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Frequent Contributor

Re: 2* Rating for Dodge & Cox - are they next?


@FD1001 wrote:


The only accuracy I'm looking for is risk-adjusted returns and DODGX failed on both performance + risk attributes which you don't want to address. I have been saying it about D&C for years, not just today.

If the term "VALUE" gives you comfort while DODGX makes less money + have higher volatility and you are OK with it then go ahead and keep it but where is the logic?


I think he is just making a point, rather than defending D&C.

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Follower ○○○

Re: 2* Rating for Dodge & Cox - are they next?

I am a long term shareholder of D&C funds. First purchased in 2004 and hold/add to this day. I find them to be a very ethical and solid firm. However, I don't view them as a core investment. In my mind they are a deep value choice and very good if you want that exposure. My core holdings are more aligned with typical index funds but at times I want the deep value exposure and this might be the best way to utilize their offerings. I agree with previous posters that although D&C might compare themselves to S&P500 or balanced index, that is not how I view them or utilize them. 

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Contributor ○

Re: 2* Rating for Dodge & Cox - are they next?


@Academic wrote:

@FD1001 wrote:

@Academic wrote:

@FD1001 wrote:

@Recordman wrote:

I have watched, liked and owned DODGX for many years (some years I had to hold my nose) and it's a pretty good fund. I like team management and their e/r is low. I remember people raving about its greatness and probably some of the same people screaming about how horrible it is. This starting this year half of my RMDs will be going in to DODGX and I feel it's a good move for me (And yes I think D&C will be around for quite some time).


Sure, I like many vehicles but why would I buy an inferior vehicle.  This is 15 years of DODGX vs VFIAX=SP500(link).  The SP500 made more money with better volatility, Sharpe and Sortino.  

Total Return % (05/08/2020)YTD1-Year3-Year5-Year10-Year15-Year
DODGX-19.51-11.261.434.5810.236.5
VFIAX-8.73.819.018.912.478.53

You are comparing a value fund to a broad market fund. That is not a valid comparison. If someone doesn't want to invest in a value fund that's fine, but they shouldn't avoid such a fund based only on a backward-looking apples-to-oranges comparison.


That was expected, claim that your lagging fund is different ;-)

BTW, DODGX owns Google + MSFT at number 2,4...so much for "value". 

When you own a fund that falls behind for performance but also risk attributes (SD, Sharpe,Sortino) it's a 2 strike knockout.


DODGX portfolio average P/E 10.0 vs. VFINX average P/E 21.0. 

Your trailing performance numbers really don't give an accurate picture of the difference between these two investments. 


Academic,

D&C’s website states the P/E ratios are 9.9 and 16.7, respectively as of March 31, 2020.  Certainly a difference, but not nearly as much as you indicated.

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Frequent Contributor

Re: 2* Rating for Dodge & Cox - are they next?

A 3-star fund does not have inferior risk-adjusted returns relative to its category. It is “average”. If it spends its life between 3* and 5* then it is above average. It has likely done better than an index fund for that category.

Its category might be underperforming any other category at any time. That is a different question and should start with the Callan chart.

Actually, in fairness, I did open up the broader AA discussion by asking if "value is dead?". So it was not off-topic to start mixing apples and oranges. But actually I was looking more for D&C sense checks.

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Participant ○○

Re: 2* Rating for Dodge & Cox - are they next?


@cegibbs wrote:

@Academic wrote:

@FD1001 wrote:

@Academic wrote:

@FD1001 wrote:

@Recordman wrote:

I have watched, liked and owned DODGX for many years (some years I had to hold my nose) and it's a pretty good fund. I like team management and their e/r is low. I remember people raving about its greatness and probably some of the same people screaming about how horrible it is. This starting this year half of my RMDs will be going in to DODGX and I feel it's a good move for me (And yes I think D&C will be around for quite some time).


Sure, I like many vehicles but why would I buy an inferior vehicle.  This is 15 years of DODGX vs VFIAX=SP500(link).  The SP500 made more money with better volatility, Sharpe and Sortino.  

Total Return % (05/08/2020)YTD1-Year3-Year5-Year10-Year15-Year
DODGX-19.51-11.261.434.5810.236.5
VFIAX-8.73.819.018.912.478.53

You are comparing a value fund to a broad market fund. That is not a valid comparison. If someone doesn't want to invest in a value fund that's fine, but they shouldn't avoid such a fund based only on a backward-looking apples-to-oranges comparison.


That was expected, claim that your lagging fund is different ;-)

BTW, DODGX owns Google + MSFT at number 2,4...so much for "value". 

When you own a fund that falls behind for performance but also risk attributes (SD, Sharpe,Sortino) it's a 2 strike knockout.


DODGX portfolio average P/E 10.0 vs. VFINX average P/E 21.0. 

Your trailing performance numbers really don't give an accurate picture of the difference between these two investments. 


Academic,

D&C’s website states the P/E ratios are 9.9 and 16.7, respectively as of March 31, 2020.  Certainly a difference, but not nearly as much as you indicated.


Oops you're right. 

I was faked out by Morningstar's number for the comparison "index" portfolio for VFINX, which they give as 21.0. Turns out that is for the Russell 1000. Which seems kind of strange when you consider how much overlap there must be between the S&P 500 and the Russell 1000. And it gets even more strange when you pull up Morningstar's numbers for the fund VRNIX. It shows that this Russell 1000 index fund has an average PE of 16.2, whereas the comparison index - the Russell 1000 - has an average PE of 21.0

One of those weird Morningstar things, I guess. 

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Frequent Contributor

Re: 2* Rating for Dodge & Cox - are they next?

All D&C equity funds down today despite every country from Albania to Zimbabwe closing in the green. I’m done.
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Frequent Contributor

Re: 2* Rating for Dodge & Cox - are they next?

Wait, D&C use value investing, they have low ER, they are the best managers on the planet, they are good stewards...please give them another 1-2-3 years  :-)

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Contributor ○

Re: 2* Rating for Dodge

FD has been advising people to ditch D&C funds for years. Just think about
how much wealthier you be had you listened. D&C is way overrated. M*
takes forever to recognize when its favorite funds have lost their mojo.
There are countless examples. I think they still love FPACX.
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Frequent Contributor

Re: 2* Rating for Dodge & Cox - are they next?


@FD1001 wrote:

Wait, D&C use value investing, they have low ER, they are the best managers on the planet, they are good stewards...please give them another 1-2-3 years  :-)


They have until 3:59 PM on Monday because my order is already in.

And since by then it will be too late, I will need to receive a personal call from San Francisco before the close.

I think it's time they move to a lower rent district than San Francisco Bay.

Form 40-24B2

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Frequent Contributor

Re: 2* Rating for Dodge


@cegibbs wrote:
FD has been advising people to ditch D&C funds for years. Just think about
how much wealthier you be had you listened.

I am plenty wealthy, thank you. However, perhaps the charities to which I donate might have received more. Still, I do what I can.

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Explorer ○

Re: 2* Rating for Dodge

At this point almost everything except the FAANG stocks has been subpar. Value, small cap, international are all crap. Index funds have outperformed because of the high weighting of the FAANG stocks and a few other high techs. The question is will this change in the future. Probably not anytime soon.

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Explorer ○

Re: 2* Rating for Dodge


@chang wrote:

@cegibbs wrote:
FD has been advising people to ditch D&C funds for years. Just think about
how much wealthier you be had you listened.

I am plenty wealthy, thank you. However, perhaps the charities to which I donate might have received more. Still, I do what I can.



Wealth is an interesting concept. If you earned it, as opposed to inheriting it, you never forget how hard you had to work to accumulate it, which makes even temporary losses difficult. One never forgets all those very long days over a period of years to grow a business or earn a paycheck. After you retire, the only reminder you have of that time is the income you derived from those efforts. I always felt that I took so much risk as an entrepreneur, I was unwilling to make big bets with my money. This was in all likelihood not wise, as I probably could have had higher investment returns. However, as you said, I am rich enough.

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Contributor ○

Re: 2* Rating for Dodge

The point is those who invested in D&C over the last decade or so have made D&C wealthier and not themselves.  Why would D&C move to lower rent areas of SF when investors like those on these forums are paying their high rent and large salaries.  While D&C may be admirable for its reasonably low expense ratios and nearly nonexistent management turnover, they don’t compare well with a simple index fund.  D&C’s alpha generator retired years ago and Charles Pohl is not an effective leader.

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Frequent Contributor

Re: 2* Rating for Dodge

They’ll have to make it to 1* without my help.

Like Elon Musk, I’m happy to get my money out of California. Alas, I still own some PIMCO products, and expect that I will stay with them.
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Explorer ○

Re: 2* Rating for Dodge

California, where I live, is a joke. They have it made it illegal to go anywhere without a mask in LA, including the beach, walking the dog or picnicking at a park. They routinely shutdown stores that dare to open by fining owners. Because of the unreasonable Corona regulations, the state is going bankrupt. The gestapo politicians in Ca are running it into the ground. I will freak out if federal govt bails them out. Let it implode.

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Follower ○○○

Re: 2* Rating for Dodge & Cox - are they next?

And here we are again - June 26, 2020

https://www.morningstar.com/articles/989201/dodge-cox-stock-remains-best-in-class?utm_medium=referra...

 

M* constant flogging of these funds was one of the main reasons I stopped watching their fund recommendations way back in 2009.  They may "bounce back" - but they've on the wrong side of the market a lot since at least 2006 or 2007 as shown by the poster who included the comparison to an index fund.  

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Participant ○○

Re: 2* Rating for Dodge & Cox - are they next?

I think M* ratings are valid within the category. If you want invest in deep value then all these funds Dodge & Cox, Oakmark , Sequoia, Longleaf and Fairholme may be very fine choices and apparently loved by M*.

Now question remains why would one want to invest in deep value?

 

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Frequent Contributor

Re: 2* Rating for Dodge & Cox - are they next?

Some folks always hold contrary investments.  I tend to favor lower yielding growth funds 

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