twacowfca Posted March 24, 2012 Share Posted March 24, 2012 With an annual turnover of 132% to 420% per year this on the surface sounds more like a momentum or trading fund than a value investing fund. Just an observation. Packer Not necessarily. Take BAC. It looks like the fund had 0 shares at 9/30/11 and then it becomes an 11.4% position at 12/31/11. BAC closed the year at $5.69. It is now $9.85. If he chose to take profits on his gain is that a trading fund or good timing on buying something cheap and seeing it trade back toward fair value? He seems to be trading intelligently from a value perspective like many people on this board. He picks stocks that apparently have genuine intrinsic value and are bargains after they have sold off more than 50%. He sells them as they rise and approach IV. As a small fund manager, he is more nimble than those who manage large amounts. He did not ignore the macro environment during the financial crisis, but adjusted his cash position to be able to take advantage of opportunities as they presented. He may be a lurker as he pulled the trigger on BAC at the perfect time just as skeptics on this Board ( "C'est moi."-- in the immortal words of Miss Piggy) finally agreed that BAC was a deep value bargain. :) Link to comment Share on other sites More sharing options...
Packer16 Posted March 24, 2012 Share Posted March 24, 2012 I would agree if it was one year but every year has a turnover greater than 100 percent. I just think with that type of turnover the probability that it is not chance goes down. Most of the long term value investors I know have low turnover. We will see but if the fund is like the Prasad fund the this will be an upside blip. Packer Link to comment Share on other sites More sharing options...
king888 Posted March 24, 2012 Share Posted March 24, 2012 Value investors are usually sell early in bull market because price and IV gap closes rather quick. And they tend to hold on stock in bear turn beause the gap keep expanding . That makes turnover for value fund to be high in bull and low in bear. Isn't it? Link to comment Share on other sites More sharing options...
Packer16 Posted March 24, 2012 Share Posted March 24, 2012 But where is it low? I agree you can trade around positions but with the low turnover being greater than 100% I think this is a trading/speculating value fund not an investing fund. Packer Link to comment Share on other sites More sharing options...
alertmeipp Posted March 24, 2012 Share Posted March 24, 2012 how does trading frequently make it not investment fund. As long as those trading are based on good reasoning, it makes no diff. Link to comment Share on other sites More sharing options...
Packer16 Posted March 24, 2012 Share Posted March 24, 2012 In my mind it increases the degree of difficulty as there are more decisions to be made and is more reflective of speculation as defined by Graham versus investment. I have no problem with trading funds you just have to know what you are getting into. Packer Link to comment Share on other sites More sharing options...
Parsad Posted March 24, 2012 Share Posted March 24, 2012 Am I mis-reading something between the article and annual reports? I actually get his annual return ending December 31, 2011 to be about 22.7% annualized since inception. Which is fantastic nonetheless, but markedly different than the 40.5% annualized the article states. His unit value ending December 31, 2011 was 28.74 and his opening unit value was 10.00 on November 9, 2006, so over roughly 5.15 years that works out to 22.7% annualized. Cheers! Link to comment Share on other sites More sharing options...
Parsad Posted March 25, 2012 Share Posted March 25, 2012 how does trading frequently make it not investment fund. As long as those trading are based on good reasoning, it makes no diff. It can make a huge difference depending on how much realized gains are passed onto the investors. On a pre-tax basis, the numbers will look very good, but on an after-tax basis the investor may end up paying alot of the gains in tax. It looks like they paid out a shitload of gains in 2010, 2011 and 1st half 2012...over 40% of the gains in 2010, over 35% in 2011 and nearly $4 a unit in just the 1st half of 2012. Compare that to someone who just bought and held FFH during the same period. On an after-tax basis, I don't think his investors did enormously better than in our U.S. fund during the same period since inception. Almost certain they did not do better than Allan Meecham's investors as well. Still, his numbers are good and he deserves to be watched. Cheers! Link to comment Share on other sites More sharing options...
ericd1 Posted March 25, 2012 Share Posted March 25, 2012 Would be ok in a tax-advantaged account! Link to comment Share on other sites More sharing options...
Parsad Posted March 25, 2012 Share Posted March 25, 2012 Actually, I take part of that back. I just looked at his annual report again, and his unit value is after the distribution, so he actually did incredibly well. I think the article takes into account the distributions, thus the 40.5% annualized. But a good chunk of that would probably be short-term gains and the annualized return would be significantly lower than the reported 40.5%, but much higher than the 22.7% I calculated. They are very good returns, and as I said...definitely worth watching! Cheers! Link to comment Share on other sites More sharing options...
stahleyp Posted March 25, 2012 Share Posted March 25, 2012 how does trading frequently make it not investment fund. As long as those trading are based on good reasoning, it makes no diff. It can make a huge difference depending on how much realized gains are passed onto the investors. On a pre-tax basis, the numbers will look very good, but on an after-tax basis the investor may end up paying alot of the gains in tax. It looks like they paid out a shitload of gains in 2010, 2011 and 1st half 2012...over 40% of the gains in 2010, over 35% in 2011 and nearly $4 a unit in just the 1st half of 2012. Compare that to someone who just bought and held FFH during the same period. On an after-tax basis, I don't think his investors did enormously better than in our U.S. fund during the same period since inception. Almost certain they did not do better than Allan Meecham's investors as well. Still, his numbers are good and he deserves to be watched. Cheers! Yeah, man, but it only costs $2000 to invest with him. ;) Link to comment Share on other sites More sharing options...
Parsad Posted March 25, 2012 Share Posted March 25, 2012 Actually another correction...I took a look at the notes in the 2011 annual report, and the bulk of the distributed gains were long-term, not short-term. This guy gets better and better. Haven't looked at the other annual report notes yet. Stay tuned! Cheers! Link to comment Share on other sites More sharing options...
Parsad Posted March 25, 2012 Share Posted March 25, 2012 Nope, I was right the first time. The bulk of the distributed gains in the previous years were mostly short-term. Still pretty darn good! Cheers! Link to comment Share on other sites More sharing options...
hardincap Posted March 25, 2012 Share Posted March 25, 2012 i agree w/ the comment that a 5 year record is too short. i have similar returns and i still dont really know what im doing. li lu remarked that even with a 10 year record its hard to tell lucky from good. nevertheless he's worth watching, as his holdings clearly show he really is a value investor at heart Link to comment Share on other sites More sharing options...
hardincap Posted March 25, 2012 Share Posted March 25, 2012 >i agree w/ the comment that a 5 year record is too short. i have similar returns and i still dont really know what im doing. And you have modeled your thought process along with Schroeders.... why dont you tell alice what you think: http://aliceschroeder.com/blog/no-joy-mudville Link to comment Share on other sites More sharing options...
Rabbitisrich Posted March 25, 2012 Share Posted March 25, 2012 If you think that Schroeder offers considered analysis of Buffett, then Jeff Matthews may destroy your mind. Link to comment Share on other sites More sharing options...
BargainValueHunter Posted March 29, 2012 Author Share Posted March 29, 2012 More on Wang: http://www.investmentnews.com/article/20120327/FREE/120329922 The lack of accessibility raises questions for some experts. “In a case like this, you really want to know how they earned that great performance, and you want to know who's behind it,” said Kevin McDevitt, analyst at Morningstar Inc. Mr. Wang does reveal something of his strategy in his annual reports. As of June 30, Mr. Wang was looking for companies trading below their “intrinsic” value. “Short-term, stock market can be volatile and unpredictable. Long-term, the deciding factor of stock price, as always, is value. Going forward, the fund strives to find at least some of the undervalued stocks when they become available in U.S. stock market, in an effort to achieve a good long-term return for the shareholders,” he wrote. Mr. Wang is also not shy about taking on risk to generate returns. The Oceanstone Fund has a standard deviation of 39, according to Morningstar. By way of comparison, the emerging markets — which are considered to be among the most volatile asset classes — have a standard deviation of 26. “He's in wipeout territory,” said Lee Munson, chief investment officer of Portfolio LLC. “What the market was doing last August is what a standard deviation of 39 looks like. Statistically speaking, he could just as easily be down 80%.” Link to comment Share on other sites More sharing options...
Parsad Posted March 29, 2012 Share Posted March 29, 2012 When reporters or analysts start talking about standard deviation to define risk, I usually want to kick them in the butt so hard, that I'll never find my shoe again! ;D Cheers! Link to comment Share on other sites More sharing options...
JAllen Posted March 29, 2012 Share Posted March 29, 2012 More on Wang: http://www.investmentnews.com/article/20120327/FREE/120329922 The lack of accessibility raises questions for some experts. “In a case like this, you really want to know how they earned that great performance, and you want to know who's behind it,” said Kevin McDevitt, analyst at Morningstar Inc. Mr. Wang does reveal something of his strategy in his annual reports. As of June 30, Mr. Wang was looking for companies trading below their “intrinsic” value. “Short-term, stock market can be volatile and unpredictable. Long-term, the deciding factor of stock price, as always, is value. Going forward, the fund strives to find at least some of the undervalued stocks when they become available in U.S. stock market, in an effort to achieve a good long-term return for the shareholders,” he wrote. Mr. Wang is also not shy about taking on risk to generate returns. The Oceanstone Fund has a standard deviation of 39, according to Morningstar. By way of comparison, the emerging markets — which are considered to be among the most volatile asset classes — have a standard deviation of 26. “He's in wipeout territory,” said Lee Munson, chief investment officer of Portfolio LLC. “What the market was doing last August is what a standard deviation of 39 looks like. Statistically speaking, he could just as easily be down 80%.” It's really easy to find out what he was doing! Look at his reports in the quarters preceding his double at 12/31/2008 and 6/30/2009! Link to comment Share on other sites More sharing options...
stahleyp Posted March 29, 2012 Share Posted March 29, 2012 I especially like the 80% wipeout comment when the guy usually holds 15-20% cash. Link to comment Share on other sites More sharing options...
BargainValueHunter Posted August 17, 2012 Author Share Posted August 17, 2012 51% Cash, 12% BAC, 4% GM, 3.5% DELL... http://funds.us.reuters.com/US/funds/holdings.asp?YYY622_jy302ZK0gRIK5CT7HY7VhhuZTH3KwZb8EX/lL+8rQLe2XAYvTeJv80QkjbRhvQp3 Link to comment Share on other sites More sharing options...
frog03 Posted August 17, 2012 Share Posted August 17, 2012 Thanks for this update. What is interesting is that despite the track record, the AUM are still very very very small. Link to comment Share on other sites More sharing options...
stahleyp Posted August 18, 2012 Share Posted August 18, 2012 Thanks for this update. What is interesting is that despite the track record, the AUM are still very very very small. I think that's mostly because it's not on any of the NTF fund supermarkets. I don't think you can buy it through the major brokerages even with a transaction fee. The average joe isn't gonna take the time to print out the application and mail it to the fund. Link to comment Share on other sites More sharing options...
Guest rimm_never_sleeps Posted August 18, 2012 Share Posted August 18, 2012 His returns are due to a very good 2009 and 2010. He did have a very small base those years. Not that I am one to criticize about that since I have the same issue. June 2008 $679,000 June 2009 $1.5 million June 2010 $4.7 million June 2011 $15.4 million Dec 2011 $14.6 million BAC fans should like that he had over 10% of the fund in BAC at year end. The next few years will reveal the truth. bingo. if he refrained from investing much in 2007 and had most of his assets in cash in late 2008 and 2009 it's very easy to understand how you could have a great record with such a small base of assets. check out the lows of LCAPA in 2008/2009. there were once in a generation opportunites. timing is everything. heck Fairholme benefited greatly by starting the fund in 1999. his kind of stocks were dirt cheap. Link to comment Share on other sites More sharing options...
Greg Posted August 18, 2012 Share Posted August 18, 2012 Look at the fund's most recently published portfolio and think about what performance you would expect from that portfolio and from whatever portfolio that it may be switched into in the future. Link to comment Share on other sites More sharing options...
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