https://www.sec.gov/Archives/edgar/data/830779/000119312518332066/d655023d497.htm
497 1 d655023d497.htm COMSTOCK FUNDS, INC.
Filed Pursuant to Rule 497(e)
Registration No. 033-40771
COMSTOCK FUNDS, INC.
COMSTOCK CAPITAL VALUE FUND (the “Fund”)
Supplement dated November 21, 2018, to the Fund’s Summary Prospectus, Prospectus and
Statement of Additional Information for Class AAA Shares, Class A Shares, Class C
Shares, and Class I Shares, dated August 28, 2018
After careful consideration, the Board of Directors (the “Board”) of the Fund approved calling a special meeting of shareholders, to be held as soon as possible, to consider a proposal to change the nature of the Fund’s business from a mutual fund registered under the Investment Company Act of 1940, as amended (the “1940 Act”) to an operating company, and to de-register the Fund as a registered investment company with the Securities and Exchange Commission (the “Proposal”).
This conclusion was based in substantial part on the Board’s belief that the appropriate business strategy to be pursued by the Fund would be becoming an operating company that owns interest in one or more operating businesses and/or to acquire assets other than securities, and try to maximize the utilization of the Fund’s accumulated capital loss carryforwards. If shareholders of the Fund approve the Proposal, the conversion to an operating company is expected to take effect in the second quarter of 2019.
Shareholders of the Fund will receive a combined proxy statement with additional information about the shareholder meeting and the Proposal. Shareholders should read the proxy materials carefully, as they will contain a more detailed description of the Proposal.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE

FYI: Gabelli Funds, LLC (the “Adviser”), a subsidiary of GAMCO Investors, Inc. (NYSE: GBL) (“GAMCO”), announced today that, after considering the recommendation of the Adviser, the Board of Trustees for each of the Gabelli Media Mogul NextShares™ and the Gabelli Pet Parents’™ NextShares™ (each a “Fund” and collectively, the “Funds”) determined that it would be in the best interests of Fund shareholders to reorganize each Fund as a no-load, open-end mutual fund registered under the Investment Company Act of 1940 (“1940 Act”). As part of a Reorganization, substantially all of the assets and liabilities of each Fund would be transferred to a new series of a new trust to be created at a future date (a “New Fund”).
Regards,
Ted
https://www.businesswire.com/news/home/20181120005559/en
M* Snapshot MOGLC: (ETF)
https://www.morningstar.com/funds/XNAS/MOGLC/quote.html
M* Snapshot PETZC: (ETF)
https://www.morningstar.com/funds/XNAS/PETZC/quote.html

Here are the VG funds in registration for the Admiral class:
Vanguard High Dividend Yield Index Fund
https://www.sec.gov/Archives/edgar/data/1004655/000093247118007445/merged.htm
Vanguard FTSE All-World ex-US Small-Cap Index Fund
Vanguard Total World Stock Index Fund
https://www.sec.gov/Archives/edgar/data/857489/000093247118007443/merged.htm
Vanguard Long-Term Bond Index Fund
https://www.sec.gov/Archives/edgar/data/794105/000093247118007444/lt_bondindexmerge.htm
Vanguard FTSE Social Index Fund
https://www.sec.gov/Archives/edgar/data/52848/000093247118007442/worldmarvel485a.htm

FYI: With the S&P 500 falling 9.08% QTD, it has been the sixth-worst start to the fourth quarter in the history of the S&P 500. The only worse Q4s (through 37 trading days) came during some of the worst years for the stock market (1929, the 1930s, 1973, 1987, and 2008).
Below is a table showing the worst starts to Q4 for the S&P 500 through 37 trading days. Any drop of more than 2% at this point in the quarter made the list. As shown in the table, the average change for the S&P for the remainder of these years has been a gain of 2.77% with positive returns 78.26% of the time. For all other Q4s in the S&P’s history, the average change for the remainder of the year has been +1.61%.
Of course, it’s not all good news. If you look at the window of Q4s that were down between 8% and 12% like we are this year, the S&P actually declined for the remainder of those four years.
And in case you don’t remember, at this point in Q4 2008, the S&P was down 35.5%! In that year, the S&P ended up rallying 20% for the remainder of the year before plummeting to new lows again in the first quarter of 2009.
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/a-historically-bad-q4-so-far/

Do the number of shares remain the same? That depends on the price of the investor shares and the admiral shares. There's some well defined dollar value of your fund holding (number of shares x investor share price). You're going to end up with the same value after conversion. Obviously if the admiral share price is higher you can't get as many shares as you had before, else you'd be making a profit on the conversion.
You only get the same number of shares if the prices of the two share classes are the same. I've done a few conversions; only once have I lucked out like that.
For example, VBMFX and VBLTX are trading at the same price. So you'd have the same number of shares after conversion.
But VTSMX is trading at $60.96 while VTSAX is trading at $60.99. If you had 100 shares of VTSMX (worth $6,096), don't expect to get upgraded to 100.000 shares of VTSAX (worth $6,099). Expect to get about 0.049 shares less (that makes up the $3 difference). At least if I've kept track of my decimal places correctly.
It's not a big deal. If you paid $5,000 for the investor shares, then the total cost of your admiral shares after conversion is still $5,000. If you sell all your shares, you declare your cost basis as $5,000 regardless of how many admiral shares that is.
In the end, regardless of what Vanguard or any other financial institution reports to the IRS, it's your responsibility, not theirs, to get the numbers right. If you think Vanguard has erred, the IRS has a box where you can say so and put down your figure.
----
You're suggesting two completely different buy/sell sequences:
1) Buy admiral shares (doubling your exposure), wait one month (presumably to avoid wash sale rule), and then sell investor shares
2) Sell investor shares before distribution (bringing your exposure to zero), wait until ex-div date, and then buy admiral shares
If you have gains, then #2 might make some sense. Though you're be recognizing all the gain. In contrast, if you do a direct conversion, you'll have the divs to deal with (they're usually qualified), but that should be relatively small compared to the cap gains you'd be deferring by doing the conversion.
Still, if you're adamant on keeping your records simplified, it has some merit. (You'd only be deferring taxes on the cap gains by doing the conversion, not eliminating them permanently.)

FYI: Healthcare/biotechnology sector funds (including both mutual funds and ETFs) took in $1.8 billion of net new money for Lipper’s fund-flows week ended Wednesday, November 14, 2018. It was the group’s second largest weekly net inflows ever (Lipper began tracking fund-flows data in 1992) and its largest since the fund-flows week ended November 16, 2016, when it had net inflows of $2.7 billion.
Regards,
Ted
https://lipperalpha.financial.thomsonreuters.com/2018/11/healthcare-biotechnology-sector-funds-post-near-historic-net-inflows/?utm_source=Eloqua&utm_medium=email&utm_campaign=00008DM_NewsletterLipperAlphaInsightFundInsightsWeekly_Other&utm_content=Newsletter_FundsWeekly_19Nov2018&elqTrackId=441CF6581E15C42DA196BE9FA1A29F04&elq=dda1f42a06064de190e2f7259012eb63&elqaid=37609&elqat=1&elqCampaignId=166

FYI: For the second month in a row investors were net redeemers of mutual fund assets, withdrawing $28.7 billion from the conventional funds (ex-ETFs) business for October. Rising interest rates and fears of slowing global growth weighed on flows into long-term funds. For the first month in eight the fixed income funds macro-group witnessed net outflows, handing back $20.4 billion for the month. And for the sixth consecutive month stock & mixed-asset funds witnessed net outflows (-$42.1 billion for October, their largest monthly net outflows since November 2016), while money market funds (+$33.8 billion, for their third month of inflows in four) witnessed the only net inflows.
Regards,
Ted
https://lipperalpha.financial.thomsonreuters.com/reports/2018/11/slowing-growth-and-interest-rate-fears-weigh-on-fund-and-etf-investors-in-october/?utm_source=Eloqua&utm_medium=email&utm_campaign=00008DM_NewsletterLipperAlphaInsightFundInsightsWeekly_Other&utm_content=Newsletter_FundsWeekly_19Nov2018&elqTrackId=FA1D32DF8BF9A4CA8B6B65DDB0A4DC06&elq=dda1f42a06064de190e2f7259012eb63&elqaid=37609&elqat=1&elqCampaignId=166

FYI: The booming loan market for highly indebted companies has faced a lot of scrutiny in recent months. The IMF has repeatedly aired its grievances. Multiple central banks, as well as the banker of central banks, the Bank for International Settlements, have chimed in with their concerns as well. And last week, Massachusetts Senator Elizabeth Warren called for tighter regulation on what she believes is “a significant risk to the financial system and the American economy.”
Beyond deteriorating protections for lenders, critics have grown wary of just who is buying these loans. In recent years, it has increasingly been retail investors.
Regards,
Ted
https://ftalphaville.ft.com/2018/11/20/1542706123000/Who-s-buying-leveraged-loans-anyways-/

Nice marketing move by Vanguard, but it seems a little hard to rationalize on a cost basis. That is, if it costs virtually the same amount per dollar invested to administer a small index fund account as a large index fund account, doesn't it also cost virtually the same amount to administer a small active fund account as a large active fund account?
We're not talking about the cost of buying and selling shares here - that's covered by early redemption fees and in rare cases purchase fees (not loads). But we're looking at the servicing costs of small accounts. IMHO there isn't any difference between servicing a small index fund account and a small active fund account. Vanguard sends out the same annual prospectuses, handle similar size transactions, send out the same monthly/quarterly statements, etc.
So why cut the fees on small index funds accounts but not on small active fund accounts? Could it be that Vanguard is facing competition on the former but not the latter? That's not exactly pricing according to cost (Vanguard's mantra), but pricing according to market forces.
From the PR that Ted linked to: "Admiral Shares were introduced by Vanguard in November 2000 to pass along the cost savings associated with large and long-tenured accounts". Now those large and long-tenured accounts will no longer get a break.
Here's a "hidden in plain sight" gotcha: "It is anticipated that all of the outstanding Investor Shares will be automatically converted to Admiral Shares beginning in April 2019, with the exception of those held by Vanguard funds"
So the Life Strategy (fixed allocation) and Target Date (glide path allocation) funds will continue to skim 10+ basis points as they continue to own Investor class shares of their underlying index funds (VFINX ER = 0.14%, VFIAX ER = 0.04%).
Fidelity's explicit management fee of 0.10% (0.08% with waiver) per prospectus on FFNOX begins to look more and more respectable. It's not hiding this fee by using high priced underlying funds (the average ER of the underlying funds is 0.03%).
More from Vanguard's PR piece: "The firm was also an early proponent of ETFs as a means to broaden the availability of passive strategies"
Yeah, sure, whatever.

Once logged into Vanguard, this message appeared:
Converting to Admiral Shares
-------------------------
You can now own lower-cost Admiral™ Shares for almost 40 of our index mutual funds for a minimum of just $3,000 each.
If higher minimums were keeping you from converting, select Yes below to find out if you can start saving money today.
-------------------------
When you convert from Investor Shares to Admiral Shares, you're still invested in the same mutual fund but you keep more of your investment returns thanks to lower expense ratios.
For example, would you rather invest $50,000 in:
•Investor Shares, which would cost an average of $90 a year? Or...
•Admiral Shares, which would cost an average of $55 a year?*
A $35 difference may not seem like much, but imagine how that might add up over time. Consider this hypothetical example:
Assume you invest $50,000 and hold onto it for 10 years (no additions, no withdrawals). The investment earns an average annual return of 6%, and the $35 annual expense ratio difference holds true the entire time. After 10 years, your Admiral Shares investment could be worth about $600 more than if it were in Investor Shares. (This doesn’t represent any particular investment; your actual savings could be higher or lower. The rate of return is not guaranteed.)
Admiral Shares minimum investment requirements
Minimums are assessed per fund, per account:
•Most index funds start at $3,000.
•Most actively managed funds start at $50,000.
•Some sector-specific index funds start at $100,000.
Fund-specific minimums can be found in each fund's profile.
After the conversion
You'll pay no taxes or fees on the conversion because you're simply moving money within the same fund.
But if you're invested in an actively managed fund or any other fund that offers both Admiral and Investor Shares, we may reclassify you back to Investor Shares if your investment drops below the Admiral Shares minimum.
Learn how converted shares are priced
Do you want to convert to Admiral Shares now?
*Vanguard Investor Shares average expense ratio: 0.18%. Vanguard Admiral Shares average expense ratio: 0.11%. All averages are asset-weighted. Source: Vanguard, as of December 31, 2017.

https://www.sec.gov/Archives/edgar/data/36405/000093247118007441/ps_adm112018final.htm
(this change appears to affect the index type funds)
497 1 ps_adm112018final.htm ADMIRAL SHARES MINIUM.
Vanguard 500 Index Fund
Vanguard Balanced Index Fund
Vanguard Developed Markets Index Fund
Vanguard Dividend Appreciation Index Fund
Vanguard Emerging Markets Government Bond Index Fund
Vanguard Emerging Markets Stock Index Fund
Vanguard European Stock Index Fund
Vanguard Extended Market Index Fund
Vanguard FTSE All-World ex- US Index Fund
Vanguard Global ex-U. S. Real Estate Index Fund
Vanguard Growth Index Fund
Vanguard Intermediate-Term Bond Index Fund
Vanguard Intermediate-Term Corporate Bond Index Fund
Vanguard Intermediate-Term Treasury Index Fund
Vanguard International Dividend Appreciation Index Fund
Vanguard International High Dividend Yield Index Fund
Vanguard Large-Cap Index Fund
Vanguard Long- Term Corporate Bond Index Fund
Vanguard Long- Term Treasury Index Fund
Vanguard Mid -Cap Growth Index Fund
Vanguard Mid -Cap Index Fund
Vanguard Mid-Cap Value Index Fund
Vanguard Mortgage -Backed Securities Index Fund
Vanguard Pacific Stock Index Fund
Vanguard Real Estate Index Fund
Vanguard Short-Term Bond Index Fund
Vanguard Short-Term Corporate Bond Index Fund
Vanguard Short-Term Inflation -Protected Securities Index Fund
Vanguard Short-Term Treasury Index Fund
Vanguard Small- Cap Growth Index Fund
Vanguard Small- Cap Index Fund
Vanguard Small- Cap Value Index Fund
Vanguard Tax-Exempt Bond Index Fund
Vanguard Total Bond Market Index Fund
Vanguard Total International Bond Index Fund
Vanguard Total International Stock Index Fund
Vanguard Total Stock Market Index Fund
Vanguard Value Index Fund
Supplement to the Prospectuses and Summary Prospectuses for Investor Shares and Admiral"Shares
Effective November 19, 2018, (i) Admiral Shares have an investment minimum of $3,000, and (ii) Investor Shares are generally closed to new investors. Investor Shares will remain open to existing investors and certain new institutional investors. You may convert your Investor Shares to Admiral Shares at any time by contacting Vanguard.
It is anticipated that all of the outstanding Investor Shares will be automatically converted to Admiral Shares beginning in April 2019, with the exception of those held by Vanguard funds and certain other institutional investors. At that time, Investor Shares will be available for ongoing investment only by Vanguard funds and certain other institutional investors.
© 2018 The Vanguard Group, Inc. All rights reserved.
Vanguard Marketing Corporation, Distributor.
PS ADM 112018

FYI: This past week was saw another positive move up by bulls – especially in the Dow and S&P 500; the NASDAQ was not quite as enthusiastic. Wednesday’s rally was on the legs of an election that was seen as market friendly or at least not as bad as it could have been. Essentially – paying people a lot of money to get nothing done the next 2 years – woo hoo!
Regards,
Ted
https://www.stocktrader.com/2018/11/11/weekly-market-recap-nov-11-2018/

FYI: This week will be a short week with markets closed on Thursday for Thanksgiving Day, and markets will close at 1 p.m. ET on Friday.
Regards,
Ted
https://finance.yahoo.com/news/thanksgiving-existing-home-sales-need-know-week-ahead-155607713.html

"Roth notes, fee-only advisors are also conflicted. If they’re charging, say, 1% of a client’s portfolio, they may ...advocate complicated strategies simply to justify their own fee."
Does he have evidence that this is happening to a significant degree? What is happening to a large enough extent that it has raised concern at the SEC, is reverse churn, essentially the opposite of what Roth is describing.
https://www.stratifi.com/blog/reverse-churning/
"Less than 100% of a realized capital gain will be taxed, because you’ll have some sort of cost basis on the shares."
No, assuming a cap gain is recognized, 100% of that gain is taxed. The reason why less than 100% of the proceeds from a security sale is not taxed is that some of those proceeds represent cost. But 100% of the part that is gain is taxed.
Right idea, but horribly expressed.
An example of where a cap gain is realized but not recognized is in the sale of a primary residence. The first $250K of gain by an individual is realized but not recognized for tax purposes.

Here's the Investment News link:
https://www.investmentnews.com/article/20181115/FREE/181119943/money-in-donor-advised-funds-can-make-impact-before-distribution
The article's first statement, that "money sitting in the [donor-advised] fund actually works against their values" is misleading. The rest of the article (and the Cornerstone study) go into ways that the money sitting in DAFs could be invested to make a positive impact. That's different from suggesting that the money that's sitting there is having a negative impact, i.e. actively working against their values.
Still, the point is that one could/should consider what good the money's doing while awaiting donation. For example, here's Fidelity Charitable's list of its four investment pools available for "sustainable and impact investing":
https://www.fidelitycharitable.org/investment-options/impact-investing-pool.shtml

BROWN ADVISORY https://www.brownadvisoryfunds.com/media/pdfs/2018 Distribution Calendar_vFINAL.pdf
OAK ASSOCIATES https://www.oakfunds.com/articles/2018-capital-gains-and-dividend-distributions
SMEAD https://smeadcap.com/files/4915/4100/0987/2018_Dividend_Estimates.pdf
VALUE LINE (New) https://vlfunds.com/gains

@AndyJ- The SF Chronicle recently reported that PG&E currently carries 1.4 Billion (!) of such insurance, but that the potential losses from the Paradise fire alone will be well over $15 billion.
A better question might be "who is stupid enough to insure PG&E?". (If I was an insurance company I would charge PG&E $1.50 for every dollar of coverage.)

In my post (above) I mentioned that "Sacramento is preparing to initiate legislation similar to last year's, again allowing PG&E to fund their liabilities by revenue bonds if that becomes necessary."
Here is a link to an article in the San Francisco Chronicle regarding that information.

FYI: Life is getting better, and tougher, for income investors. Bond yields have climbed this year, lifted by the Federal Reserve’s tightening regimen. The 10-year Treasury was recently yielding 3.12%, up from around 2.4% a year ago.
Related Data
Rising rates, however, have pressured bond prices. Many bond categories are underwater in 2018, as the accompanying table illustrates. Stocks, another income vehicle, have returned a lackluster 2.7%.
But there’s no need to sit back and suffer. Plenty of ideas and strategies for achieving respectable returns were bandied about at a conference this week focused on dividend and fixed-income investing.
Regards,
Ted
https://www.barrons.com/articles/yield-seeking-tactics-for-a-tougher-time-in-the-bond-market-1542301955?mod=djem_b_Weekly Feed for Barrons Magazine

@MFO Members: VanEck Announces Preliminary Yearend Distribution Estimates for VanEck Vectors Equity ETFs:
Regards,
Ted
https://www.businesswire.com/news/home/20181116005538/en/VanEck-Announces-Preliminary-Yearend-Distribution-Estimates-VanEck
https://www.businesswire.com/news/home/20181116005538/en/VanEck-Announces-Preliminary-Yearend-Distribution-Estimates-VanEck