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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.
  • PRWCX Position in GE
    I define fun money as 50~100 bucks. Not sure I'ld buy an historical manufacturing icon just yet though. Not sure anybody wants what they're making. I'ld have to have a lot of money lying around before I'ld take a 25K flyer on a stumbling investment bank.
    If you check the ownership tab at M* it appears to be popular with a number of other funds at TRowe, as well as Fidelity, LongLeaf, and Hotchkiss & Wiley. You can also check out who has bailed completely.
  • PRWCX Position in GE
    GE Finance was a big player in the long term care insurance segment. One of their moves was buying the ltc policies of AMEX around 1995. A large number of these policies provided unlimited coverage. I only know this because both of my parents had AMEX ltc policies, that were acquired by GE and administered by their subsidiary Genworth. The insurance providers thought most of the purchasers would drop the insurance eventually. Turned out that Seniors liked the idea of protecting their assets with ltc insurance, leading to large losses and unexpected billions of dollars in cash infusion by GE !
  • Mutual Funds with the Highest Perpetual Withdraw Rate
    what's interesting is to not use longest time frame but to set the start date to 2007, so you're going into retirement at a very bad time. i did it w PRWCX. started with 1 mil and at the end of 2019 you had 780k with a max drawdown of 55%, at the 10th percentile. scary. but at least you still had money. oh -- did retirement of 20 years. thanks for posting this!

    I could not figure out where to set a custom start date. I'm pretty sure I clicked all the options. What am I missing?
    There is a tendency to use this tool as black box oracle. I'm not faulting the use of a simulator to run models per se. Rather I'm suggesting that people may not fully appreciate what is being modeled.
    The Monte Carlo simulation engine of PV does not appear to allow a user to pick the starting date for the simulated runs. When one specifies a range of dates (which one does by setting "Use Full History" to "No"), one is specifying the data set (annual returns) from which the simulator randomly selects returns. It doesn't mean that the simulated runs start with the 2007 performance.
    By selecting 2007 to 2019, you're telling the simulator to use one of 13 annual returns for each year in each run. Which means, among other things, that a run of 20 years must duplicate the returns from some years, since it needs 20 1 year returns and it's got only 13 years to choose from.
    See "Historical Returns" in the "Methodology" section of PV's FAQs.
    The simulator does have an option where you can tell it to start with the worst year (or worst two, or worst three, or ...). So if a simulated run of 20 years has returns r1, r2, ..., r20, and r5 is the worst, the simulator reorders the returns as r5, r1, r2, r3, r4, r6, ....
    Better, but not perfect, because the worst run in your data set may not be in the simulated run. Still, this is much better than nothing.
    ---------
    Numbers:
    If you use this option with QQQ over 30 years with an initial withdrawal amount equal to 4% of the portfolio (subsequently inflation adjusted), then the simulations say that about 5% of the time your portfolio doesn't survive 30 years.
    2007 was not the worst time to start retirement. The S&P 500 returned 3.53% that year, and QQQ returned 18.7%. See graph. If one is looking for a poorly performing data set, one would be better off excluding 2007 and starting with 2008.
    Running the model with data from 2008 through 2019, 5% of the time the portfolio doesn't survive. Add in the requirement that the first year in any simulated run is the worst, and 6% or so of runs don't survive. Not a big difference.
    For kicks, I ran QQQ, 4% starting withdrawal (inflation adjusted) for the lost decade (2000-2009). Less than 1 in 5 survive for 20 years, barely 5% survive 30. Expand the data set to the past 20 years (2000-2019), and about 7 in 10 survive 20 years; a bit over half survive 30. That doesn't include starting each run with the worst year which would make things worse.
    Not comforting figures. Forget about getting the original investment back (perpetual withdrawal rate). According to the model, assuming returns over the next 20 years are like the past 20, there's a good chance that the money won't even last at all.
    OTOH, with PRWCX, based on returns over the past 20 years, starting with a 4% initial withdrawal amount (inflation adjusted), and requiring the worst year to come first, one may have a 98% chance of surviving 30 years.
  • Wealthtrack - Weekly Investment Show - with Consuelo Mack
    May 16th Episode:
    "We have to solve the biology before we can solve the economy" Erin Bromage

  • PRWCX Position in GE
    Ha! A colleague once told me the same thing when Lehman was trading close to $1. He invested $25K of fun money ... and, could not believe when it was gone. But I hope that's not case with GE!
  • Schneider Small Cap Value Fund to be liquidated
    A Three Alarm Fund.
    Over its 21.6 year life through April, it returned 7.9% per year, about 2.1% per year less than its peers.
    It incurred a 71.4 drawdown in 2009.
    It's a bottom quintile fund by every risk adjusted return measure.
    It currently has just $18M AUM.
    It started strong and performed fairly well in full cycle from 9/2000 to 10/2007.
    Then, lost its way.
    RIP.
    Hopefully, not precursor for the whole category!
  • Storm Clouds Gather Over U.S. Stocks as Hopes of Quick Recovery Fade
    https://www.nytimes.com/reuters/2020/05/14/business/14reuters-health-coronavirus-investment-analysis.html
    Storm Clouds Gather Over U.S. Stocks as Hopes of Quick Recovery Fade
    By Reuters
    May 14, 2020
    /(Reuters) - A lightning-quick rally in U.S. equities is showing cracks, as investors face mounting evidence that the economy's coronavirus-fueled woes may be far longer-lasting than many had anticipated./
    Could be stalled/stagnant recovery next few months. We will see. Many pundits also predicted double
    dip... BTW after article published DOWS went up by few percent
  • Mutual Funds with the Highest Perpetual Withdraw Rate
    what's interesting is to not use longest time frame but to set the start date to 2007, so you're going into retirement at a very bad time. i did it w PRWCX. started with 1 mil and at the end of 2019 you had 780k with a max drawdown of 55%, at the 10th percentile. scary. but at least you still had money. oh -- did retirement of 20 years. thanks for posting this!
    I could not figure out where to set a custom start date. I'm pretty sure I clicked all the options. What am I missing?
  • Reorganization of two FPA Funds
    @VintageFreak,
    The new name of the funds is listed above in my first post. A registration filing for the new funds is in my second post. The "I" class shares require $1,500 initial investment, the same as FPA Funds.
  • The Biggest Mistake A Preferred Income Investor Can Make
    Hi @litner, Thanks for your question.
    Currently, the hybrid income sleeve makes up 26.56% of the portfolio as of May 15th market close.
    Generally, the income area of the portfolio carries a neutral weighting of 40%. With the hybrid income sleeve currently at 26.56% of the portfolio and my income sleeve at 12.73% leaves me a little short of the targeted 40% desired weighting for the area as a whole but it is within an acceptable range at 39.29%. Thus, I have been buying in the income sleeve with the portfolio's monthly income generation.
    The neutral weighting for the income sleeve is 15% and for the hybrid income sleeve it is 25%. Each of these can carry target weights of + (or -) 5% from their neutral weightings with the area as a whole not being less than 35% nor greater than 45% of the portfolio as a whole. The amount of each fund held can varry based upon the number of members within each sleeve and its desired influence. Some hybrid funds might have no more than a 1% overall portfolio weighting while others might be upwards towards the maxium allowable of 6%.
    Currently, hybrid type funds make up 43.23% of my overall portfolio and total eighteen in number. My hybrid income sleeve found in the income area accounts for 26.56% of the portfolio. The other two hybrid sleeves are found in the growth & income area. The domestic hybrid sleeve accounts for 8.89%; and, my global hybrid sleeve accounts for 7.78% of the portfolio.
    My reason for a large number of funds, currently around 50, is that this limits fund manager and strategy risk. And, when one fund falters, within its sleeve, then there are the other members that can offer production and can continue to propel the sleeve. Including my two cash mamagement sleeves there are a total of twelve sleeves split among four areas of investmest within my portfolio.
    Thanks again for your question. I am hoping that this gives you insight as to how Old_Skeet rolls.
  • The Biggest Mistake A Preferred Income Investor Can Make
    I get my exposure to preferred's through an oef (PFANX). Currently, PFANX makes up about 5% of my hybrid income sleeve. In addition, I hold FISCX a convertible securities fund along with FRINX which is a real estate income fund in this sleeve as well. And, at times, I've held a commodity stratey fund (PCLAX & PCRAX) within this sleeve which has, at times, been good income generators. I've been thinking with commodity prices now being depressed this might be a good time to establish a position in a commodity strategy fund. The current yield listed by M* for PCRAX is about three percent. I've held them when they were kicking off a yields north of 10%. I generally, limit my exposure to these type of speciality funds to no more than a 5% weighting, for each, within the sleeve. The number of fund members within this sleeve has ranged form a low of nine to a high of twelve. Currently, there are eleven fund members within this sleeve. Should I add a commodity strategy fund then this would make number twelve.
  • The Biggest Mistake A Preferred Income Investor Can Make
    https://www.forbes.com/sites/brettowens/2020/05/14/the-biggest-mistake-a-preferred-income-investor-can-make/#a19e7c556359
    The Biggest Mistake A Preferred Income Investor Can Make
    Not for individual resale.”
    Ever see that label on a box of food, and scratch your head? Like who’s buying this big-mega bag of Chips Ahoy for the purpose of reselling the “individually packaged” helpings of cookies inside?
    One of our best holding is pff, it did plummet recently but we are still holding it and may add more later
  • Fortunes are going to be made - Orman
    I’ve never been a Suze Orman fan. But different folks learn in different ways. If she works for you fine. I doubt many would enjoy listening to Howard Marks droning on for hours about the appeal of buying distressed securities. But he happens to be my cup-of-tea. Different strokes I guess. Knowledge presents itself to different people in different ways.
    Linked below is a pretty good (2019) article discussing 20 of Suzy’s teachings, explaining which the author finds of value and which he disagrees with. Pretty even-handed discussion.
    Where I Agree & Disagree With Suze Orman
    https://medium.com/makingofamillionaire/where-i-agree-disagree-with-suze-orman-bd7cbcfef3a9
  • Bond ETFs Survived Their First Big Crisis
    Hi sir kings53man
    Prob..many pundits are saying and singing same themes similar after 2008 crash, feds pumping massive amounts cash into systems to keep it afloat otherwise dows maybe at 10k now
  • Options for Income and Taxes
    while paper trading is good for confidence, unless you put actual money you will not learn. Just start with 1 SPY put OTM.
    You need your own strategy / scale / objective. One thing I can tell you is do not do 2X, 3X, 5X of your trade. what I mean is, if you have more money to play with do not sell 5 puts of SPY. instead make 5 trades with 1 put. That's the standard "casino" logic. They have limits on their tables because they want you to bet smaller more number times because the more times you play, the better probability THEY have of winning. When you are SELLING a put, you are the casino. You are selling RISK to the other guy who is buying the put from you.
    Next is your objective. Few ways to think about it. One obvious way is "can i make more than i'm earning as interest"? another is "can i generate enough cash to pay my monthly utility bills". i trust you get the picture. have a goal in mind and don't be greedy.
    Here's a guideline. Disclaimer if you lose money you suck not me. Say SPY is $280. 1.5% of SPY is $4.20. Go OTM and sell a put to collect $4.20. Chill. If you get assigned SPY because it drops at expiry, go out and sell a covered call to get 1.5% of what your cost basis is. Rinse. Repeat. Do with just 1 PUT for maybe 6 months, a year, whatever.
    I cannot say this again. Paper trading will only take you so far. To know your "psychology" you need to have real money on the line. Hindsight is always 2020, and this being the year 2020 is absolutely no help at all.
  • PRWCX Position in GE
    https://www.barrons.com/articles/ge-stock-drops-to-another-new-low-51589490158
    I know a lot of people don't have the subscription to read so I added some lines from the article below

    The article isn't paywalled, at least for now.
  • PRWCX Position in GE
    Here are excerpts from a recent article in Barrons. Surprisingly (maybe) many analysis see GE as a decent risk reward play. My figures are crossed for David Giroux decisions since PRWCX is my largest fund holding.
    I know a lot of people don't have the subscription to read so I added some lines from the article below:
    GE Stock Dropped Again. But Here’s What Is Going Right.
    The reasons (for stock collapse) are well known . Demand for air travel has been pummeled by Covid-19, which means fewer General Electric (ticker: GE ) jet engines on fewer commercial jets. What’s more, low interest rates and slower economic growth hurt the GE Capital and Power business units.
    Most Wall Street analyst actually rate shares the equivalent of Buy, so they must see something in the stock. Here are a few positives about the company, and the stock, for investors to consider.
    Larry Culp: ...well respected on Wall Street. Investors don’t have to worry about leadership while they worry about everything else.
    The Balance Sheet: “GE’s industrial balance sheet is currently in a net cash position.” GE has done a lot of work on its balance sheet, paying down debt and selling assets.
    Aerospace: ...expects the commercial aftermarket to recover “fairly quickly” in 2021. Defense is part of the aerospace industry, too, and GE supplies engines to the military. while relatively small, the company’s defense business is still growing.
    Cost Cutting: The cost-cutting started when Culp took over, and more actions are being taken to reduce the size of the aerospace business, preparing it for a smaller future.
    Vaccines: A vaccine or cure would solve a lot of problems for humanity, as well as the ones experienced by the commercial aviation industry.
    Risk and Reward
    Any stock, GE included, is ultimately about balancing risk and reward. The negatives, right now, are apparent, while the positives are less obvious. That is one reason GE stock is stuck. The question for investors now is how will the balance shift in coming months.
  • Discrepancies or current updates? Morningstar
    I often X-Ray my stuff using their tool. (Premium.) OK, so today is a week-end. That might have something to do with it. But the changes in the numbers are quite significant, in a good way. How do I know if I can trust them? (Well, can we ever be sure, completely?)
    The new X-Ray (6:15 p.m. Eastern Time on Friday) has moved my portfolio's P/E from 1.0 to .77 and that's pretty big, in a good way. P/B is .70. ... PROJECTED EPS over the next 5 years has jumped from 1.18 to 1.30. And (current) Yield is 1.44. That last number is up, just a bit. (All of this is compared to the SP500.) I'm sitting wondering how I could be so smart--- because I'm NOT.