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Post by saratoga on May 6, 2024 6:08:11 GMT
A New York Times article that I missed. Hiring a financial advisor is a good move sometimes. I have David Giroux to oversee 2/3 of my tax deferred accounts at a reasonable fee.
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Post by steelpony10 on May 6, 2024 10:58:54 GMT
saratoga , If that’s his home in the background at his age he’s doing ok. The psychological aspect of investing is the worst part. Fear is stronger then greed, handling someone else’s money is worse then handling your own. I saw that also. My investing education led me to believe “sales” are always great opportunities to save (and make) money. As a buy and hold income investor I tried only to invest during downturns which I’ve seen plenty of over 45 years+. You have to stay ahead of your personal inflation rate your whole lifetime. That involves taking some risk outside of a bank account. The only aspect I might add instead of investing as market values go down an indeterminate amount of time I waited until the dust settled to get closer to the best values. I think a lot of patience is also involved when dealing with risk.
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Post by Chahta on May 6, 2024 13:42:20 GMT
A New York Times article that I missed. Hiring a financial advisor is a good move sometimes. I have David Giroux to oversee 2/3 of my tax deferred accounts at a reasonable fee.
Exactly why I don't get that so many investors are timing this or that down to the micro dollar. Look at the big picture; bonds are a buy now, or at least were in 2022-2023. |
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sgra
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Post by sgra on May 7, 2024 3:09:13 GMT
Thanks for the unlocked link! The article does a good job of humanizing the manager. The picture of Giroux in jeans was a first. TRP Capital Appreciation is my single largest holding. This NYT profile cements my good fortune.
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Post by johntaylor on May 8, 2024 13:39:34 GMT
In 2020, he did 18 percent. In 2021, 18 percent. 2022 minus 11 percent. In 2023, 18 percent.
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Post by retiredat48 on May 8, 2024 17:17:11 GMT
Don't want to throw too much cold water on this, but:
--The article (praise)is year 2020.
--I highly favor Giroux and PRWCX. However, I greatly lightened up load and only hold a foothold to be able to buy more. I am troubled by the Giroux selection of focusing on green companies,and especially utilities. I have a dour outlook on utilities (Long story why). I could be wrong.
--But green and utilities have done poorly in last half year. A fundamental shift in these investments(selling and pubic and gvt minimizing of) that to me it is not the sweet spot for next year or two. Instead I have gone with other funds such as those with strong AI themes.
--Everything at a price. Maybe utes keep relatively lagging and get to a point they may be a good investment. But for me...not yet.
The other recent Price/Giroux fund offerings may be better.
R48
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Post by chang on May 8, 2024 18:29:23 GMT
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Post by retiredat48 on May 8, 2024 19:08:09 GMT
From fidelity: " Utilities stocks experienced poor performance in 2023 as investors favored mega-cap growth stocks over defensive sectors."
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Chart shows year-to-date price performance of the utilities sector, versus that of the S&P 500." As of December 8, 2023, the utilities sector had lost 10.86%, compared with a 19.92% gain for the S&P."
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Yes, utes have recently rebounded some from very poor performance...thus appearing as big gainers. Key is where to draw the starting point.
R48
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sgra
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Post by sgra on May 8, 2024 22:51:33 GMT
Granted, the article was years old "during the pandemic." It provides good insight on how the skipper kept his head while the torpedoes headed his way. As for utes, he is not averse to buy the unloved...I'll let him set the course. He also reasons that AI deserves investment focus. His ETF TCAF may lean more in that direction (which I also own in my taxable account; the OEF only in my tax deferred/free accounts).
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Post by saratoga on May 9, 2024 1:54:08 GMT
retiredat48: --The article (praise)is year 2020.
Let us compare TRAIX performance 2020-2024 ytd with those of its main rivals:
CAGR/Max Drawdown/Sharpe Ratio
TRAIX 9.97%/-16.44%/0.61
FBALX 9.71%/-22.15%/0.55
VWENX 6.73%/-20.19%/0.40
I do not require nor expect Giroux to ace every decision he makes but his results seem good enough for me.
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Post by Chahta on May 9, 2024 3:03:47 GMT
I’m not sure why PRWCX is so popular. There are other funds that have done better.
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Post by roi2020 on May 9, 2024 5:26:22 GMT
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Post by saratoga on May 9, 2024 14:08:25 GMT
I’m not sure why PRWCX is so popular. There are other funds that have done better.
My portfolio is aggressive with over 80% equity in normal times. But I can afford to do so because I have pension, SS and PRWCX. My RMD comes largely from PRWCX. pension+SS+RMD is my fairly stable after inflation income.
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Post by retiredat48 on May 11, 2024 19:38:06 GMT
Just had an opportunity to listen to Warren Buffet and Berkshire conference presentation.
Wow, even more reasons to stay away from investing in utilities. He is strongly concerned it would be "good money chasing bad money", and that survival of business is a key concern. Survival as in: lower utility allowed returns, confiscations by State gvts/conversions of assets into gvt power companies. Excessive lawsuit liability such as calif. wildfires and how much utes are liable...and so on.
One has a choice...a broad based relatively safe money market fund investments at 5.25% annual yield, or a utility at 3-4.4% yield and undertake all these risks. Buffet likes his huge cash position, and in safe investments.
I wouldn't be surprised to see Buffett being a LENDER of monies to utilities to fund the huge growth expected is coming, versus an INVESTOR in owning utilities. Remember he got 8% loans in bailing out GE, in a zirp rate environment.
R48
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Post by chang on May 11, 2024 20:02:40 GMT
I have a position in utilities. Lately it’s been moving up well; it also tends to move opposite to other main asset classes. I suppose what I should do is watch for sell signals, such as the NAV crossing downward over some mda.
I’m not wedded to it for the long term; I’d just like to get the most out of the current trend, which may just be reversion to the mean after a couple of lousy years.
What sell signal(s) would you recommend?
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Post by Fearchar on May 11, 2024 20:45:29 GMT
That article is 4 years old.
That makes it dated.
Sorry.
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sgra
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Post by sgra on May 11, 2024 21:27:30 GMT
As of March 31, 2024 PRWCX/TRAIX had 8.27% in utilities (per M*). As of April 30, 2024 utilities stood at 5.49% (per TRP). Giroux doesn't stand still. The kerfuffle over utes seems overdone.
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Post by archer on May 12, 2024 1:30:26 GMT
Compared to FBALX, and VWELX, PRWCX is also heavy in healthcare which hasn't been a great sector. YTD XLV hasn't really improved much relative to other sectors. I'm not sure what the attraction Giroux is seeing in healthcare, but his PF outperformed mine over the long haul so I'm not going to be too critical. :-) Perhaps he just got in a little early. Chahta, To your post of why PRWCX is so popular, I think it has much to do with its performance during the dot com bust. No similar funds I know of have caught up with it starting at year 2000. Any start year 2003 or later shows it to be a good fund, but 2000 is what made it a great one. |
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Post by retiredat48 on May 12, 2024 2:01:13 GMT
As of March 31, 2024 PRWCX/TRAIX had 8.27% in utilities (per M*). As of April 30, 2024 utilities stood at 5.49% (per TRP). Giroux doesn't stand still. The kerfuffle over utes seems overdone. Interesting...apparently he's been selling utes the last year! Good...I exited a couple years ago due to lag in performance and not liking the portfolio; but I kept a foothold to buy back in. Is PRWCX still closed? R48 |
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Post by retiredat48 on May 12, 2024 2:08:45 GMT
I have a position in utilities. Lately it’s been moving up well; it also tends to move opposite to other main asset classes. I suppose what I should do is watch for sell signals, such as the NAV crossing downward over some mda. I’m not wedded to it for the long term; I’d just like to get the most out of the current trend, which may just be reversion to the mean after a couple of lousy years. What sell signal(s) would you recommend? If the bull market resumes...like S&P500 going to new highs, that would be my exit point for utilities. It is considered a defensive holding...but does not do well when defense not needed. And any sign of interest rates getting to 5% treasury or higher...exit. BTW The chatter that utilities may be good since we need to greatly increase electricity usage will be ongoing. But it is like a value trap. Utes cannot really increase earnings until they throw the switch generating power with the new power sources...likely to be from 3-5 years or more sown the road. Meanwhile CEOs stuggle with how to fund cap X spending. Better IMO is to invest in first and second derivative benefactor companies of utility expansion...like GE turbine suppliers...or copper suppliers. Increased sales go straight to bottom line earnings. R48 |
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sgra
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Post by sgra on May 12, 2024 4:03:03 GMT
Still closed. However, his all-equity ETF, TCAF, is open and has grown enough for decent liquidity/spreads. I've actually pared the OEF (in tax deferred account) in favor of the ETF (in taxable account). Shifting equity risk in my accounts. |
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Post by Norbert on May 12, 2024 4:44:40 GMT
retiredat48"Better IMO is to invest in first and second derivative benefactor companies of utility expansion...like GE turbine suppliers...or copper suppliers. Increased sales go straight to bottom line earnings." I like this. Look at the ETF GRID? Maybe also invest in nuclear energy / uranium via NLR?
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Post by chang on May 12, 2024 6:44:27 GMT
Just had an opportunity to listen to Warren Buffet and Berkshire conference presentation. Wow, even more reasons to stay away from investing in utilities. He is strongly concerned it would be "good money chasing bad money", and that survival of business is a key concern. Survival as in: lower utility allowed returns, confiscations by State gvts/conversions of assets into gvt power companies. Excessive lawsuit liability such as calif. wildfires and how much utes are liable...and so on. One has a choice...a broad based relatively safe money market fund investments at 5.25% annual yield, or a utility at 3-4.4% yield and undertake all these risks. Buffet likes his huge cash position, and in safe investments. I wouldn't be surprised to see Buffett being a LENDER of monies to utilities to fund the huge growth expected is coming, versus an INVESTOR in owning utilities. Remember he got 8% loans in bailing out GE, in a zirp rate environment. R48 Could this picture change significantly with a more business-friendly Federal administration next year? Or are the issues non-political (or state government only)? Wondering if I should be ready to sell my position when the current trend stalls, or hold longer for a 2025 resurgence? |
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Post by retiredat48 on May 12, 2024 14:52:18 GMT
Just had an opportunity to listen to Warren Buffet and Berkshire conference presentation. Wow, even more reasons to stay away from investing in utilities. He is strongly concerned it would be "good money chasing bad money", and that survival of business is a key concern. Survival as in: lower utility allowed returns, confiscations by State gvts/conversions of assets into gvt power companies. Excessive lawsuit liability such as calif. wildfires and how much utes are liable...and so on. One has a choice...a broad based relatively safe money market fund investments at 5.25% annual yield, or a utility at 3-4.4% yield and undertake all these risks. Buffet likes his huge cash position, and in safe investments. I wouldn't be surprised to see Buffett being a LENDER of monies to utilities to fund the huge growth expected is coming, versus an INVESTOR in owning utilities. Remember he got 8% loans in bailing out GE, in a zirp rate environment. R48 Could this picture change significantly with a more business-friendly Federal administration next year? Or are the issues non-political (or state government only)? Wondering if I should be ready to sell my position when the current trend stalls, or hold longer for a 2025 resurgence? , steelpony10, Chahta, sgra, johntaylor, retiredat48, chang, roi2020, Fearchar, archer, Norbert, We have a utilities sector thread on the forum. But briefly, the overall concern is how to fund the massive cap X spending required. A CEO nightmare. Starts with the people/users squawking like crazy if rates rise to fund cap X. Most utilities require a power plant to be built and the switch thrown on, to allow increases in customer rates. This takes years. Then the Liz Warrens of the world squawk if you try to raise rates or increase dividends. Then various states think utilities should be responsible for huge claims such as when a transformer catches fire, and burns thousands of homes down. Was formerly an act of god. Now utes are expected to pay claims from uninsured homeowners, businesses...aka California situation. Buffett warned of this trend. I consider that courts will determine these outcomes more than a favorable next administration. But everythinbg at a price. Maybe utes decline in price a lot and get so cheap (high yield) that it becomes compelling to own. But I put that yield at least at 8% or more. Meaning further lagging or declining. R48 |
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Post by bizman on May 12, 2024 17:38:33 GMT
Having listened to Buffett and Abel's comments on utilities and regulation at the annual meeting, I have some thoughts. First, they both basically stated that it is the people's/government's/regulator's choice to finance utilities through the private markets or, as Nebraska apparently does, through a public power framework. So one way or another the money needing to be spent will be financed by the payments of customers going forward.
They also communicated that if the regulatory frameworks going forward aren't favorable, they won't be allocating additional growth or maintenance capital to such utilities. Implied worst case scenario is that they would just hand the utilities back to the regulators, zero out their investment, and move on. Contrarily, not add new capital and let the utilities wither on the vine and shrink as a percentage of Berkshire's overall business.
The thing is that billions and probably trillions of dollars need to be invested in order to meet the increased power needs from moving the transportation fleet to all electric, paying for massive growth in data centers for the cloud and AI, meeting the government environmental targets by closing coal without adding gas or nuclear (which seems impossible to do vis-a-vis the Laws of Thermodynamics), and, oh by the way, making sure we don't have murderous rolling blackouts in the winter with tens of thousands of people freezing to death.
Something has to give here, but I'm not smart enough to figure out how it will develop. Having no edge, I'll let people like Giroux make smallish bets in this area, but otherwise I plan on giving it a fairly wide berth.
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Post by gman57 on May 12, 2024 20:29:16 GMT
Not worried about utilities. If they double your price for electricity or natural gas what are you going to do... say no? You'll squawk, then pay your bill.
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Post by retiredat48 on May 12, 2024 23:20:13 GMT
Not worried about utilities. If they double your price for electricity or natural gas what are you going to do... say no? You'll squawk, then pay your bill. Not that easy...you have to get past regulators on setting rates. Then you have standard industry rules such as the inability to raise prices to cover cap x spending, etc. R48 |
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Post by retiredat48 on May 12, 2024 23:35:27 GMT
... They (Buffett et al) also communicated that if the regulatory frameworks going forward aren't favorable, they won't be allocating additional growth or maintenance capital to such utilities. Implied worst case scenario is that they would just hand the utilities back to the regulators, zero out their investment, and move on. Contrarily, not add new capital and let the utilities wither on the vine and shrink as a percentage of Berkshire's overall business. R48 reply. My bold added above. Wow! worse case hand the utilities back to regulators!! Meaning a complete loss? I view the utes like "rent control" of apartment buildings. Not allowing increased rents is a form of theft of the buildings from the owners. Building prices stagnant. With inflation, the owner slowly loses his asset. Ditto if unable to increase dividends by utes. These earnings will be needed to fund the huge cap X. So dividends stay same...for a long time.The thing is that billions and probably trillions of dollars need to be invested in order to meet the increased power needs from moving the transportation fleet to all electric, paying for massive growth in data centers for the cloud and AI, meeting the government environmental targets by closing coal without adding gas or nuclear (which seems impossible to do vis-a-vis the Laws of Thermodynamics), and, oh by the way, making sure we don't have murderous rolling blackouts in the winter with tens of thousands of people freezing to death. Something has to give here,... R48 reply...I agree. Two things. I suspect Buffett and his money will be the financiers, not owners. Buffett said about five times he does not want to chase bad money with good money...meaning utes have been bad lately.
Second, I read where some major high tech companies may start their own "utility" by building new power sources, to directly run the data centers, etc. One has even talked of going nuclear. No retail customers involved. Novel approach. FERC involvement? Vertical integration of AI.
R48 in bold |
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Post by gman57 on May 13, 2024 0:46:31 GMT
Not worried about utilities. If they double your price for electricity or natural gas what are you going to do... say no? You'll squawk, then pay your bill. Not that easy...you have to get past regulators on setting rates. Then you have standard industry rules such as the inability to raise prices to cover cap x spending, etc. R48 Have a couple brown outs and see how fast regulators say ok to a rate hike. People may squawk about higher rates but after a few brown outs those squawks will seem like whispering compared to the uproar of periodically losing power. People will be called before congress etc..., it would be a mess. ADD: We all know they play the governmental game. The utility asks for 100 million rate hike, the regulators ok 50 million and scream win. The utility really just wanted 40 million. |
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Post by steadyeddy on May 13, 2024 0:55:04 GMT
Not worried about utilities. If they double your price for electricity or natural gas what are you going to do... say no? You'll squawk, then pay your bill. Not that easy...you have to get past regulators on setting rates. Then you have standard industry rules such as the inability to raise prices to cover cap x spending, etc. R48 It depends on the demand for electricity going higher. Current projection is that it will be much higher due to EV adoption and AI needs of power. If those assumptions are wrong, I agree that Utilities may be front-running the demand story currently. I can see that EV demand is petering out. AI we just have to wait and see. This is one reason I just don't buy a sector fund whatever the sector might be. |
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