Heh. It continues to be amazing, the things you’ll find looking at mutual fund reports. I got another one just the other day, from one of my funds that used to have a really solid track record (DODGX, if you’re curious).
In their introductory letter, the President and Chairman blamed the sinking Financials sector for their poor performance in the first half of 2008 (several points below the relevant indexes). But things were bound to get better soon, they said:
“We have selectively expanded the Fund’s Financials weighting because in our opinion their valuations have declined more than their underlying long-term fundamentals have deteriorated.”
IOW, their view was that the sector had hit bottom, and strong fundamentals would soon bounce it back. Already wincing, right? But wait, it gets better. How, specifically, did they act on this view? Well…
“…in the face of recent stock price declines we have added to positions in American International Group (AIG)… and started a new position in Fannie Mae in the first quarter.”
Wow. And this is what they were bragging about in a report datelined August 7th. A mere six weeks ago. How quickly things change, eh?
No wonder executives in the finance sector bring home the big bucks. No way we lowly civilians in the hinterlands could duplicate that kind of foresight. For performance of that caliber, you just have to turn to the experts.Tags: economy, investing