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Betting on Financials - John Hancock Classic Value Fund



April 26, 2008 – Comments (4)

Richard Beddard at Interactive Investor put me onto this one today.  He did a post on Richard Pzena and had an interesting link to a Forbe's interview with Pzena.

My reply to Beddard's post is basically that we really don't know which financial companies will survive the deleveraging, by the time share dilution is done they won't resemble anything like they were before, and their level of historical profits weren't based on any thing sustainable.  My gut feeling is that about half the profits will never come back, or at least won't come back while the Great Deleveraging lives in memories.

But, that is what got me looking at Pzena, not what I intended to blog about.  I did a search I found this post from almost a year ago pointing out Pzena's stellar returns going back to 1996, 16% per year on the John Hancock Classic Value Fund

From the link to the John Hancock fund it starts at Nov 11, 1998 with a share price of $11.74.  That's about 9.46 years ago.  So, 73.5% return in 9.46 years.  That works out to 5.4% annualized back to Nov 11, 1998.  I picked the day I started simply because it is the oldest date I could easily get data for.

Looking at Google I see something I think super yuck, front load 5.00%.  The easiest way I can think to handle that, add 5% to the $11.74, so with the load that's like you'd have to pay $12.33 instead of $11.74 and the gain would be more like 65.4%, and the return more like 4.9% annualized.  Amazing, a 5% front end load takes 10% of the almost 10 year rate of return.

On another point, I had freudian slip and typed HanCock and then as I was thinking how challenging the teasing might be for any poor kid to be blessed with such a name.  Then I thought han isn't far from hand...  What a name...

4 Comments – Post Your Own

#1) On April 26, 2008 at 11:18 AM, dwot (29.16) wrote:

Here's a post on the errors of Buffet and Soros.

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#2) On April 26, 2008 at 12:00 PM, dwot (29.16) wrote:

This is awful, the infant mortality rate in babies in Afganistan is 12.8%.  About 1.6% of women are dying in child birth and malnutrition is causing spina bifida because of the lack of folic acid.  What a nightmare, already an inability to properly look after themselves and then end up with increasing sick children and children that need life long support.

How about mass birth control as a solution?  Over population is playing a big role in this stuff. 

On another point, spina bifida in North America can be thought of as the tobacco industry's gift.  Smoking destroys folic acid and the rate of spina bifida in children of women who smoked compared to non-smoking women is about 10 times higher.  There are far fewer smoking women having spina bifida babies these days because women are encouraged to take vitamins with enough folic acid to counter the smoking's destruction of it.

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#3) On April 26, 2008 at 12:14 PM, dwot (29.16) wrote:

Hmmm, concrete examples don't help students learn concepts so they can transfer them...

This study is saying it is better to teach abstract and then apply the abstract to various different examples.

"The authors said that students seem to learn concepts quickly when they are presented with familiar real objects such as marbles or containers of liquid, and so it is easy to see why many advocate this approach. “But it turns out there is no true insight there. They can’t move beyond these real objects to apply that knowledge,” said Sloutsky."

Interesting, we have entire curriculum developed on the theory that students learn better with concrete examples...

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#4) On April 26, 2008 at 12:58 PM, EScroogeJr (< 20) wrote:

Birth control would be an excellent solution. Let's hand out condoms and birth pills to the locals and hope the ecclesiastical authorities wouldn't mind :) If necessary, we can inscribe some quote from Mohammed on the little rubber gadget if that's what it takes to warm them up to the idea :)

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