Hi @ron
PRAIX is an "enhanced" TIPs fund at this time; with all the "adjustment" tools available with many Pimco funds. I know you are aware of this, too; if this is what you want to add to your mix.
We maintain our holding of PIMIX; although the fund is having a rough start to this year, but is hopefully adjusting as this current crazy bond market moves along. But, PIMIX has been fairly steady/smooth relative to some other bond funds. I have placed this fund with the one you mentioned and two others for reference.
Hopefully, this chart will be viewable to you in the 3 year mode. NOPE.....didn't link the 3 year this time...........drag the left end of the 200 day slider to about 750 days for a 3 year view.
Are you willing to list your other bond funds or bond holdings for an overview.
Away to upgrade our modem here and hope that this goes well.
Chart of PIMIX v PRAIX v TIP v TLT past 3 years.
Take care,
Catch

In four years, AUM has gone from $18.8B to $6.6B. At that rate he only has a couple of years left to prove he is right.

Interesting to do a search for international (blend, growth, value) funds that are in the top 15% for 1,3,and 5-yr periods. Only four funds show up, and only two of those have had the current manager at the helm for five years: Ivy International Core Equity and Great-West MFS International Value. Ivy's John Maxwell has done outstanding work, under the radar, since he came to the fund in 2006. We use ICEIX, but IVVYX may also be available. Unfortunately, Maxwell's fund is not on the Fidelity no-load platform. You may have to work hard to find the fund and not pay a commission. But worth a look if you do.
Other managers worth checking are Bernie Horn from QFVIX, Mark Yockey from ARTMX, and Walter Bean/Daniel Peris from IVFIX. The latter is particularly interesting if you like to emphasize dividend yields, which is an attractive 4.97% and has a very low 11% turnover.

".even, Eddie Lampert, who he knows is no longer regarded very highly by public."
Well, at least he realizes that.
"And, to Scott's point, on when BB may have turned. I believe it was 2011 and he went all financials."
I understand that some people don't like diversification. However, I'm not going to sit and trade all day. Neither is a mutual fund.
I like Visa (to use an example.) Actually, I really like Visa. However, I would not want Visa to be half my portfolio. I have a good deal in various themes (credit cards, rails, etc.), but there is an attempt to orchestrate the portfolio so that I don't start feeling like one theme wholly and completely dominates daily, weekly, monthly or yearly performance. I really would not want to be so heavily reliant upon one name, either. This is just me, but if I saw a mutual fund I owned with half the portfolio in one name, I'd be out of it.
When you have a mutual fund like Fairholme set up like it is currently, the manager is asking for a level of belief that I don't think most investors in this day and age have, as these bets are going to take a long time to play out. Or are taking longer to play out than thought. Or in the case of Sears will play out when pigs fly.
It's almost better set up as a hedge fund where people are locked in until the occasional redemption period. Berkowitz saying that those invested with him now are "in it for the long haul" is laughable. When you have a fund whose performance is based largely around a few long-term bets (including one that is highly risky from the standpoint of its half your portfolio and the same company you said you'd walk away from in 2009 because you didn't understand its derivative book), once the performance starts to lag for 1,3 and even 5 years (people can't tolerate under-performance for 3-6 months in this day and age), people exit. I can't believe FAIRX still has the AUM it has, but it's down.
Mutual fund holders aren't going to wait for your thesis on Sears to play out. There's been so many examples of flight from star managers (Heebner and CGM Focus, which I still say was over-and-done once Cramer called it his favorite mutual fund on a morning TV show) that that should be obvious to anyone in the industry.

I'm with you, Charles. I do just sometimes wish BB would seem a little more humble, that he might admit mistakes now and then and show that he'd learned from them. But hey, sometimes managers deserve their arrogance (cue Jeffrey Gundlach) and let's hope BB soon proves that he never lost his magic, it just was hard to see for a few years.

@Mona
Your frequent conversations with fund managers, while commendable, raises one concern - being related to the following: As I understand it, open-ended mutual funds are required by a 2004 SEC amendment to existing policy to publicly disclose their portfolio holdings quarterly. This rule replaced an older one requiring semi-annual reporting of holdings. Most fund companies argued strenuously against the adoption of more frequent reporting during the period of public debate, arguing among other things that (1) The new policy increased the likelihood of "front-running" of mutual fund sales and purchases and (2) It promoted "load riding" whereby investors could replicate a fund's holdings without having paid for the research costs.
- The first link is to a 2001 position paper by the Investment Company Institute stating their reasons for opposing more frequent disclosure. They lost the battle, but I still find their logic interesting and somewhat compelling. http://www.ici.org/pdf/per07-03.pdf
- The second link is to the actual SEC Policy adapted in 2004. As far as I know, it is still in effect.
http://www.sec.gov/news/press/2004-16.htm
- Virtually all mutual fund companies have written policy governing disclosure of portfolio holdings. These appear quite stringent. The following (inked) one from Dreyfus allows a manager (or his designee) to reveal a fund's top 10 holdings to non-company affiliated individuals - but only if those holdings have been previously made available to the public. Violations of policy must be reported to the company's compliance officer.
https://public.dreyfus.com/policies-information/holdings-disclosure.html
What I'm wondering is what you can learn from speaking to a fund manager that isn't already public knowledge available on the fund's website, in their annual and semi-annual reports, or in their SEC required quarterly disclosures? I like to suppose that if I phoned Dodge and Cox one of their managers would talk with me. (I'd thank them for making me a lot of money over the years.). However, if he/she revealed to me that they were considering adding to their position in Company X sometime in the next few weeks, I'd be a bit alarmed. I'd wonder who else had already been tipped-off about the impending purchase and whether the stock's price had already been driven higher as a result of this advance knowledge.
Just some thoughts on this whole issue of calling up fund managers.

Hi Hank,
Thanks for your thoughts and a few more of mine.
As I stated in both posts, other than speaking with Morty Schaja (which I also mentioned in a post some months ago), I am not speaking with "fund managers". I am speaking with someone on the "team". I tried to emphasis that by using the word 7 times. For example, this includes analysts, statisticians, Chief Marketing Officers, and others.
As stated in my most recent post, " Many times I do not get pinpoint answers, which probably relates to SEC issues". To alleviate concerns, I will be more precise. For example, I would not get a pinpoint answers to questions #2 and #4. But that would not prevent me from asking, hoping for a response that might contain some value to me.
Asking for an opinion on sectors that attributed to under performance is something that happened in the past. No secret, albeit I did not have, but wanted the information. Or asking "where the portfolio managers believe the best valuations currently exist" (small, mid or large cap), is not giving me any proprietary information.
Regarding your question:
"What I'm wondering is what you can learn from speaking to a fund manager that isn't already public knowledge available on the fund's website, in their annual and semi-annual reports, or in their SEC required quarterly disclosures?", I do not know how to answer that any differently than I have:
"All the dated quantitative information is certainly in public documents such as their Statuary Prospectus, Summary Prospectus, Statement of Additional Information, and their Semiannual and Annual Reports. I am searching for recent changes and current thinking.
And then I am back to " Many times I do not get pinpoint answers, which probably relates to SEC issues".
Best Regards,
Mona

@TSP_Transfer
Similar and related reporting, with a bit of added data.
We've (here) discussed some of this too many times over the past few years, regarding Greece and the related complex Eurozone structure.
A Guide to the debt standoff between Greece and the Eurozone.

@Mona
Your frequent conversations with fund managers, while commendable, raises one concern - being related to the following: As I understand it, open-ended mutual funds are required by a 2004 SEC amendment to existing policy to publicly disclose their portfolio holdings quarterly. This rule replaced an older one requiring semi-annual reporting of holdings. Most fund companies argued strenuously against the adoption of more frequent reporting during the period of public debate, arguing among other things that (1) The new policy increased the likelihood of "front-running" of mutual fund sales and purchases and (2) It promoted "load riding" whereby investors could replicate a fund's holdings without having paid for the research costs.
The first link is to a 2001 position paper by the Investment Company Institute stating their reasons for opposing more frequent disclosure. They lost the battle, but I still find their logic interesting and somewhat compelling. http://www.ici.org/pdf/per07-03.pdf
The second link is to the actual SEC Policy adapted in 2004. As far as I know, it is still in effect.
http://www.sec.gov/news/press/2004-16.htm
Virtually all mutual fund companies have written policy governing disclosure of portfolio holdings. These appear quite stringent. The following (inked) one from Dreyfus allows a manager (or his designee) to reveal the following to non company affilliated persons ONLY If the information has already been previously disseminated to the publuic:
"...Top ten holdings and the total percentage of the Fund such aggregate holdings represent ... Sector information and the total percentage of the Fund held in each sector ... Any other analytical data that does not identify any specific portfolio holding"
Violations of policy must be reported to the company's Chief Compliance Officer.
https://public.dreyfus.com/policies-information/holdings-disclosure.html
What I'm wondering is what you can learn from speaking to a fund manager that isn't already public knowledge available on the fund's website, in their annual and semi-annual reports, or in their SEC required quarterly disclosures? I like to suppose that if I phoned Dodge and Cox one of their managers would talk with me. (I'd thank them for making me a lot of money over the years.) However, if he/she revealed to me that they were considering adding to their position in Company X sometime in the next few weeks, I'd be a bit alarmed. I'd wonder who else had already been tipped-off about the impending purchase and whether the stock's price had already been driven higher as a result of this advance knowledge.
Just some thoughts on this whole issue of calling up fund managers.

I hold TVRVX, which was discussed in this month's commentary, and I've been happy for the last few years. I agree with others on the DCA plan.

"Believes current shareholders know what to expect and are in it for the long term, five years or more."
Five years is a long time to wait. With Six You Get Eggroll.

Berkowitz has proven himself an impressive and intelligent investor overall, but I think where things ran into significant trouble was after the financial crisis. Fairholme has always run a concentrated portfolio, but it got - I think - concentrated to the point of absurdity, with nearly half the portfolio in AIG. The bet on St Joe was matched on the opposite side by a notable short position by David Einhorn, who - so far - has been proven right. I believe Einhorn was still short it recently.
The Sears story? I've been a vocal opponent of the long story, as well and have gone into reasoning countless times before. Fairholme was buying Sears above $100. Is there more value in Sears than the current stock price? Perhaps, but there's no way the stock will see $100+. There's just way too much retail real estate, with Sears and tons of other retailers looking to offload real estate into a buyer's market. The REIT spin-off? No thanks and I just don't see the demand being there.
I really am starting to think a group of managers got sucked into the Eddie Lampert story ("It's the next Berkshire!") and are now finding out it wasn't what they thought. If it was such a tremendous story, the market wouldn't seem to disagree so much and for so long. Yeah yeah, ignore the crowds - but sometimes the crowds are right.
The thing that continues to get me was a Kiplinger's article with Berkowitz in 2009 where he talked about if he doesn't understand something, he walks away in reference to things like AIG's derivatives. Then shortly after he loads up?
There's also the Fannie/Freddie bet that's gone sour although he continues to fight the government. Good luck with that.
Financials have done (at least at last glance) worse than energy this year, which hasn't helped BAC/AIG.
And yes, Biotech has beaten a lot of things (and I think it probably will continue to do well and now it's starting to pay dividends (Gilead announcing their first dividend yesterday, Amgen increasing dividend with next payout.) I certainly see more tailwinds then headwinds for healthcare in general going forward.
As for Fairholme:
"Believes current shareholders know what to expect and are in it for the long term, five years or more."
LOL. They'll run to something else if things don't get any better without a second thought.

Right, so here's the allure...

Basically, investing with Bruce the past 15 years means you have more than quadrupled your investment since FAIRX inception. You've earned 11.7% per year!
Who has beaten that? Suspect very few.
But you are absolutely correct about performance last 5 years and one year. But he does have strong 3 year performance, so he's not a Three Alarm Fund, if that is what you mean.
I certainly hope he's not another Hussman from a performance perspective. And, their investing styles? Really, no comparison.
c

Thanks Charles. Although wondering if anyone here has been with the fund since inception, I can see where you are coming from and not trying to stir things up. But back to that topic we have discussed many times here, who is to say his early out performance wasn't simply a byproduct of luck?
Edit: Haven't many healthcare/biotech funds bested FAIRX over that 15 year period and with a much smoother ride?

Right, so here's the allure...

Basically, investing with Bruce the past 15 years means you have more than quadrupled your investment since FAIRX inception. You've earned 11.7% per year!
Who has beaten that? Suspect very few.
But you are absolutely correct about performance last 5 years and one year. But he does have strong 3 year performance, so he's not a Three Alarm Fund, if that is what you mean.
I certainly hope he's not another Hussman from a performance perspective. And, their investing styles? Really, no comparison.
c

Hi @fundalarm
I was reading through this thread again and looked again at PIMIX and its current holdings as of its last posting. This and its cousin, PONDX have a much different mix of holdings from the previous several years. The overwhelming majority of prior holdings were directed at the mortgage sector, both agency and non.
Disclosure: We hold PIMIX at this time; although it has had a rough start for this year, but rewarding for the past several years. I fully trust both managers and their skills with a multi-sector bond fund and the flexibility available to them.

Hi catch,
I am not fundalarm, but please bear with me.
As you know, PIMIX and PONDX are the "same" fund. The only difference is in the "share class" or expense ratio. PIMIX are "institutional" shares and have an expense ratio of 0.45% and PONDX are "D" shares and have an expense ratio of 0.77%. Other than that, no difference.
You are correct that PIMIX (or PONDX) has had a rough start, but rewarding in the past. You are also correct that Dan has reduced his exposure in the mortgage sector. That said, I am confident Dan Ivascyn is as bright and sharp as the past. However, where I have some reservation, is with his promotion with the departure of Bill Gross. With his increased responsibilities, will he be able to perform at the high level that we both are accustomed to? I have no idea.
This is how I am handling PIMIX. It's still positive YTD. If and until it goes negative by 1%, I am staying with it. Yes, Junkster has taught me a few things ;-)
Mona

>>>Volatility is needed to prosper.<<<<
Wrong, wrong, and wrong! I would say this guy is another Hussman except he is not losing money. It's just that over the past month, one, three, and five years he is massively under performing the S&P and his benchmark. I must have missed something when I was gone a couple years back but what is the allure of this guy and his fund - his ancient history performance perhaps?

Hi @fundalarm
I was reading through this thread again and looked again at PIMIX and its current holdings as of its last posting. This and its cousin, PONDX have a much different mix of holdings from the previous several years. The overwhelming majority of prior holdings were directed at the mortgage sector, both agency and non.
Disclosure: We hold PIMIX at this time; although it has had a rough start for this year, but rewarding for the past several years. I fully trust both managers and their skills with a multi-sector bond fund and the flexibility available to them.
And yes, high yield has been happier again these past several trading days. I can not confirm; but suspect some of the positive direction is related to more positive action in the energy sector and their junk bonds. I also feel that if crude prices remain below $60/barrel and especially around the $50 area for the next year or so, that there be both high yield defaults in this area; as well as stronger players in this area (fracking) to start to buy the companies that are on the edge, a consolidation.
Take care of you and yours,
Catch

Except for oil and gas issues, things are really looking up for junk rated companies.
http://blogs.barrons.com/incomeinvesting/2015/02/03/moodys-corporate-liquidity-rises-burned-by-energy/

Hi @fundalarm
I was reading through this thread again and looked again at PIMIX and its current holdings as of its last posting. This and its cousin, PONDX have a much different mix of holdings from the previous several years. The overwhelming majority of prior holdings were directed at the mortgage sector, both agency and non.
Disclosure: We hold PIMIX at this time; although it has had a rough start for this year, but rewarding for the past several years. I fully trust both managers and their skills with a multi-sector bond fund and the flexibility available to them.
And yes, high yield has been happier again these past several trading days. I can not confirm; but suspect some of the positive direction is related to more positive action in the energy sector and their junk bonds. I also feel that if crude prices remain below $60/barrel and especially around the $50 area for the next year or so, that there be both high yield defaults in this area; as well as stronger players in this area (fracking) to start to buy the companies that are on the edge, a consolidation.
Take care of you and yours,
Catch

Quick summary of today's call follows...
Classic Bruce Berkowitz.
Remains committed to investing in his best ideas.
Deeply undervalued stocks...far below assessed value.
Looks for large gaps between price and value.
Investing requires as much insight into psychology as it does accounting, along with patience and courage of conviction...until the crowd finally agrees.
Patience pays.
He has 100% of his savings invested in Fairholme funds and ideas. Employees continue to increase their investments in Fairholme funds.
He does not hedge. He does not short. "Not in our DNA." The closest thing to hedging is when he exits a position deemed at fair value. "Knowledge is our hedge."
Attempts to stay course under pressure, when he know he looks wrong...through inflows and outflows. Believes current shareholders know what to expect and are in it for the long term, five years or more.
He remains the sole asset allocator. He uses his staff of half a dozen analysts, along with outside experts to challenge his positions. His analysis staff continues to increase. He expects to remain leading Fairholme for life...at least the next 20 years.
His job is to find "fallen angels priced to fail," expecting Mr. Market to disagree with him at times.
He ties to focus on valuing positions. He tries to avoid predicting time-frames.
He believes risk is not volatility, which he recognizes some see as a proxy to risk.
Risk is potential for permanent loss of capital, adjusting for inflation.
Volatility is needed to prosper.
Perception and reality meet when price equals value.
Acknowledging returns can be "lumpy, but above average" over long run, besting SP500 index.
Remains committed to AIG, BAC, Fannie & Freddie, and yes, Sears Holdings...even, Eddie Lampert, who he knows is no longer regarded very highly by public.
AIG and BAC will continue to get stronger as Great Recession troubles get behind them. Both will benefit in higher interest rate environment.
He wove an amazingly detailed trail of folks once inside or now inside Treasury that likely aided FHFA take all Fannie & Freddie profits via conservatorship, though now deny Treasury involvement. He believes both agencies remain vital to nation and future growth and have made more money for government than any in history. Government can't be above legal scrutiny, and he remains confident he will win suit. The case is in discovery stage and Fairholme has been mandated to not disclose any of its material findings to public because of potential harm to government.
On Sears, he believes the real estate remains a "once-in-a-lifetime" opportunity. He denied that he is so committed to Sears that he can't turn back now. He and every real estate expert he has brought into review continue to see extraordinary value. The REIT, which he says he did not have details on, will likely help reveal true value. He also stated that he thought the retail losses were starting to stem.
He exits positions only when they no longer rise to top of best ideas at Fairholme.
He intends to post call transcript on-line.
And, if anyone has further questions, or thinks "he is full of it," he welcomes emails and opportunity to answer.

Hi Old Joe,
Thank you for the tip on Peter L. Bernstein’s “The Power of Gold” book. I fully trust your favorable endorsement.
I’m embarrassed to admit that I’ve owned a paperback copy of the book for years, yet never opened its cover. I bought it as part of a 3-volume set that included his “Capital Ideas” and “Against the Gods” works. I did read these titles. Later, he wrote numerous other financial books; I have read several of them. All are engaging and all act as excellent teachers.
Both referenced works are superb. I learned much about the financial world and investing from both of them. Today, I’m puzzled why I did not finish the trilogy. Perhaps I had no interest in gold at that time; not much has changed in the intervening years. But I accept your counsel and will put Bernstein’s Gold book on my reading list.
Thanks for your recommendation, and your advice to other MFO participants. Bernstein was a treasure and his legacy lives in this outstanding three volume set. All investors miss his wisdom, his clarity, and his wit.
Best Wishes.

Hi, Mo.
No problem. As I say in the recap of our conversation with Bernie Horn, a lot comes down to how you weigh 2008 and how you assess their response to it. It's a strategy that's worked exceptionally well in 15 of 17 years and really poorly in two. How important those two are (is worrying about 2008 the equivalent of fighting the last war? are we building Maginot-like portfolios) and how intelligently you think they've handled it strike me as major drivers of whether the Polaris products make it in.
In general, I'm agnostic on the first question and pretty pleased with the answers to the second but that's not necessarily definitive.
As ever,
David