Wikinvest Wire
Saturday, November 03, 2007
The Big Picture For The Week Of November 4, 2007
This is a video post, if you are reading this through another site you may need to click through to watch.
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3 comments:
Good video today Roger on seeking to smooth out the market in our portfolios. Maybe someone will start a blog called "Seeking (low) Beta" now. :)
I confess to being one of the folks that came up with a buy & hold portfolio that I listed on your site that I claimed to have about a 1 1/2% yield almost all in ETFs (a rollover 401K). But I also have a smaller Roth IRA portfolio (about 65k) that I buy individual stocks, etc., in.
If I only had the one portfolio I would have put maybe 70% in the ETF's and used the remaining 30% for stocks, shorts, sector funds, etc.
Jack S.
Also I agree with your critique on the managed fund you mentioned that is volatile. That's the same reason that I was just a little wary about the managers of NARFX having a large position on what I considered at the time to be a gamble stock (Taser Int.). One such stock as you mentioned is not so bad. But what might be their thinking after seeing that bet go up? More of the same or much more of the same?
I maybe in the minority, but when I look at a fund I first look at the graph and pay attention to its variation with the general market index. If my interests are in low volatility and low beta, then a graph over time is better than a thousand words. Take for example NARFX, it does not exactly tracks Taser, thus there are critical things that MATTER TO THE FUND PERFORMANCE ARE NOT REPRESENTED BY THIS POSITION. Take another example, small caps especially microcap are not doing well. However, PVFIX, in spite being a microcap fund, also rides steadily. How did NARFX and PVFIX did it, I don't know but I am interested in learning. I supect the secret of low volatility probably is hidden more in the shorting postions than the long positions.
Most microcaps funds like IWC or BRSIX holdings have an average market cap of ~$350 million. PVFIX holdings have a market cap around $50 million and the fund is 30 to 50% in cash. The fund is tiny with only around $40 or $50 million in investments. Another tiny microcap fund is Perrit Emerging Opportunities (PREOX) where it has an average market cap around $90 million on its holdings.
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