When to get out

These are two real non-sector domestic stock funds, with average market
caps around $20B. Would you sell either of them, would you hold them,
do you need more information?

1. 5 year performance in bottom decile for its category. 3 year
performance bottom decile, 1 year and YTD - don't ask (even worse).
Bottom 1/3 in each year since 2001. Same manager since inception, with
solid record in the previous century.

2. 5 year performance in top decile for its category. 3 year
performance in top decile, 1 year and YTD second decile. Top decile (or
nearly so) each year since 2001, except 2nd decile this year. Current
manager, in place long enough to take credit for most of these figures,
is being replaced by analysts who have never run a mutual fund.

Since these are not (IMHO) obscure funds, it may not be too hard to
figure out what these funds are, but I'm curious about how people decide
when to dump a fund. Should one drop a fund based on performance (over
how long a period)? Should one follow managers (a good one will be
someday be good again) or fund families (staying with a fund in a good
family regardless of who takes the reins)? What other factors do you
consider?

--
Mark Freeland

Re: When to get out

Decibels - though a category momentum of modest returns, even at top
rankings, shan't justify wider risk exposure swings when safer bets
exist. Tolerance for diminishing returns when a lead in the competition
stands in stark contrast is not lucrative. It's annoying. Loyalty
needn't be a lucrative return, nor bailing out a secondary
consideration. When possible play within guidelines. When not, better
to be damned by penalty than incur substanial loss. Dump the analysts
when incompetence is suspect on the decibel skew. Be conversant and
respectful of investment idiologies and statistical pragmatism designed
to avoid flagrant pitfalls. Decline candy men in pink suits offer to
sweeten a contractual obligation. And while profiteering, bear in
mind, there's nothing that exact to a science of stepping up to a
trough of avarice during peak feeding frenzy. Enjoy - but best be sure
to save enough room to not be trampled when a big bell rings out it's
time to leave.


> Since these are not (IMHO) obscure funds, it may not be too hard to
> figure out what these funds are, but I'm curious about how people decide
> when to dump a fund. Should one drop a fund based on performance (over
> how long a period)? Should one follow managers (a good one will be
> someday be good again) or fund families (staying with a fund in a good
> family regardless of who takes the reins)? What other factors do you
> consider?
>
> --
> Mark Freeland
>

Re: When to get out

Is English your first language? Or even your second?

Was this written by a computer?

Is it supposed to mean anything?

Flasherly wrote:
> Decibels - though a category momentum of modest returns, even at top
> rankings, shan't justify wider risk exposure swings when safer bets
> exist. Tolerance for diminishing returns when a lead in the competition
> stands in stark contrast is not lucrative. It's annoying. Loyalty
> needn't be a lucrative return, nor bailing out a secondary
> consideration. When possible play within guidelines. When not, better
> to be damned by penalty than incur substanial loss. Dump the analysts
> when incompetence is suspect on the decibel skew. Be conversant and
> respectful of investment idiologies and statistical pragmatism designed
> to avoid flagrant pitfalls. Decline candy men in pink suits offer to
> sweeten a contractual obligation. And while profiteering, bear in
> mind, there's nothing that exact to a science of stepping up to a
> trough of avarice during peak feeding frenzy. Enjoy - but best be sure
> to save enough room to not be trampled when a big bell rings out it's
> time to leave.
>
>
>
>>Since these are not (IMHO) obscure funds, it may not be too hard to
>>figure out what these funds are, but I'm curious about how people decide
>>when to dump a fund. Should one drop a fund based on performance (over
>>how long a period)? Should one follow managers (a good one will be
>>someday be good again) or fund families (staying with a fund in a good
>>family regardless of who takes the reins)? What other factors do you
>>consider?
>>
>>--
>>Mark Freeland
>>
>
>

Re: When to get out

David Wilkinson wrote:
> Is it supposed to mean anything?

Something, not anything. For example, an abstractness in scientific
analysis can be something expressive, withal, of allied emotions that
play upon market;--Even though these are useful expressions of meaning,
than what we were to have, otherwise, to encompass market dynamics, for
something yet lacking;--At precisely that point, David, so not to be
just anything lacking, but decidely something which determines an
inexactitude market science has yet to surmount.

Re: When to get out

Flasherly wrote:
> David Wilkinson wrote:
>
>>Is it supposed to mean anything?
>
>
> Something, not anything. For example, an abstractness in scientific
> analysis can be something expressive, withal, of allied emotions that
> play upon market;--Even though these are useful expressions of meaning,
> than what we were to have, otherwise, to encompass market dynamics, for
> something yet lacking;--At precisely that point, David, so not to be
> just anything lacking, but decidely something which determines an
> inexactitude market science has yet to surmount.
>
I thought so. It is written by a computer.

Is it trying to pass the Turing test? If so, it has failed.

Re: When to get out

Mark Freeland wrote:
> These are two real non-sector domestic stock funds, with average market
> caps around $20B. Would you sell either of them, would you hold them,
> do you need more information?

> 1. 5 year performance in bottom decile for its category. 3 year
> performance bottom decile, 1 year and YTD - don't ask (even worse).
> Bottom 1/3 in each year since 2001. Same manager since inception, with
> solid record in the previous century.

Sell.

> 2. 5 year performance in top decile for its category. 3 year
> performance in top decile, 1 year and YTD second decile. Top decile (or
> nearly so) each year since 2001, except 2nd decile this year. Current
> manager, in place long enough to take credit for most of these figures,
> is being replaced by analysts who have never run a mutual fund.

Sell.

Re: When to get out

Mark Freeland wrote:

> These are two real non-sector domestic stock funds, with average market
> caps around $20B. Would you sell either of them, would you hold them,
> do you need more information?
>
> 1. 5 year performance in bottom decile for its category. 3 year
> performance bottom decile, 1 year and YTD - don't ask (even worse).
> Bottom 1/3 in each year since 2001. Same manager since inception, with
> solid record in the previous century.

I would have sold by now.

I allow a fund only one bad year. Two bad years in a row, I sell.


> 2. 5 year performance in top decile for its category. 3 year
> performance in top decile, 1 year and YTD second decile. Top decile (or
> nearly so) each year since 2001, except 2nd decile this year. Current
> manager, in place long enough to take credit for most of these figures,
> is being replaced by analysts who have never run a mutual fund.

I wouldn't allow my hard-earned money to be managed by a total novice
when it had previously been managed by an experienced good manager. I
would sell.

If one experienced fund manager is being replaced by another experienced
fund manager, I would hold onto the fund and give the new manager a
chance. For one year. If he's significantly underperforming his
predecessor, then I would sell.

I would never follow fund families if I had the choice. But if I hear
really bad things about a fund family (Janus comes immediately to mind),
I would sell all funds in that family immediately.


--
Steven D. Litvintchouk
Email:

Remove the NOSPAM before replying to me.

Re: When to get out

I'm sorry you lost, too, but I thought you did jolly well. . .[chip,
chip]. Dave, old boy, does this mean you are not angry? We should play
another, Dave. May I invite one of my old friends, Norman Weiner and
Chaos Theory, as equitable dynamics for the dole within market inertia,
Dave?

David Wilkinson wrote:
> I thought so. It is written by a computer.
>
> Is it trying to pass the Turing test? If so, it has failed.

"Jeremy Benetham had originated the conception in the early nineteenth
century under the beguiling title of the Felicific Calculus...of
humanity as living profit-&-loss calculators." VII, The Victorian World
and the Underworld of Economics. The Worldly Philosophers. -1986

Re: When to get out

Flasherly wrote:
> I'm sorry you lost, too, but I thought you did jolly well. . .[chip,
> chip]. Dave, old boy, does this mean you are not angry? We should play
> another, Dave. May I invite one of my old friends, Norman Weiner and
> Chaos Theory, as equitable dynamics for the dole within market inertia,
> Dave?
>
Er, it was Norbert Weiner actually, but what is one mistake among so many.

> David Wilkinson wrote:
>
>>I thought so. It is written by a computer.
>>
>>Is it trying to pass the Turing test? If so, it has failed.
>
>
> "Jeremy Benetham had originated the conception in the early nineteenth
> century under the beguiling title of the Felicific Calculus...of
> humanity as living profit-&-loss calculators." VII, The Victorian World
> and the Underworld of Economics. The Worldly Philosophers. -1986
>
I think you mean concept in that context. Conception is almost correct
but is more usually part of procreation, as in the immaculate...

Remember what another Victorian sage may have said "Grammar maketh Man!"

Re: When to get out

David Wilkinson wrote:
> > "Jeremy Benetham had originated the conception in the early nineteenth
> > century under the beguiling title of the Felicific Calculus
> >
> I think you mean concept in that context. Conception is almost correct
> but is more usually part of procreation, as in the immaculate...
>
> Remember what another Victorian sage may have said "Grammar maketh Man!"

A suitable situation for a protege, Noam Choamsky, were it only less
daunting.

Originated/conception = felicific = ([<calculated]<<birthgiving). A
concept is "a fairly general abstract idea," and a conception is
"a grasp of a concept" - hence, Francis Ysidro Edgeworth's concept
of ... is no conception of what it implies. Both, however, operate on
the same vector - the order of generalization.

The pleasure machine, it's mathmatical conception is living proof the
machines eke discrete pleasure, each according its status within market
inertia.

Re: When to get out

Flasherly wrote:
> David Wilkinson wrote:
>
>>>"Jeremy Benetham had originated the conception in the early nineteenth
>>>century under the beguiling title of the Felicific Calculus
>>>
>>
>>I think you mean concept in that context. Conception is almost correct
>>but is more usually part of procreation, as in the immaculate...
>>
>>Remember what another Victorian sage may have said "Grammar maketh Man!"
>
>
> A suitable situation for a protege, Noam Choamsky, were it only less
> daunting.
>
> Originated/conception = felicific = ([<calculated]<<birthgiving). A
> concept is "a fairly general abstract idea," and a conception is
> "a grasp of a concept" - hence, Francis Ysidro Edgeworth's concept
> of ... is no conception of what it implies. Both, however, operate on
> the same vector - the order of generalization.
>
> The pleasure machine, it's mathmatical conception is living proof the
> machines eke discrete pleasure, each according its status within market
> inertia.
>
This is what I am complaining about. Your last sentence is completely
meaningless. It hardly even fits the standard subject-verb-object
construction of a sentence. Your earlier ones are little better.

I take it back; a computer would have done a better job as its
programmer would have incorporated some rules of grammar. A collection
of long words does not necessarily convey any meaning.

As you seem to be keen on quotations, try this one:

Words are like leaves
and where they most abound
much fruit of sense beneath
is rarely found.

Re: When to get out

The machines, mathmatical models of human endeavour [while at work],
are transient representations of some greatest probability marketing
has to account when profiteering stratagems are deployed over all
stations of society, status by in large signifies; and, again, 'while
at work' only for so long as entropy admits inertia exists in any given
model.

David Wilkinson wrote:

> > The pleasure machine, it's mathmatical conception is living proof the
> > machines eke discrete pleasure, each according its status within market
> > inertia.
> >
> This is what I am complaining about. Your last sentence is completely
> meaningless. It hardly even fits the standard subject-verb-object
> construction of a sentence. Your earlier ones are little better.

'I would have made this shorter, only I haven't the time.' -Blaise
Pascal.

Re: When to get out

"Steven L." <> wrote in message
news:a0HUe.8603$
> Mark Freeland wrote:
>
> > These are two real non-sector domestic stock funds, with average market
> > caps around $20B. Would you sell either of them, would you hold them,
> > do you need more information?
> >
> > 1. 5 year performance in bottom decile for its category. 3 year
> > performance bottom decile, 1 year and YTD - don't ask (even worse).
> > Bottom 1/3 in each year since 2001. Same manager since inception, with
> > solid record in the previous century.
>
> I would have sold by now.

So would I. The fund, Weitz Value, was named Morningstar's "pick of the
week" on CNBC last Friday! I cannot understand Morningstar's fascination
with this fund - yes, it is heavily into media and telecom (as well as one
of traditional value funds' favorites - financials), which is why it is
having such problems, but that's been the manager's choice for years - this
is not a sector fund.

> I allow a fund only one bad year. Two bad years in a row, I sell.

I did own a semi-clone of this fund, Weitz Partners Value, and held it for
three underperforming years. The good news was that the category (midcap
value) was a right place to be those years, so on an absolute basis, it
didn't hurt as much as it could have. But in hindsight, that was much too
long to wait - your two year rule may be better.

> > 2. 5 year performance in top decile for its category. 3 year
> > performance in top decile, 1 year and YTD second decile. Top decile (or
> > nearly so) each year since 2001, except 2nd decile this year. Current
> > manager, in place long enough to take credit for most of these figures,
> > is being replaced by analysts who have never run a mutual fund.
>
> I wouldn't allow my hard-earned money to be managed by a total novice
> when it had previously been managed by an experienced good manager. I
> would sell.

This fund is T. Rowe Price Capital Appreciation, which is scheduled to
change managers as described next year.


> If one experienced fund manager is being replaced by another experienced
> fund manager, I would hold onto the fund and give the new manager a
> chance. For one year. If he's significantly underperforming his
> predecessor, then I would sell.
>
> I would never follow fund families if I had the choice. But if I hear
> really bad things about a fund family (Janus comes immediately to mind),
> I would sell all funds in that family immediately.

Here, I might be a little more magnanimous. I certainly wouldn't sell prior
to the change. I also would be inclined to give T. Rowe Price the benefit
of the doubt, especially if I had sizeable gains in a taxable account. If a
fund degrades because of a management change, it is usually a slow motion
train wreck - plenty of time to jump off (since the portfolio can't be
turned upside down instantaneously). This is one of those rare situations
where I can understand a "hold" recommendation - normally I feel that if an
investment looks good, it ought to be a "buy", and if not, it ought to be a
"sell".

Thanks for the thoughts.

--
Mark Freeland

Re: When to get out

"Mark Freeland" <> wrote

> This fund is T. Rowe Price Capital Appreciation, which is scheduled to
> change managers as described next year.
>
>
> Here, I might be a little more magnanimous. I certainly wouldn't sell
> prior
> to the change. I also would be inclined to give T. Rowe Price the benefit
> of the doubt, especially if I had sizeable gains in a taxable account. If
> a
> fund degrades because of a management change, it is usually a slow motion
> train wreck - plenty of time to jump off (since the portfolio can't be
> turned upside down instantaneously). This is one of those rare
> situations
> where I can understand a "hold" recommendation - normally I feel that if
> an
> investment looks good, it ought to be a "buy", and if not, it ought to be
> a
> "sell".

I own thousands of shares of PRWCX and I'm already working on an exit plan.
I hope I don't have to use it. If I stay with Price I might split it up
between Equity Income, MidCap Value, and Summit money market. I might just
transfer it to Oakmark Equity & Income. Don't know yet.

Re: When to get out

Seems funny that only a day or two ago I sold all that was left, a
small portion from two years holdings, though actually it would be
midyear when I first began and made one of two significant PRWCX
divestitures. PRWCX has served well, indeed, when considering a time I
had dropped out of The Darling Janus School and needy of some
redemption. Aside from a willing of late to play these risks, or
ancillary credentials that don't stand so strident as a 50%+ turnover
from an ilk PRWCX increasingly stymied to me as stagflation; I simply
couldn't get it on the capital ladder of exploitation. The shift did
provide a fair enough quarter reward, coincidentally, with real estate,
energy, and broadly overseas, all adding to profits up 15 from 4%.

Mark Freeland wrote:
> This fund is T. Rowe Price Capital Appreciation, which is scheduled to
> change managers as described next year.

Re: When to get out

I wrote wrote:
>
> "Steven L." <> wrote in message
> news:a0HUe.8603$
> > Mark Freeland wrote:
> >
> > > [...]
> > > 1. 5 year performance in bottom decile for its category. 3 year
> > > performance bottom decile, 1 year and YTD - don't ask (even worse).
> > > Bottom 1/3 in each year since 2001. Same manager since inception,
> > > with solid record in the previous century.
> >
> > I would have sold by now.
>
> So would I. The fund, Weitz Value, was named Morningstar's "pick of
> the week" on CNBC last Friday! I cannot understand Morningstar's
> fascination with this fund - yes, it is heavily into media and telecom
> (as well as one of traditional value funds' favorites - financials),
> which is why it is having such problems, but that's been the
> manager's choice for years - this is not a sector fund.

Number 10 on Forbes 2005 list of "The Ten Very Best Funds" is the
semi-clone of this fund (with nearly identical record, except bottom
1/4, not bottom 1/3 each year since 2001) - Weitz Partners Value. That
fund made Forbes' list for the third straight year, and Weitz Value just
missed in 2005 (which would have made six times in a row).

Is a ten year record that important, when the past five years have all
been disasters? What are these "experts" seeing?! How could they
praise a fund (presumably for expected future success) in 2000, see it
fall to bottom quartile, praise it again in 2001, see it sit in bottom
quartile, praise it again in 2002, lather and repeat three more times?



--
Mark Freeland

Re: When to get out

"Mark Freeland" <> wrote

> Is a ten year record that important, when the past five years have all
> been disasters? What are these "experts" seeing?! How could they
> praise a fund (presumably for expected future success) in 2000, see it
> fall to bottom quartile, praise it again in 2001, see it sit in bottom
> quartile, praise it again in 2002, lather and repeat three more times?

I think Wally was getting his share of angry callers.

Re: When to get out

this was the first I heard about the PRWCX manager change. Similar to
what was mentioned, I would exit and buy PRFDX (equity Income) in it's
place if it underperformed (lost money). Unless I can find a similar
fund and switch custodians of my Roth Holdings at TRP to this new fund.

switching fund families is not the method I prefer.

Re: When to get out

"jIM" <> wrote

> this was the first I heard about the PRWCX manager change. Similar to
> what was mentioned, I would exit and buy PRFDX (equity Income) in it's
> place if it underperformed (lost money). Unless I can find a similar
> fund and switch custodians of my Roth Holdings at TRP to this new fund.
>
> switching fund families is not the method I prefer.

OAKBX is constucted a little differently than PRWCX but it would be a great
alternative. We own both of these.

Re: When to get out

the returns look good, but fund also looks similar to prfdx (income
thru dividends, some bond holdings). I like prwcx because it does own
some mid cap and convertibles. I don't think I own convertibles thru
other funds, and most of my mid cap holdings are growth and prwcx has a
value slant to it.

thoughts?

Re: When to get out

"jIM" <> wrote

> the returns look good, but fund also looks similar to prfdx (income
> thru dividends, some bond holdings). I like prwcx because it does own
> some mid cap and convertibles. I don't think I own convertibles thru
> other funds, and most of my mid cap holdings are growth and prwcx has a
> value slant to it.
>
> thoughts?

Yup. If you want mid caps and convertibles there are some very good funds
that will accommodate you. I love mid caps and do own TRP Mid Cap Value.