Tom,
You state: "It is NOT necessary to examine anything but the latest list of holdings for a given fund to practice the disciplines they claim." This is, of course, true. But, that is NOT the reason I try to monitor funds a closely as I do. The real reason is to gauge how well their investment discplines actually work and how likely their funds are to provide superior returns in the future.
I appreciate your concerns about the public misusing this valuable information by trading the latest "PBHG Buys" and trampling the PBHG fund managers on their way into a position. But, how realistic are these fears? What if the portfolio holdings were to be published quarterly instead of semi-annually? Would the PBHG managers really be worrying about completing their purchases before the information became public? Not very likely.
If monthly portfolio updates were made available and speculative investors were to attempt to form a herd and flood into the new stock holdings, they would find it to be a much more difficult proposition than it might appear. Each PBHG fund might have around a dozen or so new purchases since its last update, with different weightings assigned to each. So, if they were looking for a hot tip, which one would they buy? To add to the difficulty, it should also be noted that not every new position in a fund will become a successful investment. And, because a new addition to a fund can be as likely to be sold as an old one, you never be sure that the manager hasn't realised his or her mistake and already sold out the position by the time the information is published.
Here's an interesting question: How long do you think it usually takes a PBHG fund manager to completely sell-out its position in a company's stock, when there is news of an earnings disappointment or the company warns of slowing sales?
Best regards,
William |
