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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.

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M*: 3 Great Funds Having A Lousy Year: Text & Video Presentation

FYI: When assigning Morningstar Analyst Ratings, we focus on managers with disciplined approaches that we think will outperform during a full market cycle. But that doesn't mean there won't be some dry spells along the way. Here are three Gold-rated funds that are struggling in this year.


  • I struggle with this topic all the time. Taleb might argue that only pedestrian journalists would make an issue of such things, since most journalists untrained in probability can't recognize being "fooled by randomness." Instead, like M* claims, look at the process ... the "generator" of the return. If the process is good the numbers will follow, sooner or later. And ultimately, it is the investor that determines just how long is too long. Is Hussman's process good? Or Heebner's? Fund Alarm was established on the premise that 5 years was about as long as an investor should give a fund manager to prove whether the "generator" is worthy. I find fund managers these days, especially quants, would rather not talk about performance: "Need to give it 10 years," they say. And, maybe statistically, they are right ... and even 10 years may not be long enough. Some random thoughts on this cloudy morning ... from Orcas Island this summer.
  • I hope the pay for this interview and these answers was maybe $50 or so. $40 perhaps.

    I love the way investors, and journalists, think of all this like sports teams, or individual players, on a streak, in a slump, wait'll next year, how do they compare w the past?, lost their touch, on a roll, shooting better, slugging worse, etc etc.
  • Agree with Charles. After 5 years if you are still down on original investment (I'm boing to ignore whether you doubled your money in S&P 500 in that same time), AND you still want to hold on to the fund, you have lost your marbles. You have as much probability of moving assets to another fund and do as good for next 5 years. ASSUMING original fund regardless of whether it starts performing does not shut its doors because investors are not forthcoming and may not return.

    Let no one take your tax loss away from you in the original fund.

    And there are no such things as journalists any more. That word should be stricken from the english languages. I wouldn't even call them reporters, who as the word suggests simply report what they say, and don't try to ANALyse things. There may be maybe 2 / 1000 who are journalists.
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