From Guggenheim's Macro View
In his famous speech, Martin preceded his punch bowl comment by saying, on behalf of the Fed, “…precautionary action to prevent inflationary excesses is bound to have some onerous effects…” The flipside -- a lack of precautionary action by the Fed -- will have its own set of consequences in time. It is very difficult to say when exactly these will happen, but near-term indicators suggest the hangover won’t hit while you’re relaxing at the beach this summer.
Equity Markets: The Bigger they Come the Harder they Fall
The S&P500 has now gone nearly 800 days since a correction of more than 10 percent – the “meaningful” level for many analysts. The more extended the market becomes, the larger the eventual decline may be. Over the last 50 years, the longer the time between market corrections, the steeper the drop once the correction does occur.(chart)
http://guggenheimpartners.com/perspectives/macroview/the-hangover

Hi John and others,
I agree, we investors who have logged some time and have followed the markets through the years have an awareness of when good value can be had in the markets along with a feeling when valuations have become stretched. Currently, there are spots in the markets where I feel valuations are in bubble territory. One of them is the Russell 2000 Index where I believe the TTM P/E Ratio is in the 70’s. For me, this is just too richly priced and I have recently trimmed my allocation in small caps.
Old_Skeet

He is 74 in September, not nearing 80. (Why guess when we have the Internet?)
If I had spare moneys I would put some again into CGMFX, hoping for regression to some mean or other :) .
As for methodology and studiability thereof, see:
http://www.hedgefundletters.com/cgm/
Yes, he is the fund, and it has never been otherwise.
rjb, half my moves are great in hindsight. I thought in those gogo years that I did not want to be in a balanced vehicle even run by him. Recall that the '80s were almost invariably gogo years too; it was an amazing time for anyone who suffered through the 1970s. Anyway, as soon as a focused variant was announced, I was in bigtime. And after the r-e slump, or the start of it, I wanted to dive into CGMRX. I am out of all Heebner now and will stay out.

You made a great move in moving it all to CGMFX in 1997.
Yeah, he is famously nerdy and studious. Probably one of the most studious managers out there. Fully committed to investing. He has few other interests in life, and rarely takes a vacation. Probably works very long hours. IIRC, I think his wife may also be a mutual fund manager, at least that's what I read several years ago.
I remember the days when his CGMRX trounced everything in sight. No other real estate fund could even come close. I notice from his calendar year performances there too, that he is very often either in the top 10% or bottom 10%. Amazing. Somebody should undertake a serious study of his investing methodology. Unfortunately, he doesn't say enough in his annual and semiannual reports to really divulge.
Even now, he has a huge short position in Treasuries in CGMFX. Quite an investor.

davidmoran, M* lists the 15-year return of CGMFX as 14.52%. The fund inception date was Sept. 3, 1997. You "bailed a couple years ago", so if you got in at inception, you were in very roughly 15 years. An initial investment of $5,000 compounds to $38,211 over 15 years at a 14.52% return, with all distributions reinvested.
Anyone who got into this fund in time for the 2000 and 2001 performance hit a grand slam, and I'm sure you were one of them.
I think his 2000 and 2001 performance will go down in investing history as truly without equal. Same goes for his 2007 performance.
Perhaps just as surprising is how poorly he did in 2008, 2009 and 2011.
In 2011, he underperformed the market by over 28 percentage points!
In 2009 he underperformed the market by over 16 percentage points.
What a party in 2007, but then the hangover in 2008 and 2009.

"Timing in and out, trying to own that "perfect" fund and collecting hot funds just doesn't make sense to me anymore. It can be fun as a hobby, but it can be detrimental on returns. Play on the fringe, invest the bulk with a longer term vision. "
Well said and that's really it. Again, I'm not one of those people who says that their way is the only way - farthest thing from it. People who use technical indicators and all of the other factors - all that stuff fascinates me. 5+ years ago, I moved in and out of things constantly and I really feel that it was detrimental on returns. Gradually I did that less and less.
The thing is, less micromanaging doesn't mean I'm not enjoying investing. If anything, having a "best ideas"/themes portfolio and having all but a couple of things pay a dividend has actually made the entire effort less stressful and decisions less emotional and less focused on the day-to-day. I can just own a (to use examples) Canadian National Railway or Conocophillips and that's it. Collect the dividend. Love researching ideas, have ideas in mind if I want to put more money in the market. Otherwise, best ideas that pay a dividend and just sit on them.
I think you have a portion that can be still for "play", but I dunno, I don't even find myself that interested in that anymore. I was going to invest in a little Canadian pot stock the other day and instead went with Marine Harvest (MHG), which has a variable dividend but a very generous dividend policy and is one of the world's largest seafood companies.
GAINX is really appealing and probably what I'll continue to move the rest of the money from PQIDX to.
As for TOLLX mentioned above, that's a great infrastructure mutual fund. I own INF, which I think is a good CEF play on it and I just keep reinvesting that monthly div. There's also Brookfield Infrastructure (BIP), which is a pure play on infrastructure but results in a K-1 at tax time.

Umm, Bee, lack of volatility??? Volatility is typically measured by standard deviation, and CAMAX stdev is almost 3x higher than YACKX, 26 versus 9 over the last 3 years. It does have a winning upside/downside capture ratio, but boy are the ups and downs magnified.

I'd agree that over the long-term this fund has hot and cold periods, as well as above-average volatility. Still, not a bad fund for aggressive investors with a time horizon beyond short-term.

The following is an Associated Press news release quoted from the Washington Post.
(It is the second article down on the page.)
New SEC rules for money-market funds
"Regulators voted by a narrow margin to end a longtime staple of the investment industry — the fixed $1 share price for ­money-market mutual funds — at least for some money funds used by big investors.
The idea is to minimize the risk of a mass withdrawal from the funds during a financial panic.
The Securities and Exchange Commission also is letting all money funds block withdrawals when their assets fall below certain levels or impose fees for withdrawals.
The rules were adopted Wednesday by a 3-to-2 vote, culminating several years of regulatory haggling and false starts. They were opposed by one Democratic and one Republican commissioner.
The floating-price requirement applies only to prime institutional funds, which are considered riskier. They represent about a third of money-market funds, according to the SEC.
A run on a money-market fund during the financial crisis showed how risky the funds could be. The Lehman Brothers collapse in fall 2008 triggered the failure of the Reserve Primary Fund, one of the biggest money-market funds, which held Lehman debt. The Reserve Primary Fund lost so much money that it “broke the buck,” as its value fell to 97 cents a share."
— Associated Press

Avert your eyes. That's how (the only way) I turned $5k in this fund into $165k over the decades. And I bailed a couple years ago only cuz I was (forcibly) entering retirement.

Congratulations. Also, you had to have added new monies to that original $5k, not just reinvested distributions, to turn $5k into $165k

Avert your eyes. That's how (the only way) I turned $5k with this fund manager into >$65k over two decades. And I bailed a couple years ago only cuz I was (forcibly) entering retirement. Would it had been $50k waay back when. But then I would have been totally unable to avert my eyes. At least I have one my children in FLVCX.

"Over the past 10 years through May 30, Morningstar’s gold-rated diversified U.S. stock funds (previously called analyst picks) on average returned 8.1% annualized, an average of 0.3 percentage point per year ahead of Standard & Poor’s 500-stock index."
When you consider that the Index fund probably has had little to no capital gains distributions, meaning it is very tax friendly and has excellent after tax performance.........was that extra .3% even worth it?
It calls into question the whole issue of trying to pick funds that beat an index.
It worked quite well in the developed foreign markets arena, but sure not in the diversified U.S. stock funds arena

I was a commodities broker 40 years ago. Their returns (funds) since the 70s (allowing for the ones that vanished) is woeful. One glance at Morningstar's Commodity Broad Basket category for the past 3 and 5 years tells it all. Over the intervening years since I was a broker I heard all about shortages of this and that commodity but overall shortages always seemed to turn into surpluses and vice versa with the net result being a terrible long term investment vehicle. Probably the worst of the worst is silver. I remember how it was manipulated to over $50 an ounce in the spring of 1980. Look at it now.
Edit Just looked at a chart of GCC back to 2008. Again, pretty much says it all.

@bee: From U.S. News & World Report (Copy & Paste)
Regards,
Ted
As of July 03, 2014, the fund has assets totaling almost $256.35 million invested in 31 different holdings. Its portfolio consists primarily of shares of large companies.
Relative to its large-cap value peers, this fund is aggressive in a number of ways. First, as of the end of January, the fund owned shares in just 29 companies. This concentrated, high-octane portfolio pushes the fund's performance, for better or worse, toward the extremes in any given year. The fund also has a fairly large part of its portfolio invested in small-cap names, which tend to be more volatile than their large-cap counterparts. And it is heavily invested in the technology sector, in which stocks are more commonly associated with fast growth than deep value. Meanwhile, the fund's turnover ratio exceeds 200 percent. This points to an opportunistic management team that is willing to trade quite frequently. Lately, this strategy has paid off extraordinarily well. The fund launched in 2007, and finished 2009 and 2010 in the top percentile of Morningstar's large-value category. Through the first quarter, the fund was once again in the top percentile of its group for 2011. Its returns over that three-month period beat the average for its Morningstar group by 13 percentage points. Its trailing three-year returns, as of the end of the first quarter, beat those of the S&P 500 by a whopping 18 percentage points per year.
Another distinguishing characteristic is the fund's exposure to international companies. One of its top holding, Flextronics International, is based in Singapore. Another big holding, Bombardier Inc., is based in Canada. As for U.S. companies, the fund's largest domestic positions are Apache and United States Steel Corporation. The fund has returned 50.79 percent over the past year and 11.34 percent over the past three years.
Investment Strategy
The fund follows an aggressive strategy. Management looks for companies whose prices are artificially low, often due to short-term losses of momentum. Management follows a highly compact strategy, which tends to push the fund's returns toward the extremes. The fund is heavily invested in foreign companies and, relative to its peers, in small-cap stocks. Management does quite a bit of trading, as is reflected in the fund's high turnover ratio. Meanwhile, when management doesn't see opportunities, it is willing to sit on a fairly substantial cash stake.

"CGM Focus Fund is for investors who believe that a smart manager can beat the market by picking stocks"
"I've never found a manager or a fund that consistently beats the market, although many certainly try."
"Back in 2009, Morningstar's Christine Benz looked at the reported returns and investor returns for CGM Focus, which had produced off-the-charts performance for years. She calculated that in the 10 years ended July 31, 2009, an investment of $10,000 would have grown to $51,633.
But when she studied the fund's investor returns, she found that an initial $10,000 investment would have shriveled to $1,585.
The fund could legally report a 10-year gain (not annualized) of more than 400%. Actual investors, on the other hand, lost more than 84% of their money in that same 10 years.
This discrepancy, while it is extreme, isn't limited to this fund. It's typical of investor behavior in general, as a research company named DALBAR has reported over and over.
Over 10 years, this difference between $51,633 and $1,585 was all due to investors' performance chasing while they repeatedly mistimed their purchases and sales, Benz wrote.
As this shows, impatient investors who are intent on beating the market can turn a mutual fund manager's superb 10-year performance (17.8% annualized) into awful returns for themselves (annualized losses of 16.8% over 10 years!)."

Umm, Bee, lack of volatility??? Volatility is typically measured by standard deviation, and CAMAX stdev is almost 3x higher than YACKX, 26 versus 9 over the last 3 years. It does have a winning upside/downside capture ratio, but boy are the ups and downs magnified.

Interesting to chart china-centric funds or ETFs over the last three years. Here's FXI and MCHFX charted. They seems to be stuck in a sideways range with cyclical lows edging higher from previous cycle lows, but bump up against resistance on the high side:

Within three three year period the highs and lows seem to be consistently a little higher each cycle.

If this persists the next cycle high would be about 15% from today's price.

This fund, CAMAX, has always intrigue me with its agressiveness and relative success. I have notice some shorting going on in the portfolio,

and would like any insight readers have on shorting as a strategy for a mutual fund or an overall portfolio.
CAMAX seens to be using SSO as it's largest short position (-5.38% of portfolio wt). I would imagine there is some secret sauce to this strategy which again certain fund managers (in this case, Brain Barish) implenent.
Finally, CAMAX recent lack of volitility and performance over the last two years is impressive when compared it to funds like YACKX:

FYI: One of the most fascinating mutual funds to watch over the past 15 years has been CGM Focus Fund.
I disagree with most of the things this fund does. I don't recommend it to anyone. And yet sometimes CGM Focus (MFD:CGMFX) is an amazing performer.
Regards,
Ted
http://www.marketwatch.com/story/top-funds-shareholders-missed-the-party-2014-07-23/print?guid=58338099-4139-4521-8BD8-0B535591F0C6
M* Snapshot Of CGMFX: http://quotes.morningstar.com/fund/cgmfx/f?t=cgmfx
Lipper Snapshot OF CGMFX: http://www.marketwatch.com/investing/fund/cgmfx
CGMFX Is Ranked # 248 In The (LCB) Category By U.S. News & World Report:
http://money.usnews.com/funds/mutual-funds/large-blend/cgm-focus-fund/cgmfx

If you believe, as MFLDX manager Michael Arronstein does, that the Fed has screwed up again and that we are overdue for a correction, or even if you do not agree, the fund is designed to be a contrary holding. There are times it will underperform (like the last 12 months). Arronstein is net short on bonds, short emerging markets, consumer staples, utilities, and the euro. A very high "cash" position, too. I am not one who expects all of my holdings to perform in a similar manner. MFLDX has been a terrific long-term hold, and I would not be too hasty in bailing just because it is underperforming now. The manager has made some pretty incredible calls over the years, and the fund uses a macro-economic overlay in helping to make decisions. While I am not a fan of the big inflow of dollars to the fund, I am willing to give Mr. Arronstein considerable time. If he is right, the fund will look darned good in a correction.

Hmmm... We don't seem to want to give Hussman considerable time. Or how much time is considerable? Looks to me MFLDX is where HSGFX was at one time, and we all know how that has turned out.

First link, zippo !!
2/nd link , it brings tears to my eyes, to think of all the extra I paid in fees over the years. Good read if you're just getting started in 401-k's
Have a great week, Derf