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Megacap and Allstar investor

edited August 2012 in Fund Discussions
The Allstar Investor weekly report indicates that megacap stocks are the ones that are in favor at this time.
Which Funds would you consider? .I have thought about MGC? Vanguard Megacap 300 and FMHIX FMI large value fund.
prinx

Comments

  • edited August 2012
    Hello prinx,

    I have linked below the etfs that Ron Rowland suggest be used with his Leadership Strategy. Take a look ... MGC is on the list.

    http://www.allstarinvestor.com/public/192.cfm?AffID=IWAE2

    I hope this is helpful.

    Good Investing,
    Skeeter
  • edited August 2012
    I see that many people are trying to follow recommendations of Allstar investor. Some time ago I also did it, and it worked until it did not, and then I was hurt badly. I guess the reason was that he is a trend follower, but during the last 5 years or more market did not show any tradable trends. I would suggest you to check performance of his strategies using the Hulbert Interactive. You may simply use a trial subscription for Hulbert Interactive and then quit a day later, it is sufficient to check all you need. There you will find how Allstar newsletters perform. Last time I checked (about a year ago), the performance was very poor, for several years back in time. So check his performance before investing, it may save you some money.
  • edited August 2012
    Hi andrei,

    I am sorry to learn of your loss. Perhaps, you had too much at play in the strategy as Mr. Rowland states that it is not a complete investment vehicle.

    I have linked the strategy below for those that would like to read more on it.

    http://investwithanedge.com/leadership-strategy

    In my reading about the Leadership Strategy, it is sggested that only a small part of ones portfolio be invested following the strategy. This is telling me that it does have some risk even though it does put one position in cash with major downdrafts as one of its holdings. I have had good success with the strategy and have employeed its use for the past five years or so. In the major market correction that occurred during the great recession I lightened up on equities and found that the strategy was indeed an aid for me in making this move. I too had losses during this time but it was not because of the strategy but my desire to stay more invested than I should have in equities.

    Presently, I am more apt to bang a buck out of the market rather than let it bang me so I now trade in and out of it, at times, with what I call ballast. Ballast is money that I move around within the portfolio. At times, it may be found in a cash position (s), a income position(s) and in an equity position(s) or some combination of the three. In the beginning this was only a sum equal to about five percent of my overall portfolio. Ballast has now grown to around thirty percent of my overall portfolio with my investable range in equities being defined as a range form forty to sixty percent, income being defined as a range form thirty to forty percent and that leaves cash floating form a range from ten to thirty percent. Currently, I am invested in the mid point of this range in equities and watching the markets and my gagues ... I might even lighten up some more as I recently sold down to the equity mid point range (fifty percent) and I am now invested in income at around thirty percent. This marks cash at twenty percent and this could quickly be raised to thirty percent with a reduction in equities to the forty percent range.

    Perhaps. you sould seek out an investment advisor that can aid you in determining your tolerance for risk and help you develop an asset allocation model for your portfolio. I did this and found it to be of benefit.

    To me investing, is much like golf, not every player has the same skill set although they may all enjoy the game; however, the more skilled seem to produce the better scores. And, again, to me, this holds true in investing as the more skilled investor should produce better returns than the less skilled. Even most pro golfers, at times, can be found seeking out advice and instruction form a professional golf teacher.

    I have used both in the past.

    Have a good day ... and, "Good Investing."

    Cordially,
    Skeeter
  • Dear Skeeter,

    The link you provided was to the useful data, but not to the results of implementation of the strategy developed by the author of the All Star newsletter http://www.allstarinvestor.com/public/120.cfm?AffID=IWAE2. If you use this information well, you can gain more than those who does not have any information. What I had in mind are the results of implementation of various strategies which were proposed by the All Star Investor newsletter on the basis of his own evaluation of the leadership in various parts of the market. He had several different portfolios, and only one of them, single sector portfolio, was beating the market year after year. He closed some of the portfolios, which did not do well. And then even this portfolio stopped doing well, in fact it was falling when the market was rising.

    To explain the relation between the service you use and the newsletter which is provided by the same author, here is a copy of information form his website:

    "Invest With An Edge is a FREE investing resource offering insightful commentary, useful market overviews, timely picks of the week, and a full-fledged investing strategy. It’s an excellent resource by itself – but what if you need more?
    We recommend two (2) options if you need more assistance with your investments…
    1. Self-Managed Investing with Award-Winning Advisory Service All Star Fund Trader 14-Day Free Trial Subscription
    Hulbert-rated All Star Fund Trader is a comprehensive online investment advisory service for regular investors.

    Sign-up today for a FREE trial subscription to All Star Fund Trader. Check it out and make sure if it’s right for you. Pay only for the months you use – cancel at any time. ($27/month or $297/year)"

    As he says, his services are Hulbert-rated. Since his services are supposed to be better than the results to be obtained without his help in interpreting his own information, it may be interesting for you to check what Hulbert actually says about it.

    Thus, if you know how to use the information provided by All Star Investor for your own strategy, it is great. I was just saying that one should be careful in following investment recommendations made by the author of this newsletter.

    Andrei

  • edited August 2012
    Hi Andrei,

    Thanks for expounding more upon this, it is indeed appreciated as I would like to learn more on what Hulber has to offer. Could you please provide a link to Hulbert's commentary and his assesment? In this way, I know I am reading the right detail and the same that you formulated your perspective from.

    Andrei, I hope you have a great afternoon. It is a pleasant day here in Carolina ... Blue sky, and temperatures in the 70's. So for me, it is off to the golf course for a Sunday afternoon scramble with my golfing friends. I'll be back and check the board this evening in hopes I can be read more on Hulbert's comments about Mr. Rowland. A link would be of a great aid in me doing this.

    My thoughts of Mr. Rowland are not fixed by any means ... and, are subject to be changed, if warranted. But, for of now ... His Leadership Strategy that I frequently reference and use ... Well, it is one of his strategies that I feel has done right for me. I indeed find it a useful tool in moving some of my ballast money around ... and, it is free with no fee as with his other strategies that he has formulated and sells. Sometimes the simple strategies turn out to be the best. And, as you have found out a strategy works until it doesn't work anymore because the table has become crowded by too many investors using it. After all, market conditions do change and strategies that were employed during these prevailing conditions no longer seem to apply with intendended production results that they once did ... and/or, too many began to employ them. Therefore, one needs to be on alert to spot strategies that might be going dead.

    Again, I am sorry to learn of your losses ... but, I am afraid loss of principal is a part of investing as investing does entail some risk taking. Uncle Sam does allow for a deduct for investment loss on his annual income and tax reporting forms that most of us have to file each year. Perhaps, this might afford you some small relief. I know this first hand as I have filed for loss relief myself at times on my own tax returns. In the long run though, I am net positive and I have to pay on my net realized net gains after taking into account losses. Thus far, I am usually net positive each year ... although I am carrying over some booked losses form the great recession. I guess, a lot of us still are. Perhaps, a tax accountant can provide you more information on this.

    Andrei, I hope you have a pleasant afternoon and may the sun shine upon you.

    Cordially,
    Skeeter
  • Dear Skeeter,

    Here is the link: http://www.marketwatch.com/user/account/hulbertinteractivelogon?siteid=mktw&returnUrl=/hulbertinteractive/Default.asp?

    Hulbert gives performance of hundreds of newsletters, with graphs, comments, etc. The first 30 days are free, you can cancel any time. One day is enough to have a pretty good idea of everything the newsletters can offer.

    Good luck!

    Andrei
  • Andrei
    Can you list the specifics that you found unuseful in Hulberts publication?
    Prinx
  • edited August 2012
    I did not find Hulbert unuseful, quite to the contrary, but the results about the All Star which I found there were uninspiring. It was a year ago, I do not remember details, and I was mostly looking for the data on the All Star single sector portfolio, because it was the only one of his portfolios that outperformed in the previous decade, whereas some others were doing OK, and some did not do well and were liquidated.

    I decided to check whether the single-sector portfolio recovered during the last few years after behaving badly for several years. I found from Hulbert that the underperformance of this particular portfolio continued. All other portfolios did not look great, but knowing their previous history I would not use them anyway. If there are any subscribers to the All Star newsletter now, they can check what is the performance of his portfolios during the last 3, 5 and 10 years and correct me if I said something wrong. But you can learn much more about it by getting a free subscription to Hulbert Interactive for 30 days, and then you may quit if you do not like it or if you got from it everything that you wanted, see the link above.
  • I have not used Ron Rowland's newsletters (free or paid) or have checked Hulberts. I use my own trend following system which works for me. In general, I find that trend following does not work very well with narrow sectors, as the trends do not persist. I focus only on the broader sectors (large, mid, smallcap, emerging, non-us developing, high-dividend, aggregate bond, gold) and also keep an eye on volatility. Check out etfreplay.com for some simple backtesting. I know what they say about past performance, but it is still a good check.
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