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.
Hi Guys,
I want to especially thank the MFO members who took precious time to craft a reply to my post. I deeply appreciation the extra effort needed. The replies demonstrate a fine diversity of viewpoints necessary to explore some of the subtlet…
Hi msf,
I absolutely agree with your astute observations.
Smart Beta is more about smart marketing than about smart investing. It is not Indexing in its traditional format, but rather various forms of active fund management strategies.
From my p…
Reply to @Vert:
Hi Stan,
Bull markets or Bear markets, it doesn’t matter. In a comparison against passive Index funds, active fund managers underperform regardless of the market direction.
It is usually acknowledged that the active mutual funds…
Hi Heather,
First, I want to commend you on your openness and your flexibility. I would never reveal my entire portfolio to strangers, especially on the Internet. I congratulate you on your flexibility with regard to portfolio modifications based …
Hi Guys,
I want to thank the MFO members who took a timeout to read about my enthusiasm for the Flexible Retirement Planner. I have been a Monte Carlo cheerleader for decades ever since my military days when participating in war games planning exe…
Reply to @AKAFlack:
Hi AKAFlack,
It’s good that you still participate on this forum. Your views are always respected.
You are spot on-target that accumulated portfolio value is pathway dependent. We would all hate to experience a significant d…
Reply to @Old_Joe:
Hi Old Joe,
Thank you for your comments.
I understand and appreciate your observation that a household is likely to have disparate asymmetric investment know-how. Initially, that asymmetry existed in our family too. But it c…
Hi Catch,
It is a pleasure to be introduced to a couple who have managed their life together so well. They are in a grand place because of their composite financial skills and savings disciplines.
I suspect they need a robust congratulations more…
Hi Guys,
I am a natural skeptic when a novel investment approach is publicized as a breakthrough “Moneyball” concept. These type of discoveries are rare events to be treasured and exploited if verified.
My skepticism expands if the methodology is…
Hi Guys,
I agree with everyone else. That could be a danger signal.
I’m not sure that is an entirely good thing. Are we going along to get along? Are we victims of groupthink?
No, the marketplace dynamic changes are dramatic and real. They de…
Reply to @catch22:
Hi Catch,
Thanks for your quick and generous reply.
I would never use the word "snooty" to describe you. No Sir, never ever.
I agree with your assessment that our emotions govern many of our investment decisions. It contrib…
Reply to @Mindy:
Hi Mindy,
I was not referring to you or your recent exchange with Investor. I had not seen that exchange when I posted on novice investors. There is no attempt by me to push anyone to become a more informed investor. The profi…
Reply to @catch22:
Hi Catch22,
Sorry I missed your earlier reference to the Khan classes. It looks like great stuff. I must have reviewed Investor's computer opportunity post before you added the worthy Khan online resource.
Thank you for all …
Reply to @VintageFreak:
Hi VintageFreak,
I do rate passive Index investing as a complete, self-contained investment philosophy. It is but one of many. All of them have fundamental financial and investing axioms and practical rules embedded withi…
Hi VintageFreak,
Thank you for the Moneyball reference. I really like investment analogies, but I especially love the baseball variety given my fondness for the game.
Analogies of all kinds teach practical lessons, enhance understanding, provide …
Reply to @andrei
:
Hi Andrei,
Thank you for your research on this matter. I did download your referenced paper, but only glanced at it. Duke financial professors do good work. But I hesitate to go any further examining GBMFX because of the size …
Reply to @David_Snowball:
Hi David,
Thank you for participating. That alone guarantees an expansive readership.
Wow, that’s quite an astute recommendation to examine the asset allocation of the GBMFX fund to gain insights into Jeremy Grantham’s…
Hi Guys,
I really do appreciate your fine contributions that significantly enhanced the practical usefulness of my original posting. Truly independent, diverse opinions enlarge on the subject’s scope and make for better decisions, especially when p…
Hi Guys,
I want to especially thank Ted and BobC for this thread.
The article that Ted referenced is excellent. It provides numerous expert perspectives on the art of mutual fund decision making.
I totally agree with BobC’s observation that "We …
Reply to @David_Snowball:
Hi Guys,
Thank you both for the Duke and CXO references. I was totally unaware of their existence. I was able to access both sources and have quickly scanned them. Good stuff.
My immediate reaction, based on their bo…
Hi Guys,
Does anyone bother to keep score of the forecasting follies game?
Okay, the respected GMO fund firm just released a worldwide forecast of expected future real returns for various investment classes. That’s comfort food for those planning…
Once again Hi Daves,
In my rush to respond, I omitted two further illustrations of the significance of controlling standard deviation in the downward direction.
I’ll correct my neglect immediately. These comments should be considered as an extens…
Hi Daves,
Your question is about the statistical characterization of a data set. Bee posted an on-target brief explanation. Let me expend on his answer.
The standard deviation is indeed a measure of the dispersion of the assembly of data points …
Hi Vintage Freak,
I seriously doubt that as investors “we suck”. I’m sure some of us do; I’m equally sure that most of us do not suck. I do not suck; you do not suck.
We often make misguided investment decisions, but being 100 % correct when for…
Hi Guys,
As the MarketWatch article claims, Mom and Pop are poor market timers; they typically zigg when they should be zagging. A ton of research establishes that as fact including the data sets from Dalbar that are referenced in the article.
Bu…
Reply to @hank:
Hi Hank,
Thank you for your thoughtful and fair reply. It is well crafted with many fine observations embedded throughout. I enjoyed reading it. I understood and agreed with all the major points that you highlighted. Congratul…
Hi Golub 1, Hi Guys,
One issue that I purposely avoided in my earlier post because of length considerations was that of active mutual fund management performance persistency.
It is significant because it simply does not exist beyond perhaps a mom…
Hi Golub 1, Hi Guys,
You are perfectly correct in stating that today’s conventional wisdom recommends that 20 to 30 stock positions provide sufficient diversification for the equity portion of a portfolio. Note that conclusion is strictly limited …
Reply to @STB65:
Hi STB65,
I suspect you meant to address your comment to “mfs” since he introduced the Vanguard VT total equity market ETF option. But since you directed your reply to me, I suppose that permits me to drop my nickel down the slo…
Hi STB65,
Once you have crossed the happy threshold of reasonable portfolio security and survival for your lifetime, you are now free to invest like an institution instead of as a private investor.
Given that comfortable circumstance, your investm…
Hi David, Hi Charles,
Thank you for your informative responses, your tolerance, and your patience. Your carefully crafted replies clarified the issues and made the exchange worthwhile, at least for me and likely for many other MFO members.
As you…
Reply to @scott:
Hi Scott,
Thank you for the Martin Armstrong heads-up.
I am not familiar with the man, his models, or his record. He certainly has the credentials to operate in the economic forecasting community. Also, I respect your recommen…
Reply to @Charles:
Hi Charles,
Thank you so much for your quick and expansive reply. It addressed and fully explained the many issues and decisions that confront the designers of the MFO fund rating guide. It is not an easy job nor is it withou…
Hi Jerry,
I don’t remember ever being exposed to the Magellan fund and Mutual fund serial tradeoff that you recalled from the late 1980s. That was a longtime ago and much has changed, within the marketplace, and particularly with the Fidelity and …
Hi VintageFreak,
I think it is likely that you are referring to a technical market directional indicator discovered (invented) by Norm Fosback in the 1970s. It was originally called the “High Low Logic Index (HLLI)”. Since its introduction is has…
Hi Guys,
Sorry.
A few moments ago I discovered that in my haste to post the Morningstar Long/Short equity fund roadmap research paper, I inadvertently neglected to close with my assessment of these evolving popular products. I firmly believe tha…
Hi Guys,
This MFO thread is especially chock full of actionable information and guidance. Thank you all for such an informative exchange.
Most participants seem very knowledgeable in the long-short arena. For those of us long-short novice who ar…
Hi Guys,
Correlation coefficients are not static entities. They may have nice long-term statistical averages, but they are dynamic over shorter timeframes. It’s like the story of a man drowning while attempting to cross a stream with an average d…
Hi Daves,
Congratulations on your upcoming retirement, and an especial congratulations for embarking on this early planning exercise. The planning will make you a happier and more confident warrior when that critical date ultimately arrives.
The …
