Help me Select Fund - GOODX or SEQUX

VintageFreak

Time to churn MXXVX. Next week I will have completed the 1 year holding period to avoid redemption. I have been churning this fund for the past 3 years. As I might have mentioned this is the only investment my better half has selected. So I plan to buy it back at some point waiting patiently for the "bust". If that bust comes next month, next year, 5 years, I will wait patiently. At which point I would have even less number of funds or will sell something else.

For now, I need to redeploy. I've narrowed it down to two funds I cannot buy NTF at a brokerage. I'm leaning toward SEQUX because of its foreign exposure, while it does hold less cash, than GOODX in case of downturn. On the other hand GOODX has a $10K minimum investment which is the max I'm ready to plonk down. SEQUX let's me DCA in with a lesser minimum of $5K to start with.

I intend to eventually own all 3 funds. However right now I need to decide between GOODX and SEQUX. Any preferences?

Ted

Dear VintageFreak: That's an easy one, SEQUX
Regards,
Ted

MikeM

What happen to your fund reduction plan? SEQUX is one of the best funds ever. If you can get in, I'd choose that one.

VintageFreak

My fund reduction plan is going strong. This is a fund swap plan

As I said I will buy MXXVX but by that time I will have got out of many more funds...

And there is another advantage of SEQUX. I can buy / manage online.
But I see GOODX has been less volatile then SEQUX.

If the next 5 years are like the last 5, then SEQUX will outperform. However if not, I think GOODX will. This is a tough choice for me in only that I need to figure out which one to buy first.

Ted

Reply to @VintageFreak: Its very difficult to compare funds, SEQUX being forty-three year old, and GOODX that started in 2011.
Regards,
Ted

TheShadow

SEQUX is $5K for taxable account; $2,500 for non-taxable account. Would not buy SEQUX for taxable account due to potential amount of capital gain exposure; I hold SEQUX in my non-taxable account. One pitfall is paying annual $12 maintanence fee for IRA/Roth account which can be deducted from your account balance or by check (no ACH).


From M* as of 8/31/13

Potential Cap Gains Exposure

SEQUX 50.99

NickF

Have you ever seen the movie "Charlie Wilson's War"? It's a Tom Hanks movie from a few years ago - he plays a congressman in the early 80s pushing american involvement in Afghanistan. Good movie. Anyway, there is this scene when Tom Hanks and Philip Seymore Hoffman go to meet a CIA weapons expert in a park. They come across this nerdy guy playing chess against four people at the same time and Philip Seymore Hoffman turns to Hanks and asks him which guy he thinks is the weapons expert. Hanks doesn't know and Hoffman says trick question, it's the nerdy guy playing four games of chess. No reason this can't be fun.

SEQUX

NickF

To clarify, this answer is to own and hold over long periods of time, maybe 7-12 years.

NickF

Also, why are you selling something you want to own?

VintageFreak

I'm selling something I want to own because I have gains in it. As I have explained I need to get capital losses off my books.

However, forget that for a second. If I wanted to plonk some money down right now, I need to decide between SEQUX and GOODX. And yes, whichever fund I buy I have no problem holding.

jerry

SEQUX generally outperforms in fair or poor years and underperforms in good years(notice it underperformed in 09,12 outperformed in 08,10,11. This year performance is roughly the S+P 500 I really don't know GOODX. While the % of foreign stocks Sequoia holds is not insignificant there are only about 8 foreign stocks in the portfolio and about 2/3 of the foreign position is in Valeant Pharm(14% out of 20) Its a Canadian company and while much of its business is world wide it does a lot in the USA. In other words I am uncertain how much extra diversification you get in this not particularly diversified fund. \I understand GOODX is even less diversified.
Obviously both funds have much more cash than than most funds . If you like Berkshire Sequoia has about 5 times as much as GOODX but SEQUX is not that optimistic about its investment in that Security. Once upon a time that had at least 25% in that stock.
As pointed out by others Sequoia has a very large unrealised gain in the stocks it holds . They will distribute over !.70 this year(the exact amount is not certain)so it might be better to hold it in an IRA. On the other hand while you can sell a position smaller than 100k by phone there is nothing to switch to. I don't know if that is true for GOODX. Sequoia has an excellent record for closing the fund when needed but it is much larger than GOODX. Since I have owned SEQUX for more than 30 years I can say it has continued to follow the same investment philosophy. IT did very badly in 99 (its only both relatively and absolutely bad year because it owned no tech. It current owns about 6% in tech Google, IBM and a few others.

I guess I would go to both websites. ON www.sequoiafund.com you will find fund reports. Click on the investor day transcript. If GOODX has anything as informative as that buy it. If not go with SEQUX

NickF

Reply to @VintageFreak: ah, I missed that about the capital losses. Makes sense. You know you can carry those over indefinitely, counting the losses against taxable income until they run out, right?

SEQUX has substantially lower risk in terms of they are less likely to screw something up as a result of the way they invest. If you think they will both do well, flip a coin.

ducrow

Reply to @VintageFreak: I like GOODX better!!!!

bnath001

SEQUX is closed to new investors

Ted

Reply to @bnath001: True, but it might be available through one of the linked brokerage houses
Regards,
Ted
http://financials.morningstar.com/fund/purchase-info.html?t=SEQUX&region=USA&culture=en-US

mrdarcey

Reply to @bnath001: SEQUX is closed to new investment through third parties.

It is open through the transfer agent or to existing shareholders.

http://www.sequoiafund.com/ht-buy-shares.htm