Oildog and Tato - thank you for your comments which were fair.
Tato you said:
"I think you have this wrong. Out of the three funds you mention here, FPPTX is the only one I would say has the flexibility to be all-cap. The others are too big to take meaningful positions in small cap stocks. In my opinion, investors seeking significant outperformance need to be looking for funds more like FPPTX than LLPFX or FAIRX."
Yes but I am sure that FPPTX has stated in its investment strategy that it seeks small value companies. You have to stay small in such a case -- and if you do stick to SV companies, then I agree that you have the potential to outperform LLPFX and FAIRX which hits larger companies.
"Also, the foreign aspect is mostly baloney in my opinion. Plenty of companies listed as US companies on US exchanges derive significant (if not all) of their revenue from outside the US. What difference does it make that these are "domestic" companies? (Same could be said, conversely, for "foreign" companies.)"
I'm sorry if I wasn't clear but that wasn't my point. I was trying to point out that by having plenty of foreign exposure your universe of stocks is a lot larger and so is your capacity or investment opportunity. But don't get me wrong -- I don't think FAIRX should go to $20b or $15b and should slow things down at no more than $10b in assets.
By the way, since you touched on this topic. Show me a study that shows that companies in the US that derive significant revenue overseas outperform. Fama/French looked for it and didn't find any conclusive data. There are many variables involved with stock performance than simply having overseas revenues. Pfizer stock for example has gone nowhere in a long-time. GM has extensive international sales and where has the stock of that company gone in the past decade? The dynamics are more complex than simply evaluating overseas sales--and I'm sure you already know that.
Overall -- you're right in that Funds do great and then bomb. We have the past 50 years to look at. I've also suggested that if people do invest in these types of things then to try to do it in tax-deferred account because the rate of musical chairs with funds is high. When I first got into investing I had Fidelity Magellan in my 401k --- not only was I glad I got rid of it when I started learning more about investing but I'm glad I didn't buy it in my taxable account! I can't believe Fidelity is still advertising the wonderful 18% lifetime returns of the Magellan fund.
It definitely is very tricky out there. For example -- I think Tweedy Browne is good multi-manager value shop and their commentaries are excellent and they're willing to close funds early to control asset size. BUT their expenses still remain kinda high and I don't know why their TWEBX (TB Value Fund) has performed so poorly despite remaining small and allcap. So it's difficult to know who will and who won't outperform even when their talk is good.
