I just bought some shares of LO today. Have been watching the price action for a while and looks like it's a good value. But I didn't realize in November there was an announced 3:1 split as of Dec 14th. My question is, if I bought the shares today (1/10) is that going to affect the share prices when the split occur? Usually if a stock is giving out a "dividend" the price will drop by a corresponding amount on the ex-date. For LO, i didn't see such a drop on the ex-date. How would that impact someone like me who bought shares after the "ex" date?
Cramer's a friggin momentum pumper. He is not a value investor. Most of the stocks he recommended are momentum stocks on a run, and basically tells you to buy high and (hopefull) sell higher. Basically he is following the crowd. He never does original research and tell you which stocks to buy when they are pulling back.
In addition, he will ditch a company on a whiff of bad news and the stock tanks... When F5 was trading at 140 he was saying buy and now it's in the 90s he's saying dont buy. Basically if you follow him, you'd be buying high and selling low.
been watching cramer for a while. the dude is a momentum-chasing guy when the stock is flying high, and immediately abandon ship when shit hit the fan due to one missed report etc... basically half of his recommendations are momentum chasing. and trust me, if ffiv is flying high right now, you'd be hearing him gloat on his show.
imo, can't rely on him to tell you when to enter a trade. his timing is god awful and always telling you to chase momentum. can really only use him to give you ideas, and you have to do your own research as to when you should enter a trade.
I hope it's a short term issue. Been feeling the pain when my cheap commission-free VIG and VTI is outperforming my expensive all-star m.f. ytd. In fact, ytd, this fund is in the bottom 10% in its category.
Been doing a little more digging in Morningstar to see why this may be. I think that with the way the portfolio is so concentrated in higher beta financial names and otherwise "controversial" companies, it's much more sensitive to macro economic headline news instead of the profitability of the company invested. Everytime middle east sneezes, financials get hit. Everytime Europe debt crises is whispered, finanicials get hit.
Be that as it may, I certainly hope the period of FAIRX is temporary. As the economic/real estate landscape continues to (slowly) improve, so should the prospects of the underlying invested company in this fund. I guess whether or not you invests in the fund depends on if you agrees with the long term vision of the fund manager. If you "ignore the crowd" too many times, occasionally you might end up in a place you dont want to be in... But personally, with Berk's track record, I'll gladly sit tight and wait it out.
If you are looking for a diversified fund, then FAIRX is not for you. Go into FCNTX or Dodge/cox or something.
Basically FAIRX you are getting investment styles of a typical hedge fund (and risk/rewards that is similar to a good hedge fund) but only paying the cost of an average mutual fund. Typical hedge funds runs 2% AUM with a manager performance cut for excess returns. Whereas FAIRX's 1% exp ratio with no load is fairly typical for what you will pay for a large cap m.f. Not to mention a lot lower entry barrier, more SEC oversight and excellent long term results to boot. It's a good deal IMO.