FYI: The “Fastest Two Minutes in Sports” is on Saturday at Churchill Downs in Kentucky. Since the founding of the race and racetrack (in which the company draws its name) in 1875, Churchill Downs Incorporated (CHDN) has branched out to a number of other lines of business including ownership of other race tracks and casinos around the US in addition to online gambling sites. CHDN has been like Secretariat over the last decade, posting a "10-bagger" by rising more than 10x in value since its low in 2009.
So how does the stock perform around "Derby Day" specifically? In the past 20 years, the period leading up to the Kentucky Derby has typically been pretty shaky for the stock with declines in the month and week leading up to the race. Historically, in the month before the derby, CHDN has only risen 28.57% of the time with an average decline of 2.26%. The week before has been slightly better, but still declines over half the time. This year bucked the trend, though, with the stock rising 12.11% over the past month and 6.91% in the past week; similar to 2016.
Regards,
Ted
https://www.bespokepremium.com/interactive/posts/think-big-blog/churchill-downs-chdn-off-to-the-races

FYI: Norway’s $1.1 trillion sovereign wealth fund, the world’s largest, made record returns on investment in the first quarter amid a surge in tech stocks.
Separately, the fund is assessing whether to make an investment in ride-hailing company Uber Technologies Inc, which is planning an initial public offering, its chief executive told Reuters.
The fund earned 738 billion Norwegian crowns ($84.15 billion) for the January-March period, the highest amount it has ever recorded.
When measured in terms of the fund’s international currency basket, the return for the quarter stood at 9.1 percent, beating its benchmark, it added.
Regards,
Ted
https://www.reuters.com/article/us-norway-swf/norways-wealth-fund-made-record-returns-in-first-quarter-looking-at-uber-ipo-idUSKCN1S9132

this is the second article on tax wash out- it also leaves a lot to be explained but more than the first
The first to benefit was the Vanguard Total Stock Market Index Fund. Investors’ end-of-year tax forms abruptly stopped showing capital gains in 2001
"Top executives at the Malvern, Pennsylvania-based firm don’t want U.S. policymakers looking too closely at how they’re doing it, according to a former insider."
"But a review of financial statements and trading data shows that Vanguard relies substantially on so-called heartbeat trades, which wash away taxes by rapidly pumping stocks in and out of a fund. These controversial transactions are common in exchange-traded funds—a record $98 billion of them took place last year, according to data compiled by Bloomberg News—but only Vanguard has used them routinely to also benefit mutual funds."
"Here’s how it works: Vanguard attaches a more tax-efficient ETF to an existing mutual fund. Then the ETF siphons appreciated stocks out of the mutual fund without incurring taxes, often using heartbeat trades. Robert Gordon, who has written about the concept and is president of Twenty-First Securities Corp. in New York, calls it a tax “dialysis machine.”
If I personally did a wash sale I would get wacked. Still don't understand!
"Rapidly pumping money into and out of the exchange-traded portion of the Vanguard Small-Cap Index Fund removes taxable gains for the benefit of the mutual fund’s shareholders."
"Rich Powers," ( YOU SLY DOG) "Vanguard’s head of ETF product management, acknowledged the design’s tax advantages. But he said in an interview that they’re not the driver of the company’s strategy and that all of its trading complies with the law."
"Taxable Gains Begone
Unlike competitors that follow similar indexes, Vanguard mutual funds stopped saddling investors with ◼ taxable gains once ETF share classes were added."
"The main benefit of avoiding taxable gains in a mutual fund is tax deferral. Funds distribute their taxable gains to investors, who pay income taxes on them in the same year. By avoiding tax events within the fund, investors get to delay taxes until they sell the fund, which could be years or decades later. It’s akin to a zero-interest loan from the IRS."
"Theoretically, owning stocks through a mutual fund or ETF works the same way. If the fund sells a stock for a profit, the taxable gain shows up on each investor’s end-of-year Form 1099."
"But thanks to an obscure loophole in the tax code, ETFs almost always avoid incurring taxable gains."
Any one else know about this loophole???
"The rule says that a fund can avoid recognizing taxable gains on an appreciated stock if the shares are used to pay off a withdrawing investor. The rule applies to both ETFs and mutual funds, but mutual funds rarely take advantage of it because their investors almost always want cash."
"ETFs use it all the time, because they don’t transact directly with regular investors. Instead, they deal with Wall Street middlemen such as banks and market makers. It’s those firms, not retail investors, that expand the ETF by depositing assets or shrink it by withdrawing. These transactions are usually done with stocks rather than cash. The middlemen, in turn, trade with regular investors who want to buy and sell ETF shares."
What is the charges of fees by the middlemen surely they are not doing this out of the kindness of their hearts??
Does the VANGARD and the middlemen eat all your capital gain?
To me it looks like Vanguard has found a way to feast on your cap gain so you don't have to pay taxes on them. How sweet a deal------ For Vanguard and the MIDDLEMEN!!!
THE DEVILS IN THE DETAILS
QUOTES FROM Bloomberg
JUST MY 2 CENTOVOS!!

@hank According to the Oregon Liquor Control Commission there may be at least one place where there is too much pot.....

Oregon is producing twice as much cannabis as people are using, according to a new study from the Oregon Liquor Control Commission. And Oregon has been overproducing marijuana for a while — leaving more than six years’ worth of supply sitting on shelves and at farms.

https://opb.org/news/article/oregon-cannabis-surplus-2019/

Hank I agree!! I used to love reading USNWR -- and the old Business Week -- back in the '80s and '90s when in high school, college, and beyond. Since then both publications have deteriorated considerably and I long-since gave up reading them. :/

U.S. News tends to be big on “splashy” headlines nowadays and low in quality. A step above the financial porn served up by the now defunct Money Magazine - but not by far. They’ve taken a once reputable name in news (the long extinct U.S. News & World Report) and converted it into some remotely related online publication. I’d much rather do my own investigating by digging through actual prospectuses and annual reports (from the fund companies) and the fund data and analysis from the likes of Lipper, Morningstar, Max Funds and, of course, at MFO. If you can get 3 of those to agree on a fund’s desirability, it’s probably worth considering.
The article takes a scatter-shot approach. Why on earth would a younger 401-K investor want to hold a corporate bond fund? Index 500 = duh. I’m not opposed to holding index funds, but they’re pretty much all the same - save for fees. Yes, VG is a low cost leader, but you hardly need third party “study” or “recommendation” to know that.
I long for the days when as a “nerdy” teen I subscribed / eagerly anticipated my weekly copy of U.S. News & World Report. Money was tight growing up. I typically devoured these cover to cover twice before discarding. While conservatively slanted, you couldn’t beat it for covering the week’s hard news.

I’m unable to access the article. But the elephant in the room here would appear to be: What’s the rest of the money invested in? For someone heavily allocated to aggressive growth funds, a higher cash level might be appropriate. But, if you’re holding a lot of balanced, diversified income or asset allocation funds, than those already hold some cash (or short term bonds) and so your own cash allocation might not need to be as high. Like so many other questions postulated here, the answer can only be answered in context.
Personally, I target 15% in my static allocation (possibly appropriate for the 70+ crowd). That’s not strictly cash, however. Also includes some short-term bond funds. I’ve considered taking it down to 10% and putting the 5% into something a bit more aggressive like TMSRX at T. Rowe. That fund should pull a couple percent higher than cash over intermediate term (3-5 years) without a whole lot of additional risk from what I can see. But there’s more liquidity with cash. So I’ll let it rest.
While cash isn’t trash, If one can afford even a modicum of fluctuation in value (and dispense with FDIC backing), there are better alternatives.

We’ve currently got about 10% of our total savings in cash right now, the highest in many years. This is due to the relatively high yields of CDs and money markets right now, as well as the low yields for high quality bonds. That, plus we need to make periodic withdrawals in retirement and want to avoid having to sell stocks during potential market downturns.

U.S. News tends to be big on “splashy” headlines nowadays and low in quality. A step above the financial porn served up by the now defunct Money Magazine - but not by far. They’ve taken a once reputable name in news (the long extinct U.S. News & World Report) and converted it into some remotely related online publication. I’d much rather do my own investigating by digging through actual prospectuses and annual reports (from the fund companies) and the fund data and analysis from the likes of Lipper, Morningstar, Max Funds and, of course, at MFO. If you can get 3 of those to agree on a fund’s desirability, it’s probably worth considering.
The article takes a scatter-shot approach. Why on earth would a younger 401-K investor want to hold a corporate bond fund? Index 500 = duh. I’m not opposed to holding index funds, but they’re pretty much all the same - save for fees. Yes, VG is a low cost leader, but you hardly need third party “study” or “recommendation” to know that.
I long for the days when as a “nerdy” teen I subscribed / eagerly anticipated my weekly copy of U.S. News & World Report. Money was tight growing up. I typically devoured these cover to cover twice before discarding. While conservatively slanted, you couldn’t beat it for covering the week’s hard news.

Those are all good funds, but the problem is that most employees have to choose from 401K funds offered by their employer. My experience is that employers offer funds based on how little it will cost their bottom line, not how well they perform.

Probably 15%in mom retired portfolio (unaccounted for 12 months emergency funds of course)

https://money.usnews.com/investing/funds/slideshows/7-best-performing-funds-for-your-401-k
7 Best Performing Funds for Your 401(k)
The best funds for a 401(k) account incorporate diverse market sectors and reasonable fees.

http://www.barrons.com/mdc/public/page/2_3053-quarterly_A-quarterly.html
1/4/19 was the last online WSJ Quarterly Mutual Fund Report. It now has the Barron's heading, but hasn't been updated since then.

FYI: Should I hold a cash reserve in retirement? If so, how much? And, if you’re willing to share, do you have a cash reserve as part of your retirement savings?
Sure. Happy to share. But let’s start with some background.
Regards,
Ted
https://www.wsj.com/articles/how-much-cash-should-you-hold-in-retirement-11556805424?mod=md_mf_news

                           Fund 1   Fund 2
Securitized                80.22%   70.81%
Agency MBS Pass-Through    18.39%   14.86%
Agency MBS ARM              9.35%    0.01%
Agency MBS CMO             10.46%    2.31%
Non-Agency Residential MBS  4.33%   12.31%
Commercial MBS              0.00%    5.02%
Asset-Backed               37.69%   34.39%
Covered Bond                0.00%    0.49%

Would you consider one of these funds significantly more or less risky than the other? If your focus is on non-agency RMBSs, would you consider Fund 2 higher risk?
To my less discerning eye, these look pretty similar, though in a broad sense it seems Fund 1 concentrates a bit more on Agency MBSs (of all stripes) than non-Agency MBSs (of all stripes), while Fund 2 does the reverse. They are both more than 1/3 invested in ABSs.
(Figures are from M*; Fund 1 is dated 3/31/19; Fund 2 is dated 12/31/18.)

I referenced this symbol back in January 2018 and have been following it since. While impressed with its performance, there is a caveat. It is prone to out of the ordinary daily trading gains. For instance most of its outperformance YTD can be attributed to an outsized daily gain one day in January. It was the same way last year where just a couple trading days contributed to its yearly gain. I worry that could cut both ways and you could see an outsized daily decline. Also, how much longer can the good times continue in securitized credit more specifically non agency rmbs.

River Canyon is having the minimum amount for a regular account updated from 100K to $2500. The change does not yet appear on the Fidelity website.
The minimum amount for an IRA is $0, which has not changed.
Fidelity has a $49.95 TF.

FYI:
Regards,
Ted
https://www.mutualfundobserver.com/issue/may-2019/

Thanks @Old_Skeet for the comment.
I think the problem we’ve both identified is that it’s hard to tell whether following is intended to serve as (1) a verb or (2) a participial (a type of modifier derived from a verb).
If #1 is the case, than the action (“following”) could conceivably happen sometime after the EM and domestic U.S. markets had already sustained the initial damage. Perhaps the investor possesses excellent timing and only bought EM stocks after the initial damage had occurred in order to to take full advantage of the anticipated divergence.
However, if #2 is the case, than “following” might serve as an adjective / modifier (part of the participial phrase: “following this diversification.”) The phrase serves to identify specifically which years are being spoken of. In this case the diversification likely occurred before the markets sustained the initial damage and (since it remained in place after the damage) served to smooth out future returns. In either case the investor experienced less volatility than had he / she been only invested in developed markets. However, it seems likely he / she would have come out farther ahead in the first instance.
Minor technical point: If we assume #2 to be the case, than the main verb in the sentence changes and becomes “smooths (out”). And in that case, the sentence technically needs a new subject (which it appears to lack). However, the intended subject is “it”, and it’s quite common in standard usage nowadays to omit the pronoun in this case, as the intended reference to the concept of diversification is easily inferred by the reader.
Ol’Skeet is correct that there are several different places a comma might be inserted. The key thing here is to note that whether the comma is placed after years or after diversification makes a significant difference in how the reader interprets the sentence’s meaning.
* I’ve linked this story before, but it’s worth repeating: The Case of the 10 Million Dollar Comma:
https://www.newyorker.com/culture/culture-desk/a-few-words-about-that-ten-million-dollar-serial-comma

Virtually everything in the article is simply a description of how ETFs make cap gains magically disappear. This is why ETFs are marketed as "tax efficient".
All that Vanguard did was make an ETF that owns the same underlying portfolio as Admiral class and Investor class shares. So when the ETF shares make cap gains disappear from the portfolio, there are no cap gains to distribute among the shareholders - none to the ETF class shareholders, none to the Admiral class shareholders, none to the Investor class shareholders.
A very quick search (for Vanguard VIPER patent) turned up this article. Not great, but it does cover what I wrote above, and was published in 2005.
http://www.exchangetradedfunds.com/news/190905Vanpatent.html

Unlike other ETFs, the Vipers, or Vanguard Index Participation Equity Receipts, are separate share-classes of Vanguard's index funds. In contrast, rival firms' ETFs are "stand-alone" funds. ...
Vanguard claims a symbiotic relationship exists between the Vipers ETFs and the index funds. ...
The way in which all ETFs create and redeem shares provides tax benefits. ...
First, ETFs are not forced to sell stock and raise cash to meet investor redemptions, which can result in distributing capital gains to remaining shareholders. Plus, the in-kind redemption process enables the manager to offload stocks that have risen in price, allowing the ETF "to flush out unrealized capital gains from the portfolio on an ongoing basis, assuming there are sufficient redemptions to do so," ...
As a result, the Viper ETF share class enables the manager of the corresponding index-fund class to "wash out" potential capital gains in the mutual fund.

@Ted, I kinda like those “open” discussion threads you occasionally serve up. Thanks. “Batter up!” :)
Re the markets. Weird day for those of us who like to look at the minutia. Commodities got clocked pretty much across the board. Most blood I’ve seen in a while in oil and miners together. Some funds that usually buck the trend with clever strategies underperformed the S&P today. DSENX and KCMTX both dropped about 1%. PRWCX lost .70%. Fixed income, usually strong on a turbulent day like this, was flattish from what I can observe.
None of the day’s action seems to add up IMHO. I’d guess investors are still trying to digest the day’s Fed statement and remarks by Powell at his follow-up press conference,
FWIW