Fidelity is funny (and stupid)
Crissy and I use Fidelity for most of our banking and investment needs. But after reading this this email they sent me today, I’m tempted to find a new broker:
Dear Vijay Bangaru,
Fidelity Contrafund and Fidelity Low-Priced Stock Fund have recently reopened to new investors. This presents an opportunity to invest in two funds run by managers with decades of experience in all kinds of markets, and backed by one of the largest investment research platforms in the world.
Fidelity Contrafund (FCNTX), Fidelity’s largest equity fund, is a highly rated fund that seeks growth opportunities in any type of market size, segment, or sector. The fund is run by Will Danoff, named Morningstar’s 2007 Domestic Stock Fund Manager of the Year. He has more than 22 years of investment management experience, and has run Contrafund since 1990.
Fidelity Low-Priced Stock Fund (FLPSX) is a highly rated small- to mid-cap fund that invests in growth or value stocks priced at $35 or less at the time of investment. The fund is run by Joel Tillinghast, named MarketWatch’s Stockpicker of the Decade in November 2007, and Morningstar’s Domestic-Stock Fund Manager of the Year in 2002. He has more than 20 years of investment management experience, and has run the fund since its inception in 1989.
The recent market activity has resulted in some negative mutual fund performance. Please click on each fund’s name to learn more about how these two funds have performed and their latest ranking information.
…
“Recent market activity has resulted in negative mutual fund performance”? You think?
The Contrafund (which I used to hold 2 years ago) is run by Morningstar’s 2007 Domestic Stock Manager. In 2008, his fund lost 37.16%, while the S&P 500 lost 37%. So not only did he lose nearly 40% of his investors money, he lost more than a simple index fund would have.
And he’s considered the best?
The Low-Priced Stock Fund is run by the MarketWatch’s Stock Picker of the Decade in 2007. In 2008, his fund is down 36.17% while the Russell 2000 is only down 33.79%.
Obviously these funds did much better then their comparable index funds in the long run, but it’s still pretty funny that these guys won huge awards in 2007 and then got destroyed in 2008.
I guess it’s like the Sports Illustrated Cover Jinx, but for Wall Street types.
John Gall wrote:
I have a 401k with a good chunk in Contrafund, it was a horrible year but William Danoff came highly recommended by Jim Cramer so hopefully he’s right as I still have alot of my remaining 401k in there until I can move it to an IRA.
Posted on 27-Jan-09 at 9:14 pm | Permalink
Vijay wrote:
I don’t really trust Cramer. On July 30, 2008 he claimed the market had hit bottom.
His calls on financials have been horrible too (source):
The article I reference is a few months old. Here’s the latest: Bear Sterns no longer exists, Morgan Stanley is at $17, Lehman Brothers is gone, and Merrill Lynch was about to fall apart until the Fed bribed Bank of America to buy it.
Like a lot of the talking heads, Cramer looks like a genius when everything is going up. But when things start going down…
Posted on 27-Jan-09 at 9:28 pm | Permalink
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Posted on 27-Jan-09 at 10:19 pm | Permalink