also shows a lack of judgment because that whole section looks personal. A manager that gets that personal or emotional will make judgment mistakes. It was highly unnecessary to do so against a peer/competitor and moreover does not imply he can do better himself in his own style. I expect the culture he will set in his company with that attitude will also be toxic. Even in the brief profile done on this site, he cannot help himself criticizing to toot his own horn.
The presentation goes on and on about Brk.B. Why would that make the fund look good? There are any number of funds you can buy to get Brk.B exposure. Or is it to make the fund look good by association?
Then I took a look at the fund performance. It is a classic index hugger with high 1.25% ER and a poor one at that and would have done poorly if it wasn't for one period between June 2012 and August 2013. That time frame with a reasonably well defined start and end suggests the fund had one or two positions that overperformed. Typical stock momentum for high flying stocks last about that much time. If the fund didn't have that, it would look bad relative to S&P 500. In fact, almost all of the good metrics for the fund can be traced to that period.
If you had bought into that fund after that period, for most such buys you might have experienced index hugging or worse performance. For the 4.5 years before that period, the fund had lagged the S&P. Now you can see why such blind metrics can be really misleading. Not because of "past performance..." caveat but the actual past performance characteristics of the fund that might hint at a high probability of underperformance gets hidden in the statistical measures and ratings.
What exactly is fhe reason to invest in a fund like this rather than the index itself or some other large blend style fund that didn't have such a one-hit wonder quality to it and didn't risk underperformance with a huge ER?

Hi expatsp:
I manage, or mismanage, retirement accounts for 2 kids and their spouses. Bought FAIRX maybe 10 years ago, sold maybe 5 years ago. Why? The 'star' manager phenom. Some of those 'kids' are more attuned than others, but none of them have the level of cynicism I do. I like the team managed stuff, thinking that there might be some continuity over the coming years. I use two you mentioned: Primecap and Dodge & Cox. Tweedy Browne Global has been in their ports for years as well, although I think their ER stinks: they don't trade an awful lot and won't buy anywhere they can't drink the water - so whats the deal with 1.40 ER?
Am taking antacids over Sequoia: thought I had a good one there. We'll see if they can right the ship.
Matthews MACSX requires monitoring now - I have been neglectful of their management changes. Artisan ARTGX can stay for a while and we'll see. Bridgeway B
ridgeway is another concern of

It looks like per M* data, procrastination is hurting you. FAIRX is down about -11% for the month (FAAFX slightly worst), compared to the S&P 500 down about -5%.
In hind sight, it appears that Berkowitz does not fit the definition of a great active manager. Over the last 10 years he has under performed the S&P by almost 3% a year on average. In the last 5 years he has under performed by an astonishing 12% a year.
So, are the chances Berkowitz some how turns things around better than switching to an index or a more stable manager?

FWIW, I sold FAIRX last year before the big cap gains distribution, but added to FAAFX. But I guess that doesn't answer the general question of whether or not to stay with BB. I'm giving him a couple more years, mostly because I think the bull market has a few more years to run, then if FAAFX hasn't knocked it out of the park to make up for its years of underperformance, I"m moving the money to an index fund or a low-priced diversified ETF like VIG or SCHD.
Because if Berkowitz can't outperform, with so much going for him, then I will no longer believe in my ability to choose great active managers.
A possible exception would be low-cost team-managed funds like Primecap or D&C.

If you were lucky enough to invest with BB since FAIRX inception, congratulations ... you've received 10.1% per year for the past 16 years! (Through December 2015 anyway.) But the past 5 years, at least, must be testing everyone's patience. FAIRX is now a Three Alarm fund (among lowest absolute return in category the past 1, 3, and 5 year periods) and a below average fund based on Martin across the most recent full cycle (beginning in November 2007). The fund seems to struggle the most during up markets. Anyway, how long do you wait for value? Is it a marathon?

FYI:
Regards,
Ted
http://video.cnbc.com/gallery/?video=3000490087&play=1

No opinion. But I'd try to find additional data beyond anecdotal observation before doing anything.
I interpreted Price's closing of PRHYX about five years ago as a warning sign and sold. Big mistake, as it continued to do well for 2-3 more years. That one is still closed.
I suspect another T. Rowe fund PRWCX will never reopen. The fund is huge and immensely successful. Maybe a clone some day? Right now I'm down to a foot-in-the-door holding with that one.

I am looking to consolidate my M/C funds; i'm leaning towards "blend" but would consider "value". It will be in a taxable account; currently the funds I own are NOT tax efficient at all, so that is an important factor at this point. I also have a long-term time horizon of 10+ years.
I'm not looking for a world beater, just something with good metrics and solid returns. My research has identifed several candidates, three of which i would like your opinion, thoughts and suggestions on.
GVMCX (Government Street Mid-Cap)
BALIX (Barrow Value Opportunity)
PARMX (Parnassus Mid Cap)
They have good metrics, are fairly tax efficient and have category beating long and short-term returns. It also appears they have the ability to scour the market spectrum for investments.
Any and all thoughts, opinions, suggestions on these or other funds is greatly appreciated!!
Thanks,
Matt

FYI: Bill Ackman’s gross return of 37.3% over three years was cut to only 22.2% because of high fees.
Regards,
Ted
http://www.marketwatch.com/story/dear-hedge-funds-index-funds-didnt-cause-your-lousy-performance-2016-01-27/print

I just do not put much stock in a massively long time frame like that. At least 90% of that time was prior to computerized trading and 24-hour negative news. And the last 30 years were a bull market for bonds. I would like to see the same thing done over the last 10 years. We are rebalancing accounts, with a few adjustments: replacing a handful of funds, increasing international allocation a bit, pulling some fixed-income dollars to market neutral, and emphasizing dividends more than the last few years.

mrc70, you make a point, but if M* insists on including global funds in their international category for these meaningless awards, they should identify the award as such. All they would have to do is call the category Global/International, and that would at least make it honest. As for asset bloat, many of the funds are already huge in size, and some are already closed when they receive the award. Perhaps it was a bigger deal years ago, but it can sometimes be the kiss of death. Anyone remember Julis Baer International? Their asset base grew so big, the fund essentially imploded. My observation, once again, is that these "awards" have much less impact than they used to, especially since the market-share gain of index funds and ETFs. But we know the fund companies will market them as long as they can.

Some of the criticism is unnecessary. Folks should read what M* is saying before coming to the conclusions. They have already explained why Global funds are categorized under International. I will attach the explanation later when I have time, but they said that they have to add Global funds to one of the existing category as they don't want to create yet another award category. What is best category to include Global than International, as most Global funds hold foreign stocks anywhere from 50 to 70%.
I saw lot of criticism for not giving the award to PRWCX in allocation fund category. They gave the award to that fund mgr just 3 years ago, They can't start giving the award to the same manager again and again, esp. in such short intervals.
As far as why AQR funds not in Alternative category, M* does not look just one year performance while giving this award, though last year is utmost important. They also look at consistent long term performance of the fund and its manager(s). AQR funds/shop is relatively new and that could be reason why they were not considered.

That extra 1% by not rebalancing resulted in a stark difference with the non-rebalanced portfolio worth more than double the one which was frequently rebalanced at the end. I'm shocked 1% compounded could make that kind of difference.
However, from 1926 - 2009 is a longer investment horizon than most of us have (approximately 83 years). To achieve the identical result one would need to have accumulated all the money initially invested by age 12 and than to have waited until age 95 to withdraw a single penny.
Anybody here fit that description?

On toxicity. HSGFX is actually up about 6% YTD - now that the last MFO holdout has abandoned the fund. Otherwise, to earn a positive return with that fund you'd have to go back to inception 16 years ago in 2000 (+2.6%).
Forbes - A sometimes candidate for President.
Amazon's Kindle subscribers also complain about ads on that site making reading difficult - even when paying a subscription fee.
Score +1 for Megyn Kelly - not that I give a damn.

Like most years, M* blew a number of these. Brown Capital has been closed for a couple of years, but they neglected to mention this. ANWPX is not an international fund. Even M* calls it a Global Stock fund, with holdings almost evenly divided between U.S. and foreign stocks. They clearly overlooked true international fund such as WAIOX (9.4% gain), DRIOX (12.6% gain), TGVIX (6.7% gain), and SGOVX (2.3% gain), all of which were remarkable in a year when EAFE was negative. And then there is MAPIX (4% gain when China killed EMs and much of Asia. Then PTSHX as the best bond fund? At least with NEARX you would have gotten a better return and not been taxed, if M* was looking for a good short-term bond. Heck, I could have been in CDs the last 2 years and been ahead of PTSHX. What were they thinking? And no AQR for alternative. I think VMNFX is an ok option, but it is not a true market neutral fund. I will stop throwing stones. In the end, these so-called awards a really nothing more than publicity events for M* and for the funds named.

Lot of moving parts to the Theranos story which is evolving continually.
Walgreens has stopped its expansion plan pending further data/clarification. Safeway deal fell through as Safeway walked away.
Cleveland Clinic has distanced itself stating that it has not tried or evaluated the methodology or the product.
CEO promised to release the results of studies after the first WSJ article but has not done so.
The Board keeps changing its composition and has had some influential people but questionable choices. The Stanford professor who was initially on the advisory board and gave it credibility has quit the board. The lead scientist killed himself many years ago and his wife has claimed that he was ranting "Nothing is working at Theranos".
There is no management team except the founder CEO and a COO who is considered a sycophant and of dubious ethics. Has been accused of asking employees to use only the comventional machines for results submitted for FDA approval based on some emails.
Most of the tests are currently being done either using conventional equipment from Siemens etc or outsourced to third party facilities paying many multiples of what they are charging their customers, in other words burning VC money.
The star VC in its lineup DFJ is trying to distance itself stating that it only provided the initial seed money and did not participate further. Crunchbase states otherwise. A VC in Google Ventures came out to say why it didn't invest in Theranos and Theranos shot back it rejected them.
It is a very complex situation even in Silicon Valley which is used to a lot of hype and not at all black and white brilliant/fraud/scam clarity outside world wants.
My perspective without any private or inside knowledge about this secretive company but with having been in the startup grind through good and bad times:
It is a story SV badly wants to be a success for everyone's sake but privately afraid that it might become a black eye.
It has all the characteristics SV wanted, a female Steve Jobs, a disruptive technology company that had real value to society unlike Snapchats and such, fight against established and dominant industry, etc, etc. It can be very lucrative for the area with a successful IPO which would prop up other unicorns.
It did a lot of things startups fail to do and so fail even with a good product. It marketed itself well. Did the right outward facing development in anticipation. Realizing that like Uber, the biggest hurdle would be regulatory in nature, stocked up on high powered individuals on its board which at one time included Henry Kissinger. Knowing that the defense industry could very well be the biggest and most lucrative customer for this product, got people with military and government connections into its board. It raised enough money so that it would have a long runway.
It struck a partnership with Cleveland Clinic to gain credibility and got a marquee customer Walgreens. The media adored the Founder CEO.
Everything was going great, except the product itself...
The founder Holmes seems to be one of those rare individuals (have never met her myself) that are able to talk otherwise reasonable people into doing or believing what she says. People say that it is because she is a young and pretty woman. It goes much beyond that because I have seen similar power in a few people (even worked with one of them) that weren't women or pretty. It is the same charismatic hold cult leaders have where followers suspend disbelief. But even industry leaders fall for this. The reality distortion field that people attribute to Steve Jobs has components of that. When I saw this firsthand with the person I worked with, I just couldn't believe it. At first I thought it was some kind of hypnotic trance or some kind of blackmailing when this person got fairly influential people to do amazing things for the company where they didn't have to do anything. Most successful CEOs have some of this but not always at that level.
Having been in the ups and downs of startup cycles, I am not going to claim this to be a fraud scheme even with things falling apart as I have listed above. Startups are like baseball teams with bandwagon fans. When things are going great, everyone wants to be associated with you. When thiñgs aren't so great, they won't return phone calls or invite you to come to their hospitality suites in ball games as they used to and some will even start to badmouth. It is all part of the game.
What I suspect happened is that the promise and potential even within the CEO's mind quickly outdistanced the product development. It happens. When Elon Musk started Tesla he was very naive about what is needed to build a production car but was in love with the promise and potential of the technology. Had to face the realities very soon and went through a similar phase, throwing the initial founder out, being accused of running a scam, etc. But the product eventually caught up sufficiently to survive.
It is a bit more extreme in the case of Theranos because the persuasive powers of the founder seems to have started the hype/promise rolling faster than I suspect even she anticipated. Because lining up these things typically take a long time you don't want to wait until the product is completely ready, except she may not have realized her own powers to get things moving.
It is like the scene in IronMan when Robert Downey Jr, discovers the power of the propelled suit and bounces around without much control but enjoying that power nevertheless. And once you have that ball rolling, you don't want it to stop. Just hope that the product catches up. It had all the ingredients of a market waiting for you with fame and fortunes and all you had to do was carry the ball past the goal posts.
It is my suspicion that the product development ran into serious problems in not being able to deliver on the initial promise for all the tests they wanted to do. It is not clear whether they were simply unable to do the tests or whether the test results were not reliable enough to commercialize. Whatever it is, the CEO had very little choice at that point other than to buy time hoping the product would catch up so they started to use conventional machines and outsourcing tests losing money and being extremely secretive about it.
People may fault her for it but this is what happens in Biotech all the time even with many of the public companies, people here may have in their portfolios knowingly or not.
The best case scenario is that the the original nano product of testing with a pin prick improves enough to become a reality like a fully battery powered car like Tesla did, or the company pivots to have a hybrid still promising the disruption in pricing and partly using its secretive technology and partly a more efficient conventional technology or the company just falls apart running out of money since it is unlikely they can raise any more money without further conclusive and peer reviewed proof.
Silicon Valley is holding its breath and pinching its nose because it is starting to stink a bit. More than reputation is at stake.
It might very well make for a better movie than a company.