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.
Reply to @AndyJ: Ditto on the thanks. And this quote makes me even more likely to invest in the fund, probably when I start transferring out of the stock market if it keeps going up: "Cohanzik doesn't treat ratings as accurately reflecting credit qu…
Berkowitz is quite willing to hold cash or conservative assets when he thinks the market is overvalued. FAIRX & FAAFX together are about a sixth of my total portfolio. Obviously he can be early, and no one is perfect, but I'm willing to believe …
Reply to @Junkster: During 2011 it fell a massive 7 basis points in the third quarter while staying positive every other quarter and for the full year (+3.86%.) If that's the worst it gets, I'm staying in.
http://performance.morningstar.com/fund/per…
Reply to @hank: I couldn't agree more. I haven't done a study (is there one out there?) but I bet you could outperform almost all of these high-priced long-short funds with lower volatility by putting half your money in a high-beta, high-return fund…
Reply to @AndyJ: From David's description, it sounds like with this fund, as they actually did with RPHYX, the managers intend to keep it small enough so they can take advantage of bonds that most bond funds are too big to take advantage of. To me t…
Reply to @VintageFreak: Agreed! I hope he isn't spead too thin, but with hundreds of millions of his own money invested in the mutual funds, I'll give him the benefit of the doubt.
Gundlach's argument seems to me modest enough that it is probably right: the days when moves in the rate curve assured these guys big capital gains are over, but they're not idiots, they too see how interest rates are moving and are skilled enough t…
Reply to @ducrow: Of course, the day after I sold JAOSX to buy SFGIX, JAOSX had a great day. But obviously one-day performance doesn't mean much after a couple of months. It is impressive how well SFGIX has outperformed its peer group since inceptio…
I've pulled the trigger: I put in an order to Schwab to sell JAOSX and buy SFGIX with the proceeds. I finally just asked myself this: If I had cash to invest and no history in either fund, which would I buy? There was no doubt as to the answer.
Thanks for the opinions, guys. I really am in the fence. Doubling down on your bets when they are down is what you are supposed to do if you believe in them. The JAOSX manager certainly has conviction--this truly is active management--along with a t…
Hi Skeeter,
Thanks for your thoughts. JAOSX is a little over 4% of my portfolio. So it sounds like you think I should keep it, which is probably the rational thing to do. I just needed some support to hold on to an underperforming fund, when it is …
I've posted this elsewhere, but I continue to be impressed by it: according to the reports on Fairholme's website, Berkowitz owns 10.5 million shares (over $300 million) in FAIRX and 9.2 million shares (about $120 million, or 40% of AUM) in FAAFX. T…
Not about SUBFX (which I own, thanks to David) but while we're talking about manager investments... I noticed yesterday that Fairholme's website reports that Berkowitz owns 10.5 million shares of FAAFX. At 11.50/share, that's $120 million out of a t…
Reply to @claimui: 9% cash is on the low side for Berkowitz. Like many value investors (Buffett, etc.) he likes to have at least that much on hand. I think he sees opportunities, though they must be big ones since he's not reopening FAAFX. Anyway's …
Reply to @MikeM: Hi Mike. Thanks for this response. It was this line in his 4th quarter commentary that got me: "We continue to question the current cycle’s sustainability without the assistance of trillion dollar fiscal deficits." The link to the r…
I got out of ARIVX about six months ago, put half in a risky small cap value fund (HUSIX) and half in cash. That combination has done a lot better than ARIVX although, admittedly, six months is way too short to judge.
I have no problem with a manag…
A lot of the top investors, including Warren Buffett, like to hold 20% or so in cash at most times, except when markets are clearly undervalued, so they can take advantage of a sudden dip either in the overall market or individual securities; surpri…
Like Hank, I am curious why you are dumping DODWX. I don't own it, but looking at M*, it's beaten its benchmark and category over every time frame they measure, has a reasonable asset base, and low expensives. It did plunge during the 2008-09 crash …
Reply to @STB65: For what it's worth, Fairholme (both FAIRX, FAAFX, and for my retired mother, FOCIX) are my biggest conviction holdings. I'd hold on for a long time. No active manager (except Bernie Madoff) can beat the market every year. The best …
Spot on, Charles. As a FAAFX shareholder, I too am looking for an explanation. The fund seems more correlated with Imperial Metals than with MBIA these days. It looks like he is rotating out of financials and into metals. I have faith in Berkowitz. …
Reply to @scott: I'll be very curious to see Fairholme's latest portfolio too. According to M*, in the last portfolio he was selling down MBIA and had opened a position in a Canadian miner. I wonder if he's in general make a shift from financials to…
Reply to @scott: Berkowitz's FOCIX was up 11% -- kind of incredible for a bond fund. Looks like he kept the MBIA bonds and sold some or all of the stock.
Here is another fund from the same family and with one of the same managers:
http://quotes.morningstar.com/fund/gaaex/f?t=GAAEX
With an average 5 year return of -25% (per year!), it might be the worst fund ever.
Reply to @mrc70: Mrc, I am in complete agreement with you about fund hopping (and about David's wonderful commentary and work on this site), and I hope a continued investment in ARIVX works out well for both of you. It isn't Cinnamond's poor short-t…
I'm among those thinking of bailing on ARIVX, even though in general I've done well sticking with and adding to funds (FAIRX, JAOSX, BRUSX) that have good long-term records but short-term underperformance.
The quotes from David's interview with him…
