@dicksonL
Finding my username in your post.....not knowing your other holdings or whether your IRA(s) has access to a brokerage feature, to allow you to place your monies just about anywhere; I can only add to what msf noted with a few trinkets of thought regarding your questions.
With the following in mind; per Mr. Snowball's "statement of the obvious", that "We cannot vouch for the accuracy or appropriateness of any of it,"
This is my/our view from this house; but will not be appropriate for everyone regarding a taxable acct. or a tax sheltered acct. as noted for your 401k and IRA(s).
You noted: " Since IRA acct can go more aggressive, for tax free growth for 6 more years( a lesson I learnt only 2 years ago) before RMD kicks in, I am tweaking my portfolio, making more index based in taxable and aggressive in IRA. my 401k with ltd. choice is on s&[email protected]%"
>>>I will presume you are stating that your IRA holdings may be invested in whatever without current concern about taxation. Aggressive, for me; has a different meaning. Aggressive could perhaps imply a portfolio of 100% in equity investments.
I agree with msf regarding the choices you noted in your taxable account; and agree that one should place whatever is most tax efficient for your choice of holdings into this area.
As for the tax sheltered accounts; one does not have to be concerned with taxation at this time; so one may "fiddle" with whatever is most appropriate for their risk/reward investment emotion. Buy and sell when you need or choose to without regard to current tax from the transactions. This, obviously; is the nice part of tax sheltered holdings. In the end, per current tax policy; we/you will pay tax on the withdrawals at an ordinary income rate at the federal/state level, yes?
A brief overview would be that you may choose to be aggressive with your investments in both types of account holdings; leaning towards the most tax efficient for the taxable account, eh? Two choices were noted in your post and in msf's reply about tax efficiency. I do not have a direct opinion of either of your choices. You noted replacing one with another. Perhaps you may decide to keep the original fund, but move some of this money to the other fund, too. I have not looked at the funds, so I don't know how similar they may be regarding the investment style/holdings.
The majority of our holdings are within tax sheltered accounts; so we have not been concerned about tax efficient holdings. Our main goal has always been captial preservation (money to live for another day, to take advantage of the long term compounding effect) and capital appreciation in whatever form it may arrive, be it income/yield or price appreciation. This goal, of course; is regulated with our own value of risk and reward from the investments.
Currently, we are about 65% equity within the broad U.S. and Europe areas. In June of 2008 we were at 90% investment grade bonds. Our portfolio is ever changing and may be slightly aggressive for some near or in retirement; and will remain in place, until we feel the investments are no longer working/happy.
Only my 2 cents worth.
Take care,
Catch

The fund's performance is fine (two years in the top 5%, two years in the bottom 5%, strong start to 2015)

But how do you benchmark something like this? All Royce funds have style creep -- how can you (for example) benchmark a hypothetical fund that can hold 30% international small- and midcap stocks against the US small cap index (which is exactly the kind of thing Royce does all the time)?
In this case, what is the benchmark? And, can you trust Royce/Legg Mason to not change the portfolio strategy every 3 years to boost market performance or capture flavor-of-the-month investing trends?

This study (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2597122) documents that the active share measure, which has attracted so much attention in the past few years, has no performance predictive power once the analysis is done carefully. This is a real problem given that many financial advisors and consultants use this measure to pick funds for their clients. In addition, some funds seem to heavily advertise having high active shares, potentially misleading investors.

From the SEC, Microcap Stock: A Guide for Investors (2013):

The term "microcap stock" applies to companies with low or "micro" capitalizations, meaning the total value of the company's stock. A typical definition would be companies with a market capitalization of less than $250 or $300 million.

That's quite a distance from Royce Micro-Cap Opportunity's billion dollar boundary. The portfolio, as currently constructed is about two-thirds microcap and one-third small cap. The portfolio's average cap is $720 million.
The fund's performance is fine (two years in the top 5%, two years in the bottom 5%, strong start to 2015) but its asset base is nonexistent, perhaps a reminder that the world doesn't need two dozen Royce clones. I suppose the remaining is a futile marketing gesture given the Royce also runs Royce Micro-cap and Royce Micro-cap Discovery.
David

Hi Hank,
The consensus wisdom from successful football coaches is that wins are generated by superior defense. A ton of expert investing professions are similarly persuaded. That’s why so many financial advisors talk about playing defense. That’s why so many articles are written that outline X number of ways to practice defensive investing.
After reading the referenced Jaffe article and your post, I feel that both you guys are on the same exact page. The way to superior end wealth is to avoid the many inviting pitfalls that do substantial harm to portfolios.
You are in substantial agreement with the six common axioms that often misguide over-reactive investors, both the professionals and the amateurs. “Don’t just do something, just stand there” is not bad advice. Even famous speculator Jesse Livermore realized that “The big money is made by the sitting and the waiting, not the thinking”. He believed that only a fool trades frequently.
Oaktree’s Howard Marks sure advocates defensive investing in his “The Most Important Thing” white paper to clients. I referenced it recently. Here is the internal Link to my original post:
http://www.mutualfundobserver.com/discuss/discussion/20477/placing-constraints-on-yourself
On page 2 of the Marks paper, he concludes that “The most important thing is investing defensively”. Later he proclaims that “If we avoid the losers, the winners will take care of themselves”.
Jaffe is simply restating ways to avoid wealth robbing mistakes. He did not invent these pitfalls. They have been recognized for decades and have been fully documented. However, the evidence suggests that the identification and warnings have not plugged the hole in the dam. These same mistakes, plus others, are made daily.
Just the other day, one of my sons worried that a large market drop was eminent because of the huge run-up in prices (number 2 in the Jaffe piece). Well, he just might be right, but the uncertainties are such that he just might be wrong. A total jump switch is almost never a good idea. Some modest incremental adjustment is likely more appropriate action given his feelings (intuition, gut, whatever).
I do not take issue with the cautionary articles that frequent our investment media. Do I benefit from them now? Not much, given my years of exposure to these warnings. But that is not the situation for many younger investors. Even reminders serve a purpose.
The referenced article is a reprint of an earlier March submittal from Jaffe. Perhaps his writing pen had just run dry momentarily and this is just a space filler. Perhaps MarketWatch feels that the article has exceptional merit, and warrants a reprint. Like all market decisions, we get to choose our own interpretation.
Best Wishes.

Yes, since at least the 1970s, surely. The slow erosion of the social contract between management and labor. My own aunt worked as a secretary at Monsanto for 800 years. You NEVER see that kind of loyalty from either management nor labor, today. Labor jumps to get what it can, because labor is increasingly desperate. In so many places, benefits are simply not there, not offered. Globalization has depressed wages, too. All quite deliberate.

Hey OJ - I'm with you in hoping that the 90%+ group share their secret. All I can figure out is that I recognized few, if any, of the fund symbols. That's largely because I haven't had a fresh idea in years. Basically, have stayed with the same 5 or 6 fund houses and pretty much the same dozen funds for well over a decade now. I guess in the past 3 years I've added just one new one (PRNEX).
Possibly they benefitted from a superior knowledge of those fund symbols and were able to identify funds a computer might overlook.

Yes, the tax statement will show foreign tax paid, and you can credit it against total taxes due in the USA. I've seen that on my Matthews statements over the years, and maybe Seafarer. But I was trying to say that I do not believe that "foreign tax paid" as it appears on the tax statement necessarily means you've paid all that's due "on that score," already. (Like getting "qualified" or "non-qualified" domestic dividends. Whatever that means.)

@Tampabay

Tampabay
10:18AM Flag
I think its more of a matter of having too much Cash on hand for profitable companies, and innovative ways to make money with the cash, Why not find ways to give back to Company Owners, the share holders, Bay backs are one (easy) way to do this...

One of my takeaways from the paper's arguments is that the corporate mentality that has driven a significant portion of the buybacks has been too short term in its nature. Investments in labor (including additional technical training and other education for existing workers) and capital may take many years to fully provide a payback....particularly when the economy is struggling. But, if that part of the equation gets short changed in order to goose the stock price in the current quarter, the overall economy including the wages of its workers suffers in the long run. I am inclined to think some of that has been going on in recent years.

Another thought, How many Middle Class people buy Stocks (invest).... last I read it was less than 10%, How many Care or want to?
In fact how many well educated Americans even Know how to go about buying stocks?
Guarantee, myself as a well educated, young successful businessman with plenty of disposal money didn't have a clue....finally after years of fooling around with mutual fund companies and buying IRAs out of tax necessity.. I educated myself....
Middle Class Doesn't do that....buying stocks....so I guess they don't benefit....
all my guessing

"In terms of types of financial wealth, the top one percent of households have 35% of all privately held stock, 64.4% of financial securities, and 62.4% of business equity. The top ten percent have 81% to 94% of stocks, bonds, trust funds, and business equity, and almost 80% of non-home real estate."
http://www2.ucsc.edu/whorulesamerica/power/wealth.html
Also:
http://www.cnbc.com/id/100780163
http://www.salon.com/2013/09/19/stock_ownership_who_benefits_partner/

Another thought, How many Middle Class people buy Stocks (invest).... last I read it was less than 10%, How many Care or want to?
In fact how many well educated Americans even Know how to go about buying stocks?
Guarantee, myself as a well educated, young successful businessman with plenty of disposal money didn't have a clue....finally after years of fooling around with mutual fund companies and buying IRAs out of tax necessity.. I educated myself....
Middle Class Doesn't do that....buying stocks....so I guess they don't benefit....
all my guessing

William Lazonick writes that "Stock buybacks are an important explanation for both the concentration of income among the richest households and the disappearance of middle-class employment opportunities in the United States over the past three decades. Over this period, corporate resource-allocation at many, if not most, major U.S. business corporations has transitioned from “retain-and-reinvest” to “downsize-and-distribute” ". Toward the end of the paper, Lazonick further states "Senior executives who are willing to waste hundreds of millions or billions of dollars annually on buybacks are likely to lose the judgmental capacity to comprehend the types of investments in organization and technology that are required to remain innovative in their industries."
Rex Nutting comments on the paper at this link where he says "Share buybacks encourage executives to loot companies, stall innovation and depress wages":
marketwatch.com/story/how-the-stock-market-destroyed-the-middle-class-2015-04-24?dist=beforebell
Here is a link to a summary of the paper and to its full pdf version ("Stock buybacks: From retain-and reinvest to downsize-and-distribute"):
brookings.edu/research/papers/2015/04/17-stock-buybacks-lazonick
It is my impression share buybacks have been a key driver of US equity market performance in recent years. I am not sure that trend can be sustained in a positive way over the next several years. This may be worth thinking about since it impacts our portfolios.

The $20M is in DSL - all a single position.
As Junkster pointed out, this is a muni bond, not a corporate. Aside from that, there are other differences from what Gundlach was talking about. He specifically mentioned a flood of maturities in the 2018 time frame. He felt that this would create a problem both in price (lots of new bonds coming on the market to replace the old ones) and defaults (not having the cash flow to deal with higher coupon bonds?).
PR bonds, in contrast, are generally (still) long term maturing in the 2030s and now 2040s. In particular, the series in DSL mature in 2035. PR is having problems servicing its current debt, but it won't have to deal with rolling over its bonds for many years.
PR bonds are unique in another way. They were recently downgraded to junk (the only "state" bonds to be so graded, so they're in a class by themselves). As a result, funds dumped them (as did many other investors), and they have already been badly punished in the market. As Junkster's link pointed out, they're trading at all-time lows. I have a small portfolio of individual munis, and I watch the PR bond prices drop even as all other muni prices (from BBB to AA) rise.
Not wishing to sound like a Pollyanna, I nevertheless offer a (possibly rare) contrarian view for your consideration: https://www.fmsbonds.com/News/bond_article.asp?id=488

@msf: Thanks for the comment. Since IRA acct can go more aggressive, for tax free growth for 6 more years( a lesson I learnt only 2 years ago) before RMD kicks in, I am tweaking my portfolio, making more index based in taxable and aggressive in IRA. my 401k with ltd. choice is on s&[email protected]%. So was looking for suitable alternatives for IRA holding. one i found was poskx. There will be a lot more surely. I find some members like catch22, crash ( max B), msf, rono etc giving really great insights, so am looking forward to some.

@andiel049, I have been impressed by everything about GP until now, including the big investments they have in their own funds, closing funds aggressively and even more hard closing funds. As I mentioned this all screams outperformance to me and in a world where not that many managers outperform over time I don't think its a big surprise that they've gathered assets so quickly. Maybe that's the trick. They thought it might take 10 years to gather this amount of assets. They thought they would close everything at $1.5-$2.0 billion then at $3 billion and now something larger. For all the experience they have they're conservative and they were probably too transparent about the asset levels they thought they could manage.
To answer @JoJo26 's question, I look at this as one small cap portfolio. It helps that it's global but as opposed to many small cap fund managers who are at the top end of small cap or have a lot of assets even in mid-caps, these guys are very small cap and that would lower the assets I'd like to see in the fund(s). I think $3 billion is a great level, but I think $5 billion is probably okay, although they don't have a lot invested in the US and I think that makes $5 billion relatively larger. Once you get past $5 billion I think it starts to get more difficult to keep the market cap down or to "only" have 400 plus stocks (based on GPROX) in their collection. I'm already concerned pending their explanation but above $5 billion I think they're losing their ability to prioritize what they said they would when they closed GPROX last September.
From what I understand, the Stalwarts are just going to be another cut of GPROX and it will be limited, more or less, to the stocks with market caps greater than $1.5 billion. That would tend to make me believe they will include the larger small caps and a good portion of the mid-caps in GPROX. There are only a few holdings that M* categorizes as large cap and while those could certainly be part of the Stalwarts, even so they wouldn't likely make up a big part of it.
@Charles, if we believe what andiel049 says, and I have no reason not to, then it's pretty clear this is motivated by pressure from institutional investors more than investment opportunities or more management fees (although clearly that goes along with more assets). Based on what I've read in commentaries, annual letters or press releases closing funds they've talked about understanding the difficulties hard closing funds causes for asset allocation, they've talked about the desire from customers for more room to continue investing, and it sounds like someone has managed to convince them they might be great at making investment decisions but they're wrong about how much money they can manage and keep making those great investment decisions. I'm trying to keep an open mind but hopefully it will help when they share some of the thinking that went into these decisions.

My score was a perfect 50%. (Exactly what you'd expect when guessing)
When these robots sign-up and start posting here, then we got a problem.
John Hussman might as well be a robot. Wrong now for how many years? Would also explain why his photo on his website hasn't changed a bit over the last 15 years. Robots don't age like we humans.

Great call; missed it but caught the mp3 yesterday. I thought AF's explanation of how security picking and macro interact in the Seafarer process was about the most detailed and illuminating I've heard from any manager.

Let me second AndyJ on this. I think Foster has it exactly right: It would be wonderful to get the future Macro environment right, but the unfortunate fact is that nobody can. Better to concentrate on something you might be able to judge with some accuracy, i.e., a company's fundamentals over the next couple of years (maybe 5 years tops in my view).
And a belated thanks to David for setting up these calls. In two cases (Seafarer and RSIVX) they've convinced me to invest in funds I likely would not have otherwise.

A little text here would help. This is a "reboot" of Julius Baer/Artio by the JB founders, including Rudolph-Riad Younes and Richard Pell (who isn't mentioned in the MFWire article). Their original fund, BJBIX, was excellent for several years until it ballooned; it was subsequently sold to Aberdeen and has continued its decline.
Here's a M* article from a year ago that describes this in gory detail.
The new incarnation of the fund is RSQ International Equity RSQVX. Not a particularly auspicious start to date.

Starbucks is very pricey for what you get. At the beginning their food offerings were also expensive but unique. Everyone else has the same things now. It does become an expensive habit. The frugal part of me pushed the idea of making my own. Never looked back but I cannot stand regular coffee anymore.
Chipotle has been a surprise for these few years. I've been waiting for the stock to revert to its mean but it hasn't happened. I guess this old guy doesn't understand the value of another restaurant chain.
I stopped by Olive Garden for lunch while stateside. Very disappointed. Food was bland. I don't think I'll go there anymore.

I'm starting to wonder who does eat there and who invests in their stock?

Aren't any where we are in northern Michigan. Not sure about the downstate area. My first encounter with them was on a long drive we took across the Ohio-Pennsylvania Turnpike on the way to W. Virginia couple years ago. They're scattered all along the way at those big commercialized rest areas. We stopped every couple hours for our caffeine fix. Clean & modern with customer friendly staff. Any flavor/size concoction you can imagine. But 2 or 3 X more expensive than your local coffee shop. Also, while in NY, I picked-up a prepackaged salad at the Starbucks inside Macy's big store in Manhattan. Took it back to the hotel for later. I'll have to say it was nothing special. A bit disappointing considering the high price paid.
If you go to EBay or Amazon they have large sections devoted soly to Starbuck branded items. I've looked at some of their classic Holiday mugs from specific years in the past - which actually have attained collector's value. They've attained something of a cult-like following I dare say.