FYI: Canny stock investors are like judges in a quirky beauty contest. They aren’t looking for real beauty but for qualities that other people believe still other people will find beautiful.
That was the observation of John Maynard Keynes, who suggested that investors do not actually make money by picking the best companies, but by picking stocks that waves of other traders will want to buy.
Investing, in other words, is an exercise in mass psychology.
Regards,
Ted
https://www.nytimes.com/2017/09/15/business/stock-market-mass-psychology.html?mcubz=3

" Also promised—repealing the Affordable Care Act, which subsidizes muni-bond-financed health-care facilities via Medicaid reimbursements."
This seems to be conflating two different factors - changes in Medicaid coverage (which pays for hospital services just as "regular" insurance pays for services), and changes to hospital subsidies that are made via Medicaid.
The ACA reduced the number of uninsured. The number of individuals getting insurance from private insurers (not through the government or employer) increased by several million. The number of individuals covered by Medicaid increased even more significantly.
Because many more individuals were covered, hospitals had to absorb the costs for many fewer people. If you were to remove the Medicaid expansion and eliminate the individual mandate, the number of people covered would drop, and hospital costs would regress.
Such changes in coverage would have constituted the largest impact that the AHCA would have on hospitals. But this is just changing the number of people covered, not the subsidies to hospitals (except in an indirect sense, like saying that hospitals are subsidized because people receive tax subsidies for buying insurance).
The writers of the ACA recognized that because of better coverage, hospitals would be spending less providing for the uninsured. So they put a provision into the ACA to cut actual hospital subsidies. These subsidies are called disproportionate share hospital (DSH) funding. While these cuts have been repeatedly deferred, they are currently scheduled to kick in on Oct. 1.
Modern Healthcare, Billions in federal uncompensated-care funds to be cut starting in October
The AHCA (by undoing the ACA) would have restored these subsidies - the opposite of what the article seems to be saying.
On balance, the AHCA would indeed have cost the hospitals about $2B/year over the next decade, but that's more because people would have lost coverage (and thus cost hospitals more to take in as patients), than it is because of changes to subsidies (which would have been restored).
See Exhibit 3 in:
The Commonwealth Fund, The Financial Impact of the American Health Care Act’s Medicaid Provisions on Safety-Net Hospitals
Both Medicaid and Medicare have DSH programs.
Here's a short column on Medicaid's DSH. It talks about how the SC ruling that Medicaid expansion was optional hurt the hospitals and motivated the government to delay Medicaid's DSH cuts.

Medicare's use of DSH to subsidize care of the poor is a bit more convoluted (since it gradually evolved from a payment to care for higher-maintenance poor seniors to a more general payment to support hospitals serving the poor of all ages). AFAIK, these subsidies are not affected by any proposals floating around Congress now.
There are many moving parts here. A lot of effort went into ensuring that facilities were able to serve everyone regardless of economic status. It's really not fair for me to pick on a sentence or two that Lewis wrote in a space-limited column. I'm not doing the issue much justice here, either. If you care, and have the time, look through some of the links above.

Thanks @LewisBraham & @Ted,
Article also had a link to Barron's weekly mutual fund scoreboard:
barrons.com/public/page/9_0210-scoreboard.html

@Crash
You noted: "Small-caps have been lagging, this year."
>>>One would have to define "which" small caps. The fund category returns at the below link indicates the happy areas of all cap sizes in U.S. equity. The current trend favors growth; with perhaps value being value for good reasons. One might expect that value will become so inexpensive that the algo machines will signal a buy. I recall a year or two backwards that growth in this area was not so happy.
M* All category returns
http://news.morningstar.com/fund-category-returns/
M* Small Blend...........click onto the YTD column header to sort list for best performance YTD.
http://news.morningstar.com/fund-category-returns/small-blend/$FOCA$SB.aspx
Just for the heck of it, a chart of sm. cap value, growth and a Vanguard sm. cap blend; with the selections chosen at random.
http://stockcharts.com/freecharts/perf.php?SLYV,SLYG,NAESX&n=1009&O=011000
>>>Mr. Snowball described the background of the managers of this fund, per your link.
However, with management's E.R. of 1.51%; one would expect great things, eh? The fund is ahead of the crowd average for small cap blend (7.6% vs 4.1%, more or less); but there are currently other funds much ahead of both, at this time.
I don't find any particular attraction to this fund, if I were investigating this sector area.
What draws you to this fund?
My Sunday morning two cents worth.
Now back to chores while Michigan weather remains pleasant.
Respectfully,
Catch

Just skimmed this article (for lack of time). But it appears to be (at surface level) a thoughtful and well documented article.
-The first part of the statement is acknowledged in probably 80% (could be 100%) of the prospectuses of funds investing in any type of foreign securities to any extent. Usually it goes something like "Investing in foreign securities carries additional risks, which include, but are not limited to ... (enumeration of several risks)". So, not much new here.
- Far as I can tell, he's basing the second half of the argument on some kind of regression to mean argument - based on some kind of foreign small cap outperformance in recent years. I too subscribe to the regression principal - though the time frames involved for it to play out often last decades. A very young writer predicting today a regression back to some (lower) mean might well have grown very old before the regression actually occurs. Additionally, he seems to view foreign small-cap markets as one market. Of course they are not.
For most long term fund investors, I think one or two good international funds is a better way to go, assuming you want international exposures. Let your manager slice and dice as to various cap sizes and particular economies in which to invest. I'm probably swimming against the current here. The fund companies profit from our willingness to buy very narrowly focused funds - usually having higher levels of risk and higher expenses. And investors' relentless pursuit of every possible extra 10-cents worth of higher return helps support them.

Nice. Impressed you did not get into covariance.
About cash, all I was pointing out is that no one invests in cash. Actual investing practice. Some like to quip that cash is what you do not in vest in, by definition. Whatever. Not that everyone and his mother does not write 'cash investments' and 'cash waiting to be invested', true. I sometimes write this stuff for a living, and have typed the phrase 'cash investments' many times. I do try not to write 'riskless investment', and have successfully argued for writing around the wording to emphasize the risklessness and get rid of 'investment'. Just to try and adhere to the lawyers' vetting spirit of investor warning, blah blah. It has worked a few times.
About negative correlation vs noncorrelation, I was commenting in the context of Maurice's 'losing money' phrase. That is, necessarily losing money in comparison. Not a good way to phrase it. though. nor, as you explain, even of thinking about it. Like ads for gold. 'Behavior unlike equities', even in a bull market (they never qualify it that way), as it can go ever so much higher. Etc.
Can you think of assets (not cash) that do not move together at all? Interesting about stocks' / bonds' being phase-shifted.
Finally, did I mention to you long ago the first few months of CD player shipments from Japan (35y ago) which had a function button saying 'random' / 'random play', and the customers returned them to the store after they played the CD tracks 1,3,6,3,3 ?

No way this is going to be a short post, because people have a mistaken fixation on zero, such as: "I'll wait until my returns get back to zero before selling, that way I won't have lost anything."
Similar fixation with zero with respect to volatility and correlation. Volatility is variation about the mean return, not around zero. So two assets could have perfectly inverse (negative) correlation - as differentiated from being uncorrelated - and still both could always be rising.
Even if one chooses to be lax with wording and use "uncorrelated" to mean negatively correlated, this shows that when everything else is going up, an "uncorrelated" (negatively correlated) asset does not need to be going down. It could just be rising less than its mean (average) Thus, it is not mathematically true that "When everything (stocks, bonds, REITs, and more) rises in synch in a bull market, then [an "uncorrelated" asset] must necessarily [go down]".
Say you have two investments, one which rises 1% a month, give or take volatility, and another which rises 1% a month, give or take its volatility. They could have perfect negative correlation. One might rise (in percent) 1 + sin(month #), while the other might rise 1 - sin(month #). These assets move in perfect (inverse) unison. They both rise every month (since sin(x) ≤1), but when one zigs (rises faster than its mean), the other zags (rises slow than its mean).
Why am I going through all this detail? Because aside from revisiting what I tried to explain before, you asked about stocks and bonds. Bonds, on average, rise in every part of the business cycle. So if one looks only at whether an asset class is simply rising or falling (and not looking at how it's performing relative to its mean performance), one would conclude say that bonds must be closely correlated with cash - they both rise together. But that would be wrong. Cash doesn't correlate well with anything, including bonds.

The graph above is from a good Fidelity page on "How to invest using the business cycle". Stocks and bonds tend to be phase shifted, much like sin and cos, but not as cleanly. So while the correlation coefficient between stocks and bonds tends to be a low (positive) number, it doesn't mean that the performance of stocks and bonds is unrelated. (Nor does it mean that when stocks zig up, bonds will zag down, just that they may gain less than their average.)
Which gets us to Vanguard's precise statement that uncorrelated means that one would expect no systematic linear relationship.
First, linear. As I've been stating, a simple phase shift can produce two curves (say, stocks and bonds) with little linear relationship (like sin and cos). But they're hardly unrelated. Checking for phase shifts, autocorrelation, etc. is one of the first things one does in looking for patterns in time sequence data.
The word you're more concerned about is "expected". A thing with random variables is that the unexpected happens. It must, else the variables are not random. Toss a fair coin enough times and you will come up with ten heads in a row. Toss two coins (to represent stocks and bonds), and sooner or later they'll match 10 times, 20 times, however many times you choose, in a row.
In short, zero correlation does not imply independence, and independence does not mean variables must not show correlation over any arbitrary stretch of time (just that they're expected not to).
"zero correlation and uncorrelated synonymous, sure. Not worth using the term about in the first place. "
I think you missed the point of the bolded sentence, viz. that zero correlated (i.e. uncorrelated) assets don't move together at all. That directly contradicts the claim that an "uncorrelated asset is one that does the opposite".
I agree with you that, unlike the other terms above which have clear mathematical meanings, "reliably" (and hence "unreliably") are weak (vague) words. Outside of this thread, I don't think there's any question that these are extremely fuzzy terms.
"Unreliably" didn't come from a citation. I used the negation ("unreliably") of the word you introduced ("reliably"). Here, I took it on faith that you had some meaning in mind when writing "reliably". I tried to make sense of it, and used it accordingly.
Cash in the "actual investing world". Again, I tried to follow your lead. You suggested looking at how terms are used in journalistic idiom.
We can start with the term "riskless investment". As already discussed, "riskless" entails essentially zero volatility, and cash is the only asset that has that attribute (90 day treasuries, the usual benchmark, would meet the requirements for a MMF). If cash is not an investment, then "riskless investment" must be an oxymoron, albeit one in widespread use.
Moving on to Vanguard, that writes: "Cash investments can lower the overall risk of your portfolio and give you a place to hold money while you wait to invest it." Vanguard seems to be of two minds - cash is an investment awaiting investment. This is pretty typical. While one may not personally think of cash as an investment, and some in the "actual investing world" agree, it seems others don't (hence the ambiguity).
Much has been made of the fact that Schwab Intelligent Portfolios® (robo investments) have a high allocation to cash. Schwab calls this portion of the portfolio a "cash investment".
It defends its use of cash on its FAQ page (see the question "How do you approach cash ..."). There, Schwab says that cash provides stability and liquidity, but also diversification and possible inflation protection. The latter two attributes are usually ascribed to investments.
Finally, TD1 wrote of SRRIX as a "100% non-correlated asset". The meaning in that post was pretty clear and precise, regardless of how sloppily "journalists" might use the term. That's what Maurice was writing about, and what you were responding to when you stated that when everything else was moving up, such a non-correlated asset must necessarily move down (move in the opposite direction).
Likewise, when I wrote "unreliably", I was using it to mean the opposite ("un") of whatever "realiably" meant in the post to which I was responding. Context matters.

FYI: (Click On Article Title At Top Of Google Search)
Unfulfilled promises of tax cuts, health-care repeal, and infrastructure spending have spurred municipal bonds higher this year.
Regards,
Ted
https://www.google.com/search?source=hp&q=Political+Misfires+Mean+Good+News+for+Munis&oq=Political+Misfires+Mean+Good+News+for+Munis&gs_l=psy-ab.3..33i160k1.5933.5933.0.8066.3.2.0.0.0.0.77.77.1.2.0....0...1..64.psy-ab..1.2.153.6..35i39k1.76.6TwLV-zh-xE

ASFQX. Anyone else tempted to bite on this new fund? I got into another new fund in the same category, in 2012, after it was open for just a matter of months, too (MSCFX.) Small-caps have been lagging, this year. I know this one was written about not long ago in the monthly commentaries.
http://www.morningstar.com/funds/XNAS/ASFQX/quote.html

"But in journalistic (and financial adviser) idiom, rightly or wrongly, an uncorrelated asset is one that does the opposite of or at least is reliably different from, the rest. In my experience."
Uncorrelated means unreliably different. What you're describing is negative correlation. My experiences with financial writings (I fastidiously avoid advisers) are different. Excerpts from Vanguard and Schwab papers:
Vanguard Research, Dynamic correlations: The implications for portfolio construction:

two assets that are “uncorrelated” could be expected to show no systematic, linear relationship between their returns over time. ...
Correlation is a statistical measurement used to convey the strength and direction of a linear relationship between two random variables. In finance, these variables can be anything from an individual security to an entire asset class. Increasingly positive (negative) correlation indicates an increasingly strong (inverse) relationship between the two variables, up to 1 (–1), which indicates a perfectly positive (inverse) relationship.

Schwab, Schwab Intelligent Portfolios™ Asset Allocation White Paper

Diversification offers substantial benefits. As noted above, the diversification benefits associated with combining assets into a portfolio are driven primarily by how closely the returns on those assets move together. When two assets move in perfectly positively correlated (correlation of +1), there are no benefits from combining them in a portfolio. When two equally risky assets are perfectly negatively correlated (correlation of -1), combining the two assets into a portfolio can eliminate all volatility. A correlation of zero means that the two assets are uncorrelated and don’t move together at all.

"Can you think of something zero-correlated in the actual investing world? "
I thought I addressed that above. Cash. Backing me up is another Schwab paper.
Schwab Intelligent Portfolios™ The Role of Cash Investments in Asset Allocation:
"Relatively few assets have low or negative correlations with each other. However, as a result of its low volatility, cash is an asset class that tends to have lower correlations relative to all other asset classes."

" Asset prices from stocks to real estate have never been this expensive simultaneously."
https://www.nytimes.com/2017/09/14/opinion/trump-federal-reserve-markets.html

cat bonds are also included in a Pioneer offering HNW. the bonds plunged 16% on Friday, before Irma, as some predictions estimated damages of over $200bln and a wipe out of Fla insurers. on Monday those estimates were paired back to about $50bln, with about $20 bln of insured losses so cat bonds are back into recovery. one needs to note that in the Katrina aftermath they, too, have recovered and rallied.
so yes.. these are uncorrelated risks and returns. but, by its nature, people are happy with the perfect correlation in a bull market, with 'know-it-all comments' all around. efficient portfolio construction is not something everyone does as a hobby in their spare time.

FYI: I got an email from a reader which touches on so many interesting points that I wanted to share and answer him here.
Regards,
Ted
http://ritholtz.com/2017/09/my-friend-is-beating-me/

>> if noncorrelated means losing money
When everything (stocks, bonds, REITs, and more) rises in synch in a bull market, then necessarily so.

That would be negatively correlated.
Uncorrelated means, roughly speaking, that one has nothing to do with the other.
That's not to say this "detachment" is necessary to have zero correlation. Consider sine and cosine. Zero correlation, but identical except for phase. Rising together in quadrant IV, falling together in quadrant II; only moving in opposite directions in quadrants I and III. The fact that they're in sync half the time and out of sync half the time doesn't mean they have nothing to do with each other. (One of the limitations of linear correlation - it only takes you so far.)
Ideally what you want are assets which all have a positive tilt but are otherwise negatively (not zero) correlated. Such as (sin(x) + x) and (-sin(x) + x). Both oscillating, but exactly inverted, one zigs when the other zags, so that their oscillations cancel out. At the same time, they are both rising (the +x component).
I thought that the only curve that was "100% non-correlated" to all assets was a constant, i.e. something changing at a constant rate ("essentially zero volatility"). That is, cash or "cash plus", i.e. cash-like but with a positive (or negative) alpha. You've found the holy grail, bet the farm, mortgage your kids, go all in and more.
But that's really not what this is. "Sure, there is risk in the portfolio." While I'm not one to say that risk is the same as volatility, an investment with no volatility (zero std dev) would be riskless. Since there's risk, there's volatility as well.
A problem with "essentially zero volatility" things is that they're very stable (by definition) until they're not. Like land sitting near the San Andreas Fault. Or like a fund that rises smartly and smoothly until it drops 11% or so. That's not to say that long term performance may not be fine, or that it's usually uncorrelated with everything (because its returns are so smooth, like cash). But it's not the holy grail that "zero correlation" and "zero volatility" would imply.

Right; but not the name I used w FA, back in the early 1990s, just trying to remember exactly when. I would have to look up my email with RWeitz.

Not sure how this has lost money over the past 3 years as it was up 25% over the past 3 years before IRMA and is still up 12.69% with essentially zero volatility (with the exception of the past 2 weeks). It also goes back to portfolio construction and that is why advisers use it. Take a look at the chart of AIG and Berkshire over that time period and then take a look at SRRIX. Volatility in those stocks is HUGE while SRRIX has next to none. It's about building a diversified portfolio where this is just one component. People pull from their portfolios over time and risk adjusted returns is most important. No client closes their eyes for 10 years and then opens them on the ten year anniversary to see how they did. How you get there day by day is most important. Modern portfolio theory.

You are completely missing the point if you look at it the way that you do. It is a 100% non-correlated asset in a portfolio that does not derive any return from the economy, politics, interest rates, etc. If you had actually looked at the return of the fund since it launched in Dec 2013 you would have seen it had beaten the global stock market over that time period with zero correlation. Sure, there is risk in the portfolio, just like in every other investment I'm sure you have, but the driver of returns are completely different than everything in your portfolio. When your stock portfolio dropped -19% from May 2015 through February 2016 Stone Ridge reinsurance was up over +8% with once again, no correlation. The fee is high certainly, but I have no idea how you can say it has "nothing particularly unique" as it is the most unique mutual fund out there. They negotiate contracts with reinsurance companies to get this exposure. Just like when you get into an auto accident and your premiums go up guess what happens when a major hurricane hits???? Premiums go up too and guess who reaps the benefits of those higher premiums???? That's right, investors in the fund. It is not an investment to day trade (nor do they let you do it anyway) - hence the high minimum so people that actually get it can purchase it, and people who do not, don't get access. It is a buy and hold strategy. There is a reason why quite a few reinsurance companies have been around over 200 years.......

@Ted- wait... wait !!!
:)
@davidrmoran- You come in as #1014. Not even on the radar.

Update:
https://www.sec.gov/Archives/edgar/data/1318342/000139834417011981/fp0028074_497.htm
497 1 fp0028074_497.htm
Horizon Spin-off and Corporate Restructuring Fund
Supplement dated September 13, 2017, to the
Prospectus, Summary Prospectus and Statement of Additional Information (“SAI”)
each dated September 1, 2016, as amended.
IMPORTANT NOTICE ON PURCHASE OF FUND SHARES AND ADJOURNMENT OF SHAREHOLDER MEETING
As previously disclosed, effective as of the close of business on August 31, 2017, the Horizon Spin-off and Corporate Restructuring Fund (the “Horizon Fund”) is closed to all investment, and the Horizon Fund’s transfer agent will not accept orders for purchases of additional shares of the Horizon Fund, either from current Horizon Fund shareholders or from new investors. Existing shareholders may continue to redeem Horizon Fund shares. If all shares of the Horizon Fund held in an existing account are redeemed, the shareholder’s account will be closed. This temporary closure is expected to last until October 20, 2017, at which time the Horizon Fund intends, subject to shareholder approval at the special meeting described below, to re-open as the Kinetics Spin-Off and Corporate Restructuring Fund (the “Acquiring Fund”), a newly created series of Kinetics Mutual Funds, Inc.
As previously disclosed, the Board of Trustees of Investment Managers Series Trust (the “Trust”) approved an Agreement and Plan of Reorganization (the “Plan”) providing for the reorganization of the Horizon Fund into the Acquiring Fund. The reorganization of the Horizon Fund is subject to approval by its shareholders.
The Trust has called a shareholder meeting at which shareholders of the Horizon Fund will be asked to consider and vote on the Plan. Shareholders of the Horizon Fund have been provided with a combined prospectus/proxy statement with additional information about the shareholder meeting and the proposed reorganization. The shareholder meeting has been adjourned to October 19, 2017. If shareholders of the Horizon Fund approve the reorganization, the reorganization is expected to take effect on October 20, 2017.
Please file this Supplement with your records.

@davidmoran: All 16,793 of my MFO links in one !
Regards,
Ted :) :)
http://www.mutualfundobserver.com/discuss/discussions/mine