Sprott Funds

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Max
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Post by Max »

If my view was the main stream majority view I think you'd find more would invest in small caps.

I've found most people are cheap, for one reason or another and that's fine. Some people can't afford better and to some it's a way of life.

Some of my friends are the cheapest mingiest folks around. Always fun to talk to them. Have a very different and sometimes enlightning point of view. And one of them is a millionaire, just be prepared to drink cheap homebrew plonk when you visit him and leftover stew. Mmmmmmmmmmmmm.

I'm not arguing with any of you. I'm just giving my opinion based on my observations and experience in my life. Call it Max's musing or whatever you like. Crap probably comes to mind for some of you

I have read Mr. Boogles musings. I've also read Ira Gluskins, Don Coxe and a multitude of others and have arrived at were I am. The last 2 folks are no dummies.

I have my own style based on my personality and risk tolerance, NOT YOURS.

And I would hope as I'm sure is the case that you follow your own styles. I'm not trying to persuade you or prove anything so please don't get your shorts in a knot and tell me what to do. Just my opinion.

This forum is to provide ones perpective not to persuade other to emulate.

I've read all your stuff much of it going back to the Fund Library when Bylo and pals would have rants ad finitum. Had many a good nights sleep in those days. Went to bed early.

If you think that your research is more proven and better than others then good for you. As Calamity Jane said on Deadwood. "Congratulations on a big $u$king deal".

Sorry I couldn't help saying that. My sense of humour. Direct quote by the way.

Great series once and if you can get past the language.

None of what I've said was intended personally, don't take it that way.

If we all agreed on everything it would be a dull boring world, n'est-pas.

Max
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adrian2
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Post by adrian2 »

gyrfalcon wrote:I own 3 small cap funds, all chosen, at least, to be permanent positions. I believe you can miss major recoveries, suffer re-investment risk, etc. if you try to market time them. The annual returns are highly variable but the LT returns can be impressive.

My 7 yr position has given me 14.5% CAGR & has a 15 yr record of 15%. The other 2 are shorter term in my hands but have 10 yr records of 16.5% & 17% respectively. The latter also has a 15 yr record of 16.5%.

I prefer to avoid names but these are value-based funds, low-medium turnover, well-diversified sector-wise. Also, the MERs are all under 2%. I also don't buy the get-what-you-pay-for concept in Cdn Active funds. I actually believe it's the reverse for long-term holders, & that's actually my view of Mgt, *not* the direct cut from the higher MER.
Gyr and Adrian agreeing again? TEOTWAWKI must be coming :) !

BTW, I've just noticed that Mawer New Canada's second largest holding is Canadian Western Bank. See gyr, peace on Earth is an achievable goal :lol: !
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gyrfalcon
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Post by gyrfalcon »

adrian2 wrote: Gyr and Adrian agreeing again? TEOTWAWKI must be coming :) !

BTW, I've just noticed that Mawer New Canada's second largest holding is Canadian Western Bank. See gyr, peace on Earth is an achievable goal :lol: !
I hesitate to say this adrian, but I've asked myself in the past "Is it the folks who are actually the most similar, in many ways, who get into the strongest disagreements ?" :roll: There's not much merit in exploring this, but there you have it.

Happy New Year. gyr.
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Closest in similarity

Post by Moe Mentum »

I remember hearing this one on CBC a few years ago and thought that it might be appropriate, re. the above posting from gyrfalcon.


Once I saw this guy on a bridge about to jump. I said, "Don't do it!" He said, "Nobody loves me." I said, "God loves you. Do you believe in God?"

He said, "Yes."

I said, "Are you a Christian or a Jew?" He said, "A Christian." I said, "Me, too! Protestant or Catholic?"

He said, "Protestant." I said, "Me, too! What franchise?" He said, "Baptist."

I said, "Me, too! Northern Baptist or Southern Baptist?" He said, "Northern Baptist."

I said, "Me, too! Northern Conservative Baptist or Northern Liberal Baptist?" He said, "Northern Conservative Baptist."

I said, "Me, too! Northern Conservative Baptist Great Lakes Region, or Northern Conservative Baptist Eastern Region?"

He said, "Northern Conservative Baptist Great Lakes Region."

I said, "Me, too!"
Northern Conservative Baptist Great Lakes Region Council of 1879,
or Northern Conservative Baptist Great Lakes Region Council of 1912?"

He said, "Northern Conservative Baptist Great Lakes Region Council of 1912."

I said, "Die, heretic!"

And I pushed him over.
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Bylo Selhi
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Post by Bylo Selhi »

adrian2 wrote:
Max wrote:Oh by the way Bylo. How's that Bissett investment working out compared to your indexing investments??? Looks like a 5 year annual of around 19%, up 31%YTD. Not too shabby! Or are you in the Microcap with a 5 year of 22 and a YTD of 21%. Looks like a pretty consistent performer to me. Good choices, both.
Not Bylo, but why are you comparing small cap active with large cap index?
Bylo here ;) and I almost missed this thread because I don't follow Sprott Canadian Equity. In any case, yeah I just got back from the bank after cashing the ~8% CG distribution cheque from Microcap that arrived in today's mail. And yes, it's done better than my index funds. However as Adrian has already pointed out, this is an apples to oranges comparison because there is no Canadian microcap index fund.

So maybe I was lucky on Microcap. Now ask me about my other active fund investments, including -- especially -- the 5-star wonders from the past couple of decades. Please ;)
Adrian2 wrote:
Max wrote:I was a carpenter and a contractor for some of my life and I know for a fact that people who cheaped out on a reno, I.E. the lowest or next to the lowest price mostly had many complaints about the quality of the workmanship etc.

While choosing the best money can buy does not guarantee a good outcome, it does improve the chances.
In carpenting, you may be right. In MF investing, more often than not, you are wrong.
And he's not necessarily right on contracting either ;) We completed a major reno this summer. The contractor was by far the least expensive of the three we asked to quote -- about half of what the most expensive guy wanted. And you know what? He did a first class job. That's not just my opinion, but also that of some experts who've looked at his work.
Sedulously eschew obfuscatory hyperverbosity and prolixity.
Max
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Post by Max »

Good for you Bylo. You da man.

But may I point out 2 important things you've revealed with all due respect oh great and magnificent one.

First you didn't do your DD.

You seem to have invested without knowing the history of small cap/microcap stocks and maybe the manager of the fund so you were indeed lucky as in guessing right.
But you could have chosen from a big list of small/micro funds and still hit the target

Second you have admited that your biggest gains have come from your microcap fund and not an index investment.

Both Front street and Norrep invest in this sector and both have given over 25%/year average annual for the last 5 years. Front street almost 32%

In fact Front street under 2 different managers is up over 2,800% in 15 years, 325% in 5 years. Norrep 425% in 5 years. And your very own Bissett fund up 22% average over 5 years, 190% over 5 years total.

Okay so you will say it's randomness and stick to your index philosophy and claim you bought this fund cause there's no small cap index fund available which if there was would have been cheaper and made just as good returns.

Well the Nesbitt burns small cap index is available for comparison and both Front street and Norrep have beaten it consistently. That index is up about 100% in 5 years. Still okeydokey BUT.

I believe small cap/microcap investing from the evidence I can find is best done by SOME managers who have a nose for it. It does not fit into randomness or use a basket of stocks as per indexing, so well

Left to an index you'd be left in the dust in an index.

All just and entirely my opinion though. I may be wrong but to me from these eyes it sure doesn't look that way.


Okay so it will be said that this is not diversified investing, you also need large caps, global, emerging markets, bonds etc etc.

That's fine but I know Canada a bit, I'm a Canadian investing in Canadian dollars and I see less risk at the moment by investing at home with no currency risk.
And I prefer small caps over large caps which are followed ad neaseum (spelling) to the point where most of the advantage is taken away.

It's like this, "don't confuse me with the facts, my mind is made up".

Oh ya and congrats on the reno. Lucky again!!!!!!!!!!

Max
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Post by randomwalker »

I was just looking at the performance graph on Globefund.com from inception for the Front Street Small Cap Canadian Fund and it looks to me like any real out performance has happened in the last two to three years. In fact there look to be two periods of approximately eight (1985 t0 1993) and six years (1996 to 2002) in length where virtually no gains were made by the fund.

I then compared Front ST Small Cap Canadian to the DOW 30 total return in C$ (large cap vs small cap) and again it is only in the last two years that the Front Street fund has out performed. Up until that point one would have done better holding the DOW 30 and reinvesting the dividendes.

I would submit that any out performance has nothing to do with "stock picking ability" or "small cap advantage" but just happening to be so massively over weighted in materials and oil and gas over the last two years. In other words they got lucky. Right sector, right time.

Some of you will remember one of the princpals at Front Street, Frank Merch from his days at Altamira when he was "king of the sector rotators" and I believe fund manager of the year two years in a row until he lost is hot hand (or hid luck ran out) and had a couple of 2 and 3 percent years.
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Bylo Selhi
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Post by Bylo Selhi »

Max wrote:First you didn't do your DD.
Actually I did, although my idea of DD may be different from yours.
Second you have admited that your biggest gains have come from your microcap fund and not an index investment.
So? That's a surprise? Other than for entertainment purposes, e.g. Microcap, I don't need to take big risks, so I don't. Microcap represents ~1% of portfolio. The serious money is either indexed or at least passive.
Okay so you will say it's randomness and stick to your index philosophy and claim you bought this fund cause there's no small cap index fund available which if there was would have been cheaper and made just as good returns.
Actually if I had to do it again, I wouldn't buy any actively-managed fund -- including Microcap. I don't need to take the risks and, as I've come to realize, the entertainment value isn't what it was cracked up to be. (I don't buy lottery tickets either, for the same reason.)
Left to an index you'd be left in the dust in an index.
No. You'd be left with index returns less a small MER. Mix a bunch of broadly diversified index funds into a portfolio and you're almost guaranteed to outperform a similarly diversified portfolio of higher cost actively-managed funds in the long run. If that's dust, it's gold dust.
Okay so it will be said.. It's like this, "don't confuse me with the facts, my mind is made up".
So it will. That strategy is not for me, it's not for the vast preponderance of institutional investors and it's not for the vast majority of individuals. (Sorry if those facts are confusing ;))

But heh, if it works for you and you do it with open eyes and despite that you can sleep soundly, then let me be the first to extend my best wishes for continued success.
Oh ya and congrats on the reno. Lucky again!!!!!!!!!!
Thanks!

"Good fortune is what happens when opportunity meets with planning" ...Thomas A Edison
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Post by dakota »

I bought the Sprott Small Cap funds in Feb this year and seeing it under perform my own small caps on a almost a daily basis, I finally got out in Oct. I guess a lot of people did the same as it now will be open again in Jan. '06
A fool and his money are lucky to get togethere in the first place
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Post by Raymond »

Sprott is coming out with a new fund. (Sprott/Cdn Growth Fund)
I think it is to be run by newly hired Peter Hodson (formely of Synergy/Ci/Waterfall).
Conicidentally, I was just looking at the FP Business section and saw Peter top their contest with 57%+ gain. Hmmm!
I would be interested IF the MER is fair (with Sprott, I guess fair would be anything less than 5% + NO incentive fees!).
Currently I am a happy investor in their Energy & Cdn Eqty fund, so I may indeed shift some of the profits from these into a new fund ( or replace the Cdn Eqty with a broader mandate Growth Fund).
Don't know when the new fund is becoming avail thou!
!! cheers !!
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Post by DanH »

Raymond wrote:Conicidentally, I was just looking at the FP Business section and saw Peter top their contest with 57%+ gain. Hmmm!
Please don't pick funds based on the performance of one stock for one year. If you'd done that, you'd have sold Hodson in 2001 and 2002. Not saying I recommend him (or not) but that's not the way to do it.
Raymond wrote:I would be interested IF the MER is fair (with Sprott, I guess fair would be anything less than 5% + NO incentive fees!).
Their standard is 2.5% management fee + performance bonus.
Raymond wrote:Don't know when the new fund is becoming avail thou!
!! cheers !!
January 16, 2006.
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Post by Raymond »

Hi Dan,
Of course i don't/won't pick funds based of recent performance or a manager's past record. But thanks for the caution anyways!!

BTW, Sprott Energy has a MER of 7.96% and the Cdn Eqty 5.63% (as per Morning Star).

Have a great day!
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Post by gyrfalcon »

Raymond wrote:Sprott is coming out with a new fund. (Sprott/Cdn Growth Fund)
I guess if anyone can meet your expectations, it just might be Eric & Co.

As a more general comment, I think the days of big, hairy Sector bets may be just about over for 2-3 yrs now. I think all of the easy money may have been made in pretty much every sector you could name.

If I'm correct on that, the only Active mgrs that will out-perform the indices for 2-3 yrs will be those who can identify true value, including solid, sustainable growth, & who then have the patience to wait for the market to re-value their picks.

I know where I'll look for that but others would be better-equipped to say whether Sprott does that well. gyr.
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Post by DenisD »

Raymond wrote:Sprott is coming out with a new fund. (Sprott/Cdn Growth Fund)
I think it is to be run by newly hired Peter Hodson (formely of Synergy/Ci/Waterfall).
Peter Hodson was on ROB TV last night on Market Call Tonight.

www.robtv.com/shows/past_archive.tv?day=thur
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Post by Raymond »

gyrfalcon,
my expectations??!!
i am one of those who realistically thinks that 7-8% long term is what i can hope to get at the most (and will be happy with that!)
in all my retirement scenarios/calculations, i ALWAYS use 8% as my rate of return in addition to 2 - 2.5% inflation. This way there will be no letdown if I don't get the 10%+ "average" long term return of major indices as often repeated by the 'pros'.
Have a great one!
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Post by bubbalouie »

http://www.morningstar.ca/globalhome/In ... 2920059241
As of Nov. 30, the Morningstar five-star rated fund was overwhelmingly concentrated in two sectors. It held 47.7% of its portfolio in energy stocks, and another 46.4% was in the materials sector, which includes gold stocks. .

Sprott better hope that energy and materials come through in 2006, or this will be their 2nd year in the row of sub-par performance. I guess they have never heard of diversity before.
"They misunderestimated me." --George W. Bush, November 6, 2000
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Post by Raymond »

Norrep new funds become available today.
I think a US Class (small & micro cap) & Norrep Gwth & Income.
With all pundits predicting/arguing for investing in US large cap fund, is it prudent to launch this fund now?
Any thoughts?
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Post by dakota »

DenisD wrote:
Raymond wrote:Sprott is coming out with a new fund. (Sprott/Cdn Growth Fund)
I think it is to be run by newly hired Peter Hodson (formely of Synergy/Ci/Waterfall).
Peter Hodson was on ROB TV last night on Market Call Tonight.

www.robtv.com/shows/past_archive.tv?day=thur
No he wasn't, Peter was :)



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Market Call Tonight with Howard Green
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Post by ukridge »

Thinking of buying some of Sprott Canadian Equity as a portfolio insurance. Most of my equity content is in XIU, VTI and active funds for overseas equity. Looking at the overall reliance on commodities and financial services, I'm thinking of this fund as a diversification tool, for ~4% of the overall portfolio.

From what I've been able to gather so far:

- Mr. Sprott is pretty negative on the broad markets
- He seems to be betting on the "peak oil" theory; i.e. oil supply can only go down from here
- Heavy on Bullion, mining stocks and cash
- Short on NASDAQ, practically no health care or financial services.

I had some reluctance to pay someone to hold cash and gold, but think I'm overcoming it after thinking a bit.

What do you guys think? Thanks for helping me decide.

Ukridge.
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Post by parvus »

ukridge asked:
What do you guys think? Thanks for helping me decide.
I hold Sprott (at about 5% of the portfolio) purely as insurance. His results have been great, but I'm not a gold, coal or uranium bug. If those things participate in a commodities* rally, that's fine, but I hold this as a downside, market's-gone-to-hell, investment.
*typo: my bad.
Last edited by parvus on 15 Jul 2006 14:52, edited 1 time in total.
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Post by ukridge »

Thanks parvus.

This thought process started as a realization that my only Canadian equity holding is XIU. I wanted to take some of that and diversify in mid/small caps. The "portfolio insurance" consideration was an afterthought.

I'm still debating between Sprott and Sceptre. Leaning towards Sprott, still.

- Ukridge.
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Post by arthur »

This Fund seems to have easily beat the Index, if I am using the Right Index, and although there is a Fee and a higher MER than an ETF, why would this not be a good substitute for XIU??

I understand it has some weightings, but cannot the same be said for the TSE?
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Post by ukridge »

why would this not be a good substitute for XIU??
Because it has no overlap at all with the consituents of XIU. I think of this as a complement to XIU to cover the Canadian market.

As I said upthread, I was worried about the dominence of financials and commodidites in XIU, and needed something to counterbalance, and add a representation for smaller caps. This fund seems to fit the bill, although this choice is against my overall bias towards indexing.

Secondly, this fund makes big sector bets, and is hence not a a good core holding.
I understand it has some weightings, but cannot the same be said for the TSE?
Not sure what you mean by this.

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parvus
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Post by parvus »

This Fund seems to have easily beat the Index, if I am using the Right Index, and although there is a Fee and a higher MER than an ETF, why would this not be a good substitute for XIU??
Go to sprott.comand read the commentaries. The fund managers are quite down on markets in general, so you have to be comfortable with what is, ultimately, a contrarian pick — with higher fees than an ETF.
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Sprott Cdn Equity

Post by retireat50 »

I'm looking at this fund and it appears to have outperformed it's group a majority of years. MER is kinda high at 2.5% plus a performance fee. Also it has a front end load of 0-2% based on "adviser's discretion". My question is what does this mean? I would purchase thru Scotia Direct and when I look up this fund on their site it doesn't say anything about a front end fee...is it safe to assume that in this case there is no front end load? I'm assuming that if there is, this would be clearly disclosed when I purchase the fund online via Scotia Direct?

Also, anyone have any thoughts on Sprott or this fund in particular? Thanks
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