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CGM Focus Message Board

  • caponsacchi caponsacchi Aug 10, 2011 10:17 PM Flag

    How do you reach an agreeable exit point with this fund?

    I was blind enough to buy into this in early 2008 and soon saw my holdings lose 50% of their value. I waited, and after 2009 saw my losses go to less than 20%. That's when I should I have jumped ship, because now the fund is moving back up toward 30% in the red. This one could easily go right back to where it was after 2008, so I'm not confident that cost-averaging is the answer.

    I guess if you're bullish on Apple, as I am, it makes sense to wait it out with this fund but not to keep throwing more money at it. Heebner still seems attracted to storage drive makers like Western Digital and Sandisk, but that market looks over-supplied to me, especially with all the "Clouds" that are replacing individual storage devices. At least I no longer see any financial stocks in his list of holdings, which is a good sign. Also, he's no longer married to some of those metals stocks like TCK and Peabody. They were a good story--but that was back then. Wish he'd been in GLD or IAU, but anyone who gets in them now, at their highs, is defying gravity without a net.

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    • I did the same, cost average all the way down and up-same results. I'm holding and hoping he's not like Tiger Woods..

    • "How do you reach an agreeable exit point with this fund?"

      Look at both daily and weekly 10 month moving averages (200 day) to time exits and entry points. See Meb Faber's Quantitative Approach to Tactical Asset Allocation":

      http://papers.ssrn.com/sol3/papers.cfm?abstract_id=962461

      Something as simple as buying when a fund closes above the 200 day, and selling when it closes below the 200 day will beat a buy and hold, and will stand a better chance of avoiding the big draw downs that wipe out accounts.



      As far as his pickings, 3+ lean years for sure. He may have gotten back into an AEM type, but doubt he has physical gold or silver.
      His newest quarterly holdings should be released next week.
      Best to keep diversified through those 5 Meb Faber areas of asset allocation.

    • seems like this fund does the classic human flaw of buy high sell low. the fund obviously has believed that grass was greener elsewhere only to misinterpret the rotation and lose at many transactions. A passive value etf might be a better choice as TD ameritrade provides many with no trading commission . think VIG, for dividend growth or VUG for Growth. PCY .. emerging mkt bonds.. these are some examples of commission free etfs that can be added to on a cost averaging style basis month after month buying as little as one share. These etf's are also passive so one can count on a fund manager staying out of the market fluctuations.

      • 2 Replies to challenge_your_limit
      • I have an order in for VIG. With TDA! I'm checking out the other 2.

      • Capon: CGMFX provides understanding to the old cliche of "Tiger by the tail"! In either situation, you're going to be scratched, no matter how you turn loose. Something you should also be aware of, depending on the size of your account with this fund. I had several accounts, two of which were of good size. The smaller accounts sold and sent me the money within a few days, but the larger accounts did not come through for almost 20 days.

        So my counsel is, while keeping in mind the "Tiger by the tail", vision, accept the fact that you're going to get scratched, just pick the time when you feel you will be scratched the least. Never sell in the morning because what appears to be an opportune time in the morning, may change drastically throughout the day. Also remember that CGMFX differs from all other funds by the fact that brokers won't accept a sell order after 3 PM.

        As for where to go next. Watch the world news and global situations. Try to think of products/sectors which you believe are inevitable to be in demand, then invest your portfolio there and wait for the financial world to come to you. I am about finished posting here since I came back to help the very few good people on this board to navigate through this setback, which is far from over. I normally stick to our private board where we skip the trash talk and share info and ideas. I think it is going to get far worse and that's something to keep in mind as you make your decisions./Good Luck/Juan

    • You say you've had enough and that you can do better on your own.

 
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