Author Archives: David Snowball

About David Snowball

David Snowball, PhD (Massachusetts). Cofounder, lead writer. David is a Professor of Communication Studies at Augustana College, Rock Island, Illinois, a nationally-recognized college of the liberal arts and sciences, founded in 1860. For a quarter century, David competed in academic debate and coached college debate teams to over 1500 individual victories and 50 tournament championships. When he retired from that research-intensive endeavor, his interest turned to researching fund investing and fund communication strategies. He served as the closing moderator of Brill’s Mutual Funds Interactive (a Forbes “Best of the Web” site), was the Senior Fund Analyst at FundAlarm and author of over 120 fund profiles.

Preparing for a new world

By David Snowball

The scariest line of the election season appeared on the front page of The Wall Street Journal:

The U.S. stock boom has its roots in tactics that fund managers, small savers and Robinhood traders alike have applied over the past decade:  Don’t hide from markets by hoarding cash.

The Dow Jones Industrial Average closed above 30000 on Tuesday for the first time, extending an eight-month rebound that has taken many analysts by surprise … The run has put the Dow up 62% from its March low, when the U.S. Federal Reserve ended a panic that wiped out trillions of dollars in investments by outlining a plan to counter the pandemic’s economic stress.

The market appears to be in a self-perpetuating upward spiral, defying the pandemic and accompanying economic woes. (“Behind Dow 30000: A Self-Perpetuating Upward Spiral,” Wall Street Journal, 11/25/2020, pg 1).

That sounds only Continue reading →

Rondure Overseas Fund (ROSOX/ROSIX), December 2020

By David Snowball

Objective and strategy

Rondure Overseas invests, primarily, in the stocks of corporations located in developed markets outside of the US. The managers pursue a benchmark-agnostic, active style that allows them to invest in stocks of any size. In general, they aspire to invest in great companies at good prices. They have the freedom to invest in good companies at great prices, but the wisdom to play that game rarely.

The quantitative markers of being a great company include strong balance sheets, stable free cash flows, and high returns on capital. The qualitative markers are “compelling competitive advantages,” which might include elements of the business niche and strong, responsible leadership.

The portfolio currently holds Continue reading →

Funds in Registration

By David Snowball

The Securities and Exchange Commission, by law, gets between 60 and 75 days to review proposed new funds before they can be offered for sale to the public. Fund companies anxious to have a new fund up and running by December 31st need to have it in the hopper by the third week in October at the latest. And, my goodness, a lot of folks did find time to file with 50 new funds and active ETFs listed in our November issue.

This month brings a far more sedate pace of launches with 19 new products in the pipeline. They continue the trends we identified last month: socially-responsible funds, funds with options strategies, and dumb ideas.

The most notable change is the shift from a passive approach in ESG investing toward an active or “impact” approach. Historically, most socially-responsible funds had a “first, do no harm” mandate: avoid tobacco, weapons, alcohol, porn, or whatever. Impact investors seek out the opportunity to actively advance good: allocate capital to firms seeking to address the global climate crisis, to advance social equity, or Continue reading →

Briefly Noted

By David Snowball

Updates

Guinness Atkinson’s groundbreaking OEF-to-ETF conversion is surging ahead. In early summer, GA filed a plan to convert two of their current funds – the four-star Dividend Builder GAINX and Alternative Energy GAAEX – directly into ETFs. Other firms have launched ETF clones of their funds, and a bunch of strategies that would normally have been launched as funds have instead followed the non-transparent, active ETF route. Guinness was the only firm bold enough to try a switchover mid-flight.

The conversions were slowed by “a thousand thoughtful questions and comments” from the SEC, according to president Jim Atkinson. In the latest round of comments, the agency has asked GA to begin incorporating concrete Continue reading →

November 1, 2020

By David Snowball

And now we wait.

I’m writing this less than 48 hours before the end of the most divisive and likely most consequential presidential election in a hundred or a hundred and fifty years. (It depends on your view of the sea change enacted in 1932 or the tumult of 1860.) I am exceptionally distracted by the unfolding events.

In general, I have faith that things will work out okay. People are, on the whole, sensible when not terrified. And, while many of our fellow citizens are terrified – in part because conditions in many parts of the country are unremittingly hard and, in part, because political parties have learned that it’s in their best interests to enflame our worst fears – we have an okay track record of tempering our fears with Continue reading →

Chuck Akre & the Future of Focus

By David Snowball

Chuck Akre is an iconic investor, the sort of guy whose very existence vexes the efficient market advocates. Some years ago, Mr. Akre managed FBR Focus. After a dispute with the parent company (they, incorrectly, didn’t think he was worth what they were paying him), Mr. Akre left to found his own adviser and launch his own fund.

Akre Focus (AKREX) launched on August 31, 2009. Against all conventional wisdom, it’s grown to nearly $14 billion and continues to generate exceptional absolute Continue reading →

The Rookie Roster

By David Snowball

Each month we chronicle the funds newly in registration with the SEC. You could think of them as akin to all of the players who declare their eligibility for the NFL draft each year. “Put me in, coach,” they cry. “I’m ready to play!”

Here’s the football math: each year, around 3500 players are eligible for the NFL draft. Two hundred fifty-four will actually get drafted. Of the drafted players and undrafted free agents, about a third make it to a training camp. By the calculations in Pro Football Reference, of those making the final roster, only 20% Continue reading →

Funds in Registration

By David Snowball

We warned last month that we were “at the beginning of the annual insanity.” This month, it’s at flood tide.

The Securities and Exchange Commission, by law, gets between 60 and 75 days to review proposed new funds before they can be offered for sale to the public. Fund companies anxious to have a new fund up and running by December 31st need to have it in the hopper by the third week in October at the latest. And, my goodness, a lot of folks did find time to file.

The fund industry is given to fads and Continue reading →

Launch Alert: West Hills Tactical Core Fund

By David Snowball

On October 26, 2020, Frank Capital Partners launched the West Hills Tactical Core Fund (LEBOX).  The plan is to invest half or more of the portfolio directly, or through ETFs, in domestic large-cap stocks. The remainder will be placed in cash or options.  The fund will be managed by Alan McClymonds. From 2011 to 2015 Mr. McClymonds was a consultant for Whitaker Securities in New York, NY. Whitaker’s “primary goal is to provide global liquidity in the fixed income markets,” which they do for 200 or so clients.  From 2016 to present, Mr. McClymonds has been a private investor who was introduced to founder Brian Frank by a professional associate.

Three things to know Continue reading →

Launch Alert Redux: Evolutionary Tree Innovators Fund

By David Snowball

In our October issue, we shared a Launch Alert for ET Innovators. In late October we had the opportunity to speak with manager Tom Ricketts, and so share this expanded Alert.

On September 9, 2020, Evolutionary Tree Capital Management launched the Evolutionary Tree Innovators Fund (INVNX).  The plan is to invest in 25-35 domestic growth-oriented companies that qualify as “leading innovative Continue reading →