A few highlights:
Expect the S&P 500 to bottom somewhere between 1600-1700. It's about 1950 now.
Given the length of this bear (going on 11 months) and the length of a normal bear, the bottom might occur this summer.
The worst of overvaluation has been squeezed out. We've gone from the second highest valuation to perfectly average in a bit over a year.
"On a smoothed-over basis, the S&P 500 is 19.5 times normalized earnings. The developed world ex-U.S. is 14.5, and emerging markets are 9.5. Europe has depressed valuations on depressed normalized earnings." Much of the risk from small caps is gone. Indeed, GMO projects small caps to return noticeably more than large caps in the next 5-7.
For what interest that holds,
David

@expatsp: $10,000,000 is the low minimum retail class for GMO, buddy. The share class minimums are $10M, $50M, $125M and $300M.

@expatsp: agree. The 2008 downturn was so severe, that many of the conservative, deep value stalwarts took a major hit. Since GMO recognized that a 3-sigma was on the horizon, they should have been *especially* prone to go ultra-defensive. But in a severe crash everyone wants out of everything, which leaves little place to hide.
I think we are on the edge of another bubble at some point in the next 1-3 years. I wonder if, for younger investors who have lived through the GR, and now another bubble, if they won't avoid the market altogether. Problem is, many are also very wary of owning property as well (and/or have student debt). Where will they invest for the future? Will they simply spend (buy dividend-stalwart consumer stocks !!!)?
We are "blessed" to be living in interesting times.
My parents caught some of the dot-com boom; but otherwise enjoyed what in retrospect seems to have been a very good market throughout their investing careers. I don't think many retail investors investing today will enjoy such good fortunes.

@shostakovich. A fair point, sir. It indeed seems that actively-managed funds can successfully offer lower volatility in return for lower returns, and for retirees, that is probably a good option.
But since over a ten year period -- one that included the biggest housing bubble and market crash since the Great Depression -- a simple balanced index fund outperformed GMO's flagship fund on an aftertax basis by an average of 226 basis points a year, and on a pretax basis by 117 basis points a year (and that's assuming you were lucky enough to have $10 million to buy the cheaper, institutional share class), I think that for most people with at least 10 years till retirement, the index fund is the better bet.
But that investor will have to close his eyes and even add more if possible during the inevitable downturns. Not every investor can do that.

Hi David,
I just glanced at M*, and for the last ten years, GBMFX has returned 4.82% annually, beating its category by a highly respectable 1.03%. http://www.morningstar.com/funds/XNAS/GBMFX/quote.html
But that's the institutional share class, with a $10 million minimum. I presume that the higher fees for non-institutional investors will eat up some of that alpha, and then it's very inefficient taxwise (1.78% tax cost) so unless you're in a tax-sheltered account, there goes the rest of that alpha and then some.
Vanguard's balanced index fund, VBINX, turned in a 5.99% annual return over that ten year period, with a 0.80% tax cost. In a taxable account, the annual return would be nearly double GBMFX, and even in a tax-sheltered account it would be superior. And of course there's no manager-transition risk, concern about luck, etc.
I don't know about the since-inception results, maybe in the 90s GBMFX had glory years, but MJG's thoughts -- that even funds run by brilliant, ethical, humble, and careful managers like Mr. Grantham have a hard time outperforming -- are becoming ever more convincing.

FYI: (Click On Article Title At Top Of Google Search)
"Leuthold Group's Doug Ramsey Sees a Bear Market Coming"
You might have breathed a sigh of relief after stocks bottomed on Feb. 11, but the bear is getting ready to pounce again, according to Doug Ramsey, chief investment officer of Minneapolis-based Leuthold Group. Founded by the legendary Steve Leuthold, the investment-research firm has studied market tops and bottoms for decades, and its institutional research is highly regarded.
Regards,
Ted
https://www.google.com/#q=doug+ramsey+bear+market+barron's

FYI: It seems like at the beginning of each year, market pundits predict that equity markets will generate positive returns in the year ahead, with the majority of the predictions landing between 0% and 10%. Ironically, the broad U.S. equity market has finished outside of that range in 77 of the past 90 years, with annual returns ranging from +54% to -43%.
Regards,
Ted
http://www.forbes.com/sites/jamescahn/2016/02/25/rebalance-regularly-even-during-periods-of-volatility/print/

"At first glance, it appears that we’ve declined as much as the market — down 11.71% since May 2015’s market peak against the S&P 500’s 11.30% decline — but that’s looking at the market only through the lens of the S&P 500. However, roughly half of our equity holdings (totaling almost a third of the Fund’s equity exposure) are not included in the S&P 500 index. Our quest for value has increasingly taken us overseas and our portfolio is more global than it has been in the past. We therefore consider the MSCI ACWI a pertinent alternative benchmark."
What?
"We look pretty good compared to a global all-equity benchmark"?
Uhhh ... the fund is 37% cash and 8.5% international stocks. That's way less global than either its Morningstar benchmark or Morningstar peer group.
Underperformance doesn't bother me. Obfuscation does.
David

'Let the jury consider their verdict,' the King said, for about the twentieth time that day.
'No, no!' said the Queen. 'Sentence first - verdict afterwards.'
'Stuff and nonsense!' said Alice loudly. 'The idea of having the sentence first!'
'Hold your tongue!' said the Queen, turning purple.
Mr. Swedroe is a marketer. His title, Director of Research, strikes me as modestly misleading since we often associate that title with someone leading the stock-by-stock, market-by-market analytics effort. BAM's official description of his role is this: "Larry regularly reviews the findings published in dozens of peer-reviewed financial journals, evaluates the outcomes and uses the result to inform the firm’s formal investment strategy recommendations." What does that mean? The most recent research I read concluded that frequent portfolio disclosure depresses performance by facilitating front-running of the fund. Okay, and therefore ... ? Several recent studies found that most active funds don't outperform their benchmark's raw returns. Uh-huh. "Finding successful funds ex-ante is extremely difficult." Someone got published for that nugget. At base, Larry's conclusion was reached a long time ago, BAM is deeply invested in it, and I'm not sure what he's actually contributing. The nature of peer-reviewed articles is that they aren't timely, so it's unlikely that the answer to the question "what on earth are the Chinese doing?" will be found there.
On the risk-adjustment stuff, I looked at GMO's five largest funds.
Benchmark-Free Allocation (GMBFX) is largest and it's beaten its peers since inception with dramatically higher returns (about 300 bps/year) and lower risk (a downside deviation of 4.4 versus 7.2 for its peers). It's Sharpe ratio is 0.99 versus 0.43 for the peers.
International Equity (GMOIX) is second largest and it's beaten its peers since inception with modestly higher returns (about 120 bps) and lower risk (DSDEV 11.2 vs 12.5), resulting in a higher Sharpe (0.24 versus 0.16).
Quality (GQEFX) is third, a Great Owl (i.e., a consistent winner), with higher returns (40 bps), lower DSDEv (7.8 versus 10.3) and higher Sharpe (0.44 versus 0.32).
Emerging Markets (GMOEX) is fourth. It has better performance (180 bps), very slightly higher volatility (16.9 versus 16.8) and a higher Sharpe (0.14 versus 0.06).
US Equity Allocation (GMUEX) is fifth. Better performance (90 bps), lower vol (9.8 versus 10.6) and higher Sharpe (0.51 versus 0.42).
If you play with the comparison groups or the time frames, you can substantially change the results. That said, most of these funds lead most of their peers, mostly with lower volatility, over most full market cycles.
David

@MJG: your points on n-factor models are well taken. It would be interesting to compare fit statistics and information criteria for each of the models for each of the funds to better determine if funds' all have the same underlying factor structure. Which model is correct? Is the correct model the "correct" all the time? Leave that as it is for another time. There's also a methodological issue in terms of getting the random variable distributions of the observed indicators correct. Without that, the factor analysis results are apt to be biased, and statistical inferences on parameters from the factor solution are apt to be incorrect. Same, of course, goes for a t-test, etc. Would the biases be consistent across funds/comparisons? Hard to say. But, leave that as it is. There is also the question of how appropriate linear or fully parametric models (such as factor analysis) are for something as opaque as financial markets and asset performances. Perhaps a parametric model should explicitly account for trending (is "momentum" sufficient) in a different manner. Again, leave that as it is.
Because, what I really want to know is -- in terms of actual, realized, dollar value returns -- what is GMO's performance when we factor in their contribution to risk reduction. I would think that is what GMO with their "2-sigma" logic, etc., is trying to do: not just pick attractive and/or undervalued assets per se, but avoid market bubbles. This is how I often hear Grantham speaking of GMO's mission. Here I think a different accounting for volatility is important before dismissing what GMO does or doesn't do. And it doesn't have to be all that complicated, but simply comparing means to means doesn't account for this aspect of what GMO attempts to do (perhaps adding "momentum" to a factor analysis does capture this in some tangential way; I don't think so, but its possible). I would think an analyst such as Larry savvy enough to wax poetic about factor analysis would know this. For example, it is quite possible for Fund A to have a lower mean annualized return than Fund B, but outperform Fund B, if it has lower volatility. As Buffett says: "Rule #1 is to not lose money; Rule #2 is to not forget Rule #1". Who cares if the market index has a higher average return but takes costly bites out of your principle along the way? That's really the point of my critique. If GMO lagged the market average by 0.5% but reduced investors' exposure to the 2001 or 2008 downturns, they would have added significant value that would likely not be captured in simple mean comparisons or (as I understand it) an n-factor model.

The report looks at several topics including the performance of the fund in 2015 and their current view towards the high yield bond market. (I hope the link works for anyone who is interested....I accessed it via a brokerage account after being notified the report was available.)
See: https://materials.proxyvote.com/Approved/MC2221/20160204/AR_272169.PDF

As best I can tell, it looks like boilerplate, routine stuff.
Just more detail, including:
" NO FRONT-END, DEFERRED SALES LOAD OR REDEMPTION FEE WILL BE CHARGED AS A RESULT OF THE EXCHANGE."
One of Chartwell's funds has classes that include 5.75% sales load and no-load.
And this caveat, if shareholders say "no.":
"If any of the Reorganizations is not approved (...blah, blah,...)
then the Board will consider what further actions to take with respect to the Acquired Fund(s) that will not be reorganized, which may include liquidation of such Acquired Fund(s)."
Also, I see that the initial/subsequent purchases change to $1000/$100

Here is link to an article on February 8 where Gundlach predicted a collapse in the junk bond market.

So far he has been completely wrong. Junk bonds had another strong day today.
I'll believe junkster's opinion over Gundlach any day of the week.

Thanks G, albeit wouldn't go that far. Junk bonds bottomed on 2/11 a pivotal day for a lot of markets YTD (see MFO link below) Since the generational bottom in December 2008 I have never found Mr Gundlach very prescient on junk bonds. There have been few times when he was outright bullish on junk. He seems to have had a bias against them for most of the past 7 years. And among the experts out there, I actually think he is among the few that has a clue when it comes to the markets in general. I like him!
It has been a nice rally in junk since the recent bottom and after today many of the open end will be positive YTD. I have no idea if Gundlach will be proven correct in junk this time around. While the experts practice their vodoo forecasting and predicting, the market will tell its own story best by its price action. Junk and oil have been joined at the hip the past two years or so. If oil is to go back down to its lows would *think* so will junk. But then I never have been much of a *thinker*
http://www.mutualfundobserver.com/discuss/discussion/25925/was-yesterday-it#latest

@MOZART325 & MFO Members: Here is the article.
Regards,
Ted
http://www.reuters.com/article/us-doubleline-gundlach-idUSKCN0VH1XS

GLFOX has a low beta, high alpha historical record. Not that it will continue this way but in comparison to TOLSX it has weathered this last storm quite well.
Here it is charted with TOLSX and your IDE:

http://www.sec.gov/Archives/edgar/data/1318342/000139834416010143/fp0018037_n14a.htm
Not sure what changed from the prior registration filing, but this filing differs from the prior filing.

http://www.sec.gov/Archives/edgar/data/814232/000119312516481083/d149076d497.htm
497 1 d149076d497.htm RS INVESTMENT TRUST
RS Investment Trust
Filed pursuant to Rule 497(e)
File Nos. 033-16439 and 811-05159
RS INVESTMENT TRUST
Amended and Restated Supplement to the Prospectus (Class A, C, K, Y shares),
dated May 1, 2015
RS Partners Fund
RS Partners Fund will open to new investors on March 1, 2016. All references to the limitations on the offer, exchange or sale of shares of RS Partners Fund in the prospectus are removed effective March 1, 2016. The Trust or RS Investments reserve the right to impose limitations on the sale of shares of RS Partners Fund at any time without notice...
(other changes/information are posted in the hyperlink)

Below link is Fidelity site fund composition overview..........note: only 34 holdings per most recent report.
We are not invested in this fund.
https://fundresearch.fidelity.com/mutual-funds/composition/52106N442?type=sq-NavBar

In the 21st century Artisan Funds has assumed the unenviable mantle of Royce Funds:
1. Too many funds, most of which are unnecessary.
2. Too expensive - expense ratios consistently above their category averages.
3. Too unfocused - performance of funds has become decidedly mediocre.
The time to move on and wean one's portfolio of Artisan Funds was several years ago.

FYI: (It would be nice to know which ones ?)
Jeffrey Gundlach, the co-founder and chief executive officer of DoubleLine Capital, said on Friday that his firm purchased some U.S. stocks two weeks ago after their rocky start in January.
Regards,
Ted
http://www.reuters.com/article/doubleline-gundlach-idUSL2N1651GF