Dennis,
Back in the beginning of August, I exchanged some of my FSESX into FBIOX. I primarily did this to reduce risk on the heels of a 110% runup in my total return since getting into FSESX.
I like both of them, not necessarily on a short term technical basis, but more from a futurists' viewpoint. If you think about growth sectors going forward for the next few years. Energy, Biotech, Telecomm, Electronics and similar sectors are probably pretty good bets.
Dick Cheney, CEO of Halliburton Company was interviewed last week on CNBC Squawk Box. He had some very interesting comments on the increase in daily production that would be needed to support the world energy consumption. His numbers are not necessarily fact, but I think the drivers on day rates for drilling rigs and construction costs probably support that line of reasoning.
Likewise for the Biotech industry, Gordon Binder, of Amgen fame. He was interviewed on CNBC not too long ago and he had very interesting comments on profitability in the biotech market. Large R&D budgets, long timeframes from concept to fruition, lots of volatility there, but if you stick with a strong research group like FMR and the Fido Select funds that trade on their research, my thinking is that you make long term opportunity for yourself.
If you dig, I bet you can find very candid interviews with industry luminaries from the other sectors.
By the way on another topic, If you take Fido's top ten holdings for each Select Fund, plot them in aggregate against the fund's performance the correlation is very, very high. If I'm contemplating a rebalance between Select Funds, I do this to decide when to exchange. You can get graphs of the interday trading prices for free from Microsoft Investor. Sometimes I even use the Select Money Market fund for a short term buffer to increase my advantage. I.E. wait for a great day on the top ten, put in the trade ten minutes before the hour or day close on the exchange out into the MM. Then do the reverse and wait for a dip of the top ten to do the exchange into the next fund. I never expose myself to Fido's 0.75% charge by trading more frequently than every thirty days. I'm under no illusions about being able to predict the market and do all of the trading in an IRA brokerage account so the tax issues are nil. All in all I've been very pleased with the result.
Just a thought or two. Happy Investing.
Larry |
