Archive for the ‘MUTUAL FUNDS’ category

12/18/13 – Sequoia Fund Is Closed

December 17, 2013

12/18/13 . . .  by Bob Karrow

——————————– SECTION ONE ——————————–

WAVE COUNTS

  • If you aren’t familiar with my unorthodox wave counting method, there is a simple explanation (KISS) at the beginning of the glossary. The glossary also contains ideas and details that don’t appear in the blog.

CHARTS

  • Pages 1 and 2 – are of the same indexes (groups #1 through #5).  These charts consist of monthly, weekly and daily charts.  The monthly charts have a wave count beginning with the bear market bottom of 1974 through the present.  Each set of succeeding charts consists of smaller time frames.  The sets range from a 33 year view to 1.5 years.
  • Page 3 – are charts of my key indicators.
  • Pages 4 and 5 – are charts of 10 different market sectors.  Page 4 are daily charts and page 5 are weekly charts.  Each sector chart shows the following key indicators.
  1. Price chart
  2. Cumulative line of advances minus declines
  3. Cumulative line of up volume minus down volume
  4. New highs minus new lows
  • Pages 6 through 8 – are various indicators.  Don’t let these indicators confuse you.  They simply are an indication of the general health of the market.  Watch for a divergence between the indicators and prices.  Some indicators consist of oscillators where you watch for extreme overbought or oversold conditions.
  • Some of these indicators have the ability to predict future market action. The interesting indicators have an * in the title bar.

TWEETS

  • My tweets are frequent and my blog updates are infrequent.
  • Tweets are very short and may contain a link to a chart that will explain my point.

——————————– SECTION TWO ——————————–

I wrote about Sequoia fund on December 5th.   It closed to new investors on December 9th.

I knew the close was coming, but I didn’t realize it was so near.  Successful funds usually limit their size because it becomes difficult to invest huge amounts of money (many, many billions).

If I had written about Sequoia when I first became aware of it (mid-November), it would have given readers more time to digest the info and possibly open an account.

I wasn’t aware that Sequoia was already closed until a reader notified me that it was closed and she was unable to open an account.  Sorry about that.

I am hopeful that an excellent buying opportunity will occur sometime in 2014.  That would be the time to add cash to your Sequoia account (if you had acted quickly and opened an account).

The Sequoia news release follows:

December 9, 2013

To our Sequoia Shareholders:

Effective immediately, we are adopting a harder close for Sequoia. The Fund will be closed to new investors, except for new accounts opened with us directly by existing shareholders of the Fund or existing clients of our firm, or members of their families. The Fund will remain open to contributions from existing shareholders, though we reserve the right to reject any order to purchase Fund shares.

This change will make Sequoia consistent with the separately managed portfolios under our management, where we stopped opening accounts for new clients earlier this year. The objective of this change is to restrict the inflow of funds under our management. As the funds we manage grow, incremental investments must become larger if they are to generate meaningful returns. We believe there is some truth to the adage ‘size is the enemy of performance,’ and would like to maintain our ability to make investments in mid-sized companies that can provide meaningful returns to our shareholders.

The predominant source of the growth in funds under our management in the last five years has derived from appreciation of the price of the equities in the portfolio. Clearly, we’d be pleased if good investment performance continued to drive growth in assets. We seek to curtail growth in assets coming from new investors.

We appreciate the confidence that all of our investors have shown us over many years and we hope that this measure will in small part repay that confidence.

Sincerely,

Richard T. Cunniff

Vice Chairman

Robert D. Goldfarb

President

David M. Poppe

Executive Vice President

——————————– SECTION THREE ——————————–

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  • ES is SP 500 futures
  • YM is DJ Industrial futures
  • NQ is NASDAQ Composite futures
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