http://www.sec.gov/Archives/edgar/data/1096344/000091957415008282/d6136779_497.htm
497 1 d6136779_497.htm
FAIRHOLME FUNDS, INC.
The Fairholme Fund
The Fairholme Focused Income Fund
The Fairholme Allocation Fund
Supplement dated November 17, 2015 to the Prospectus of The Fairholme Fund dated March 27, 2015, the Prospectus of The Fairholme Focused Income Fund dated March 27, 2015, and the Prospectus of The Fairholme Allocation Fund dated March 27, 2015 and the Summary Prospectus of The Fairholme Allocation Fund dated March 27, 2015.
The Board of Directors of Fairholme Funds, Inc. has approved the re-opening of The Fairholme Allocation Fund (NASDAQ: FAAFX) ("The Allocation Fund") to new investors. Effective November 18, 2015, The Allocation Fund will offer its shares to new investors and begin accepting orders for the purchase of Fund shares from new investors.
The first four paragraphs under "Purchase and Sale of The Allocation Fund Shares" in the summary section of the Prospectus and Summary Prospectus of The Allocation Fund are deleted in their entirety and replaced with the following paragraph:
Purchases of shares of The Allocation Fund are subject to the following minimum investment amounts (which may be waived by the Manager in its discretion):
The following paragraph is added as the second to last paragraph under "Purchase and Sale of The Allocation Fund Shares" in the summary section of the Prospectus and Summary Prospectus of The Allocation Fund:
The Allocation Fund reserves the right to limit the sale of shares to new investors and existing shareholders at any time. The Allocation Fund may reject any order to purchase shares, and may withdraw the offering of shares at any time to any or all investors.
* * *
The first five paragraphs under "HOW TO BUY SHARES OF THE FUNDS" in the Prospectus of The Fairholme Fund, the Prospectus of The Fairholme Focused Income Fund and the Prospectus of The Allocation Fund are deleted in their entirety and replaced with the following paragraph:
Shares of each Fund are available for purchase by both new investors and existing shareholders. Each Fund may reject any order to purchase shares, and may withdraw the offering of its shares at any time to any or all investors.
* * *
YOU SHOULD RETAIN THIS SUPPLEMENT WITH YOUR PROSPECTUS AND SUMMARY PROSPECTUS FOR FUTURE REFERENCE.

@davfor Thanks! I was wondering how the Schwab robo-advisor was doing.

You're welcome. I was wondering about that too......

"We all know how miserable it's been recently for some hedge funds, now it's time to look at some Robo Advisors. These portfolios vary depending on the needs and risk tolerance of the investor, but you can get a feel for what the returns might look like for a conservative or moderate investor. I'm using the allocation of a recent Wall Street Journal article."

The year-to-date results for the first three of these are:
"Schwab Intelligent Portfolios.... this particular mix is down 5.16%.
Betterment's mix is....down 3.66%.
Wealthfront ...this particular mix is down 5.15% year to date."
See: Frank Zorilla and WSJ

A Big Bet on Emerging Markets
Posted on November 17, 2015 by David Ott Acropolis Daily Insights
Schwab’s IMPACT conference
This year featured more academics than usual, which I found particularly engaging. One of the sessions was actually a debate between academic Roger Ibbotson (who also manages some money) and Rob Arnott, a practitioner with some academic credentials as the former editor of the Journal of Portfolio Management and the author of a number of papers.
The debate was good, although the real highlight for me was during the audience Q&A when someone asked Rob Arnott how much of his personal net worth was invested in emerging markets stocks.
First, Arnott has been saying that emerging markets are a great value for a while now and they keep heading lower. With the double digit decline this year, he said at the conference that he is now pounding the table that emerging markets are a screaming buy if you’ve got a 10-year time horizon (which, in theory, we all should).
Second, the question is good because it asks the question the right way. In the last issue of Portfolio Insights, I included a quote that Chris found from finance author Nissim Taleb who said, ‘Never ask anyone for their opinion, forecast or recommendation. Just ask them what they have or don’t have in their portfolio.’
Arnott responded by saying that he now has one-third of his net worth in emerging markets stocks, which is a big time wager. Emerging markets stocks account for about 15 percent of the world’s market capitalization, so Arnott has a huge relative bet on them. I would never make that kind of bet, but I admire that he’s put his money where his mouth is.

http://acrinv.com/a-big-bet-on-emerging-markets/

In the past, Fidelity's minimum investment on NTF platform was $500. When the asset went up, they gradually let it rises to $2,500.
More importantly, the minimum on transaction-fee funds could be lowered to $5,000 - 10,000 instead of the $100K on institutional shares.

Interesting. Under fees and expenses, it lists a management fee of 0.85%, a (puke) 12b-1 fee for "distribution and/or service" of 0.25%, other fees etc. (left blank, as is the new typical), and then a total fee (after reimbursement, unstated) of 1.32%. OK, so far, par for the course, so to speak.
Under "Choosing a Share Class", we find something added for Investor Class: a 12b-1 fee of up to 0.25% and a transfer agent fee of up to 0.18%. Hmmm, doesn't the former usually take care of the latter? Well, hell, while you're larding it on, Harbor, why don't you just toss in a utilities services charge--- water and sewer, heating, electric ('cause those lights don't stay on all by themselves, you know?)--- and maybe a portion of the long-term lease you carry for office space rental? Fair to share..... because "mutual."

I think this is a brilliant move by Schwab and I hope it catches on with other brokerages. If I can start with $100 instead of $2500 or sometimes $10000, I a more likely to invest and invest sooner.

FYI: Walking the exhibit hall at the Schwab IMPACT Conference in Boston last week was a bit like strolling through the perfume and cologne department at a big department store.
Every few steps, it seemed like a representative from a firm selling exchange-traded funds was jumping out to spritz you with their wares.
Some of the smells were pleasing and appealing, others muddled and a few were offensive and seemingly hard to scrub off, like they could leave a portfolio reeking for years.
Regards,
Ted
http://www.marketwatch.com/story/some-sweet-smelling-mutual-funds-and-etfs-could-turn-out-to-be-skunks-2015-11-17/print

FYI: Initial investments for most funds cut to $100 from $2,500; subsequent investments reduced to $1 minimums.
Regards,
Ted
http://www.thinkadvisor.com/2015/11/16/schwab-slashes-minimums-on-onesource-ntf-mutual-fu?t=mutual-funds

https://www.onefpa.org/journal/Pages/NOV15-Updated-Advice-on-Mutual-Fund-Selection.aspx
"Over the past three years, academic research has revealed new characteristics to look for in an actively managed mutual fund. In 2012, I suggested that financial planners look for funds with a high level of fund manager ownership, board of director ownership, a short-term redemption fee, a high active share or low R-squared value, and that lack affiliation with an investment bank. Recent research shows that financial planners should also look for funds that manage their portfolios in-house, outsource the execution of their shareholder services, have managers with performance-linked bonuses, and have a key role in their fund family performed by someone with a Ph.D. Each of these characteristics are associated with outperformance. "
I'd like to see a little math. It's early for these.

Sequoia Fund SEQUX
http://www.sequoiafund.com/si-dividends-capital-gain.htm
"On November 16, 2015, Sequoia Fund, Inc. made a long term capital gains distribution to shareholders of record on November 13, 2015. The distribution amount was $7.98 per share. "

FYI: A deep look at Janus today.
Regards,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=723115

"...let’s look at China from the 30,000 foot view. From this perspective we observe two things that will unfold over the next decade. First, investment as a share of GDP will fall from almost 50% of GDP to closer to 35% of GDP, if not lower. Second, consumption as a share of GDP will rise from 38% to around to 50%, if not higher...Companies that feed off of Chinese investment in infrastructure will likely struggle and companies that benefit from Chinese consumption will do ok, if not great."

"...all the common benchmarks for diversified developed or emerging markets (MSCI, FTSE, Vanguard, etc) are around 50% (or more) allocated to the economic sectors with the largest headwinds in the decade ahead. That means that any diversified EM or DM investment products (mutual funds or ETFs) that look anything like the benchmark are by default leaning into the wind rather than letting it push them. "
See: GaveKal

Update: On 11/16/2015, Verso released its Q3 results.
Included in the results were management comments (essentially) that Verso is "going concern" risk and that they don't have adequate liquidity and that "restructuring" is a real possibility.
I don't recall seeing that verbiage in earlier press releases.
Foreseeable. Predictable. Apollo Investments does it again!

Whenever the Fed moves, it's likely to be 0.25%, eh? And further tightening will be extremely gradual, in light of uncle Janet's presentations. And yet, whenever the Fed finally does make that first step, I bet there will be a quick "relief rally." I'm not optimistic, short-term, either. But the near-term has never been my investing horizon.

DoubleLine's Gundlach: Fed hike 'no-go more likely than most people think' Paris attacks alone are unlikely to play a factor in next month's decision.
Reuters By Jennifer Ablan Sun.Nov 15th
DoubleLine Capital co-founder Jeffrey Gundlach said on Sunday that the Federal Reserve may hesitate to raise rates given rocky economic and financial conditions, though the Paris attacks alone are unlikely to play a factor in next month's decision.
The influential money manager, who recently warned that the U.S. Federal Reserve should not tighten monetary policy in December, said the Paris attacks could pressure stock markets around the globe, "which we know Fed officials have been watching, even if they try not to admit it."
Gundlach cited a number of asset classes that are signaling deteriorating conditions: The S&P Leveraged Loan Index, which is at a four-year low, the SPDR Barclays High Yield Bond Exchange-Traded Fund "very near a four-year low" and the CRB Commodity Index at a 13-year low. "You also have the Eurozone doubling down on stimulus. Fed raising rates? Really?"
http://www.reuters.com/article/2015/11/15/us-doubleline-gundlach-idUSKCN0T417Z20151115#Xa4BZzDyQ3V3uC0h.97

Krauss' concerns are absolutely legitimate -- especially about ETFs failing to approximate NAV during moments of market stress.
OTOH, Krauss' concerns are self-serving too. -- lower-fees which ETFs provide are working counter to the profitability of the old-line money-management industry. For any retail investor who was ever sold a "class A" fund for a 7% load, you know that load-funds held a persistent, material difference between bid and ask.
Fink's comment is also self-serving --- he runs the largest ETF complex, so is quite willing to poo-poo concerns re the risks/shortcomings of ETFs.
If (a part of the ) problem is that ETFs encourage "short term-ism" by making it very convenient for institutional money, hedgies, etc to make very short-term, low conviction bets, perhaps tax policy could have an effect -- something like: for very short-term trades (say 3 days or less) a "proceeds tax" -- levied not on gains, but on proceeds of sale, of perhaps 5%. This might serve to discourage ultra-short-term speculation, in favor of real investment.
Too bad the relevant regulatory authority (SEC) are a bunch of hacks who have been co-opted/corrupted by Wall Street, and who have no concern for protecting the retail investor -- on the ETF issue or any other.
Caveat investor !

FYI: The deadly terror attacks in Paris are likely to strike financial markets, too, when trading resumes Monday. But the initial losses expected in risk assets like stocks and the shift into safer holdings like U.S. government bonds and cash are likely to be short-lived, history says.
Investors’ knee-jerk reaction to terror attacks and other "shocks" is to sell so-called risky assets until they have a chance to measure the resulting economic fallout, according to data compiled by Sam Stovall, U.S. equity strategist at S&P Capital IQ. The good news is the losses tend to be recouped relatively swiftly as Wall Street typically concludes that both the domestic and global economy won’t be derailed by acts of terror.
Regards,
Ted
http://www.usatoday.com/story/money/markets/2015/11/15/terror-and-markets-sell-offs-tend-short-lived/75822426/