This fund seems to defy gravity, up 23% during the last year, up 98% during 3 years, up 153% during 5 years.
Any opinion?

@claimui, I certainly agree with you the deep value can be very volatile and gut-wrenching and I think that has something to do with why there's a value and a small cap premium. In my case, I think allocating a portion of my portfolio where I can live with that volatility and potentially extended poor returns is a reasonable attempt to collect those premiums. My guess would be, although I haven't studied it, that a passive fund like Vanguard's Small Value Index fund suffers from what David mentioned in his review of TDVFX, meaning that they fail to capture the value premium. I don't completely believe in M*'s version of value vs. growth in terms of where funds fall in their style box, but out of the 3 funds TDVFX is furthest into value territory while Vanguard's is in the upper right hand corner of the small value box. Pinnacle is obviously very small but not as far left on the value spectrum. I wonder if that's caused in part by their large cash stake?
Like you, I think PVFIX is a reasonably compelling fund and like you I'm not fond of the big cash position. It feels to me like they become market timers and we know how that usually works out. David Iben had an interesting chart in his quarterly conference call for KGGAX that he used to make a point about valuation vs. timing. It showed, in more detail than I'll mention, if he buys a business that's worth twice as much as he buys it for and it takes 10 years for the market to recognize the true worth of the company, he still makes 7% annually on the investment. If he buys a company that's worth 5 times as much as he pays then he makes 17% annually even if it takes 10 years for the company's value to be recognized.
His point was that if he gets the valuation right then whether he's early or not is far less important, part of which is because he thinks 10 years would be an unusually long time for the market to overlook the company's value and part of which is because he's been early for the last 2 years.
It seems like value generally has had a pretty rough ride of it for a while now so hopefully the fun times when value does really well aren't too far off in the future.

https://www.google.com/search?q=barron's snowball funds Oct 2015 Overlooked

There are 173 funds with less than $100 million in them that have outperformed more than 80% of their peers in the past five years, according to Morningstar... (here are five)

I'm not a David Stockman fan. A wonder-boy in RR's administration, renowned for his number-crunching abilities if I remember correctly. And he seems to have mastered the media pretty well in his later years.
However, the linked article (in David's original post) is by a Bloomberg journalist and summarizes (from what I can tell) the views of a couple UBS analysts. I'm not aware of any rigid or standard definition for hybrid fund and it's curious they would use the term here. (If you want a real hybrid, buy some PRPFX.) :) So what they're really talking about (and what their graphic illustrates) is the conventional balanced fund with about 60% in equities and 40% in fixed income (mostly investment grade). Note too, that while the phrase mutual fund investors is often associated with the Ma&Pop types (you and me), they offer as an example Microsoft's significant holdings in balanced funds. I found that quite interesting.
Not smart enough to pretend to understand all this liquidity jargon - but yes ... it has long been suggested that a sharp rise in interest rates will inflict significant damage on traditional balanced funds. Bonds don't like rising rates. Neither do equities. As '07-'09 demonstrated, today's investors have a very quick trigger-finger - a willingness and ability to sell just about anything on a moment's notice. Heck - even money market funds came under panic selling back than. So the argument is correct in the sense that another big-sell off will happen at some future time (and the dry tinder may well be stacked in the high-yield sector). But I think the argument is a bit misdirected (not to mention ambiguous) in targeting hybrid funds for criticism.
Thanks to David and others for the insights. Regards

Hi Guys,
Good grief, Charlie Brown! As I thought about what I plan to say in this posting, the frightening image of Harry Dent invaded my mind. I’m about to stress the significance of dynamic demographic changes that will strongly influence the marketplace in a negative way in the coming years.
Dent has been singing that same song for decades. I suppose this singular theory of Harry Dent is alive and well.
I few years ago I examined a bunch of broad market data to discover chief contributors to real (after inflation) GDP growth rate. I postulated that corporate profits would be loosely coupled with some time displacement to GDP growth.
My correlation efforts identified demographic growth and productivity increases as primary GDP growth rate factors, with the demographics component contributing one-third to the total picture. The correlation was very tight.
That outcome was not unexpected since consumer spending accounts for roughly 70% of our economy. And consumer spending changes as a function of age. Although his numbers have shifted a little as Dent accumulated more data and as our population ages, he finds that the average consumer reaches peak spending in the 45 to 55 age bracket.
Couple that relatively stable spending distribution with an increasing average lifespan and a decreasing child birth rate, and the makings of a shift in our overall spending profile definitely is possible. Potentially, that shift does not bode well for the stock markets. The same arguments are also valid in the developed nations. Potentially, trouble is everywhere.
I distrust forecasting since I really believe that forecasters can’t forecast. As John Kenneth Galbraith said: “The only function of economic forecasting is to make astrology look respectable”. With that warning, here is my analyses (yes, it’s a forecast by another name).
For the past few decades, a prosperous USA chose spending over savings. We bought what we wanted. With an aging population, our overarching policy will shift from buying what we want to only buying what we really need. Old folks do that. Consumer spending per person will contract. Working against that observation, our population will continue to increase, thus somewhat canceling and ameliorating the reduced spending trend.
Profits will still be positive, but somewhat attenuated. Market returns will be reduced to reflect lower positive levels of GDP growth rates. The markets will mirror lower GDP growth rates. So sad.
Good luck on this forecast being anywhere near what actually happens. The problem has far too many moving and interacting parts. But, nevertheless, it’s a fun task.
The Beatles song “When I’m 64” captures some of the issues of an aging population. Here is a Link to the original version of that song by The Fab Four:

Enjoy. It’s always a losing challenge to accurately project the future. Therefore, I’ll close on the success of the Beatles song.
I realize I failed to answer any of Professor Snowball’s tough questions, but my note does address some issues outlined by MFOer Bee. The questions are well beyond my pay-grade. But I do see a correlation between an aging USA population and muted market rewards for whatever that is worth.
Best Wishes.

I'm considering swapping one MFO-profiled fund (HUSIX) for another, TDVFX. I can do this without tax consequences. Both have performed poorly over the past year, but I expect that now and then from a deep value fund, that doesn't bother me (much.)
My thoughts are: TDVFX has a lower expense ratio (1.20% vs 1.85%) and smaller asset base (about $500 million vs. $1 billion, including separate accounts), plus it seems more of a team-managed effort than one based on a star manager, and I rather prefer the idea of a management team based in St. Louis instead of Southern California.
HUSIX is overweight is financials and basic materials. TDVFX is overweight in energy and industrials. I'm not capable of deciding which overweight is a more likely bet.
One advantage to HUSIX is that it's remarkably tax efficient, only 3 basis points (0.03%) over the last 5 years, as opposed to TDVFX's still modest, but higher 0.73%, according to M*.
HUSIX also had a record of bouncing back really well from bad years like the one it's been having.
Any thoughts?

Up-chuck only with way too much wine! Haven't done that in years, thank goodness.

@briboe69
@jojo26
It is no different than someone allocating $5,500 a year ($458.33 per month(less than 50 yrs old)) or $6,500 a year ($541.67 per month(more than 50 years old)) for a roth retirement account. If you fully fund your self directed retirement account it amounts to about the same thing. It may be the poster's retirement account as he never mentioned what type of account he was subscribing for.
Plus, the poster mentioned that it was nice to invest up to $500 per month. If my memory serves me, Wasatch offered a similar option when it offered the International Opportunities fund years ago.
One of my retirement accounts is BRUSX.

$6,000/year seems kind of high for a micro cap allocation... Unless you have stockpiles of money that you don't know what to do with or like taking a lot of risk.

@briboe69
Congratulations! That was partially the reason why I initially called GP was to make sure my email address was legible and correct since I scanned it into a PDF file then emailed it. My handwriting is not the best.
I received my full allotment that was requested which will be for a taxable account. Did you receive your full amount or less?
@jojo26
It is no different than someone allocating $5,500 a year ($458.33 per month(less than 50 yrs old)) or $6,500 a year ($541.67 per month(more than 50 years old)) for a roth retirement account. If you fully fund your self directed retirement account it amounts to about the same thing. It may be the poster's retirement account as he never mentioned what type of account he was subscribing for.
Plus, the poster mentioned that it was nice to invest up to $500 per month. If my memory serves me, Wasatch offered a similar option when it offered the International Opportunities fund years ago.
One of my retirement accounts is BRUSX.

Anyone who has been through an SEC examination understands they will find some aspect of the business that is not right. In the last two years, examiners have been quite aggressive. The ability of the SEC and similar organizations to access data even before the exam begins is much greater than it was a few years ago. I am not giving a pass to First Eagle on this. But I am saying it is entirely possible this one instance was an oversight, since no compliance department wants to be responsible for the publicity that the news generates. The fact that First Eagle cooperated fully and made corrections immediately is certainly positive, unlike some firms who obfuscate and try to make less of the problem than it is. In the grand scheme of things, this is relatively small potatoes compared to some of the egregious fee-and-expense gouging that happens in the financial world. It is important to note, however, that the SEC is looking very closely into all aspects of fees and expenses and how they are reported. My guess is that they used this instance as a broad shot to all other firms to check into their own fee structures. And that is a good thing.

Do most of the buyers of the new fund also still wait outside all night for concert tickets and apple phones and, dare I say, do you go shopping when the rest of the us are comatose on Thanksgiving?
Sorry, but I just don't get the hype. Nor the rush to be the first adopters of any fund.

Hi Bee,
This will mark the first time I've jumped through these types of hoops for a fund, but the reason is fairly straightforward.
To first justify this of course, one needs to determine if a fund with this capitalization target is what you want. If yes, then you look for a manager with a fund with a track record in this space and their record in terms of shareholder value, and you simply base your decision on that....you are betting on a manager and their track record.
The reason for this leap of faith is because, unfortunately in the small cap space, you don't have the luxury of watching a fund for a few years and then buying in. By the time you've made that decision, the fund is long since closed or the AUM is so bloated to make the capitalization targets meaningless.
Of course, one additional risk needs to be mentioned as pertains to funds discussed on financial sites...even one as esteemed as this, and that is the avoidance of group-think. But, that goes for any decision made in the midst of conversation I suppose.
press

Janus has had enough problems over the years. Now they have Mr. Gross.

:)
I'm not planning on transferring any money to either of these two firms. But it does make one wonder how other large financial instutions - especially in the mutual fund arena - deal with these types of personality issues? Can't imagine anything getting near this ugly at TRP or D&C for instance.

Poor destitute Mr. Gross. My reaction is that this has more to do with his bruised ego than any dollar issues. Anything to get publicity and attention on him again. Janus has had enough problems over the years. Now they have Mr. Gross.

This really strikes home for me. I was at a small startup that never had a shareholder meeting or board election since the day it incorporated. After several years of this, a majority of shareholders (in both numbers of bodies and more importantly, shares) removed and replaced the board. The company CEO then asserted he'd been constructively terminated and made all sorts of pronouncements.
I'm hesitant to post more. Suffice to say, and with thanks to Yogi, it's déjà vu all over again.
IMHO the article is correct. Generally (in the absence of an employment contract to the contrary) a company is free to fire an employee for anything except what legislatures and courts have deemed against public policy ("bad reasons") - like your race or religion. California is likely the best place in the US to work as an employee, as it gives employees great protection.
So it will be interesting to see if Gross can make his argument that firing was to avoid a bonus payment fly. It would seem he needs to show that this money really was a substantial reason for his termination, and that (in California) this would constitute a "bad reason".

Hi @Dex,
In the cash area of my portfolio, which includes money held in currency and on deposit at two banks, I currently have enough cash to live off of for more than three years at my current spending rate should all other forms of income I receive (social security, a small pension and from investments) come to a halt. If I sold out of the markets today, I anticipate I'd have better than twenty years of worth of cash on hand at my current spending rate. Seems, I recall Ted chose to go to mostly to an all cash position this past summer. For me, being age 67 and my wife age 65 I think I am going to stay invested in the capital markets for many years to come. Should my portfolio return what I have projected over the next ten years, as detailed in another blurb and noted below, the returns will most likely be enough to support my lifestyle without a cash drawdown.
For easy reference, below is my post regarding my anticipated portfolio's return. It reads as follows ...
"Hi @MJG,
Thanks for posting your forecast of six percent average annual gain for stocks over the next ten years. Wonder what bonds are going to do? And, then there is cash?
Here is my thinking ... Like you say, I'll use six per cent for stocks, (my call) four percent for bonds and two percent for cash. With this and based upon my current asset allocation of 25% cash, 20% bonds and 55% stocks (which includes the 5% other assets as defined by M* within my portfolio) I can expect between a four to five percent annualized return over the next ten years on my portfolio. Sounds reasonable to me.
So, if I want to make more I will need to continue to employ some spiffs (special investment positions) from time-to-time as I have been doing in this low interest rate environment. Doing this, might add a percent or two. Or, I could take on more risk and raise my allocation to stocks and bonds while lowering my allocation to cash. Think I'll continue to play the spiffs and tweak my asset allocation form time-to-time as to how I am reading the markets. In doing a look back, Morningstar's Portfolio Manager indicates that my current fund possitions have a combinded returned for the past five years of about 8.5% and for the ten year period about 6.5%. With this, some adjustment (downward) would needed to be made to account for my cash position in use with the above percentages. So, let's knock a percent off of these percentages to derive at what the portfolio would have returned adjusting it for current cash held. Probally, not exact but close.
Currently, I think from a TTM P/E Ratio (21.5) stocks are more than fully valued along with most bonds. With this, I am going to stick with being cash heavy for the time being and employ the spiffs.
Thanks again for posting your insight. It is appreciated."
Best regards,
Old_Skeet

Not sure what you have in mind here, so let's try a simpler question. What would APY for an individual bond mean for you? I see various possibilities:
A bond typically has coupon payments twice a year, so its APY (using compounding, like a bank's APY) would be (1 + r/2) x * (1 + r/2) where r was the APR. r could be either
coupon/face value or coupon/purchase price, depending on what you're looking for.
Either way, that would only represent the compounding of the coupon, and not any change in bond price. For example, a zero coupon bond would have an APY of zero if APY only included coupon payments. But I doubt that's what you have in mind.
What I personally care about (especially if I were holding until maturity or call, which is somewhat implied by computing a compound yield) is yield to worst (yield to maturity or yield to call, whichever were lower). That's a calculation (like amortization) that includes both the coupon rate and the change in price to maturity.
If this is the figure of interest, then a zero coupon bond with a price of $50 (face value of $100) that matured in 12 years would have a yield to maturity of 6% (rule of 72).
The best approximation of yield to worst for a portfolio of bonds (such as a mutual fund) is the SEC yield. It incorporates the price changes in the underlying bonds and their coupon rates. It's my figure of choice, because it includes all factors instead of looking only at interest payments which can be misleading.
Here's a pretty clear article from Forbes on current yield and SEC yield.
http://www.forbes.com/sites/rickferri/2012/07/19/the-yield-trap/

DS,
Thanks. Waggoner did go back 25y (though not analyzing discrete years), and there was followup too that might be of interest:
http://www.usatoday.com/story/money/2015/02/27/investing-do-you-want-to-send-your-money-abroad/24077415/
Interesting about 10%, wow.

Hmmmmm..... don't know what the advisers are doing with "other peoples money".
--- U.S. started and kept the QE money machine running from late 2008. So, U.S. was the best of the breed at that time.
--- Europe was in the restrictive mode as I recall and there were a series of equity "fits", mostly during the springtime months (May). Greece was a concern and then Mr. Draghi did the "whatever it takes" thing with the European QE.
--- China got rolling again after the melt and bought every commodity in sight. That was good for a few years and of benefit to the Aussies (iron) and some folks in South America for awhile.
--- Japan began (again and/or still) their version of QE.
--- Some central banks continue to reduce rates here and there; I suspect, with the aspect of slow spending and the thought of deflation.
So, there was a strong dollar (commodity pricing globally), fracking finally started to produce changes in this countries energy reserves. The Euro and Japan QE provided a positive boost for investors, especially with tools like HEDJ and DXJ type funds. Recalling that the Euro/dollar was just about $1.60:$1 in 2008 and now runs around $1.14, more or less.
Don't know that anything disrupting has been provided. Just a few trinkets from the past several years that have shaped where some money travels and why.
Not included is anything that is military, social or the particular changes of status in many middle eastern countries.
Lots of stuff going on that we know about, and as much that we don't know about.
The U.S. is likely still the best of the economic turd piles for investing, but there are always investment gems here and there that come to life for a period of time.
Take care,
Catch

Anyone use preferreds? They seem to be less volatile than REITs.

Yes, I'm new to preferreds, but owned PPSAX (lw at Fido) in 2014-early 2015 and now have a stake in a preferred cef. Good income, not all that volatile, but all the preferred funds I've looked at are at a high price to par now. They seem to do well about every other year and lag some in the off years, and they did great in 2014. Most of the funds I've considered are hybrids, with some straight corporate debt, so they act more like bonds than a REIT fund would. Make sure you check the credit exposure if you go shopping; the credit quality varies quite a bit.
The etf PFF is a quick & easy way to get exposure, but I "prefer" active management in preferreds.

Yeah, lots of the active equity mutual funds at Vanguard show cap gains hits (eg., VGENX). But the related index mutual funds (eg., VENAX) do not. Nor do the ETFs with same share class (eg., VDE). Presumably this benefit is because of the concept of in-kind exchange.
But as these indices become more sophisticated and tailored, they are essentially becoming a formulated "active" trade...but without the cap gain penalty.
If this advantage is bankable, got to believe it increases favor of ETFs. 'Cause, nobody likes paying cap gains, especially on down years.