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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • Janet Yellen supposedly Biden's pick for Treasury Secretary
    >> Basically if you're under 60 and healthy there's a 99% chance you'll live.
    May be. What's the cite for this?
    https://covid.cdc.gov/covid-data-tracker/#demographics is interesting.
    Of course you know that QoL is majorly impaired in many survivors.
    Two months out of date:
    image
    You separate economic impacts from public health. No one with sense does that; they are not severable in any way. If we had appropriate disaster relief, we would not be having such a bootless discussion.
  • Janet Yellen supposedly Biden's pick for Treasury Secretary
    @wxman123 And you are ignoring my point that by the measures that matter most regarding health, Newsom's covid response has been successful and not at all "pretty dreadful overall" as you stated. Would you admit he has been successful relative to other states?
    Would I support a total lockdown is a misleading question in that regard because Newsom hasn't done a total lockdown:
    https://covid19.ca.gov/stay-home-except-for-essential-needs/#regional-stay-home-order
    Under the Regional Stay Home Order Can We Go Outside?
    Members of the same household are encouraged to maintain physical and mental health by safely going to a park, a beach, hike, walk, or bike ride with members of their own household. Californians are also encouraged to keep connected with loved ones virtually.
    Limiting mixing and movement of individuals from different households is critical in order to stop the transmission of the virus.
    First, the order isn't for all of California but for any region that "falls below 15% ICU bed availability, the Regional Stay Home Order goes into effect." But secondly, what really bothers you if this aspect of Stay at Home does is not that people are forced to stay inside--they can still go outside--but that they can't congregate in large numbers at businesses. That's it, the making money part that seems to upset the GOP.
    But also the would-I-support-a-total-lockdown question is a false one because like the California order itself, the answer really depends on the infection rate, the availability of medical treatment, and the length of the lockdown. My answer is yes I would support a total lockdown if conditions were severe enough and no I wouldn't if they weren't that severe. But it's a false question because no U.S. politician has enforced a "total lockdown."
    What really bothers you is the inability to make as much money from businesses as before. And you are willing to sacrifice lives for those businesses. The appropriate anology is to the movie Jaws and the mayor who refuses to shut the beaches down when a shark is killing people. It wasn't human life he was concerned about. It was the loss of the summer business. If he shut the beaches, people could still leave their homes, just not congregate in the water where the shark was.
    And this anology is especially relevant in relation to DeSantis in Florida, given the beaches there and his lousy response to the pandemic. This is where he is ethically now: https://aol.com/entertainment/florida-gop-official-resigns-protest-075650944.html
    Even members of his own party are abandoning him as he tries to suppress the truth.
    The Jaws analogy is even relevant on an economic basis, because it's fair to say that from a long-term economic perspective shutting down the beaches temporarily would have been a better idea. The brand value of the beach was severely damaged by keeping the beaches open because tourists will think after the attacks "That's the beach where ten people died from shark attacks because the greedy mayor cared more about business interests than human life." They won't want to go to that beach even after the shark is gone. So, in the short-term business is lost from the shut down and the local economy is hurt. But in the long-term, it's actually better for the business's brand to have a pristine safety record. It won't have the stain on its record of unecessary deaths.
    To put it in Covid terms, I have no desire to visit Florida as a tourist right now and probably won't for a long-time even after Covid is gone because of DeSantis's terrible response.
    The length of your reply doesn't hide the fact that you are simply picking a line of covid restriction with which you agree. Within that band you are willing to accept deaths that would not occur with greater restriction, and villainizing those who have a different perspective. Sure, you say you would support a full lockdown under "severe" enough conditions. So would everyone, but using conditions they define as "severe" enough.
  • Janet Yellen supposedly Biden's pick for Treasury Secretary
    Additional side effects are surfacing with regard to the Pfizer vaccine that were not observed during trails (individuals with allergy sensitivities at greater risk to negative side effects). This may slow its deployment.
    Allergy-risk-Pfizer-jab-TWO-patients-fall-ill
    MA reporting today that 64% of all state deaths are still occurring in senior care facilities. Many of these residents leave the care facility to be treated by area hospitals and then are being sent back to the facility where special wings are being setup when possible. Contracting Covid-19 complicates the already compromised health of this population.
    Using MA data, that means 36% of Covid-19 related deaths are occurring outside of these facilities. Again, do some / most of these individuals often have compromised health issues? The vaccines (with all there potential side effects) may be the best response for both of these populations.
    We hear a lot about positivity rates which is important when dealing with the problem of transmission, but does anyone have numbers on the death rate of "healthy" individuals? Herd immunity...which is a thing... will play a part in this population because we mingle more in herds.
    Seniors home residents seem to be our top priority going forward, then our general population that have preexisting conditions.
    coronavirus & preexisting conditions
    Masks, vaccines, and common sense behavior all play a part for the rest of us
    As far as the economy is concerned. Senior facility have little impact. E-commerce has entered into a perfect storm and should emerge stronger than ever. Home based businesses will grow. Small businesses (in- store retail) are being tested, while big box retail gains market share. Travel and leisure businesses are in full stress test mode. For individuals whose jobs are going away we'll need re-training programs, Shifting resources toward construction and infrastructure projects would make good sense.
    Basically if you're under 60 and healthy there's a 99% chance you'll live. As you get older the risk of death increases greatly.
  • Building Downside Protection For Retirees

    I have been using great risk reward funds since 2000 but in the last several years and especially since retirement I just sell to cash when I see extreme market conditions. It's the only sure way to protect my portfolio. When a black swan shows up is years such as 2008,2009,2020 there is no way to know what will work and what used to work before may not work in the future.
    Thank you, FD1000,
    I agree that each bear market is different and they are less predictable with massive quantities of stimulus. I reduce my exposure to stocks to 25% following Benjamin Graham’s guidelines late in the business cycle. MFO has been great to identify lower risk funds. I am pleased with the low downturns in my portfolio which is rising slow and steady.
  • Building Downside Protection For Retirees

    The only concern I have with your suggestions is Hussman. Many of us were quite convinced Hussman knew what he was doing with HSGFX in the run up the 2008 but his fund did especially poorly since, and I can't say I feel comfortable believing him now. There is very little recent data ( since June) on HSTRX even on his web page.
    Thank you for your insights. I agree on most of Hussman’s funds. HSTRX kept coming up in MFO screens for funds with good longer term performance. I ran it through Portfolio Visualizer and it has performed well during downturns. It stumbled some around 2012, QE, I think. I read the prospectus when I bought it. I like it for a tactical, defensive position. See the link below.
    https://money.usnews.com/funds/mutual-funds/tactical-allocation/hussman-strategic-total-return-fund/hstrx
    My core holdings are traditional, low cost-diversified funds, but I also own a large minority in the funds shown in my articles.
    I am a member of AAII, but don’t buy into the philosophy either. The portfolios are too volatile for me.
    Best wishes for the holidays.
  • Building Downside Protection For Retirees
    Hi Lynn, great article.
    I have been using great risk reward funds since 2000 but in the last several years and especially since retirement I just sell to cash when I see extreme market conditions. It's the only sure way to protect my portfolio. When a black swan shows up is years such as 2008,2009,2020 there is no way to know what will work and what used to work before may not work in the future.
    I have several criteria but the easiest one is the VIX, when...VIX>30 get ready...VIX>35 start selling...VIX>40 rapid selling. The catch of course is not to stay out for longer term. I have been out of the market about 3% of the times in the last 10 years.
    As you said correctly: "All Weather" Permanent Portfolio created by Harry Brown in 1980's. It was made of four equal weighted assets of gold, cash, stocks, and long term treasuries. It's performance has worked well in some environments and not others. This portfolio performance was poor since 2010 (PRPFX isn't exactly it but close enough) compared to VBINX(60/40) and VWINX(40/60) see (link).
  • Bond mutual funds analysis act 2 !!
    Does M* calculate fund metrics (for example risk and volatility measures or value and growth measures) themselves or is data provided by a third party?
    M* site shows you several risk metrics see (this) or the old site was easier where you can compare several funds see (this)
    PV is a great site with many metric and you can run different scenarios and trading dates, see (this)
  • Is Oakmark going to offer a retail bond fund?
    I appreciate all the comments and observations about how OAKBX has altered its portfolio (both in allocation and in types of bonds) over the past several years. This seems to be in response to the changing fixed income market (interest rates low and presumably bottoming out though not rising).
    Interestingly, OAKBX is the only Oakmark fund that M* does not like (rated neutral). So while M* does not see significant changes happening on the equity side, somethings must have changed to cause the equity funds to degrade so much.
    (M* still loves long time managers Nygren at 2*, gold-rated, OAKMX; Herro at 2% gold-rated OAKIX and 1* bronze-rated OAKEX; McGregor at 2*, silver-rated OAKGX.)
  • Building Downside Protection For Retirees
    I too want to thank you for all your hard work and interesting ideas. As a recent retiree I am concerned about the potential for significant losses early in retirement that will never be made up, having lived through 1974 and later bear markets. Many other portfolio recommendations ( ie AAII) claim that there has never been a five year period of negative returns on various indices so if you just can leave your equity position alone and have a 5 year supply of resources, don't worry.
    My math show the negative period is in fact longer but it really depends on "hanging on" as you see your net worth drop by 30 or 50%. This works far better at age 25 or 35 than 65, believe me, and almost all of the previous periods did not start from such insane valuations.
    The only concern I have with your suggestions is Hussman. Many of us were quite convinced Hussman knew what he was doing with HSGFX in the run up the 2008 but his fund did especially poorly since, and I can't say I feel comfortable believing him now. There is very little recent data ( since June) on HSTRX even on his web page. The data on M* is equally unhelpful.
    As for Gold, I have owned a small % for years as inflation hedge. Seems to work OK although some mining stocks would pay a dividend
  • Compliment to HY muni

    I'm looking to add an I/T muni fund to compliment my HY muni, OPTAX (only bond fund owned in my taxable acct). I have a fair amount of cash (in pct terms) that obviously is doing nothing. I'm at my target stock-to-bond/cash allocation, but not sure it's wise to hold onto CASH or increase my stock percentage, so the next best thing, i presume, is to put some CASH to work, somewhere. I've look into "alternative" investments, but not sure the added risk and uncertainty is what i am looking for.
    I prefer a below 1 beta and low/below avg risk profile.
    I've narrowed it down to: BBIIX (BBH); BMNIX (Baird); WITAX (Segall Bryant & Hamill)
    They all have solid metrics, including sub-four SD. WITAX appears to have slightly lower credit quality but also has slightly out-performed the other two, but for the most part, most metrics a very similar.
    Any thoughts, suggestions or opinions on these or other investments that i should consider and investigate, would be greatly appreciated!!!
    Thx,
    Matt
  • Perpetrators of huge distributions
    It looks like HFCSX has a history of not being tax efficient. Its tax cost ratio, not counting the current distribution (figures are through Nov. 30th) is 2.29% for one year and 2.18% for three years. Though funds in its category, MCG, are typically not tax efficient. On average they lost 1.85% to taxes annually over the past three years.
    Last year HFCSX distributed about 10% of its NAV (click on 2019 box here). 2020 was a great year for growth funds, so one would not be surprised to see cap gains distributions double or triple that of last year's.
    For example, one of the handful of other mid cap growth funds with mid cap blend portfolios, HMDYX, had a cap gains distribution in 2019 of 2.28%, while its estimate for 2020 is 10.62%.
    "They don't deserve to have my funds."
    Is it because of their cap gains distribution this year, though last year's 10% was tolerable? Or is it at least in part because of the fund's recent anemic performance of 4.45% YTD? None of the MCG funds with MC blend portfolios did better than average for the category; still HFCSX's performance was way under that of its peers.
    "I'll be liquidating in 30 days."
    If you're worried about wash sales, your net gain (or loss) will come out the same regardless since you're liquidating. Or are you thinking about postponing any remaining gain in your shares until 2021? (That would be 23-24 days.)
  • Janet Yellen supposedly Biden's pick for Treasury Secretary
    Additional side effects are surfacing with regard to the Pfizer vaccine that were not observed during trails (individuals with allergy sensitivities at greater risk to negative side effects). This may slow its deployment.
    Allergy-risk-Pfizer-jab-TWO-patients-fall-ill
    MA reporting today that 64% of all state deaths are still occurring in senior care facilities. Many of these residents leave the care facility to be treated by area hospitals and then are being sent back to the facility where special wings are being setup when possible. Contracting Covid-19 complicates the already compromised health of this population.
    Using MA data, that means 36% of Covid-19 related deaths are occurring outside of these facilities. Again, do some / most of these individuals often have compromised health issues? The vaccines (with all there potential side effects) may be the best response for both of these populations.
    We hear a lot about positivity rates which is important when dealing with the problem of transmission, but does anyone have numbers on the death rate of "healthy" individuals? Herd immunity...which is a thing... will play a part in this population because we mingle more in herds.
    Seniors home residents seem to be our top priority going forward, then our general population that have preexisting conditions.
    coronavirus & preexisting conditions
    Masks, vaccines, and common sense behavior all play a part for the rest of us
    As far as the economy is concerned. Senior facility have little impact. E-commerce has entered into a perfect storm and should emerge stronger than ever. Home based businesses will grow. Small businesses (in- store retail) are being tested, while big box retail gains market share. Travel and leisure businesses are in full stress test mode. For individuals whose jobs are going away we'll need re-training programs, Shifting resources toward construction and infrastructure projects would make good sense.
  • Perpetrators of huge distributions
    Permanent Portfolio Aggressive Portfolio has estimated a $10+ distribution; some of T. Rowe Price Funds (New Horizon and New America Growth) have estimated large distributions also. Grandeur Peak Micro Cap Fund has estimated a total payout of about $1.50.
    Here is M*'s November article with fund families and their largest offenders:
    https://www.morningstar.com/articles/1009922/capital-gains-roundup-2020-edition
  • Perpetrators of huge distributions
    My worst offender this year is BCSIX despite M* saying its turnover is only 17%. My other two Brown Capital funds are really light on the distributions, however.
  • Is it worth chasing this funds performance ?
    @wxman123 & @dtconroe : Thanks for your replies, more is better!
    Enjoy your day & Stay Safe , Derf
  • Janet Yellen supposedly Biden's pick for Treasury Secretary
    @wxman123 And you are ignoring my point that by the measures that matter most regarding health, Newsom's covid response has been successful and not at all "pretty dreadful overall" as you stated. Would you admit he has been successful relative to other states?
    Would I support a total lockdown is a misleading question in that regard because Newsom hasn't done a total lockdown:
    https://covid19.ca.gov/stay-home-except-for-essential-needs/#regional-stay-home-order
    Under the Regional Stay Home Order Can We Go Outside?
    Members of the same household are encouraged to maintain physical and mental health by safely going to a park, a beach, hike, walk, or bike ride with members of their own household. Californians are also encouraged to keep connected with loved ones virtually.
    Limiting mixing and movement of individuals from different households is critical in order to stop the transmission of the virus.
    First, the order isn't for all of California but for any region that "falls below 15% ICU bed availability, the Regional Stay Home Order goes into effect." But secondly, what really bothers you if this aspect of Stay at Home does is not that people are forced to stay inside--they can still go outside--but that they can't congregate in large numbers at businesses. That's it, the making money part that seems to upset the GOP.
    But also the would-I-support-a-total-lockdown question is a false one because like the California order itself, the answer really depends on the infection rate, the availability of medical treatment, and the length of the lockdown. My answer is yes I would support a total lockdown if conditions were severe enough and no I wouldn't if they weren't that severe. But it's a false question because no U.S. politician has enforced a "total lockdown."
    What really bothers you is the inability to make as much money from businesses as before. And you are willing to sacrifice lives for those businesses. The appropriate anology is to the movie Jaws and the mayor who refuses to shut the beaches down when a shark is killing people. It wasn't human life he was concerned about. It was the loss of the summer business. If he shut the beaches, people could still leave their homes, just not congregate in the water where the shark was.
    And this anology is especially relevant in relation to DeSantis in Florida, given the beaches there and his lousy response to the pandemic. This is where he is ethically now: https://aol.com/entertainment/florida-gop-official-resigns-protest-075650944.html
    Even members of his own party are abandoning him as he tries to suppress the truth.
    The Jaws analogy is even relevant on an economic basis, because it's fair to say that from a long-term economic perspective shutting down the beaches temporarily would have been a better idea. The brand value of the beach was severely damaged by keeping the beaches open because tourists will think after the attacks "That's the beach where ten people died from shark attacks because the greedy mayor cared more about business interests than human life." They won't want to go to that beach even after the shark is gone. So, in the short-term business is lost from the shut down and the local economy is hurt. But in the long-term, it's actually better for the business's brand to have a pristine safety record. It won't have the stain on its record of unecessary deaths.
    To put it in Covid terms, I have no desire to visit Florida as a tourist right now and probably won't for a long-time even after Covid is gone because of DeSantis's terrible response.
  • Is Oakmark going to offer a retail bond fund?
    I owned OAKBX for about 10 years in my IRA, and it generally performed better than average. I sold it several years ago because it was changing in ways that didn’t suit my purposes. It started holding higher percentages in stacks, its volatility increased, and its bond sleeve seemed to underperform. It no longer had the excellent downside performance that attracted me in the first place. I replaced it by increasing stakes in funds I already owned — FBALX, PRBLX, TWEIX— that had good downside performances. I also added money to good performing bond funds to achieve a comparable stock/bond allocation.