Hi Guys,
This is a tricky task for me. To paraphrase, I come to bury Ron Muhlenkamp, not to praise him, yet I admire the man.
Both my wife and I have separately talked with Ron on a number of occasions. We both like the man as a person and as a fund manager. He is well informed about the market conditions, dedicated to the investor’s task at hand, articulates his decisions in a fundamentally convincing manner, and practices a conservative investment approach. Basically, he is a smart investor who applies his farming management experiences to growing investments. He uses plenty of farm analogies in his newsletters.
But in today’s marketplace, being smart is just not enough. The investment world is populated by smart folks. All these (us) smart folks neutralize one another to cancel our perceived advantages.
That’s what happened in baseball such that it is highly unlikely that the sport will ever again record a 400 batting average over a season. Ted Williams was the last to do so, at least partially because the depth and talent of pitching staffs have remarkably increased and position defensive skills have greatly improved.
In Michael Mauboussin’s writings, he constantly makes the case that investment rewards are the sum of a skill component and a luck component. With skill neutralizing itself because of the competency and resources of the professional investor class (which now dominates the shares traded), all that remains is luck. Given that luck is unpredictable, over time it facilitates a reversion-to-the-mean grip as measured by performance.
Hence, although Muhlenkamp did very well early in his career, sadly, he has suffered an extended reversion-to-the-mean. A similar fate has finally befallen on the Sequoia Fund.
Even guys like Bill Ruane, who benefited from the wisdom of Benjamin Graham’s teachings at Columbia University, are not immune to that relentless reversion law. It is not uncommon that dynasties crumble in the investment universe. The timing of that event is nearly impossible to project, except perhaps for that rare individual who possesses extraordinary skill that overshadows semi-persistent luck.
There are not many of those superior guys available to us. My list is completely blank. Therefore, although I suspect that MFOer Junkster’s estimate is a bit too extreme at the 99.5% level, I too believe most of us would do much better investing in low cost Index products.
For the record, we have never owned any Muhlenkamp funds.
Best Wishes.

Chip posted our updated ratings on the Search Tools pages last night, thank you.
Quick look shows ...
All three CGM funds are on the Three Alarm list. As are both Fairholme's equity funds (FAIRX and FAAFX). Sequoia (SEQUX) is not yet ... it has two alarm bells.
bee's fav Bruce (BRUFX) is on the Honor Roll. As is Matthews Asia Dividend Inv (MAPIX), T Rowe Price's Capital Appreciation (PRWCX), and Vanguard's Balanced Index Inv (VBINX), Value Index Inv (VIVAX), Wellesley Income Inv (VWINX), and Vanguard/Wellington I (VWELX).
Remind me again why we should not just invest in VBINX and forget about it?
A little more here ... ignoring survivorship bias, there are 4,856 US funds and ETFs that have been around since the start of current full market cycle in November 2007. Across these 8 plus years, the absolute worst performer is iPath Exchange Traded Notes Bloomberg Natural Gas Subindex Total Return ETN Series A (GAZ) at -47.6% return annually ... down 99% or so from peak. Wretched! The best is Biotechnology UltraSector ProFund Inv (BIPIX) at +18.1% annually.
VBINX is at +5.6% annually, which is better than 80% of all other choices. Hmmm ... I'll offer shipwreckedandalone's post VBINX.
FWIW, Vanguard 500 Index Inv VFINX also returned +5.6% over this period. As has PIMCO Total Return III Inst (PTSAX), Voya Corporate Leaders Trust (LEXCX), and James Balanced: Golden Rainbow Retail (GLRBX).
The just over four year old Seafarer Overseas Growth and Income Inst (SIGIX) remains a Great Owl fund, besting its peers by 8.2% since inception. Also on the GO list are Gavekal KL Allocation Inst (GAVIX), Grandeur Peak Global Opportunities Inst (GPGIX), RiverPark Short Term High Yield Inst (RPHIX), FMI International (FMIJX), Pear Tree Polaris Foreign Value Small Cap Inst (QUSIX), Oberweis International Opportunities (OBIOX), Lifestyle Conservative Inst (TCSIX), TrimTabs Float Shrink ETF (TTFS), Akre Focus Inst (AKRIX), Zeo Strategic Income I (ZEOIX), Scout Low Duration Bond (SCLDX), Queens Road Small Cap Value (QRSVX), PIMCO Short Asset Investment Inst (PAIDX). All these funds have been profiled by David and can be found on the MFO Dashboard.

Ron is an "expert" and very articulate and knowledgeable. So how could he have possibly lost money for you over the past 10 years. 99.5% of investors would be best served in a domestic index fund from Vanguard.

( Ron is working hard for you ! Right !)
(From Muhlenkamp Website)
We are professional investment managers. We are not accountants, auditors, brokers, custodians, financial planners, or tax experts. We do not file tax returns, prepare legal documents, or churn out black box financial plans. We seek to maximize total returns, after taxes and inflation, to our clients by taking advantage of the opportunities provided when markets periodically misprice assets.
Our motto is “intelligent investment management” to emphasize that we remove the emotion from investing. We might also be described as “no BS” or “common sense” investment managers—you get the idea. Investing other peoples’ money is a rational profession and we apply ourselves to it on a continuous basis.
We invest money for people who want their money to work as hard for them as they’ve had to work for it—and who want their money to grow over periods of time best measured in years and generations. Our clients and shareholders hire us to help protect what they have, help make it grow, and help ease their minds.
Regards,
Ted
Let's See How Hard Ron Is Working For You: MUHLX Performance:
15 Years 92 Percentile, 10 Years 100 Percentile, 5 Years 99 Percentile, 3 Years 99 Percentile, 1 Year 98 Percentile, YTD 99 Percentile. At least Ron your consistent.
M* Snapshot MUHLX:
http://www.morningstar.com/funds/xnas/muhlx/quote.html
Lipper Snapshot MUHLX:
http://www.marketwatch.com/investing/Fund/MUHLX
MUHLX Is Ranked #226 out of #483 (LCB) Funds By U.S. News & World Report)
http://money.usnews.com/funds/mutual-funds/large-blend/muhlenkamp-fund/muhlx
Larry Swedroe 2011 Article:
http://www.cbsnews.com/news/does-muhlenkamp-add-value/

JPC is up almost 3% at the Monday open, 325k shares traded, more than average daily volume in the first 15 minutes. Bill the G. must still have some influence!

BRUFX vs OAKBX - lower expenses, smaller asset base, much more flexible mandate, able to own small market-cap holdings because of smaller size. Bigger loss in 2007-08, bigger gains 2009-10. Underperformed 2012-2013, outperformed 2014-2015. Just FYI for the board.

Like others, I was surprised to see the Sequoia prospectus excerpt that David S posted. Not so much because it warned to expect redemption in kind (which is exceedingly unusual), but simply because it gave rules - over $250k in 90 days.
Yet (keeping @ducrow in mind), the first fund I checked was OAKBX, that had somewhat similar language:

Each Fund is obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the Fund’s NAV during any 90-day period for any one shareholder. Redemptions in excess of those amounts will normally be paid in cash, but may be paid wholly or partly by a distribution in kind of securities.

The main difference is highlighted - Oakmark doesn't expect to redeem in kind, even if you exceed the $250K limit.
But pro-rata? I too thought that was almost everywhere. Yet it's not in Oakmark, and it's not in the next family I checked, Vanguard. No pro-rata qualification in the in-kind section, at least in Primecap's prospectus.
Regardless of whether an in-kind redemption is pro-rata or not, the fund comes out a tiny bit better when it redeems in-kind. It gives the shares to the investor at full price (no market movement), and the investor gets less than 100% value as the sales push the price down.
That market movement affects the fund's remaining securities also. If the redemption is pro-rata, the percentage impact on the fund's NAV will be the same as if it had sold the shares itself.
But suppose the fund has a really volatile, poor performing stock that it unloads on all the redeeming shareholders. Now it has eliminated (or reduced) its position in that one stock. So it no longer cares how the market moves as those shares are sold off by the individual investors.
For this reason it seems that funds would be better off dumping their dogs when redeeming in-kind, rather than redeeming pro-rata. Unless the prospectus explicitly requires pro-rata redemptions.

Well, it would help to have a more current print on asset allocation to better understand what is going on. As of 12/31/15, the equity sleeve was rather concentrated in only 46 holdings (and with $17B in AUM suggests big position and a not-so-nimble ability to move on a dime). The fund also showed 20% in cash. With the bonds being so conservative and short in duration, I don't know what kind of yield you'd expect from the fund, beyond what you're getting.
http://www.oakmark.com/Our-Funds/Overview/Equity-Income.htm
Unless this fund changes its long-standing modus operandi, I can't envision anything but underperformance for the foreseeable future. The fund just isn't structured for anything else, IMO.

@hank
You noted: " the investment grade universe today more closely resembles Disneyland than a serious investment option. (Returns on a 10 year Treasury held to maturity should net the owner about 1.5% per year after expenses. Sound attractive?)"
>>>Held to maturity are the key words.....
Yes, 1.6 % or so held to maturity and assuming no changes along the 10 year journey is not much of a return. Tis why folks trade bonds, not unlike equity stuff of all flavors.
Now, not unlike equity(s); the capital appreciation is with the "price", yes?
Much of the IG bond area is running +3% so far this year................that gain such as heck has nothing to do with yield (if it were static). The longer term IG is +10% and greater.
Forget the yield with the bond, except as a reference to where the bond(s) price is parked at the moment.
Bond yield is of value and can have a straight line method of a calculation for the yield only and the money value, in the perfect world of "static". I don't find any static in today's world of money.
Now if bond fund "x" is on the ball with all of this, they are likely buying bonds based more upon pricing versus yield. That is how the capital appreciation will be had, and won't be reflected with whatever a fund states is the "current yield".
I would be more concerned with a fund (holding IG bonds) shows a high average yield. With the proper circumstances, perhaps it is time for the fund to sell away some of the bonds, as the price may be eroding.
Not unlike HY bonds purchased in early 2009 and one stating at a page indicating a yield of 20% or more. Geez, one would like that all day long, eh? But, that yield came from the price being beat to hell in the prior 6 months. I wanted the price appreciation that would evolve from the "bail out" that would help smooth the pain and fear in the markets.
Nuff said by this"WhatsAMatter U" masters program graduate, in theoretical economics.
Take care,
Catch

@ducrow & MFO Members:: Here's the problem with OAKBX and it's performance: Very long-term 10-15 years excellent, medium term 3-5 years below par, recent term YTD- 1 year horrible.
Regards,
Ted
Years: Percentile Rank:
15 2
10 12
5 58
3 35
1 89
YTD 91

I can't believe how terribly late to the party Barron is, muni CEFs are trading with a one year z-score of 2-3.... if this article leads to another jump, i'll be a seller.
"As munis have climbed in value, yields have fallen. The average high-rated intermediate term municipal bond yields just 1.6%. After-tax, that’s still way better than a 10-year Treasury, but not a lot of income.
One solution to the income dilemma is to buy a closed-end muni fund. Because many of them use leverage (borrowing short-term to buy longer-term bonds) they average 5% yields. The funds typically trade at discounts to net asset value, but those have narrowed substantially in the past year, boosting returns. The average total return in this niche is 11% over the last 12 months, reports Morningstar."
google search results here

@ducrow,
GM is the fund's largest holding (at just over 4%). GM's down nearly 15% over the past year. They've only recently (past 3 years) acquired GM - sensing deep value. Either the bet pays off or it's a classic value-trap. Oakmark is known to dump companies when they feel they've made a mistake - so I suppose that's a third possibility. Lipper places the fund in its "mixed equity" category and gives it a 5 (highest) for category performance, but only a 3 (average) for consistent performance . So much of this ratings game depends on the category one places a fund in. Looks like the fund averaged about 6% over past 3, 5 and 10-year periods.
Haven't paid much attention to their fixed income holdings lately. The fund has never played much in the junk bond area (where there may still be value). It's just not their game. And (IMHO) the investment grade universe today more closely resembles Disneyland than a serious investment option. (Returns on a 10 year Treasury held to maturity should net the owner about 1.5% per year after expenses. Sound attractive?) So, most likely, the fund has gone very short on its fixed income component (around 35%) which helps explain the low returns for fixed. To them, in the current environment, fixed income is more of a defensive holding than a way to generate return.
I've owned OAKBX for close to 15 years* (currently 9-10% of holdings). No plans to do anything - just not my nature. But can understand others' concerns. Am sure you'll find better performers on the chart Ted linked. As for this fund "getting crushed" anytime soon ... don't hold your breath waiting. :)
*Temporarily moved all of it to their more aggressive OAKGX for 1-2 years starting in early '09.

Here are some Muni C E F's with current Premium/
Discounts to nav ( Pricey ?)
NUW + 2.34
NMZ +1.29
OIA -0.26
NBH +1.04
Good spots for further research.
Nuveen Tax-Exempt Municipal Debt - National Municipals
http://www.nuveen.com/CEF/DailyPricingTaxExempt.aspx
Source for C E F reseach
http://www.cefconnect.com
I have OIA on my watch list and own @fundalarm mentioned BGH
From Bill Gross
In a world of barely visible interest rates, it pays to borrow, rather than invest, Bill Gross tells Barron's. One way to do that is are closed-end funds which borrow and lever assets 35-50%, and his fund,:JUCAX, has 8-9% of its money in CEFs trading at a discount to NAV. Two favorites are the Nuveen Preferred Income Opportunities fund (NYSE:JPC) and the Duff & Phelps Global Utility Income fund (NYSE:DPG). (These two are not muni's)
http://seekingalpha.com/news/3172321-bill-gross-let-others-borrow
Mr Gundlach has also mentioned C E F's in recent commentaries as viable income producers in the current investment environment.
Speaking of Mr Gundlach,maybe he'll be clear on his outlook for High Yield and other financial assets in the coming week.Usually fun to listen to in this format.

Asset Allocation Webcast
Please join us for a live webcast titled "Asset Allocation Webcast" hosted by:
Jeffrey Gundlach
Mr. Gundlach will be discussing the economy, the markets and his outlook for what he believes may be the best investment strategies and sector allocations for the DoubleLine Core Fixed Income Fund (DBLFX/DLFNX) and Flexible Income Fund (DFLEX/DLINX).
Tuesday, April 12, 2016
1:15 pm PT/4:15 pm ET /3:15 CT
Register here
https://event.webcasts.com/starthere.jsp?ei=1085514

Wow! I just took a look at NHMAX it has matched its previous all time high of 17.51
http://finance.yahoo.com/echarts?s=NHMAX+Interactive#{"range":"5y","allowChartStacking":true}

The prospectus text, which is unusually clear on the subject:
Payment of Redemption Requests
Unless otherwise prohibited by law, the Fund may pay the redemption price to you in cash or in portfolio securities, or partly in cash and partly in portfolio securities.
The Fund has adopted a policy under which the Fund may limit cash payments in connection with redemption requests to $250,000 during any ninety (90) day period. As a result, the Fund may pay you in securities or partly in securities if the amount of Fund shares that you redeem is more than $250,000.
It is highly likely that the Fund will pay you in securities or partly in securities if you make a redemption (or series of redemptions) in an amount greater than $250,000.
David

Good stuff, but imho, the videos have gotten a little repetitive. Nowadays I'm finding the portfolio reviews more informative; most of the newer material he covers in the videos seems to be also in the reviews, and it doesn't take 15 minutes to read the reviews. Again, just mho - not saying he isn't still doing a great job communicating.

Jerry's correct above. And I won't argue that Sequoia management screwed up royally in managing their fund.
But here's the crux of the WSJ article:
"Sequoia’s repayment approach, called a “redemption in kind,” is part of a longstanding fund policy that allows it to give shareholders mostly stock if they are pulling out $250,000 or more. A person close to the firm said it has done thousands of in-kind transactions over many years and that the majority are done for redemptions in excess of $1 million."
If Sequoia failed to disclose RIK in its Prospectus that's a serious legal matter. In all likelihood it was mentioned. I've seen similar language in many prospectuses for my funds. It's not uncommon. Bottom line: Read and understand your Prospectus before you invest.
Additionally ... How many on this board will ever have occasion to pull a quarter-million dollars from one fund all at once (which is what triggered the RIK in this case)?
WSJ fails to address Mr. Bently's age and circumstance. Sequoia's annual/semi-annual reports should have revealed to him that Sequoia was concentrated in only a dozen or so securities. Ed S. addresses this issue in David's April 1 Commentary. In a nutshell: Potential rewards are high with a concentrated portfolio. So are the risks. If I'm reading Ed correctly, he has serious reservations concerning the suitability of highly concentrated portfolios for retirees.
msf has a good thread running on the topic of disclosure. Personally, I'm often guilty of clicking on "Accept these terms" without due diligence whenever Apple, Amazon or PayPal update their terms of use (not smart I know). But I love reading financial literature and so very much enjoy reading over prospectuses and reports for the funds I own. (And don't like the dumbed-down "summary" prospectuses either.)

FYI: (Click On Article Title At Top Of Google Search)
When Tom Bentley tried to pull his money from a mutual fund troubled by its large stake in Valeant Pharmaceuticals International Inc., he instead received shares in a Springfield, Mo. auto-parts retailer.
Sequoia Fund Inc. sent the retired computer hardware engineer about 5% of his money in cash and the rest was stock in one company–O’Reilly Automotive Inc. Mr. Bentley said he sold the shares as soon as they appeared in his account on April 7, but they had already dropped in value
Regards,
Ted
https://www.google.com/#q=Clients+Pull+Cash+From+Valeant+Investor,+Get+Stock+Instead++wsj

http://www.seafarerfunds.com/video/2016/03/quarterly-briefing/?utm_medium=email&utm_campaign=2016-04-06 Quarterly Briefing Individual Investor - Monthly&utm_content=2016-04-06 Quarterly Briefing Individual Investor - Monthly+CID_093448545840c6355a189d212fe43027&utm_source=E mail Campaign&utm_term=Quarterly Briefing
For those invested-- or who just like to watch-- here's one "interpretive reading" of the continuing EM turmoil. (Maybe) every little bit counts.

@Junkster: i agree these have been better relative value. please note that lots of loans are made to junkier credits, especially those to smaller energy companies. the recent oil action has resulted already in a bunch of bankruptcies, but more to come, since a lot of interest coverage modeling was done with oil at above $50.
loans, even more than bonds, are very flow dependent. since joe retail is not very much educated about loans, their flows haven't swelled as much as those for the bonds, hence the underperformance (in my view). another kink is that latest SEC liquidity proposal which could make daily liquidity loan mutual funds all but extinct.
since i dabble in CEFs, i choose those that have discretion to allocate to both. i trust that managers will pick up the relative value. BGH, which suffered mightily due to its energy exposure is on the rebound, so is HNW for example and more single asset thingies such as JRO/JQC/JSD/VTA/VVR, etc.