FYI: Bloomberg shared a graph recently that shows there is now $13 trillion of negative-yielding government debt in the world:
More than half of European government debt now has a negative yield.
I’m still trying to wrap my brain around this so here are some questions rattling around my head about this one:
Remember the European debt crisis of 2010-2012 or so? Remember how high their interest rates got? Greek 10-year debt hit yields of more than 30%! It’s now down to 2% or so. Spain saw 10-year yields hit almost 7% in 2012 which are now approaching zero. Ireland’s 10-year yield was north of 11%. It’s now basically zero. Italy went from more than 7% to negative 1%.
How the hell did this happen?!
Which environment was more mispriced — the high yields back then or these new low yields?
Regards,
Ted
http://awealthofcommonsense.com/2019/07/my-questions-about-negative-yielding-debt/

FYI: European stocks paused after a selloff in Asia on Monday, as the strength of the U.S. labor market led to doubts that the Federal Reserve would cut rates as much and as quickly as investors had hoped.
Asian markets were hit by Friday’s strong U.S. jobs data, which have dented investor hopes for a move to lower rates from the U.S. central bank at its next meeting in July.
At the same time, industrial production and trade data from Germany remained weak in May after April’s sharp contraction, suggesting that economic growth continues to slow in the heart of Europe.
The pan-continental Stoxx Europe 600 index and Germany’s DAX were helped by Deutsche Bank stock rising nearly 4% after it launched a new restructuring plan on Sunday, which aims to cut nearly 20,000 jobs and slash its balance sheet.
Chinese shares dropped, with stocks in Shanghai down 2.6% and Hong Kong’s Hang Seng down 1.7%. Japan’s Nikkei also lost 1%, mainly reacting to the drop in U.S. stocks on Friday and the view that fewer market-supporting interest-rate cuts will now come through.
U.S. stock futures also slipped, with the S&P 500 down 0.1% and the Dow Jones Industrial Average down 0.2%. Meanwhile, 10-year U.S. Treasury yields fell to 2.025%, from 2.044% on Friday. Yields fall as prices rise.
Regards,
In Europe, bond prices rallied and yields fell, heading back toward record lows set late last week. The German 10-year yield was minus 0.381% down 0.018 percentage points from Friday’s close, while French and Italian yields also fell.
Elsewhere in emerging markets, Turkey’s lira fell nearly 2% on concerns about central-bank independence, after President Recep Tayyip Erdogan dismissed the bank’s governor over the weekend.
In commodities, gold was up 0.6% at $1408.40 per ounce and Brent crude oil gained 0.33% to $64.44.
Ted
WSJ:
https://www.wsj.com/articles/global-stocks-fall-as-u-s-rate-cut-prospects-recede-11562563827
Bloomberg:
https://www.bloomberg.com/news/articles/2019-07-07/asian-stocks-set-to-slip-turkish-lira-tumbles-markets-wrap?srnd=premium
IBD:
https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-zscaler-stock-market-rally-cyberark-stock-boeing-737-max/
CNBC:
https://www.cnbc.com/2019/07/08/stock-market-us-futures-lower-as-jobs-data-dashes-fed-rate-cut-hopes.html
Reuters:
https://uk.reuters.com/article/uk-global-markets/global-shares-muted-as-prospect-of-sharp-u-s-rate-cut-fades-idUKKCN1U301F
U.K.
https://uk.reuters.com/article/uk-britain-stocks/tobacco-stocks-help-ftse-100-counter-easing-fed-rate-cut-bets-idUKKCN1U30OK
Europe:
https://www.reuters.com/article/us-europe-stocks/european-shares-edge-higher-deutsche-bank-rally-lifts-banks-idUSKCN1U30NH
Asia:
https://www.marketwatch.com/story/asia-stocks-slide-monday-in-wake-of-us-jobs-report-that-undercut-market-hope-for-aggressive-fed-rate-cut-2019-07-08/print
Bonds:
https://www.cnbc.com/2019/07/05/bond-markets-treasury-yields-tick-lower-as-investors-await-key-jobs-data.html
Currencies:
https://www.cnbc.com/2019/07/08/forex-markets-dollar-us-jobs-in-focus.html
Oil:
https://www.cnbc.com/2019/07/08/oil-markets-us-jobs-report-in-focus.html
Gold:
https://www.cnbc.com/2019/07/08/gold-markets-us-jobs-federal-reserve-in-focus.html
Cuirrent Futures:
https://finviz.com/futures.ashx

I agree with you, @Lawlar, that it's hard to get good information about this fund. The portfolio is rightly labeled by Lipper as multi-cap growth, not LC, but I could not tell what stocks it shorts or even evidence of gold holdings. Under the current manager, it seems you can count on volatility. I note that the fund made a much larger than usual distribution in 2018; that could simply be a reflection of that year's market drop forcing the manager to sell a lot. Maybe you takes your money and you runs; DFDPX, one of the funds mentioned in the Barron's article on little-known funds, has achieved similar long-term results with less volatility.

The Momentum Trading Strategy (Finance)
https://what-when-how.com/finance/the-momentum-trading-strategy-finance/

A strategy that buys past winners and simultaneously sells past losers based on stock performance in the past 3 to 12 months is profitable in the U.S. and the European markets. This survey paper reviews the literature on the momentum strategy and the possible explanations on the momentum profitability.

The "Momentum Has Its Moments" paper I mentioned describes a strategy that sounds like this one on steroids - instead of selling past losers, one shorts them:

Momentum in the long run ... Buying winners and shorting losers has provided large returns of 14.46% per year, with a Sharpe ratio higher than the market. The winners-minus-losers strategy offers an impressive performance for investors. ... But ... momentum has a dark side. Its large gains come at the expense of ... a very fat left tail, this is a significant crash risk.

No entry or exit plan; just pure momentum.

All ratings have been updated on MFO Premium site, including MultiSearch, QuickSearch, Great Owls, Fund Alarm (Three Alarm and Honor Roll), Averages, Dashboard of Profiled Funds, and Fund Family Scorecard. The site now includes several analysis tools, including Correlation, Rolling Averages, Trend, Ferguson Metrics, Calendar Year and Period Performance.
Here's link to some highlights.

If you continually monitor the M*, Lipper*, etc. charts and keep shifting money away from the poorer performing funds into the better performing ones in each “category” (as a good many do), than I’d say you are a “closet momentum player” - though probably unaware of it.
A simple example of how the game can be played might be John Hussman’s HSTRX - which Lipper describes this way: “The Fund seeks to provide long-term total return from income and capital appreciation by investing fixed-income securities, such as U.S. Treasury bonds, notes and bills, Treasury inflation-protected securities, U.S. Treasury Strips, and other U.S. Government agency securities.”
Yet, a quick scan of top holdings indicates approximately 15% to consist of precious metals mining companies. As might be expected, this “conservative income fund” jumped about 8% in the last quarter. (It suffered a loss nearly as large in the 4th quarter.) If gold keeps rising, the fund may well flaunt a 15-20% gain by year’s end. While representing only a small % of the fund, the driver in terms of over and under performance has always been its investments in metals and mining - not its bond managing capabilities.
Hussman doesn’t disguise this very well - so most here are aware of the reason the fund might over or underperform its peers during shorter periods. But if you carry the logic a little farther, it shouldn’t be hard to recognize that other fund managers can play the same game - even improve on it - by adding hot momentum funds to their holdings during rising markets, causing their funds to outperform, drawing in even more investment dollars, and allowing them to buy even more of the hot momentum stocks .....
You might say this is a classic case of the elephant chasing his own tail.

Well,at 108 pages, he certainly put a lot of work into it! He must have been evoking his inner Tolstoy when compiling this tome. I stopped after about 7 pages. I am certain there is a great epiphany in there somewhere, but life is too short.
Are earnings really a "mirage"? I guess all those Big 4 CPA firms are in on the conspiracy? Is book value systemically understated due to inflation (and other causes)? Yeah. But its no secret, nor is it a mirage.

FYI: FEW WEEKS back, a reader—let’s call him Karl—challenged me with a question. Why, he asked, don’t I recommend momentum investment strategies?
If you aren’t familiar with the term, momentum strategies seek to buy stocks that have done well in the past, with the hope that they will continue rising, while also selling stocks that have done poorly, with the expectation that they will keep falling.
Karl asked why, in a recent article, I had dismissed momentum investing as the sort of thing that would turn your portfolio into an “unpredictable stew,” even though research has found that it can be profitable. It’s a fair question.
Regards,
Ted
https://humbledollar.com/2019/07/say-no-mo/

FYI: In this piece, I'm going to introduce a new methodology for measuring the profitability and valuation of corporations. In applying the methodology, I'm going to encounter a massive discrepancy in corporate capital allocation. To explain the discrepancy, I'm going to attempt to show that reported company earnings are systematically overstated relative to reality. After identifying the likely causes of the overstatement, I'm going to explore their implications for individual stock selection and overall stock market valuation.
Regards,
Ted
https://osam.com/pdfs/research/The-Earnings-Mirage-Whitepaper-2019.pdf

The first apple pie recipe was written in England, not America, in 1381:
https://en.m.wikipedia.org/wiki/Apple_pie
Hot dogs or frankfurters are of German origin: https://en.m.wikipedia.org/wiki/Hot_dog
And last I heard, motherhood was not a uniquely American phenomenon.
As for buybacks, I do think they are harmful when compared to company reinvestment, new R&D and expansion which creates new products and jobs. Moreover, they amplify a company’s leverage as equity shrinks during a buyback relative to debt on the balance sheet. But a larger problem is a fundamental disconnect that has occurred in recent decades between capitalism and the general well-being of labor, consumers, the environment and society in general. Buybacks which produce no larger societal benefits—no new jobs or products or economic growth but a sleight of hand to increase on paper profitability—are part of that disconnection problem. They only benefit a sliver of shareholders and just temporarily.
And if companies have so much excess cash and would otherwise waste it as Zweig claims if they didn’t buy back shares, why on earth did the government just give them a big fat tax cut to “spur economic growth?” That’s like just giving them more money to buy back stock. I’ve got a better idea—tax companies appropriately to pay for new infrastructure—roads, bridges—which they exploit anyway and social services for all the people who’ve lost their jobs because companies now flush with cash for buybacks outsourced people’s jobs to other countries or replaced them with technology. That will get rid of all the excess cash they have lying around and make sure they don’t “waste it.”

Thanks Ted.
Here's how the five funds stack-up on MultiSearch ...
https://mfopremium.com/blog/2019/07/06/barrons-best-mutual-funds-youve-never-heard-of/

@Paul, coming late and unread to this, but I can see the top 5 for FLPSX easily at M* Top Holdings, of course, and then could plot them the last six months or whatever period and see how they did compared with anything else. Including the fund overall, of which they were 17%. However, this is as of the end of April.
So even if I thought JT had bought them some time ago (I could go delve his reports) and I could determine roughly when, the outperformance, or whatever, would be only approximate, right?, dependent on timespan and exact periods. Also not up to date.
So I am not sure it is possible to do what you wish, and I wonder what FPA was talking about specifically.

FYI: Share buybacks are as American as mom, apple pie and hot dogs on the Fourth of July.
You’d never guess that given the many politicians on both the left and the right who say share repurchases are a newfangled, evil spawn of deregulation. Buybacks, argue their critics, barely existed before the Securities and Exchange Commission changed a rule in 1982 and unleashed a multi-trillion-dollar torrent—enriching fat-cat investors, starving workers and stunting the long-term prospects of the companies buying back all those shares.
Regards,
Ted
https://www.wsj.com/articles/the-fireworks-over-share-buybacks-are-duds-11562338801?mod=searchresults&page=1&pos=1

FYI: Overlooking a strawberry field off the coast of California, Bernzott Capital Advisors doesn’t look much like a Wall Street firm. Portfolio managers dress in jeans, shorts, and flannel shirts. They sit in an open bullpen. Arranging meetings is simple: “We spin around in our chairs and talk to each other,” says Ryan Ross, an analyst and portfolio manager. “If you came in here you might think it’s a surf shop.”
Regards,
Ted
https://www.barrons.com/articles/the-best-mutual-funds-youve-never-heard-of-51562370354?mod=article_inline

FYI:
Regards,
Ted
https://www.barrons.com/articles/mutual-fund-winners-and-losers-for-the-second-quarter-of-2019-51562373043?mod=past_editions

FYI: To still believe in active management is quite something, especially when you work at BlackRock (ticker: BLK), the world’s largest asset manager and a giant in the world of index investing. Yet Mark Wiseman, 49, believes it’s a critical component in long-term investing that will provide the returns that people need for retirement.
Regards,
Ted
https://www.barrons.com/articles/blackrock-talks-solutions-to-short-termism-and-the-retirement-crisis-51562370565?mod=past_editions

"corporations were already sitting on piles of cash that they didn't know what to do with"
Please see footnote (1), directly above.

I've never looked at the form, but you might check out Form 4626.
https://www.irs.gov/instructions/i4626
But that was then. This is now, and now there's no more corporate AMT. It was permanently repealed as part of the 2018 tax cuts.
http://www.bowlesrice.com/tax-cuts-and-jobs-act-2018-changes-Alternative-Minimum.html
Why was that done? As I understand the official story line, corporate tax cuts were made, and made permanent, so that US corporations would be more competitive and to stimulate investment and jobs. Never mind that corporations were already sitting on piles of cash that they didn't know what to do with. Meanwhile, individual taxpayer tax cuts were made temporary, because otherwise the deficit after ten years would be too big and would break Senate rules.
https://www.businessinsider.com/trump-gop-tax-plan-senate-bill-why-individual-tax-cuts-temporary-2017-11

Corporations are persons, and therefore entitled to all of the prerogatives and benefits due persons (1), except when an obligation as a person is involved (2), then of course they are not.
(1) For example, as persons they are entitled to spend whatever humongous amount of cash they deem necessary to bribe propitiate congress so as to obtain whatever outcome they may desire.
(2) No, they are not subject to any AMT.
I hope that clarifies the situation.

msf, that's very helpful. Thanks again!
I'm basically trying to see how much performance is attributable to the top 5 holdings. I read a while ago that FPA ran an analysis and said that their top 5 holdings beat the index by a large amount. I'm mainly curious what FLPSX would look like with the top 5. It's not been a great performer over the past 10 years but part of that is due to its international exposure. I wonder if the fund would have outperformed the S&P 500 if one looks only at the top US holdings.
It looks like FCNTX is up about 80% over the past 5 years so it seems like the larger holding have done quite well.