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Profiting From Investors’ Mistakes: (FTHNX)

TedTed
in Fund Discussions
FYI: Raife Giovinazzo is a student of mistakes. He studied with the fathers of behavioral economics—Richard Thaler at the Booth School of Business at the University of Chicago and Daniel Kahneman at Princeton University. They were just professors then, before the Nobel Prizes, the Michael Lewis books, and screen time with Selena Gomez.

“I was always showing up to class at the very last second and sat in the back. I didn’t know anything—even who Kahneman was—and I questioned the material half of the time. He really liked that,” says Giovinazzo. “It didn’t occur to me until weeks in that he authored all the papers he was teaching.” Even so, Kahneman, an Israeli-American psychologist, was impressed, and he pointed the young Giovinazzo toward academia, to Chicago, where his best friend Thaler was teaching.

Giovinazzo has since embraced that education (an undergrad Princeton degree in sociology and a Ph.D. in finance from Booth) and put it to use at a fund that employs the principles of behavioral finance. He became a manager of the $370 million Fuller & Thaler Behavioral Small-Cap Equity fund (ticker: FTHNX) in early 2013
Regards,
Ted
http://www.cetusnews.com/business/Profiting-From-Investors’-Mistakes.HydDMOozf.html

M* Snapshot FTHNX:
http://www.morningstar.com/funds/XNAS/FTHNX/quote.html

Lipper Snapshot FTHNX:
https://www.marketwatch.com/investing/fund/fthnx

FTHNX Is Unranked In The (SCB) Fund Category By U.S. News & World Report:
https://money.usnews.com/funds/mutual-funds/small-blend/fuller-thaler-behavioral-sm-cp-eq-fd/fthnx

Comments

  • David_Snowball
    Too, there's a recent MFO profile of Fuller & Thaler.
  • slick
    I own its " sister" fund UBVSX, which was closed in 2016, and has grown to over 6B which is large for a small cap fund. Would switch over to FTHNX if it keeps growing much more. Nice find.
  • CrashCrash
    Indeed. My fav. small-blend fund is the one from Mairs and Power bunch outa St. Paul. I own that one. FTHNX makes me a bit jealous. Of course, the M & P bias toward investing in the Upper Midwest is an arbitrary limit.
    http://www.morningstar.com/funds/XNAS/MSCFX/quote.html
  • expatsp
    FTHNX fund has performed well, and anyone who owns it is surely happy. But I have 4 reasons for not buying it. 1) They've got, as @slick mentioned, a "sister fund" using this strategy, also in the small cap space, with $6.2 billion in assets 2) That sister fund's performance has been strong, but it underperformed pretty significantly in 2007-2008. Which is fair for a SV fund, and I don't mind volatility along the way, but it's something to keep in mind 3) Isn't every value fund trying to take advantage of other's behaviorial mistakes? Isn't that what Graham talked about nearly a century ago with his voting machine vs weighing machine metaphor? 4) If Barron's is writing about it, it's probably too late to jump on the bandwagon.

    In short, seems like a fine SV fund, but one that suffers from asset bloat within the family and probably doesn't have a secret sauce, just smart managers.
  • davfordavfor
    edited December 2017
    FTVNX is a new mid-cap value option that won't immediately suffer from some of the potential pitfalls @expatsp mentioned above....how well the strategy translates into more widely followed stocks is another question. David Potter from UBVSX is one of the two managers...

    https://www.mutualfundobserver.com/discuss/discussion/37577/fuller-thaler-behavioral-mid-cap-value-fund-ftvnx
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