Mutual Fund Monday 3/30/09

Another Monday has reared it's ugly head upon us. GM still couldn't get their house in order, so the Barack had to finally be the one to push Wagoner out. I understand some people's worry about socialism and government interference, but hey, don't run your company into the ground and it won't be an issue. Is Immelt being pushed out at GE? Is Mulally being pushed out at Ford? No, they're not, because they have their house in order. The lesson from all this? Be a responsible CEO. If we have to brush up against socialism for our Executive class to understand their responsibilities to all their stakeholders, then so be it. I don't endorse it, but something has to change.

So the title of the post is Mutual Fund Monday. I thought an easy way to do a post once a week would be to use the Yahoo Fund Screener to pop out some mutual funds that might be worth looking at. I am in the process of changing jobs, so I will more than likely be rolling over my current 401(k) to an IRA, so I'll have some decisions on how I want to divy up my current retirement stash.

I read an interesting article in Money (I think) a year ago or so that gave a real nice procedure for looking for Funds that don't suck. Of course, the main goal of picking Funds is finding some that are going to give you a chance of beating the SP500 index, which you can own in an index fund or ETF with no loads and very small expense ratios (<.25 or so). The procedure was using the screener to pick funds with no loads, 4 or 5 Morningstar Rating, low ratios, manager tenure of at least 5 years (with the longer the better), and a good performance rating (top 30% for example). Let's go to the first screen!


Category Any US Stock Fund
Rank in Category Top 30%
Tenure More than 5 years
Morningstar 4 Star Min
Min Investment less than $2500
Front Load None
Total Expense Less than 1%

Running that gives us 103 Funds. 100 is still a lot of Funds to pick from, but it's way better than 6 or 7 thousand! Let's sort on Manager Tenure and see who leads the pack. I'm always intrigued by the Manager Tenure, it's interesting for a Fund manager to be at one place for 20 years or so. So, building on that manager tenure, let's sort on longest tenure. The longest tenure is...73 years. 73 years! How does that work?

This week's fund is: ING Corporate Leaders Trust B (LEXCX)

So what's going on with a 73 year tenure? Looking up the profile on LEXCX, it says that it is a grantor trust that was formed in 1935. I looked around and found the prospectus at their site, and in 1935, they created the fund by buying an equal number of shares of 30 top American companies. Over the years, companies have failed, been bought, and merged, and now there are 23 companies. How great is that? The annual turnover: 0%. Category average: 68%. Having no turnover also saves a lot in expense ratios, .49% vs 1.28%. That's definitely staying ahead of the competition.

The alpha and beta of LEXCX is also an interesting study. The beta is .91, which means that the risk of LEXCX meeting the SP500 return is less than the SP500, giving it a nice risk rating. On top of that, the alpha is over 3, meaning that for the risk involved, you'll beat the SP500 return by 3 pts. Wow! For less risk, you should beat the SP500 by 3. Awesome.

I like long periods, so comparing 5 year performance (which includes a bunch of the last 6 months mess), LEXCX is down 1% vs 6.63% for the SP500. Beating the market by that much over that much time is a nice point. Sticking with long term strong companies is always a good way to invest long term.

So what are some problems? When you have only 23 companies, it's tough to not be too concentrated in a couple areas. LEXCX has a couple areas that could be worrisome, or good, depending how the next few decades pan out. Not surprisingly, having formed the fund in 1935, you've got some interesting holdings. From the prospectus, (granted, this is from Dec 07 and the percentages will be different), the two biggest sectors in LEXCX are oil (35%) and transportation (17%). The oil is as you would expect, with Exxon Mobil, Chevron, and Marathon. The transportation is two train companies, Burlington and UP. How many funds these days have 17% of their holdings in two train companies? Are trains sexy investments? Probably not. But if you think that rising oil prices are going to cause the railroads to continue to win freight back, you've got a hell of a play with the oil companies (oil prices causing the push to coal fired trains for delivering freight).

So, should you maybe have a cut of this in your IRA? You know, it looks fun to own. It's fun to talk about, and it's an interesting story. With a lot of oil, it could continue to perform well if the price of oil continues to go up. It has some other real nice blue chips like P&G, and GE. Would I put everything in there? Of course not. Is it maybe worth 20-25%? I think you could make a good case. I bet I end up with a little of this one in the end.


How do you buy a mattress?

I was checking out Lifehacker this morning and they had an interesting post about how to buy a mattress.  I thought this was interesting because I got to thinking about the things that I have no idea how to buy.  In this day of endless customer reviews, review sites, technical specs, etc; it's usually easy to find the information you need to make an informed decision.  As I have gotten use to this, when it comes to buying some items, like mattresses, I just have no idea how to proceed.  I thought I would come up with a list of items that are kryponite to my purchase researching skills.

  • Mattresses - How do you even start to know what to look for?  Memory foam, pillow tops, etc.  What??  How do you know what to compare to other mattresses?  So you get stuck looking at a bunch of logos and brand names which mean nothing and a bunch of prices that don't really mean anything.  The other big knock on mattress shopping is the price?  How do you compare prices?  The price listed is never the actual price because you can't keep track of what is on sale, how the sale works, etc.  It's just a mess.
  • Furniture - Furniture isn't quite as bad.  The issue with furniture is that it's usually a big purchase, and the two requirements that are important is durability and how long the cushions stay comfortable.  There is no way to tell either of these items by looking at the furniture in the store.  There isn't really an industry standard "rating" for cushion durability.
  • Blinds - Thank God Bridget took care of this for me.  String, vinyl planks, cords.  Yikes.  I probably would have passed out trying to decide what the best value is.  How do you assign values to this stuff?
  • Dishes - We bought some dishes right after we got married, and they're chipping all to hell.  How can you tell if something if plates are more apt to chip than the next one?  I can't do the research to check on this.  On the other hand, I picked out the great china we got for our wedding.  I guess I'd probably have to chalk that one up to luck.

So why do we have trouble buying some things?  I've read some interesting books lately on neuro-marketing, which is a new science that explores why we buy one thing over another based on how your mind works.  Very interesting stuff.  For me, I believe neuro-marketing would say that I have trouble with these kinds of purchases because the lack of a good comparison.  If you don't have a good "anchor" on what something should cost, your mind struggles on assigning values.  I don't know what a "good" mattress costs, versus what an "excellent" mattress costs.  On the other hand, I can easily look up what a 3 series BMW costs, and what a Nissan Altima costs, along with all the features of each one.  This allows me to put some kind of a value on the features of each one.  While the cost of the cars would be much more than the mattress, I would have a much easier time making the decision on which car to get. 

or maybe I'm just too analytical for my own good......


Johnny's Italian Steakhouse

After a productive Sunday afternoon of cleaning and organizing the garage, it's time to write up a quick post about last night's dining excursion.  For our first "date" night out in Omaha, Bridget and I headed up to Village Pointe to try Johnny's Italian Steakhouse.   I'm going to try and keep a somewhat consistent review method of restaurants/bars, so let's see how this works:

Johnny's Italian Steakhouse  3/22/09

Style:  JIS had a Sinatra/Martin/Rat Pack feel to it.  Dark wood tables, low lit.  Plenty of Sinatra playing in the background.  I'm always up for some Frank or Dean, so that's always a plus in my book.  While I do love Frank and Dean, the overall feel was a bit too chainy for me.  When I'm out at an Italian restaurant, I like for it to have that family run feel to it.  Not necessarily that I feel like I'm eating at someone's house, but that some family members got together and bought the pictures, tables, etc.  JIS didn't quite have that.  It wasn't over the top chainy like 54th Street, but enough that you could tell there was description given to someone.  Unfortunately, a family with two kids sat down in the table next to us towards the end of the meal.  Kids were well behaved, but the toys they were playing with where the wind up kind.  That buzzing sound they make when the toys are walking around is very annoying.  Props to the kids for being quite and playing with their toys.  Thumbs down to the parents giving them annoying toys to play with during dinner.

Drinks:  Appeared to have a normal stocked bar.  Drink menu had some specialty martini's and such.  I was in the mood for a manhattan with Makers Mark.  They put a LOT of MM in there.  So much that I had to spend the entire meal nursing it down so I didn't pass out.  Whew.  Should have ordered my usual Tanqueray and Tonic.  Oh well.  That one was on me.  Bridget got some wine <yawn>.

Food: Food was very good, but not outstanding.  We had some fried mozzarella wedges for an appetizer.  Nicely fried and breaded, but the mozzarella could have been a bit fresher (I think).  I've had better mozzarella apps before, and I think the difference is due to making your own or using the pre-prepared ones.  I had a parmesan encrusted new york strip with garlic mashed potatoes, which came with a salad.  The salad was mediocre at best.  Tasted like a bag salad from the grocery store, topped with ranch dressing from a tub.  The steak was outstanding though.  Cooked to a very nice medium rare.  The parmesan encrustation was a parm butter sauce or something like that on top.  It was spectacular.  Really, really good.  The garlic mashed potatoes were good as well.  Not quite garlic-y enough for me.  Bridget got crab stuffed shrimp, which appeared to be shrimp with crab cake in it.  Very good.  Would have been outstanding had they used bigger shrimp.
Overall, the entrees were very good, but the lack of effort on the salad was really disappointing.

Price:  Nothing wrong with the price, $25 for the steak seemed reasonable. 

Will we go again?  Yes, there were several other steak entrees that looked really good.  The steak I had was good enough to keep my interest high on the other ones.
Is it a place when friends come in town and we say we have to go there?  I would say no.  Not quite enough to set it apart from other chain Italian restaurants like Carraba's.


Taco John's, I am back!

It was a wonderful day yesterday. I finally made it back to Taco Johns! Bridget and I went out to run some errands at Costco and Target and I convinced her to make a stop at TJ's. I picked up 3 Tacos and a small potato ole's with cheese. MMMMM, the taste is the same as I remember.

I previously lived in Ottumwa, IA, where there were several TJ's. I lived there during my middle school and early high school years, and we would frequent the TJ's quite often. Being guys in the early 90s, spending the night at a buddies' house would consist of running by the video store to rent a couple Nintendo or Super Nintendo games (hopefully Street Fighter 2), grabbing some 2 liters of Mountain Dew, and stopping by for a couple "6 pack and a pound" sacks of heaven. Nothing like it.

Of course, having lived in St Louis for 6 years, many people will tout the awesomeness of White Castles. While a case of Whitey's after the bar is nice, I would like to match it up with some TJ's. Since I was younger during my previous TJ encounters, I am anxious to see how they do after a good night of drinking.

Sounds like a challenge.


First Post

My wife and I recently moved to Omaha due to a business relocation.   She is originally from Omaha, but I am new to the scene.  This blog will catalog some of our restaurant choices, events, and other happenings.   I also will take time to talk about other things that will pop up in my mind, like business, politics, etc, so it should be fun.