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Post by xray on Apr 10, 2022 19:24:57 GMT
PR Newswire
CLOUGH GLOBAL EQUITY FUND DECLARES MONTHLY CASH DISTRIBUTIONS FOR APRIL, MAY AND JUNE 2022 OF $0.1162 PER SHARE
Fri, April 8, 2022, 6:00 AM
DENVER, April 8, 2022 /PRNewswire/ -- Today, the Board of Trustees (the "Board") for the Clough Global Equity Fund (the "Fund") has declared a monthly cash distribution of $0.1162 per common share, payable on the dates noted below. The Fund's managed distribution policy is set the monthly distribution rate at an amount equal to one twelfth of 10% of the Fund's adjusted year-end net asset value per share ("NAV"), which will be the average of the NAVs as of the last five business days of the prior calendar year.
Clough Capital Partners Logo (PRNewsfoto/Clough Capital Partners)
Clough Capital Partners Logo (PRNewsfoto/Clough Capital Partners)
The following dates apply to the distributions declared:
Ex-Date: April 18, 2022
Record Date: April 19, 2022
Payable Date: April 29, 2022
Ex-Date: May 19, 2022
Record Date: May 20, 2022
Payable Date: May 31, 2022
Ex-Date: June 16, 2022
Record Date: June 17, 2022
Payable Date: June 30, 2022
A portion of the distribution may be treated as paid from sources other than net income, including but not limited to short-term capital gain, long-term capital gain and return of capital. The final determination of the source of all distributions, including the percentage of qualified dividend income, will be made after year-end.
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Comment: GLO GLQ and GLV had similar press releases. Dividend investors flock to high dividend payers but there is more to buying dividend securities than just buying them. The problem with these CEF's is that they are paying current shareholders too much against their NAV's. Their NAV's are collapsing with the current on-going monthly distributions. If we "review" their highlighted statement shown above, we take notice that the payout is based on "Last years performance" with no regard to this years current or future performance. Distribution amount needs to be cut (IMHO)....
Currently my analysis data shows their Rf (risk factor to portfolio's) at +0.60 (need +362). Their weekly overall analysis total #'s are averaging <200. "ALL" of the above were down last week in both NAV and MktPrc's. We must remember that these particular CEF's are normally very good in UP markets (buying) but normally collapse in down markets (selling by investors currently)....
Disclosure: Have none of the above in current portfolio....
One single opinion of the many I am sure....
Live Long and Prosper....
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Post by steelpony10 on Apr 11, 2022 13:16:18 GMT
Those who seriously invest in CEF’s know that. The pigs get slaughtered and then squeal how bad an investment they are because they screwed up. Equity income can vary also even more frequently. Standard bonds are “safe”. Diversification in equities and bonds are protection, only within those categories not a general market swoon. Two years cash is for recessions losing purchasing power while you wait.
I don’t really believe inflation is a big deal yet or a recession on the horizon. Meanwhile investors market time in and out playing next days unknowns trying to keep from cutting back on spending or drawing down retirement funds quicker.
So in that context which I experienced with our parents for 35 years and our own retirement any distribution cuts are minor but expected. As income investors the solution was to over invest your current needs. We compounded our needs to about age 90 using a 3.5% personal inflation rate. When combined with an SS yearly increase of 2%, our parents, we’re good for years. There’s plenty of real cash to spend in the go go years of retirement, plenty to reinvest for future needs and plenty to support a surviving spouse.
All that matters to us is the most assured cash flow to our risk limit ignoring all the other bad qualities just like others ignore the unsure income equities might provide for my unknown future needs (or tomorrow) and the inadequate yield (income) of standard bonds if you encounter a permanent sudden increase in your personal income needs.
So given those possibilities and an early start to get past the learning curve and one’s laziness is way better then suddenly jumping into the deep end at 85 when you can’t remember a grandkids’ name and your retirement portfolio is flying out the window.
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Deleted
Deleted Member
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Post by Deleted on Apr 11, 2022 13:54:04 GMT
There is a writer (ADS Analytics) on Seeking Alpha whose recent article on the subject of this thread is very insightful. I don't have a link, but recommend reading the article if you haven't already.
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Post by xray on Apr 11, 2022 17:27:08 GMT
CLM and CRF (15% distribution) have declared a RO with 4/18 eligibility (1:3) expiring 5/20. The premium on both is off the charts. A while ago, on seeking alpha, some traders showed a plan to use their RO (each year) to a shareholders advantage. They may show it again and should be studied if any trader wants to take advantage of it....
Live Long and Prosper....
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Post by Fearchar on Apr 11, 2022 18:33:46 GMT
Not sure if I'm reading the same article by ADS Analytics or not.
Lots commentary on many funds.
Bottom line; he is long:
NZF $13.66
AIF $14.19
NAD $12.89
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Deleted
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Post by Deleted on Apr 11, 2022 19:13:27 GMT
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Post by Fearchar on Apr 11, 2022 22:00:09 GMT
Thanks @haven, Interesting read. I see he likes FRED graphs: fred.stlouisfed.org/series/BAMLH0A0HYM2EYThe HY index is currently at 6.26%, which is a reasonably healthy plateau. Could go higher, but levels much higher appear in the past to be unsustainable. It hit 8% back in Dec 2018, which was the most recent tightening period. Hard to say if the FED might have to tighten down that much again or not. I'll guess not as the market will crack at lower levels. So far the FED hasn't really tightened all that much. |
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Post by xray on Apr 12, 2022 18:58:23 GMT
EDI and EDF are other examples for always losing money. Both EDI/EDF have now cut their "MANAGED" distribution plan and went to fixed distributions (after cutting their distributions during last year)....
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EDF:
PR Newswire
Stone Harbor Emerging Markets Income Fund to Remove Managed Distribution Plan, Declares Monthly Distribution of $0.06 Per Share
Fri, April 8, 2022, 4:30 PM
In this article:
VRTS
-0.44%
EDF
-1.92%
NEW YORK, April 8, 2022 /PRNewswire/ -- Stone Harbor Emerging Markets Income Fund (NYSE: EDF), a closed-end fund, today announced that it will remove its managed distribution plan, effective with the May distribution. The Fund intends to maintain its level payout at the current distribution rate of $0.06 per share. The managed distribution plan was determined not to be necessary at the current time, given that the Fund's principal investment strategy is not focused on generating capital gains, and that elimination of the plan and its associated requirements may reduce certain Fund expenses.
The Fund also announced the declaration of a monthly distribution of $0.06 per common share, payable on the date noted below. Based on the Fund's current share price of $6.58 and net asset value per share of $5.60 (as of close on April 7, 2022), the distribution represents an annualized distribution rate of 10.94% and 12.86%, respectively.
Effective April 11, 2022, the Fund will begin trading as the Virtus Stone Harbor Emerging Markets Income Fund. The Fund's CUSIP (86164T107) and ticker (EDF) will not change.
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PR Newswire
Stone Harbor Emerging Markets Total Income Fund to Remove Managed Distribution Plan, Declares Monthly Distribution of $0.07 Per Share
Fri, April 8, 2022, 4:30 PM
In this article:
VRTS
-0.44%
EDI
-3.38%
NEW YORK, April 8, 2022 /PRNewswire/ -- Stone Harbor Emerging Markets Total Income Fund (NYSE: EDI), a closed-end fund, today announced that it will remove its managed distribution plan, effective with the May distribution. The Fund intends to maintain its level payout at the current distribution rate of $0.07 per share. The managed distribution plan was determined not to be necessary at the current time, given that the Fund's principal investment strategy is not focused on generating capital gains, and that elimination of the plan and its associated requirements may reduce certain Fund expenses.
The Fund also announced the declaration of a monthly distribution of $0.07 per common share, payable on the date noted below. Based on the Fund's current share price of $7.24 and net asset value per share of $6.61 (as of close on April 7, 2022), the distributions represent an annualized distribution rate of 11.60% and 12.71%, respectively.
Effective April 11, 2022, the Fund will begin trading as the Virtus Stone Harbor Emerging Markets Total Income Fund. The Fund's CUSIP (86164W100) and ticker (EDI) will not change.
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Live Long and Prosper....
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Post by FD1000 on Apr 16, 2022 4:27:48 GMT
I just post about generic investing ideas and style. I really don't care what anybody does. A portfolio is measured in either of the following.
There are only 2 basics choices:
1) Only performance (AKA total performance) for investors who don't care about risk/SD
OR
2) Risk-adjusted performance.
Some of these CEFs are just bad. PDI lost money in the last 3 years (the 30% income didn't change this fact). SPY made 58.5% in 3 years. It doesn't matter how you try to justify it.
If you ask any child what do you want after 3 year? $99 instead of the $100 you gave me, or do you want $158.5? My 4 years old grandson can tell you the answer.
Investors who believe in high distributions use them even if they know that 3 years from now it will perform worse than a simple index, and that's the problem. Same old stuff..."I have used it for decades and it worked for me and why it's OK"...real life is a bit different. My millionaire neighbor (sold his business in early 90s for about 15 millions) is using 90+% in Munis, the rest in stocks. He could use only MM and do OK for life. That doesn't mean it's OK. But he does it because he wants very low SD, safer portfolio (this is basically the second choice). Leveraged CEFs, MLP, higher income stocks don't guarantee a better risk-adjusted performance.
Investors who believe in high distributions use them even if they know that 3 years from now it will perform worse than a simple index, and that's the problem
As always, I wish you all good luck with your investments.
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bf22
Commander
Posts: 135
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Post by bf22 on Apr 17, 2022 4:05:50 GMT
Is there only one definition of risk adjusted performance?
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Post by xray on Apr 17, 2022 16:16:09 GMT
FD1000, Your: Investors who believe in high distributions use them even if they know that 3 years from now it will perform worse than a simple index, and that's the problem. Same old stuff..."I have used it for decades and it worked for me and why it's OK"...real life is a bit different. My millionaire neighbor (sold his business in early 90s for about 15 millions) is using 90+% in Munis, the rest in stocks. He could use only MM and do OK for life. That doesn't mean it's OK. But he does it because he wants very low SD, safer portfolio (this is basically the second choice). Leveraged CEFs, MLP, higher income stocks don't guarantee a better risk-adjusted performance. Investors who believe in high distributions use them even if they know that 3 years from now it will perform worse than a simple index, and that's the problem --------- Very good point made. Many of us use "analysis" to direct our investing or selling of our securities. The time period in holding any security, for each security in our portfolio's, could be one week, one month, one year or 3 years (or more). Markets change, Managers change, Corporations change, dividends change, NAV/Book values change (and so on). The "variables" (analysis data points being analyzed) are many. Many of us "follow" the "MANAGERS", "CFO's" and insider buying/selling to help with our decisions.... Investing is always tough but we always require "some luck" in our timing (against market volatility) to make our investments work for us (IMHO).... Good Luck to all.... Live Long and Prosper....
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Post by FD1000 on Apr 17, 2022 22:51:13 GMT
Is there only one definition of risk adjusted performance? ( link) "A risk-adjusted return measures an investment's return after taking into account the degree of risk that was taken to achieve it. There are several methods of risk-adjusting performance, such as the Sharpe ratio" You just have to pay attention and avoid high Sharpe with low performance. That happens sometimes. This is why I check performance=TR, SD, Sharpe, Sortino (downside volatility) just to be sure. To find my best ideas, I start with the highest performance and then look for the lowest SD. Sharpe is a quick and good way to measure investment of different categories and disregard all the noise (high distributions is one of the main ones). SPY vs PDI in the last 3 years (3/31/2019-3/31/2022) from PV( link) shows how bad PDI managed by the best bond team in the world can be. Numbers don't lie. SPY Sharpe is 10 times better, it's not a surprise, because PDI hardly made anything while SPY made 18+% annually. But that's not all, PDI had higher volatility. Pretty much, SPY gave PDI a double knockout. That was very easy to prove. This one is...it depends. VWINX (40/60) vs VWELX (60-65% stocks) managed by the same team, just using different AA over many years. PV( link) for 37 years shows that VWINX Sharpe is higher, which means it was a better risk-adjusted return investment. VWINX average annual = 9.1%...SD=6.5...Sharpe=0.9 VWELX average annual = 10.4%...SD=10...Sharpe=0.7 VWELX made 14% more annually but had 54% more volatility. It shows that the reward(performance) was far lower than the volatility, some people don't care, they just want better performance. This is why I say there are only 2 choices: 1) only care about performance, 2) care about risk-adjusted return. The idea of high distributions regardless of performance and or risk-adjusted return doesn't exist. |
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bf22
Commander
Posts: 135
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Post by bf22 on Apr 17, 2022 23:12:59 GMT
Is there only one definition of risk adjusted performance? ( link) "A risk-adjusted return measures an investment's return after taking into account the degree of risk that was taken to achieve it. There are several methods of risk-adjusting performance, such as the Sharpe ratio" You just have to pay attention and avoid high Sharpe with low performance. That happens sometimes. This is why I check performance=TR, SD, Sharpe, Sortino (downside volatility) just to be sure. To find my best ideas, I start with the highest performance and then look for the lowest SD. Sharpe is a quick and good way to measure investment of different categories and disregard all the noise (high distributions is one of the main ones). SPY vs PDI in the last 3 years (3/31/2019-3/31/2022) from PV( link) shows how bad PDI managed by the best bond team in the world can be. Numbers don't lie. SPY Sharpe is 10 times better, it's not a surprise, because PDI hardly made anything while SPY made 18+% annually. But that's not all, PDI had higher volatility. Pretty much, SPY gave PDI a double knockout. That was very easy to prove. This one is...it depends. VWINX (40/60) vs VWELX (60-65% stocks) managed by the same team, just using different AA over many years. PV( link) for 37 years shows that VWINX Sharpe is higher, which means it was a better risk-adjusted return investment. VWINX average annual = 9.1%...SD=6.5...Sharpe=0.9 VWELX average annual = 10.4%...SD=10...Sharpe=0.7 VWELX made 14% more annually but had 54% more volatility. It shows that the reward(performance) was far lower than the volatility, some people don't care, they just want better performance. This is why I say there are only 2 choices: 1) only care about performance, 2) care about risk-adjusted return. The idea of high distributions regardless of performance and or risk-adjusted return doesn't exist. You said: " There are only 2 basics choices:
1) Only performance (AKA total performance) for investors who don't care about risk/SD
OR
2) Risk-adjusted performance.
"
Representing two endpoints, this is correct. However, for many investors there is a middle ground: Good performance with reasonable volatility.
Some achieve this with a diversified portfolio. A portion of PV provides a relatively stable income stream. This provides for low volatility as far as spending money is concerned. CEFs can be part of this income stream. The rest of PV is invested as wanted, e.g. for growth (SPY, etc).
You asked somewhere "What am I missing?". It seems the middle solution space between your mentioned endpoints. Whether one wants to live in that space is up to them.
Good investing...
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Post by FD1000 on Apr 17, 2022 23:20:09 GMT
( link) "A risk-adjusted return measures an investment's return after taking into account the degree of risk that was taken to achieve it. There are several methods of risk-adjusting performance, such as the Sharpe ratio" You just have to pay attention and avoid high Sharpe with low performance. That happens sometimes. This is why I check performance=TR, SD, Sharpe, Sortino (downside volatility) just to be sure. To find my best ideas, I start with the highest performance and then look for the lowest SD. Sharpe is a quick and good way to measure investment of different categories and disregard all the noise (high distributions is one of the main ones). SPY vs PDI in the last 3 years (3/31/2019-3/31/2022) from PV( link) shows how bad PDI managed by the best bond team in the world can be. Numbers don't lie. SPY Sharpe is 10 times better, it's not a surprise, because PDI hardly made anything while SPY made 18+% annually. But that's not all, PDI had higher volatility. Pretty much, SPY gave PDI a double knockout. That was very easy to prove. This one is...it depends. VWINX (40/60) vs VWELX (60-65% stocks) managed by the same team, just using different AA over many years. PV( link) for 37 years shows that VWINX Sharpe is higher, which means it was a better risk-adjusted return investment. VWINX average annual = 9.1%...SD=6.5...Sharpe=0.9 VWELX average annual = 10.4%...SD=10...Sharpe=0.7 VWELX made 14% more annually but had 54% more volatility. It shows that the reward(performance) was far lower than the volatility, some people don't care, they just want better performance. This is why I say there are only 2 choices: 1) only care about performance, 2) care about risk-adjusted return. The idea of high distributions regardless of performance and or risk-adjusted return doesn't exist. You said: " There are only 2 basics choices:
1) Only performance (AKA total performance) for investors who don't care about risk/SD
OR
2) Risk-adjusted performance.
"
Representing two endpoints, this is correct. However, for many investors there is a middle ground: Good performance with reasonable volatility.
Some achieve this with a diversified portfolio. A portion of PV provides a relatively stable income stream. This provides for low volatility as far as spending money is concerned. CEFs can be part of this income stream. The rest of PV is invested as wanted, e.g. for growth (SPY, etc).
You asked somewhere "What am I missing?". It seems the middle solution space between your mentioned endpoints. Whether one wants to live in that space is up to them.
Good investing...
I didn't miss anything. I just explained generic investing ideas. The middle ground can be achieved regardless. This is what I do for over 20 years, good performance with lower SD. Higher distributions have nothing to do with the middle ground. Risk-adjusted performance is the ultimate tool to check and prove it. If you want to prove your point, post an example.  I didn't mention anything about diversification, but since you asked, diversification isn't a guarantee for better performance and or volatility. It is just a great way for most investors to make less mistakes. See this ( article) "Diversification is a protection against ignorance," according to Buffett. "[It] makes very little sense for those who know what they’re doing.” ..."If you spread yourself too thin, you will compromise your results and your likelihood of beating the market. " This is exactly why I owned very concentrated portfolio since 2000. |
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Post by roi2020 on Apr 18, 2022 0:29:08 GMT
You said: " There are only 2 basics choices:
1) Only performance (AKA total performance) for investors who don't care about risk/SD
OR
2) Risk-adjusted performance.
"
Representing two endpoints, this is correct. However, for many investors there is a middle ground: Good performance with reasonable volatility.
Some achieve this with a diversified portfolio. A portion of PV provides a relatively stable income stream. This provides for low volatility as far as spending money is concerned. CEFs can be part of this income stream. The rest of PV is invested as wanted, e.g. for growth (SPY, etc).
You asked somewhere "What am I missing?". It seems the middle solution space between your mentioned endpoints. Whether one wants to live in that space is up to them.
Good investing...
I didn't miss anything. I just explained generic investing ideas. The middle ground can be achieved regardless. This is what I do for over 20 years, good performance with lower SD. Higher distributions have nothing to do with the middle ground. Risk-adjusted performance is the ultimate tool to check and prove it. If you want to prove your point, post an example. I didn't mention anything about diversification, but since you asked, diversification isn't a guarantee for better performance and or volatility. It is just a great way for most investors to make less mistakes. See this ( article) "Diversification is a protection against ignorance," according to Buffett. "[It] makes very little sense for those who know what they’re doing.” ..."If you spread yourself too thin, you will compromise your results and your likelihood of beating the market. "This is exactly why I owned very concentrated portfolio since 2000. --------------------------------------------------------------------------- The Warren Buffett quotes are misleading.
Warren Buffett Talking to MBA Students:"If you are not a professional investor; if your goal is not to manage in such a way that you get a significantly better return than the world, then I believe in extreme diversification.
I believe that 98 or 99 percent —maybe more than 99 percent—of people who invest should extensively diversify and not trade.
That leads them to an index fund with very low costs.
All they’re going to do is own a part of America.
They’ve made a decision that owning a part of America is worthwhile.
I don’t quarrel with that at all. That is the way they should approach it."Link |
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bf22
Commander
Posts: 135
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Post by bf22 on Apr 18, 2022 3:16:41 GMT
You said: " There are only 2 basics choices:
1) Only performance (AKA total performance) for investors who don't care about risk/SD
OR
2) Risk-adjusted performance.
"
Representing two endpoints, this is correct. However, for many investors there is a middle ground: Good performance with reasonable volatility.
Some achieve this with a diversified portfolio. A portion of PV provides a relatively stable income stream. This provides for low volatility as far as spending money is concerned. CEFs can be part of this income stream. The rest of PV is invested as wanted, e.g. for growth (SPY, etc).
You asked somewhere "What am I missing?". It seems the middle solution space between your mentioned endpoints. Whether one wants to live in that space is up to them.
Good investing...
I didn't miss anything. I just explained generic investing ideas. The middle ground can be achieved regardless. This is what I do for over 20 years, good performance with lower SD. Higher distributions have nothing to do with the middle ground. Risk-adjusted performance is the ultimate tool to check and prove it. If you want to prove your point, post an example. I didn't mention anything about diversification, but since you asked, diversification isn't a guarantee for better performance and or volatility. It is just a great way for most investors to make less mistakes. See this ( article) "Diversification is a protection against ignorance," according to Buffett. "[It] makes very little sense for those who know what they’re doing.” ..."If you spread yourself too thin, you will compromise your results and your likelihood of beating the market. " This is exactly why I owned very concentrated portfolio since 2000. I do believe you missed my post. As I have demonstrated to myself for decades, the middle ground I described can be achieved in different ways. There a many posters on here who post about it. I certainly am always willing to learn even if I don't use all of it myself. And I have the pudding... |
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Post by FD1000 on Apr 18, 2022 3:45:36 GMT
I didn't miss anything. I just explained generic investing ideas. The middle ground can be achieved regardless. This is what I do for over 20 years, good performance with lower SD. Higher distributions have nothing to do with the middle ground. Risk-adjusted performance is the ultimate tool to check and prove it. If you want to prove your point, post an example. I didn't mention anything about diversification, but since you asked, diversification isn't a guarantee for better performance and or volatility. It is just a great way for most investors to make less mistakes. See this ( article) "Diversification is a protection against ignorance," according to Buffett. "[It] makes very little sense for those who know what they’re doing.” ..."If you spread yourself too thin, you will compromise your results and your likelihood of beating the market. "This is exactly why I owned very concentrated portfolio since 2000. --------------------------------------------------------------------------- The Warren Buffett quotes are misleading.
Warren Buffett Talking to MBA Students:"If you are not a professional investor; if your goal is not to manage in such a way that you get a significantly better return than the world, then I believe in extreme diversification.
I believe that 98 or 99 percent —maybe more than 99 percent—of people who invest should extensively diversify and not trade.
That leads them to an index fund with very low costs.
All they’re going to do is own a part of America.
They’ve made a decision that owning a part of America is worthwhile.
I don’t quarrel with that at all. That is the way they should approach it."LinkCorrect, but you as most others missed the rest too. ( link). Instead of stock picking, Buffett suggested investing in a low-cost index fund. “I recommend the S&P 500 index fund,” Buffett said, which holds 500 of the largest companies in the U.S., “and have for a long, long time to people.”..."Buffett said it’s the reason he has instructed the trustee in charge of his estate to invest 90% of his money into the S&P 500, and 10% in treasury bills, for his wife after he dies. “I just think that the best thing to do is buy 90% in S&P 500 index fund.” The above didn't say to invest in 10-15+ funds, single stocks, small cap, international, MLP, high dists, CEFs or many other funds that posters are discussing here daily. If you read my posts in the last 10+ years, I have said hundreds of time that most should invest in a few funds, mostly indexes and keep their asset allocation stable and hardly trade. |
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Post by roi2020 on Apr 18, 2022 4:24:14 GMT
Correct, but you as most others missed the rest too. ( link). Instead of stock picking, Buffett suggested investing in a low-cost index fund. “I recommend the S&P 500 index fund,” Buffett said, which holds 500 of the largest companies in the U.S., “and have for a long, long time to people.”..."Buffett said it’s the reason he has instructed the trustee in charge of his estate to invest 90% of his money into the S&P 500, and 10% in treasury bills, for his wife after he dies. “I just think that the best thing to do is buy 90% in S&P 500 index fund.” The above didn't say to invest in 10-15+ funds, single stocks, small cap, international, MLP, high dists, CEFs or many other funds that posters are discussing here daily. If you read my posts in the last 10+ years, I have said hundreds of time that most should invest in a few funds, mostly indexes and keep their asset allocation stable and hardly trade. --------------------------------------------------------------------------------------------------------------------------------- Your prior Buffett quotes, if taken at face value, run counter to Mr. Buffett's suggestion for the vast majority of investors. Important context was omitted and therefore the information was very misleading. You did suggest on multiple occassions that most investors should invest in only a few funds and limit their trading activity. However, this is at least the third time you've "missed the mark" regarding Warren Buffett's views on diversification! |
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Post by xray on Apr 18, 2022 17:10:28 GMT
FD1000, roi2020, Your: The middle ground can be achieved regardless. This is what I do for over 20 years, good performance with lower SD. Higher distributions have nothing to do with the middle ground. Risk-adjusted performance is the ultimate tool to check and prove it. If you want to prove your point, post an example.  Item #1 ... didn't mention anything about diversification, but since you asked, diversification isn't a guarantee for better performance and or volatility. It is just a great way for most investors to make less mistakes. See this (article) "Diversification is a protection against ignorance," according to Buffett. "[It] makes very little sense for those who know what they’re doing.” ..."If you spread yourself too thin, you will compromise your results and your likelihood of beating the market. " This is exactly why I owned very concentrated portfolio since 2000. --------------------------------------------------------------------------- The Warren Buffett quotes are misleading. Warren Buffett Talking to MBA Students: "If you are not a professional investor; if your goal is not to manage in such a way that you get a significantly better return than the world, then I believe in extreme diversification. I believe that 98 or 99 percent —maybe more than 99 percent—of people who invest should extensively diversify and not trade. That leads them to an index fund with very low costs. All they’re going to do is own a part of America. They’ve made a decision that owning a part of America is worthwhile. I don’t quarrel with that at all. That is the way they should approach it." Correct, but you as most others missed the rest too. (link). Instead of stock picking, Buffett suggested investing in a low-cost index fund. “I recommend the S&P 500 index fund,” Buffett said, which holds 500 of the largest companies in the U.S., “and have for a long, long time to people.”..."Buffett said it’s the reason he has instructed the trustee in charge of his estate to invest 90% of his money into the S&P 500, and 10% in treasury bills, for his wife after he dies. “I just think that the best thing to do is buy 90% in S&P 500 index fund.” ITEM #2 ... The above didn't say to invest in 10-15+ funds, single stocks, small cap, international, MLP, high dists, CEFs or many other funds that posters are discussing here daily. If you read my posts in the last 10+ years, I have said hundreds of time that most should invest in a few funds, mostly indexes and keep their asset allocation stable and hardly trade. ---------- ITEM #1 ... A very good point to make (continually) for those more advanced investors who are investing (using their own experience over many years in up/down markets) and using their own personalized individual analysis.... Currently I have 22 securities in portfolio (with 9 CEF's currently) and 33% cash to reduce my current market volatility and " reduction" of risk. Any sudden downside in any one security has " little" effect on overall portfolio (currently in a volatile market). Some of us were trained in diversification back in our older college days where we were taught that 16 securities at a minimum with no allocation of >6% in any one security. As we got wiser through many many years, we learned to cheat a little bit on the maximum 6% maximum and go higher but with the greater risk allocation that is understood.... Many of us usually never invest in any security >$20 since we "like" to experience greater CapGain because of owning more shares (along with our current dividends or distributions >10% with our initial buying activity).... Concentrated portfolio's work very well with experienced investors but will have a greater risk that is already known and accepted by the individual investor.... ITEM #2 ... The number of investments that many current investors currently have is really based on a number of variables. Inexperienced investors and advanced investors (who should understand the " RISK" being taken) will normally expand their portfolio's because of continually seeing a new value investment (a investment opportunity) that interest them. The numb3r of shares becomes the " RISK FACTOR" that we must understand and are willing to take the added risk. Indexes, Mutual Funds, CEF's are considered "less Risk" because of the greater diversification and reduction of the usual risk.... Trading is another story and would take pages of explanation (and controversial) as we all do it because of many different reasons. If a manager leaves or CFO leaves (and insider selling), we need to go back to basic's and see if we want to continually own the same number of shares. In my case, as much as I don't want to trade, I would not make my " Goals & Objectives" each year without trading against my computer analysis programs. Add to this, if a manager of a CEF fails to maintain their NAV or dividend over each Qtr or Company Qtrly security reports are negative, a new portfolio analysis is required.... Bottom Line: There is no one answer as we all like (and sharing) about what we are doing and achieving what we want to achieve the results by the end of the year ( Goals & Objectives).... One single opinion of the many I am sure.... Live Long and Prosper....
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Post by FD1000 on Apr 18, 2022 20:58:44 GMT
Correct, but you as most others missed the rest too. ( link). Instead of stock picking, Buffett suggested investing in a low-cost index fund. “I recommend the S&P 500 index fund,” Buffett said, which holds 500 of the largest companies in the U.S., “and have for a long, long time to people.”..."Buffett said it’s the reason he has instructed the trustee in charge of his estate to invest 90% of his money into the S&P 500, and 10% in treasury bills, for his wife after he dies. “I just think that the best thing to do is buy 90% in S&P 500 index fund.” The above didn't say to invest in 10-15+ funds, single stocks, small cap, international, MLP, high dists, CEFs or many other funds that posters are discussing here daily. If you read my posts in the last 10+ years, I have said hundreds of time that most should invest in a few funds, mostly indexes and keep their asset allocation stable and hardly trade. --------------------------------------------------------------------------------------------------------------------------------- Your prior Buffett quotes, if taken at face value, run counter to Mr. Buffett's suggestion for the vast majority of investors. Important context was omitted and therefore the information was very misleading. You did suggest on multiple occassions that most investors should invest in only a few funds and limit their trading activity. However, this is at least the third time you've "missed the mark" regarding Warren Buffett's views on diversification! I'm glad you count the number "missed the mark". So let's do it again FD: "Diversification is a protection against ignorance," according to Buffett. "[It] makes very little sense for those who know what they’re doing.” ..."If you spread yourself too thin, you will compromise your results and your likelihood of beating the market. " The above is correct. I don't see any misleading. If you know what you are doing, why would you diversify roi: I believe that 98 or 99 percent —maybe more than 99 percent—of people who invest should extensively diversify and not trade. The above is misleading because you didn't go for the next step. I posted what Buffet actually said many times. He doesn't believe in "extensively diversify", he believes in the SP500. He didn't promote SC,MC,CEFs,BDCs,international,MLP, high distributions investment just to name a few. Buffett also like 90/10 for retiree, see ( link) I also posted hundreds of times over 10 year, that in MY OPINION, not Buffett, most investors should own a limited number of funds, I even quantified it as 5-7 max. They should know their goals and risk tolerance, invest mostly in indexes, which means they can also use managed and hardly trade. In contrast to Buffett, I believe in more diversification. I also posted about my style and what I have done for decades. Over these years there isn't any other poster who attached hundreds of data, charts, tables, T/A and figures more than me. I'm the only one who has his own site of how I invest, with hands on of what to do and a lot more. You can see all that. I helped hundreds over the year who asked for that, from simple questions to a full portfolio analysis, all for free. So, I let the above speak for itself. You can have your own opinion. I'm OK with that. |
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Post by Deleted on Apr 18, 2022 21:15:15 GMT
This conversation would benefit from definitions. An S&P index fund is the definition of diversification. Much of Buffett's views in this area tie into Graham's view of the defensive and enterprising investor and respective roles. His adherence to Graham is reflected in his advice to the MBA students cited above. Diversification is a portfolio standard. How it is defined can differ. Time frames for measuring differ. X-ray is correct - no one right answer.
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