Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
I was going to add to their international fund, but they certainly paint a gloomy picture...of course, not sure what the options may be other than sit tight.
"Investing is an odd business. In very few other businesses do emotions and psychology play such large roles."
Play it again, Sam.
Good find Press. But I was hoping board could steer clear of the passive investing debate and Donald Trump's policies - for a while anyway. First first few pages plunge headlong into the morass.
I have to agree with @hank on the political debate. After the first couple of paragraphs the report went in that direction. Now, I'm not saying that politics does not play a role, but rather it opens or changes opportunities for investors. The President sets the tone and direction and investors should see which sectors will benefit. Obviously, defense should do well under Trump.
For most of us here with index or widely diversified portfolios, it will be pretty much steady as she goes. If you have a hankering for some timing, sector ETFs can work very well here.
I agree with @PRESSmUP. Have owned FMIJX long enough to have become weary of the gloomy tone of the mangers' reports. Still, I've added to my holdings with proceeds from another international fund. Maybe gloom sells…
My remark was somewhat tongue-in-cheek - an allusion to the fact that you can't discuss global markets in a vacuum devoid of politics. FMI believes stock valuations are unrealistically bloated based on a number of false assumptions about what Trump will deliver.
(Uhh - speaking of sarcasm): "Somehow Mr. Trump is going to spend a trillion dollars on infrastructure without increasing the debt load. Somehow America is going to sell more of its goods overseas even while we bash our trade partners, threaten to erect additional tariffs, and cope with a very strong dollar. Somehow we are going to roll back the regulatory burden and make government agencies more accountable, even though most presidents have been saying this for generations and the government just gets bigger. Somehow we are going to reform the tax code, making it fairer for more people and more attractive for risk-takers and business owners while balancing the budget. Somehow we are going to fix the health care system, eliminate perverse incentives and make it much more cost-effective without diminishing access."
I agree with you that the U.S. appears to be entering a period of increased militarism. However, I'm not sure how you reconcile increased U.S. spending on armaments and profits by arms manufacturers with other promises to (1) cut taxes, (2) build-out aging infrastructure, (3) reduce profit margins for defense contractors, and (4) manufacturer more of it at home, where costs are higher for a number of reasons (including the strong dollar). Throw in (5) the possibility of a protectionist inspired global trade war, and U.S. arms exports fall-off as customers turn elsewhere or produce more at home.
I agree with @PRESSmUP. Have owned FMIJX long enough to have become weary of the gloomy tone of the mangers' reports. Still, I've added to my holdings with proceeds from another international fund. Maybe gloom sells…
- Look beyond the tone to the rationale behind it. Whatever your opinion of FMI, they lay out their (admittedly negative) market assessment in some detail. Of course, others may draw different, possibly more optimistic, conclusions.
- Market gloomrarely sells. If it did, there would be a lot more money flowing to John Hussman than there is. And, mutual fund investors would sell at times of high valuation and open-up their pocketbooks (buying) after the underlying assets had depreciated. The evidence, however, seems to suggest just the opposite - that small investors typically buy near market tops and sell near market bottoms.
FMI beats to their own drums as long as I have invested with them. Their reports are what I considered realistic and at times quite pessimistic. That is reflected in the large cash position (10-18%) among the 3 funds.
That is no different than Warren Buffet does, and let cash piles up then strikes when the opportunities arise. He bought $1billion of Apple stock near the low $90 when Carl Icahn sold his entire position near the same timeframe. Who is a better investor?
To their credit, FMI managers actually analyse and provide excellent rationales for their portfolio decisions. Compared to the light-weight fluff some funds offer in the their reports, FMI is a model of probity. I do not hold funds that offer no more analysis than, "We trailed the index this quarter." I'm happy to own FMIJX.
Comments
Play it again, Sam.
Good find Press. But I was hoping board could steer clear of the passive investing debate and Donald Trump's policies - for a while anyway. First first few pages plunge headlong into the morass.
For most of us here with index or widely diversified portfolios, it will be pretty much steady as she goes. If you have a hankering for some timing, sector ETFs can work very well here.
My remark was somewhat tongue-in-cheek - an allusion to the fact that you can't discuss global markets in a vacuum devoid of politics. FMI believes stock valuations are unrealistically bloated based on a number of false assumptions about what Trump will deliver.
(Uhh - speaking of sarcasm): "Somehow Mr. Trump is going to spend a trillion dollars on infrastructure without increasing the debt load. Somehow America is going to sell more of its goods overseas even while we bash our trade partners, threaten to erect additional tariffs, and cope with a very strong dollar. Somehow we are going to roll back the regulatory burden and make government agencies more accountable, even though most presidents have been saying this for generations and the government just gets bigger. Somehow we are going to reform the tax code, making it fairer for more people and more attractive for risk-takers and business owners while balancing the budget. Somehow we are going to fix the health care system, eliminate perverse incentives and make it much more cost-effective without diminishing access."
I agree with you that the U.S. appears to be entering a period of increased militarism. However, I'm not sure how you reconcile increased U.S. spending on armaments and profits by arms manufacturers with other promises to (1) cut taxes, (2) build-out aging infrastructure, (3) reduce profit margins for defense contractors, and (4) manufacturer more of it at home, where costs are higher for a number of reasons (including the strong dollar). Throw in (5) the possibility of a protectionist inspired global trade war, and U.S. arms exports fall-off as customers turn elsewhere or produce more at home.
- Market gloom rarely sells. If it did, there would be a lot more money flowing to John Hussman than there is. And, mutual fund investors would sell at times of high valuation and open-up their pocketbooks (buying) after the underlying assets had depreciated. The evidence, however, seems to suggest just the opposite - that small investors typically buy near market tops and sell near market bottoms.
Just my humble thoughts.
That is no different than Warren Buffet does, and let cash piles up then strikes when the opportunities arise. He bought $1billion of Apple stock near the low $90 when Carl Icahn sold his entire position near the same timeframe. Who is a better investor?
https://www.washingtonpost.com/opinions/the-delusion-that-openness-has-impoverished-america/2017/02/06/a271e0bc-ebe8-11e6-b4ff-ac2cf509efe5_story.html