I was asked recently what I thought of T. Rowe Price Capital Appreciation (PRWCX) compared to T. Rowe Price Capital Appreciation Equity ETF (TCAF), which has gained $235 million in assets under management since its June 2023 launch. TCAF is one of two new T Rowe Price offerings that play off the unparalleled success of the PRWCX, which is closed to new investors. The other new entrant, the T. Rowe Price Capital Appreciation and Income Fund, has not yet debuted.

The most striking similarities are the name and the fact that they are both managed by David R. Giroux, who has an outstanding record. From here, the similarity fades. PRWCX is a moderate to growth-oriented mixed-asset fund, while TCAF is a predominantly domestic equity fund. There are differences in how the equity sleeve of PRWCX compares to TCAF, which are explored in this article.

Let’s start with Continue reading →

This is the last article in a series that describes what I learned in the year following retirement. After fifty years of working, military service, and getting two university degrees, I took the first year as “Me Time”. I once worked with an Australian who was fond of saying that he had his $100 in the bank, meaning that he was financially secure. I have reached the end of the rainbow after decades of investing and financial planning. I just signed up for Social Security, which, combined with pensions, will cover normal spending needs, plus I have my $100 in the bank. Continue reading →

Who now remembers Long-Term Capital Management, the failure of genius, the price of hubris, and the lesson that the innocents bear the cost of their elders’ folly?

Too few, judging from investor behavior.

The collapse of LTCM was the first of three global financial crises over the past 25 years that erupted primarily in the developed world, but whose consequences were primarily borne by emerging markets economies and Continue reading →

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. Each month, we survey actively managed funds and ETFs in the pipeline. Summer’s trickle of new funds becomes autumn’s torrent as advisers rush to have new products on the market by December 31. That’s because a fund launched after that date won’t get to report annual or year-to-date results for 2024, which is a serious marketing problem.

Many new funds, like many existing funds, are bad ideas. (Really, you want the latest “anti-woke” ETF or a new way to invest with Bill Miller’s son?) Most will flounder in rightful obscurity. That said, each month brings some promising options that investors might choose to track.

Two, or perhaps two point five, to add Continue reading →

Investors and commentators have long bemoaned the catastrophic effects of a zero-interest-rate environment: a disincentive to save, distorted capital allocations, excessive risk-taking, and inflated equity prices. In winning the fight against inflation, the Federal Reserve has given investors the victory they sought: interest rates high enough to encourage saving and penalize speculation. Our question, suggested by King Pyrruhs’ catastrophic victories in 279 BCE, is: can investors survive their victory? Continue reading →

One of the two managers at Akre Focus (AKREX), Chris Cerrone, has resigned. Effective September 27, 2023, John Neff is listed as the sole manager of the consistently excellent, $13 billion large-growth fund. The fund has seen steady performance, but also steady outflows, since the retirement of founder Chuck Akre. Morningstar has placed the fund “under review,” which is certainly sensible and appropriate. That said, Mr. Neff has been co-managing the strategy since 2014. The portfolio holds fewer than 20 stocks, and the historic turnover ratio is 1%. The fund has trailed its large-growth peers on two occasions (2020 and 2023). In both cases, the market was narrow and frothy, and the fund produced entirely respectable absolute returns (20% and 10% YTD) for its investors. We do not believe that’s any immediate cause for concern.

Keith Long, co-founder Continue reading →