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Thanks for taking the time to comment, much appreciated. I was truly not trying to insult anyone on this forum as I think the people here are great and its an excellent medium to exchange ideas. I guess my barbs were designed to hopefully illicit more responses and hopefully foster ideas.
Obviously I am questioning parts of my allocation or would not have posed the question to begin with. The PP is something I am wrestling with and continue to seek alternatives. When I have time to post I will plan to explain direct lending in greater detail.
Maurice- I would be very interested in hearing how your entire portfolio is structured when you have time?
I'd like to add this about the PP. The worst possible scenario for PP is probably rising real rates (especially rapid ones not based on growth ). If one believes that is in the cards the PP will have a tough time. I think the name says it all. It is meant to be a permanent strategy, but I think some mistakenly believe that there is less downside than there is because of its history.
I like the idea of unconstrained bond funds, but I also believe having some dedicated dollars in foreign/em bonds is logical. I do not believe that we are going to see truly high interest rates in the U.S. ANYtime soon. Heck, we will be lucky if the Fed raises short-term rates even a measly 0.5% by the end of next year. This being the case, the significantly higher yields obtainable from foreign bonds remains very attractive. Most investors would agree that a 6% yield from an investment-grade bond is darned good. Some volatility? Of course.
As for gold, most mining companies will tell you that their break-even number is $1,200. Below that, they cannot continue operations. This would lead to less inventory and, ultimately, to buyouts of smaller miners by the bigger ones. So, at some point, gold prices much below $1,200 are extremely attractive. Some very bright people are starting to accumulate more gold at current prices. I have no prediction...I am just saying what is obvious.
As for long-short equity, Michael Aronstein may be the best in this group. MFLDX just keeps on grinding out decent numbers. We do not always share his outlook on certain sectors, but we have learned that he is often eventually right...maybe early but usually right. You would do well to consider his fund. A second option would be FMLSX. We have repeatedly looked at Gateway, but it just has not gotten enough of the market's upside to justify using it.
Go-anywhere managers are plentiful, but not many really good ones. Ivy Asset Strategy (IVAEX), FPA Crescent (FPACX), PIMCO (PAUIX) are rund by thoughtful, talented managers. Most importantly, they look at things very differently.
Eaton Vance (EIGMX) is one of the best TRUE absolute return options.
Three years ago gold was trading at about the same price it is trading at today.
Three years ago GDXJ was trading at over $26.00 a share.
I would say that GDXJ has probably overreacted with its 65% decline in share price compared to June 2010 price levels when you consider that the price of gold is at exactly the same level as it was then.
$1,200 gold is still very profitable to mine for many mining companies.
Reply to @Kaspa: Peer-to-peer lending has taken off rather significantly in other countries (Jacob Rothschild invested in peer-to-peer lender Zopa; “We are witnessing the growth of the non-banking lending market,” Lord Rothschild told the Financial Times. “Following the 2008 crisis many of the banks remain under capitalised,” he said. “In these circumstances alternative forms of credit will be developed on a significant scale. This is happening.” http://www.ft.com/cms/s/0/2ffbe17e-405f-11e2-8f90-00144feabdc0.html#axzz2XvHAAxeD)
I haven't looked into what is available in the US, but plan on doing so at some point down the road. It would seem to me that regulations are likely keeping expansion in this industry slow at best - peer-to-peer in this country is more Kiva and Kickstarter; there are few services (at most) where you earn interest. It will be interesting to watch how this expands over time.
Reply to @Maurice: probably wouldn't scare me... I'm with you on cash- but of course our time horizon is pretty short, compared to other posters. At 81% right now, but we made some good money in the first five months this year, and now just watching to see what happens next. Advise against Egyptian investments at the moment.
Investors have abandoned gold and gold equities over the past year based on a misunderstanding of how prices respond to monetary expansions, while the continued actions of the Fed and other major central banks are increasing the likelihood that the gold bull market has a long way to go. Although anything can happen in the short term, including a further decline in the months ahead, we have seen gold go through several steep selloffs during this 13-year bull market, and each of them ended with negative sentiment and many declarations that its bull market was over. It’s likely the current decline will end, and the next bullish phase will begin, amid conditions similar to what we see today.
If you really want to understand what gold is all about, I suggest you read an interview on Gold Switzerland with Robert Blumen: “What’s really key for the price formation of gold?” Read more at:
My inflation adjusted two cents worth of comment for precious metals and any other investment sector one may choose to review; is that much of the actions in pricing of the investment have and are today greatly affected by and with the very large positions being held from large investment houses, be they hedge funds or whatever other choice one may submit.
One may be concerned or wonder about this and that for any given sector; but be assured, if the big kids think it is time to take some money and run; one may know that large unwinds of positions in etf's do and will continue to drive many sectors, regardless of anything that may resemble the use of and/or the consideration of the word, "fundamentals".
Some of the true value of an investment sector may only be displayed as to the fact of who among the big houses are playing what and how large the bet is upon the table. One(s) will win and one(s) will lose; at least for that day or week or month. We investors will remain on the outside looking in and wondering what is real and what is not.
Not clear why you would conclude that I would take you, or the topic, personally. I didn't say that every holding hits the criterion, only that that is still the chief, not outdated, criterion. Of course Tillinghast uses broader metrics, always has (read older interviews with him). And since I write legalese for mutual funds sometimes, as I said, I refer you to the FLPSX prospectus's Principal Investment Strategies.
>> There are stocks like Autozone in the portfolio that does not fit but still can be considered reasonably priced. So, I think that view of an absolute price points is outdated and my observation is that manager is using broader valuation metrics.
First three bullets: - Normally investing primarily in common stocks. - Normally investing at least 80% of assets in low-priced stocks (those priced at or below $35 per share), which can lead to investments in small and medium-sized companies. - Potentially investing in stocks not considered low-priced.
Given the adverb 'normally' and elaboration on the 'not constrained' strategy later in the prospectus, Tillinghast could put the entire portfolio into Apple.
Comments
I do not think an allocation greater than 10-15% is wise to invest in any single strategy, no matter how great it is or the manager.
Thanks for taking the time to comment, much appreciated. I was truly not trying to insult anyone on this forum as I think the people here are great and its an excellent medium to exchange ideas. I guess my barbs were designed to hopefully illicit more responses and hopefully foster ideas.
Obviously I am questioning parts of my allocation or would not have posed the question to begin with. The PP is something I am wrestling with and continue to seek alternatives. When I have time to post I will plan to explain direct lending in greater detail.
Maurice- I would be very interested in hearing how your entire portfolio is structured when you have time?
As for gold, most mining companies will tell you that their break-even number is $1,200. Below that, they cannot continue operations. This would lead to less inventory and, ultimately, to buyouts of smaller miners by the bigger ones. So, at some point, gold prices much below $1,200 are extremely attractive. Some very bright people are starting to accumulate more gold at current prices. I have no prediction...I am just saying what is obvious.
As for long-short equity, Michael Aronstein may be the best in this group. MFLDX just keeps on grinding out decent numbers. We do not always share his outlook on certain sectors, but we have learned that he is often eventually right...maybe early but usually right. You would do well to consider his fund. A second option would be FMLSX. We have repeatedly looked at Gateway, but it just has not gotten enough of the market's upside to justify using it.
Go-anywhere managers are plentiful, but not many really good ones. Ivy Asset Strategy (IVAEX), FPA Crescent (FPACX), PIMCO (PAUIX) are rund by thoughtful, talented managers. Most importantly, they look at things very differently.
Eaton Vance (EIGMX) is one of the best TRUE absolute return options.
Three years ago GDXJ was trading at over $26.00 a share.
I would say that GDXJ has probably overreacted with its 65% decline in share price compared to June 2010 price levels when you consider that the price of gold is at exactly the same level as it was then.
$1,200 gold is still very profitable to mine for many mining companies.
“We are witnessing the growth of the non-banking lending market,” Lord Rothschild told the Financial Times. “Following the 2008 crisis many of the banks remain under capitalised,” he said. “In these circumstances alternative forms of credit will be developed on a significant scale. This is happening.” http://www.ft.com/cms/s/0/2ffbe17e-405f-11e2-8f90-00144feabdc0.html#axzz2XvHAAxeD)
I haven't looked into what is available in the US, but plan on doing so at some point down the road. It would seem to me that regulations are likely keeping expansion in this industry slow at best - peer-to-peer in this country is more Kiva and Kickstarter; there are few services (at most) where you earn interest. It will be interesting to watch how this expands over time.
"when we factor in ALL COSTS, in reality, the break-even price of mining gold is now above $1,300"
Silver Doctors.com
If you really want to understand what gold is all about, I suggest you read an interview on Gold Switzerland with Robert Blumen: “What’s really key for the price formation of gold?”
Read more at:
http://goldswitzerland.com/what-is-key-for-the-price-formation-of-gold/print/
One may be concerned or wonder about this and that for any given sector; but be assured, if the big kids think it is time to take some money and run; one may know that large unwinds of positions in etf's do and will continue to drive many sectors, regardless of anything that may resemble the use of and/or the consideration of the word, "fundamentals".
Some of the true value of an investment sector may only be displayed as to the fact of who among the big houses are playing what and how large the bet is upon the table. One(s) will win and one(s) will lose; at least for that day or week or month. We investors will remain on the outside looking in and wondering what is real and what is not.
Sincerely and fully lucid,
Catch
>> Are there any companies that you love?
Sure, CVS, Costco, and one nobody knows about, Barnes Group (B). Add Brk.b if you want fundlike 'balance'. That should do you for a few more decades.
Not clear why you would conclude that I would take you, or the topic, personally. I didn't say that every holding hits the criterion, only that that is still the chief, not outdated, criterion. Of course Tillinghast uses broader metrics, always has (read older interviews with him). And since I write legalese for mutual funds sometimes, as I said, I refer you to the FLPSX prospectus's Principal Investment Strategies.
>> There are stocks like Autozone in the portfolio that does not fit but still can be considered reasonably priced. So, I think that view of an absolute price points is outdated and my observation is that manager is using broader valuation metrics.
First three bullets:
- Normally investing primarily in common stocks.
- Normally investing at least 80% of assets in low-priced stocks (those priced at or below $35 per share), which can lead to investments in small and medium-sized companies.
- Potentially investing in stocks not considered low-priced.
Given the adverb 'normally' and elaboration on the 'not constrained' strategy later in the prospectus, Tillinghast could put the entire portfolio into Apple.