@LLJB: Thanks. Great comments. Like Ol Skeeter, I wasn't going to say any more either.
However, with reference to your new car analogy, I think that's one reason Scott's threads may appear to some to focus only on the funds that were recently bought. (the "unlimited bankroll" comment comes to mind). When you buy a new car, that's what you're prone to think about and talk about to others. The old one you traded in is "history" and you're inclined not to mention it unless somebody asks about it. Human nature. ..... Plus, a lot of folks have built up some pretty large cash positions in recent years as stocks have soared.

+1, Catch

Not to the messenger; but to the writers of the article. Man, I'm glad I am not in this line of work; requiring to pump out something, anything.
Did it really require two people to put together this piece; and what did anyone learn???
We learned that junk bond holdings went down, along with the broad U.S. equity market recently when some folks were a little bit shaken. Apparently the marketplace remains on the 1-3 month investment return(s) range, eh? I also don't recall an explanation related to the title.
The title could have been, "What have your investments done for you in the past 1-3 months?" Holy crap. with this type of article; as Robin would say to Batman.
My 2 cents for HY vs, well; the SP-500/ SPY.
Typical for the HY versus the SPY measurements for the past 5 years is that for every 1% move in SPY, HY bond sectors (active managed) move .25 - .33%; up and down. Plain and simple.
Yes, there are times when these numbers do not follow this pattern.
A quick view of a plain jane HY bond fund; and not even the best of the bunch, is to review SPHIX vs SPY.
Total returns:
Jan, 1999 - Oct 22, 2014
SPHIX = + 166%
SPY = + 107%
The nasty period, Oct 2007- March 19, 2009
SPHIX = - 24%
SPY = - 48%
Data source is Stockcharts.com.
Your mileage may vary.....
Regards,
Catch

Hi LLJB,
I was not going to make continued comment ... about my investmet style.
What you wrote about your father was much in of the same as to how my father raised me. I believe they both were wise gentlemen. I lost my father about ten years ago but his teaching and lessons I learned form him about life still remain a big part of my life today. One of them was to learn from others but think on your own. I take great pride in being able to write this as you probally did about what you wrote.
Sincerely,
Old_Skeet

BPLSX has served me well over the years and I'm hoping it will continue to do so during the next market downdraft.

It would seem to me that judging any fund based on a one-week period is very short-sighted. Yes, the premise is that long-short funds should have some upside participation and should have limited downside. Just what those amounts are is certainly open to discussion. A top equity fund manager said this week that the market volatility on Wednesday last week was another 'flash crash' that will result in an investigation, caused by hedge funds and other traders begin caught in the euro/dollar speculation. I would not expect my long-short fund to anticipate something like that. On a longer time horizon, however, I would and do expect L/S managers to navigate the markets reasonably well.
The group of 30+ L/S funds we track use all kinds of strategies, and only about half of them have 3-year records, and fewer than 10 have 5-year records. Those with 10-year records held up much better than the S&P 500. As I look at a handful of L/S funds with long-term records, it would appear that investors should use these with the understanding that they will underperform, sometimes significantly, when markets are in a strong bull trend. For me, that is the trade-off. The crux is how they handle real bear markets. Because we have not had one of these since 2008, it is difficult to evaluate the large number of L/S funds that have come to market in the last 1-2 years. They could look pretty good now, but they could be real stinkers in a long bear market.
Selecting the BEST long-short fund is problematic, therefore. Those with long-term measurable records include GGUIX, CLSIX, GATEX, HEOZX, MFLDX, FMLSX. It is very easy to look at some of the newer funds and assume the current performance is indicative of long-term expectations. That would be a mistake.

Not to the messenger; but to the writers of the article. Man, I'm glad I am not in this line of work; requiring to pump out something, anything.
Did it really require two people to put together this piece; and what did anyone learn???
We learned that junk bond holdings went down, along with the broad U.S. equity market recently when some folks were a little bit shaken. Apparently the marketplace remains on the 1-3 month investment return(s) range, eh? I also don't recall an explanation related to the title.
The title could have been, "What have your investments done for you in the past 1-3 months?" Holy crap. with this type of article; as Robin would say to Batman.
My 2 cents for HY vs, well; the SP-500/ SPY.
Typical for the HY versus the SPY measurements for the past 5 years is that for every 1% move in SPY, HY bond sectors (active managed) move .25 - .33%; up and down. Plain and simple. (These numbers are from personal experience with our holdings during this period.)
Yes, there are times when these numbers do not follow this pattern.
A quick view of a plain jane HY bond fund; and not even the best of the bunch, is to review SPHIX vs SPY.
Total returns:
Jan, 1999 - Oct 22, 2014
SPHIX = + 166%
SPY = + 107%
The nasty period, Oct 2007- March 19, 2009
SPHIX = - 24%
SPY = - 48%
Data source is Stockcharts.com.
Your mileage may vary.....
Regards,
Catch

I agree@scott, the restaurant business is a tough one. Most don't last the first year.
I guess my comment is based on the experience of watching CNBC get ahold of a stock and start reporting on it ad nauseam. Of course how many times did they report on GE, the parent company of the network? Some might call it pumping the stock. Never mind that they had a big chunk of GE in their 401k's.

CNBC did push GE and now they talk favorably of Comcast. CNBC does pump certain stocks (Jim Rogers called CNBC a "PR agency for stocks" and whatever one's opinions of Rogers are, that's not an entirely inaccurate statement, really.)
There's also the video of Cramer from The Street a few years back where he talked about the idea that hedge funds will call up CNBC's floor reporters with a view and that view is pushing their book. It wouldn't surprise me if it happens often.
CNBC pushes whatever is talked about often and whatever they think is of interest to retail. Things like social media stocks. Rarely do you get any discussion of foreign stocks at all and discussion of unheard of names has become rarer and rarer. I was stunned when one of the anchors referenced the band Fugazi, speaking of things most probably haven't heard of.
The video in question (from Youtube:) While people have their opinions on Cramer and have probably seen this video, it's worth watching from the standpoint of I think it's the reality that people have to at least kind of keep in the back of their mind.

FYI: Few of today's top-yielding dividend mutual funds have been around for 10 years. Few are beating the S&P 500 year to date. And none of the top yielders have higher returns than the S&P 500 in the past 10 years.
For example, Alpine Dynamic Dividend Fund leads the pack with a 12-month yield of 6.28%, far above the S&P 500's 1.98%, according to Morningstar data.
Regards,
Ted
http://license.icopyright.net/user/viewFreeUse.act?fuid=MTg1ODc5MzM=
Enlarged Graphic: http://news.investors.com/photopopup.aspx?path=WEBlv1023.gif&docId=723101&xmpSource=&width=1000&height=1152&caption=&id=723098

Personally, I've noticed some comments about the threads I occasionally do before this thread and it kind of gets to a point where it's certainly not upsetting but a little surprising and kinda "well, fine, that's not something that has to be done". The threads were intended to encourage discussion (because I do like this forum and I guess I'm of the thought process that I'd like to see it be more inclusive and less a little club for the same group of 10-20 people) and were open threads on a discussion forum. I'm glad that people enjoy them and I'll continue to do them or anyone else is welcome to start them whenever they see fit.
The other thing that I think may be a little bit of an issue is, what are you (and I direct this to everyone) looking to get out of this forum? What do you expect it/want it to be? Maybe that's a discussion to have.
Personally, feel that when I make a decision to invest in something, I'm responsible for that decision. For me, nothing here is going to be an "actionable idea" in and of itself, ever - I may find someone's idea interesting and if I do, I'll do the research and then I'll make that decision. That should be for any investment idea from someone on the internet, whether here or on seekingalpha or a morningstar article or whereever - you have to do the research and decide whether or not that investment is something that is right for you and understand it yourself rather than go on what an article says.
To me the whole idea of the threads wasn't about actionable advice as much as it was some manner of "small talk", where people could just kind of throw out what they like. Rather than multiple threads of people talking about what they currently like/are looking at, there could be something of a chat (once every week or perhaps two) within the larger chat forum.
"Is there a reasonable time period for our ideas to pan-out? Or will we be held up to scorn if the investment doesn't make money next week?"
Well, then it becomes something else, where we're writing articles with detailed recommendations and specific time periods. This, combined with the fact that many of us are very different, different risk tolerance, different time horizons, etc. I buy with the intent of holding for possibly years. Others may trade by the day. I don't disagree with the various methods that people use on this board (I'm of the mindset that hey, if that's working for you, great) and, if anything, am fascinated by the diversity of ideas and approaches.

Futures are a very small portion of my portfolio and its my play money. Most of the time I make bets based on a combination of fundamental and technical aspects of whatever I trade. Right now I'm long Canadian $ and short Euro and keeping my eyes open for opportunities to short Yen and 30 Year Treasury Bonds.
Finally, I have a few investments in private equity that have become a much larger percentage of my portfolio than they should be but it shouldn't be too much longer before I find out whether my thought process was right or not.

What you're doing sounds very cool. I own a fair amount of private equity and I view it more as the desire to have continual exposure to that asset class with the understanding that it is volatile and does go through cycles. Despite the variable nature of the dividend from the private equity companies, I'm largely paid to wait with it.

FYI: Low interest rates have led many investors to buy high-yield funds holding below-investment-grade, or junk, bonds.
It’s a strategy that has paid off over the past few years. But lately, investors have seen the other side of these high-yield bond funds: negative returns. As the stock market turned volatile, the funds lost money on average over the past month and three months, even as high-quality bond funds delivered positive returns
Regards,
Ted
http://blogs.wsj.com/totalreturn/2014/10/22/know-what-junk-bond-funds-are-and-arent/tab/print/?mg=blogs-wsj&url=http%3A%2F%2Fblogs.wsj.com%2Ftotalreturn%2F2014%2F10%2F22%2Fknow-what-junk-bond-funds-are-and-arent%2Ftab%2Fprint&fpid=2,121

Rob Arnott and his firm, Research Affiliates is the source of that chart showing the expected 10-year returns of different asset classes.
Rob Arnott has managed the Pimco All Asset All Authority fund for 11 years, since inception. So how well has he done implementing his firms' forecasts into a real life portfolio? It appears that he can invest in anything, anywhere with this fund, PAUIX.
Above, PAUIX. Below, the S&P 500 over the same timeframe.

Has been discussed numerous times over the years.................that folks should likely regard what is put in place on these pages; "as suggestions or for your further review".
This includes the well known names among the Wall St. crowd, Phd'd. economist folks and other related studies/theories; who/that continue to have bouts of "cranial-rectal inversion", regarding the world of investments.
Time to leave.....

Does Ritholtz have the prediction he made ten years ago so we can compare?
I agree with MJG and Old_Joe.

Wait a second. Their YTD performance number is flat. If 8.13% is being charged means they made that return. Something is not right. Please see below note in the prospectus

The Adviser has contractually agreed to reduce Management Fees and to absorb the Fund’s other operating expenses (for the life of the Fund) to the extent necessary to limit annual ordinary operating expenses to an amount not exceeding 1.90% of the Fund’s average daily net assets. Management Fee reductions and expenses absorbed by the Adviser are subject to repayment by the Fund for a period of three years after such fees and expenses were incurred, provided that the repayments do not cause the ordinary operating expenses of the Fund to exceed the 1.90% limit. Ordinary operating expenses includes all Fund expenses except brokerage, taxes, borrowing costs such as interest and dividend expenses on securities sold short, Acquired Fund Fees and Expenses and extraordinary expenses. The Adviser’s right to receive repayment of any Management Fee reductions and/or expense reimbursements terminates if the Adviser ceases to serve as investment adviser to the Fund. This agreement may be terminated by either the Fund or the Adviser upon not less than 60 days prior written notice to the other party, provided, however, that (1) the Adviser may not terminate the agreement without the approval of the Board of Trustees, and (2) the agreement will terminate automatically as to the Fund if, and when, the Adviser ceases to serve as investment adviser of the Fund.

I don't think investors are paying 8.13%

@00BY, thanks for posting the very interesting study!! The numbers may be a little surprising but not too much. When I think about the SAI's I've looked through, its not very often I see a pension plan or endowment on the list of 5% owners. It's almost always the Schwab's, Fidelity's, TD Ameritrade's, E*TRADE's and Vanguard's that own a very large portion of fund assets and in most cases they would represent households through company sponsored 401K plans, IRAs or individual accounts. I do guess, however, that Grandeur Peak's breakdown is not reflective of the same split. It could be that the 19% Institutions number are non-households according to the study. It isn't totally clear, though, whether these numbers are based on where they get their assets or whether its the number of investors regardless of the assets they invest.
I did discover a few interesting facts based on this study though. I'm a little shocked that 53% of people who own mutual funds are not college graduates (47% are). I know that 50 or 60 years ago a college education wasn't as common as today, but it strikes me as a shocking number.
It seems a little ironic that 47% invest in mutual funds to reduce income taxes. I wasn't actually aware that mutual funds reduced taxes. Maybe its just a misuse of the words, since they may consider the mutual funds held in a 401K plan or IRA as reducing their taxes, when in fact its the IRA or 401K that affects taxes, not the mutual fund. Otherwise, I think the only way a mutual fund lowers taxes is by having a lower return or higher expenses than if you invested in some other way, and neither of those seems like a good thing.
I also found out my wife belongs to a different generation that I do, barely, but that explains a lot! :) I knew she was young, but I didn't realize she was that young.

@Old_Skeet My earlier comment may have (unintentionally) come off as being critical and I apologize for that. What I meant to say is that I appreciate all comments made in this forum and incorporate them into my decision making process.
One of my regrets in my investing career is that I spent too much time (and money) trying to uncover star fund managers and time the market. Moving more and more into ETF indexing, particularly in the domestic, REIT and emerging market areas. Bonds are still actively managed with many of the managers mentioned here (PIMCO, Gundlach, Fuss, Gaffney). International holdings are about 50/50 index ETFs/actively managed.
Have a small percentage allocated to commodities...probably spent too much time listening to those that Paul Krugman of the NYT would call "inflation scolds". Have some PAUDX, but think Arnott is a better academic than investment manager. Use Target Date funds...relatively easy to pick out the better long term performers there. Have an allocation to alternatives, which I call my fun money.
Would like to find some "defensive" mutual funds, but not convinced there is such a thing. Yacktman funds come to mind. Yes, he did do well in the 2007-2009 downturn, but does that mean he will do well in the next downturn? Has done just average in the last 5 years.
Ten years ago I would have laughed if someone said I couldn't uncover managers who would "beat the market" and do better than average. Now, I'm not so sure.

I'm not a coffee drinker, but Starbucks is - I think - successful in large part due to the leadership of Howard Schultz, who I do think is one of the great CEOs (and I liked his books.)
Chipotle had huge growth, but a weaker-than-expected forecast. I don't get Chipotle (and I look at a number of Yelp reviews for locations and they don't get great reviews), but the growth they're having continues to roll on - it just becomes do you want to buy it at nearly a 50 p/e.
What they're doing in terms of introducing new concepts (something McDonalds should have done ages ago instead of resting on the fact that it's McD's) is smart. I wouldn't invest in it (I have to really care about something/have an interest to invest, among other things), but I think they're doing the right things. McDonald's would have been smart not to have sold its stake in Chipotle years ago.
I think what's more troubling that no one really talks about is how obliterated a number of the restaurant IPOs that people hoped were the next Chipotle got. Noodles and Co probably the biggest example:
http://finance.yahoo.com/echarts?s=NDLS+Interactive#{"range":"max","scale":"linear"}

>>>>>I think a lot of this lengthy discussion stems from Scott's "What are you buying ... selling ... pondering" threads. While I find the comments in those threads interesting, I've never seen them as meant to give actionable advice. If that's the intent, it might be a good idea for future contributors to include (1) an explanation of why they took the action, (2) the percentage of their overall holdings so invested and (3) the specific time frame (measured in weeks, months, or years) before which they expect to realize a profit. For my part, I'll refrain from mentioning any sales or purchases I've made in those threads in the future. <<<<<
Couldn't agree more Hank!!! Some here have a seemingly unlimited bankroll and hold just about every listed stock and fund in the universe.

"On this board, I look for well reasoned actionable advice."
There's lots of advice here. Most I dare say sounds reasonable. Do I consider it "actionable"? Emphatically No. That's unless your time horizon is measured in decades. (Some of the best actionable advice in that regard pertains to buying low cost index funds.)
Shorter term? ... Nobody really knows what will happen tomorrow or next month. Even a great house like T. Rowe Price cautions us in writing that the fund we're about to purchase may lose money. And the big fellas earning millions a year at the hedge funds don't get it right every time either.
I admire Ol Skeet's willingness to spend so much time explaining his approach and trying to make it understandable. I'd never be able to articulate mine so clearly. As many know, Skeet's father was a long time investor and taught him much. So he's literally spent a lifetime watching markets. I'm sure many things he does are second nature to him, in the same way we learn to drive.
I think a lot of this lengthy discussion stems from Scott's "What are you buying ... selling ... pondering" threads. While I find the comments in those threads interesting, I've never seen them as meant to give actionable advice. If that's the intent, it might be a good idea for future contributors to include (1) an explanation of why they took the action, (2) the percentage of their overall holdings so invested and (3) the specific time frame (measured in weeks, months, or years) before which they expect to realize a profit. For my part, I'll refrain from mentioning any sales or purchases I've made in those threads in the future.

Hi all,
In review of my income sleeve within my portfolio which consist of the following funds ... EVBAX, LALDX, LBNDX, NEFZX, THIFX and TSIAX ... it appears the managers have now lowered their duration and the sleeve currently has a duration reading of 3.4 years. In addition, its yield is 3.6% and thus far it has had a total return of 4.3% ytd.
It appears that the manages are doing their job in managing interest rate risk while at the same time providing a good income stream with a yield of about 3.6 percent along with a decent total return at 4.3% thus far this year.
Score me, a happy camper.
Old_Skeet