@Ted- re "Godless communism": Not any more. Putin is real tight with the Russian Orthodox fatcats.
Different subject: Shouldn't you be responding over on the "men over 85" thread? I thought that you were well over 100? :)

FYI: (While we work to eventually free the Cuban people from the grip of Godless communism let's speed up the process by the use of a little capitalism.)
Regards,
Ted
How To Invest In Cuba:
http://www.investopedia.com/articles/investing/121914/how-invest-cuba.asp?view=print
Hank Greenberg:
http://www.foxbusiness.com/business-leaders/2015/06/24/exclusive-maurice-hank-greenberg-cues-up-for-cuba-biz/print
M* Snapshot CUBA: http://www.morningstar.com/cefs/XNAS/CUBA/quote.html

Likely for 18-24 months.
Grantham's argument is two-fold: asset class bubbles occur when valuations exceed their historic norms by two standard deviations but high valuations alone don't cause bubbles to pop; you need a trigger. Right now, US stocks are about 1.6 standard deviations high, measured by either Tobin's Q or Schiller CAPE. If you chart the rising valuations, the inflation is pretty steady. It likely won't cross over the "two sigma" line until around the time of the Presidential election. At that point, we'd be set up for a 60% repricing of stocks. In the interim, don't discount your run-of-the-mill 10-15% hiccups.
He is not, he argues, pessimistic. It's just that the rest of us are irrationally optimistic.
The most interesting element of his talk centered on the distortions introduced by the Fed. Publicly traded corporations are posting record profit margins; rather than reinvesting that cash (capital expenditures / capex are at historic low levels), they're buying back overpriced company shares to reward current shareholders. The buybacks are also being funded by low interest debt issuance. Private firms are continuing to commit large amounts of money to capex. That's contributing to the high profit margins, since firms aren't trying to arbitrage their competitors' high profits away by competing for business in those sectors (which would require capex). They're luxuriating in their own cash flows and distributing it straight to executives and other shareholders. The fund managers who are heavily exposed to the energy sector point to a collapsing E&P infrastructure as old rigs retire but few new ones (and few new ships and pipelines and refineries) are funded.
David

I agree on FB. As for Google, I think there is a great deal of potential in a lot of what Google is doing and the Google of 5-10 years from now I think may look very different than the Google of today (nothing against the Google of today, which is a very solid company.) That said, I do think there's a point here where Wall Street is losing patience with Google and the calls for returning money to shareholders via an Apple-like dividend have grown louder.
The other point of interest about Google is that the spread between GOOG (no vote) and GOOGL (voting rights) shares has widened noticeably since the company paid out the price for the spread between the two share classes that was agreed upon after the C class shares were distributed. It was generally around $5, then started widening as the date approached. Now the spread is $20-25 +/-. Kinda interesting.

FYI: My last two articles (Who Wins ‘Passive vs. Active’ Institutional Debate? Pt. 1: U.S. Large Cap Blend, and Who Wins ‘Passive vs. Active’ Institutional Debate? Pt. 2: U.S. Large Cap Growth) hit on two of the three asset classes in the U.S. large cap arena – blend and growth.
Regards,
Ted
http://www.thinkadvisor.com/2015/06/24/who-wins-passive-vs-active-institutional-debate-pt?t=mutual-funds&page_all=1

@Junkster Good to hear there are so many women in your area living past 85; that will keep you busy! :) However, several decades from now, that trend won't be lasting. How would you guess middle-aged women are doing? A research note from CDC plopped into my inbox several months ago, regarding an unexpected finding from analyzing 2010 census data. My memory could be a bit off on this, but starting in the Appalachian Mtns in eastern KY and TENN, extending down slightly into ALA and MISS, and the swiggling across all of ARK, lower part of OKLA and into W. Texas, something is happening to middle-aged women--- they're dieing in appalling numbers. How appalling? Enough to drive the life expectancy for all women living within that bounded area all the way down to 75! It is impacting all races/ethnic groups. This hasn't happened before. Needless to say, a good chunk of the mini-census (2015) will be devoted to getting a handle on this; they really don't know.

Agree 100% with that, rforno.

Craig Israelsen made a convincing case for cash as a beneficial asset class in a diversified portfolio in this 2007 Article.
In our household, we have an emergency cash fund which earns very little but is very liquid. In our taxable and retirement investment accounts, I try my best to keep a low cash balance, at most 5-10% at any given time, as I am about 20 years from retirement and I want to maximize our wealth creation despite increased volatility. If I have extra cash with no specific target, I dump the funds in my PRWCX position.
As for the question of how many funds to own, we own a total of 9 funds/stocks, but I see no problem with folks who own more funds, as long as they are excellent, relatively low cost and outperform their respective indices. Live and let live. As I will likely die before my fetching wife (not "partner"), I am focused on wealth creation, and I continually remind my wife that there is only one thing worse than being old, and that is being old and poor.
Kevin

If a fund has FB in it's top 10 holdings and it's not even a technology fund, I avoid it. Heck, for a tech fund, I don't want a large holding in FB or any social media site for that matter. FB in particular I despise and consider a 'fad' and a 'herd' trade for fund managers. (Not a FB user, either)
GOOG is more a tech infrastructure play in my view, and I have no problem with holding it (which I do). But social media like FB, LinkedIn, Twitter, etc? They're nothing special imho, and I'm a career geek. Couldn't care less about them financially or for their 'role' in the 'tech' world.....Facebook is not a 'tech' company in my view anyway - it's a consumer communications & consumption company.

Hi Catch: What I was implying was that "dry powder" in the form of cash allows you to put the money back to work later when prices are lower. If a stock (or fund NAV) drops 50% while you're waiting in cash, when you redeploy the cash you buy 2 shares for what 1 would have cost. By sitting in cash you have doubled your wealth. That's the leverage.
You can pick a lot of holes in that argument if you want. In fact, I'll do so myself. First, it assumes that one can be successful in timing the market (not a given). Second, it ignores the likelihood (but not a certainty) that bonds may actually appreciate substantially while stocks are falling - and so, in a sense, would provide even greater leverage.
I don't have a dog in this fight. Ted had said earlier that cash is trash - and I was simply pointing out that under some circumstances it can be quite valuable. Gotta run. Take care.

Hi @Dex and @hank
Dex, you noted: "Cash flow ... think about it. It isn't sexy but it is overlooked and needed for financial longevity"
>>>I will presume, because of the nature of this web site; that cash in an investment portfolio would also have a money market component available.
Any MM that I can directly access at Fidelity as a parking area for money is at a negative value. This circumstance is from the .01 or .02% yield and expenses for many of these at various investment houses to be at about .46%. Fidelity Cash Reserves indicates an e.r. range of .27-.37. If one looks through returns for these type of "investments", the returns will be negative.
If this is what is being discussed regarding "cash" within an investment portfolio, then I still have no need for such an item. The exception would be another market melt.
If one has 5 major areas for investment as has been noted in this thread, what is the value of the cash portion.......no yield, e.r.'s that eat the principal and top this off with inflation destroying more principal.
Being that "income" is one of the 5 areas noted previous; why not keep the monies in this and move monies from this area into another, if needed?
hank, you noted: "I understand where Ted is coming from. But in more volatile markets than we've witnessed recently, cash can also be leverage.
>>>I fully agree that cash can have its place during nasty periods, but I don't call this leverage.
I'm trying to understand the need to keep any cash inside of an investment portfolio, with the exceptions that I noted previously. When we think we have a more valuable investment, we sell all or part of something else that isn't doing as well and move the money, period. We sold quite a bunch of bonds last year and moved the monies elsewhere, but not to cash.
I surely don't knock anyone's plans; as I know we all travel different money paths.
Fidelity Cash Reserves values
Okay, time for a large bowl of ice cream with fresh Michigan strawberries.
Take care,
Catch

Here is an interesting article on people 100 years and older. There are five times as many women as men in this group:
http://money.usnews.com/money/retirement/articles/2013/01/07/what-people-who-live-to-100-have-in-common

The "risk of ruin" is diminished due to spreading the allocation among managers and geography. And the fees are no more than aggregating into one fund of average cost.

But then isn't the opposite also true? You are hoping the average of all those funds is better then say your best pick over time. I am not a fan of duplicate funds in the same category but I understand others feel like it reduces risk. But lower risk is lower return. I don't think it works the other way around. To me you extend the risk of negating your manager's effort.
Just trying to argue the other side. Always comes down to comfort level. But you do pay a price for comfort.

Mike, your point is very true. On the dice table, if I knew 5-5 would be thrown, I would bet the house on a hard ten. Unfortunately, I am not adept at picking the specific fund which will do the best for the next 12 months or for any given time period. As such, I spread my wagers.
In my specific case used as example, while my funds are all international in scope, I try my best to make sure they do not occupy the same footprint. I accept less than "best possible case", and aim for above average.
press

Hi Guys,
A very nice ongoing discussion here. Please allow me to contribute a few thoughts.
The Persistency Scorecard has been a part of the mutual fund industry for many years. In each of its now semi-annual reports, although the specific numbers change, its overarching findings have remained the same. Persistent mutual fund performance in terms of consecutive quartile rankings is an elusive goal.
In large part, what goes up all too often comes down. One exception is that the poorest quartile of funds linger in their desperate positions until they disappear from the scene.
This consist finding opens the manager skill/luck issue once again. As noted in the referenced report: “Demonstrating the ability to outperform repeatedly is the only proven way to differentiate a manager’s luck from skill.” Far too many active managers are failing this test.
I don’t remember the source, but from memory, about 75% of active managers hover near their benchmarks, sometimes generating positive Alpha, sometimes producing negative Alpha. After fees and trading costs, their performance relative to a benchmark is mostly a wash. Roughly 24% of active managers are persistent losers relative to their benchmarks. The residual 1% consistently contribute positive Alpha.
That’s a thin cohort. The trick is to identify these rare souls. But if the fund population is roughly 8,000 strong, that means that maybe 80 such funds exist and are waiting to be discovered.
In general, I like the Persistency Scorecard. But it does have its shortcomings. The Persistency Scorecard is not focusing on the most useful fund selection criteria. Consecutive quartile rankings are not nearly the best sorting tool.
Individual investors are much more interested in cumulative outperformance relative to some benchmark. The single best criterion to satisfy that target is a positive Alpha. And its not single year Alpha. It is positive Alpha over several extended timeframes.
Morningstar provides precisely the requisite data in their Ratings and Risk MPT Statistics section. Morningstar computes Alpha for 3, 5, 10, and 15-year periods using several benchmark comparisons. Alpha is a dynamic parameter and depends on timeframe and comparison standard.
No easy answers here since much depends on your specific portfolio management style and measurement choices. It helps if management has been stable over time and if costs are minimal.
The hunt is to seek positive Alpha scores over multiple timeframes. They exist.
Best Wishes.

CELG is my largest single stock position. I dare not sell lest I cross bracket barriers and trigger Medicare premium increases. Thanks for posting the very useful info on the company. HQL and THQ are anchors of a Roth where I'm glad to reinvest the distributions.
Obesity threatens our prosperity as a nation, not merely our healthcare system. "The China Study" should be part of the Common Core reading list. I wasn't being facetious in another post where I opined that eliminating hamburger is a meaningful action anyone could take. Can't get three of my five kids to follow along, but the two youngest (24 and 17) are vegetarian since infancy. We've also eliminated dairy, but not fish. We travel and have lived abroad; unfortunately the American way of eating is taking its toll on Europeans and Asians. Okinawa is an example. End of sermon.

FYI: Google (GOOGL) and Facebook (FB) might seem like crowded picks by fund managers. Think again.
Regards,
Ted
http://blogs.barrons.com/focusonfunds/2015/06/24/most-managers-dont-own-enough-google-and-facebook-does-yours/tab/print/

@davidmoran: Which has a better chance of enhanced returns, a portfolio of ten funds, or one of 50 funds? The more funds you own past a reasonable point brings in the law of dimishing returns. Once again, the more funds you own reduced returns are exponentially increased. Basic Funds 101.
Regards,
Ted

@linter
1. M* shows a 30d SEC yield of (---). What is the distribution yield of this fund? If SHAIX produces an income stream, to compensate you for the market risk it is taking, to whom is it "streaming"--- to them, or to you?
2. The fund is hedged, and hedging costs money. The SEC now requires MF literature to state not only fund expenses, but it must also include a figure for transaction costs. For this fund, what is the difference between the two?

If the M* portfolio holdings detail and the fund fact sheet are to be believed, SHAIX is going for market neutral & low-ish volatiility. It's essentially long the S&P 500 and short an equivalent total percentage of 120+ stocks. Over the last month, its gains are down to 0.29%, so about 3.6% annualized, which is pretty much what I'd expect as a decent result from a market neutral fund.
The other fund in the stable, just plain Schooner (SCNIX), appears to be no great shakes, so doesn't inspire a lot of confidence that Hedged Alt Income is going to shoot out the lights.
Is it really being marketed as an FI alternative, in the sense of its being somehow equivalent? I don't see it in the fund literature, which (prospectus, fact sheet) just says that it's an income-oriented fund with little correlation to FI, expressed like this in the prospectus:
"Investment Objective. The investment objective of the Schooner Hedged Alternative Income Fund (the “Fund”) is long term appreciation through the generation of income using strategies that have minimal correlation with traditional fixed income markets."
I don't see any reason to get too excited, either positive or negative, about SHAIX.
P.S. Westwood recently came out with a "market neutral income" fund that sounds superficially like SHAIX (~ same objective, different methodology) - ticker is WMNIX.

@Old_Joe: The difference is that the ER for Old_Skeet's fifty-one funds is not the same. For every additional fund Old-Skeet owns the chances of reduced returns is exponentially increased. From 2009 through 2014 the S&P 500 Index has had an average return of 17.39%. Remember, the most expensive coat only has two sleeves.
Regards,
Ted